Isn't there a better way to conduct the investigation into the Indian Premier League?
Trust the government to conduct a ham-handed investigation that humiliates the nation and holds up our rampant corruption for the world to snigger at. The raid-raj unleashed by the Income-Tax and Enforcement Departments accompanied by fanciful, but off-the-record claims and innuendo is only humiliating the country.
Isn’t there a better way to conduct this investigation so that the IPL (Indian Premier League), which is acknowledged, even by Lalit Modi's worst detractors as a huge, business-entertainment-and-sporting success is cleaned up but kept alive?
It is not that other countries have not had bigger sleaze and scams than those exposed in the IPL. Notice how the US didn’t unleash a raid raj, even when the sleaze of Wall Street and the toxic sub-prime mortgage derivatives, led to a worldwide financial crisis and bankrupted Iceland. Instead, they pumped in taxpayers’ money to limit the damage, created a system to recover the money with interest and worked at reform over a two-year period and going on.
Can’t the same be done with the IPL? In any case, what is the credibility of a politician-infested Board of Control for Cricket in India (BCCI) to investigate anything? All we know is that the top honchos of most political parties (barring the Left) are represented on it. We know that each of them had their hand in the till in shocking ways—Cricket Minister …oops… agriculture minister Sharad Pawar's son-in-law has a stake; N Srinivasan, who is on the governing council openly owns a franchise and aviation minister Praful Patel was clearly pulling many strings through his daughter (conveniently employed in the IPL office and powerful enough to pull off an Indian Airlines flight from its duty schedule to charter it for the richie-rich IPL crowd). Why, even the Nawab of Pataudi, who suddenly appeared on various television channels recommending that Lalit Modi ought to step aside, may have had a connection to the franchise but for Tharoor upping his bid. Tharoor has (almost) openly alleged that he became the victim of a conspiracy to ensure that Videocon (in which Pataudi's son and current girl friend had a much publicised interest) obtained an IPL franchise.
If this drama isn’t enough, we have AC Muthiah of SPIC, a close friend of the home minister, moving the Supreme Court to re-open his demand that a governing council member ought not to own an IPL franchise.
Clearly the prime minister and the Congress Party is bereft of ideas on how to deal with all this. Why else would we have a report that a home minister, who just offered to resign for failure to handle security issues would be asked to clean up the IPL muck? Harsha Bhogle, a cricket commentator has suggested Deepak Parekh, Narayana Murthy etc. must get involved to find a way to save the IPL (as a former tax commissioner suggested on television) in the process of cleaning it up.
Frankly, that won’t work either. It would require these corporate honchos to look closely at murky political interests in the IPL and doing an honest job is bound to affect their business interests some time. So let us not try to cast this burden on corporate leaders, they have enough on their plate already. The Left parties are demanding a Joint Parliamentary Committee (JPC), but the two financial scams have shown that this dwindles into an orgy of influence peddling with no tangible results.
The alternative would be for the Supreme Court to decide on a slew of charges with regard to the ownership, tax havens, underworld links and the massive illegal betting connected with the game. A couple of cases have already been filed, but a case-by-case hearing of issues will be a slow, long drawn-out process that will destroy the IPL and permanently damage India's credibility.
Instead, G V Ramakrishna, former chairman of the Securities and Exchange Board of India, who has the knack of hitting on the appropriate solutions, has a better idea. He suggests that a three-member committee of judges should be asked to investigate the matter. But the choice of judges must not be left to the law ministry or the courts. It must include Justice JS Varma, Justice SP Bharucha and they should in turn be asked to decide who the third member would be. The tax and enforcement authorities should report to this three-member bench. More importantly, it must be mandated to suggest ways of cleaning up cricket and all sport management in order to ensure transparent and orderly conduct in the future.
Hopefully, this bench will take into account the fact that cricket is as much a business today as it is a sport and it is unrealistic to expect council members to spend time on administration without any personal financial gains. Let bidding for the franchises and various contracts be conducted in an open and transparent manner without involving the BCCI’s governing council. The best outcome would be if the three-member bench manages to rid Indian sport of the debilitating and corrupting influence of netas and babus and allows for professional management with clear deliverables and profit-sharing based on results. That will ensure that our 1.1 billion people start winning games and bring in gold and silver medals by the dozens.
Now that the Sensex has closed above 17,600, expect continuation of the rally subject to dips
The Sensex ended the day 120 points higher (0.6%) at 17,694 and the Nifty ended 34 points up (0.6%) at 5,304 points. The market started the day with a high on the surprise issue of bonus shares by Wipro. In the morning session, it touched the intraday high.
Later, the bourse slid from the high, until it rebounded in afternoon trade. Asian stocks declined as speculation heightened that Greece could default on its sovereign debt obligations after Moody's cut its ratings on the country's sovereign debt.
Key benchmark indices in Hong Kong, China, Indonesia and South Korea fell by 0.14% to 0.98%. Key indices in Singapore and Taiwan rose by 0.04% to 0.33%. US stocks staged a late-day comeback on Thursday after steady quarterly profit earnings reports from consumer bellwethers like Starbucks outweighed worries over Greece's finances. The Dow rose 9.3 points (0.08%) to 11,134. The S&P 500 rose 2.7 points (0.23%) to 1,208. The Nasdaq gained 14.46 points (0.58%) to 2,519.
The Greek prime minister asked for the activation of the EU-IMF aid package aimed at pulling the eurozone member out of a debt crisis. The People’s Bank of China has said that Chinese GDP grew at a seasonally accelerated rate of 12.2% in the March quarter from 11.3% in the fourth quarter of 2009. It also said that there has been a healthy revival in exports, domestic production and consumption.
Closer home, the Reserve Bank of India (RBI) has suggested increasing the time period for banks for holding a loan before converting it to a security asset, to nine months. However, bankers are of the opinion that the holding period for corporate loans and retail loans should be three and six months, respectively. The government has approved infusion of Rs150 billion in State-run banks during the fiscal year ending March 2011, to help meet growing credit requirements of the economy. In the annual Budget, the government has proposed an infusion of Rs165 billion for State-run banks. This will help banks to increase their credit growth by about Rs1.85 trillion. Foreign institutional investors were net buyers on Thursday of Rs518 crore. Domestic institutional investors bought stocks worth Rs181 crore. The rupee was strong on higher equities and the weak dollar.
ABG Shipyard (up 1.1%) has received an order from Associated Bulk Carriers of Singapore for construction of three 20,000 deadweight tonnage cement carriers. Hind Rectifiers (up 1.8%) has commenced commercial production at its two plants at Dehra Dun for manufacture of rectifiers, invertors, convertors and transformers. Reliance Industries (up 1.1%) has announced the closing of its recently-announced Marcellus Shale joint venture transaction with US-based Atlas Energy. The IPO from Talwalkars Better Fitness (down 0.4%) has been fully subscribed on the second day of issue. Out of the total of 70.41 million bids obtained, 3.75 million bids were obtained at cut-off price. The price band of the issue which closes on 23rd April has been fixed at Rs123-Rs128 a share. SKF India (up 7.6%) has posted a growth of 59% and 174% in sales and operating profit in the March quarter over the year-ago period.
Private Treaties, the controversial investment arm of Bennett, Coleman & Co Ltd, is now housed under a separate company. However, it seems to have too many dubious investments in its books
Set up in 2005, Times Private Treaties, a part of Bennett, Coleman & Co Ltd, publishers of the Times of India, is now a separate corporate entity called Brand Equity Treaties Ltd. However, its investments not only continue to be controversial but are turning out to be quite unsound as well.
The business model of private treaties is unique. Under a legal arrangement, Brand Equity picks up a stake in the company in return for discounted ads and favourable editorial coverage. Most of these companies subsequently go public. A sample of recent headlines, to name a few, have been: ‘HCC plans Rs50,000 crore investment in Lavasa in a decade’; ‘The Lavasa Women's Drive 2010’; ‘Lavasa city to mimic nature’; ‘Pantaloons Femina Miss India 10 finalists: Lavasa trip’. These appeared in the Times Group’s newspapers. Lavasa of Hindustan Construction Company and Pantaloon Retail (India) Ltd are both private treaty clients.
According to the data available on the Times Treaties website (see here), the company has as many as 119 companies in its portfolio of clients.
Last year, there were media reports that the private treaties business had incurred mark to market losses exceeding Rs1,500 crore, following the market crash of 2008. Then came a nasty controversy about one of its treaty clients Pyramid Saimira Ltd. The market regulator Securities and Exchange Board of India (SEBI) alleged that Pyramid Saimira was banned from trading for seven years in connection with illegally ramping up the share price of Pyramid with the help of few media professionals. The trio attempted to plant a fake order in several newspapers led by a media cabal that included Rajesh Unnikrishnan (assistant editor of The Economic Times and close buddy of Nirmal Kotecha, a co-promoter of Pyramid Saimira) and Rakesh Sharma, a former journalist with Business Standard, who had turned into a PR professional.
Apart from controversy, there are questions also of how smart the investments have been. Shree Ganesh Jewellery, a treaty client, has plunged 45% as on 23 April 2010 from its offer price of Rs260 on 9 April 2010. CARE had assigned an 'IPO Grade 3' to the Shree Ganesh IPO indicating ‘average fundamentals’. Bennett, Coleman & Co had made an investment in this company to the tune of Rs5 crore in June 2007 at Rs150 per share. Moneylife had yesterday reported on how Nitesh Estates Ltd (which opened today) made a pre-IPO placement to Brand Equity Treaties Ltd at Rs143 per share on 19 February 2010 for 10 lakh shares aggregating to Rs15 crore. The stock is being offered at a Rs54-Rs56 price band. Jaiprakash Infratech Ltd which also appears in the ‘portfolio list’ list of Times Private Treaties is set to hit the market on 29 April 2010. Interestingly, there are speculations that Brand Equity Treaties itself would go public.