The government and the Central Bureau of Investigation (CBI) said that Mr Chidambaram, who was finance minister at the time of allotment of spectrum, was not in direct communication with the then telecom minister A Raja in determining the price of the radio waves
New Delhi: The Supreme Court Monday reserved its order on the plea for a probe into the alleged role of home minister P Chidambaram in the second generation (2G) scam after a spirited defence of him from the government and the Central Bureau of Investigation (CBI), both of which maintained that no case has been made out against him, reports PTI.
They said that Mr Chidambaram, who was finance minister at the time of allotment of spectrum, was not in direct communication with the then telecom minister A Raja in determining the price of the radio waves.
“The records show that there was no meeting between Mr Raja and Mr Chidambaram throughout this period and before 10 January 2008 and that all the discussion papers were seen and routed through the finance secretary to the finance minister and all the correspondence was seen and routed through the finance secretary,” the Centre submitted before a bench of justices GS Singhvi and AK Ganguly.
However, the NGO, Centre for Public Interest Litigation (CPIL) and Janata Party chief Subramanian Swamy refuted the claims of the CBI and the Centre that Mr Chidambaram was not in the picture till 10 January 2008 when the Department of Telecommunication (DoT) headed by Mr Raja issued 122 Letters of Intent (LoIs) to telecom companies without following the policy of auction.
The bench, which also reserved its order on the plea of setting up a committee like Special Investigating Team (SIT) to monitor the probe in the case and to direct the CBI to investigate the role of Mr Chidambaram, was told by the probe agency that no case was made out against him.
“No case is made out to issue any direction to the CBI for further investigation,” CBI's counsel and senior advocate KK Venugopal submitted while placing another status report on the progress in the case.
An identical stand was taken by Centre’s senior counsel PP Rao, who said the view taken by the CBI after studying all the documents and those placed by intervener cannot be said to be perverse or motivated.
Mr Rao criticised the reporting of the 2G case saying media picks up half-baked information without realising the consequences and they were trying to ‘destabilise’ the system without any justification.
Counsel for Reliance Telecom Mukul Rohtagi complained that media reported the observations of the court during the proceedings on an earlier hearing despite a caution by the bench.
He pleaded that the contents of the status report prepared by the CBI should not be read out in the open court.
CPIL’s counsel Prashant Bhushan and Mr Swamy contended that throughout the finance ministry officials and the finance secretary were advocating for the allocation of spectrum throughout auction and Mr Chidambaram was apprised of what was going on.
“Mr Chidambaram was consistently apprised of what was going on. Till 30 November 2007 Mr Chidambaram was apprised of what Mr Raja was up to,” Mr Swamy said.
Mr Bhushan said “the officials were overruled by the finance minister (Mr Chidambaram).”
“There was tripartite meeting going on between DoT, finance ministry and the PMO as to what should be done,” he said
Mr Swamy supported Mr Bhushan’s arguments and said “well before 15 January 2008 Mr Chidambaram was aware what was going on.”
“There is a general negative sentiment prevailing in the market due to various reasons. Interest rates and fuel prices are going up. Besides, developments in the Europe are also not encouraging,” SIAM president S Sandilya told reporters
New Delhi: The Indian automobile industry today significantly lowered the passenger car sales growth forecast for 2011-12 to 2%-4% due to lower output at Maruti Suzuki because of labour issues, and higher lending rates, reports PTI.
The Society of Indian Automobile Manufacturers (SIAM) had earlier revised the sales forecast for FY11-12 downwards for the passenger cars at 10%-12% in July against 16%-18% announced at the beginning of the fiscal.
“There is a general negative sentiment prevailing in the market due to various reasons. Interest rates and fuel prices are going up. Besides, developments in the Europe are also not encouraging,” SIAM president S Sandilya told reporters here.
Besides, the labour unrest that is severely impacting productions at Maruti Suzuki India’s (MSI) Manesar plant has also affected the car sales growth of the industry, he added.
“Maruti produces and sells 50% of the market’s cars. So, any negative incidents happening at Maruti Suzuki will obviously impact the industry,” Mr Sandilya said.
In the April-September period this fiscal, domestic car sales declined by 1.36% to 9,09,283 units from 9,21,812 units in the year-ago period.
MSI’s sales in this period also fell by 11.55% to 3,90,878 units from 4,41,899 units in the same period in 2010.
The total passenger vehicles segment is now estimated to grow by 4%-6% in this fiscal compared to 10%-12% projected in July. It was at first projected to grow at 16%-18% in the beginning of this fiscal.
Utility vehicle sales is likely to surge by 9%-11% now compared to 10%-12% announced earlier.
On the total vehicles sales, SIAM revised its projections marginally upward to 11%-14% for FY11-12 from 11%-13% announced three months earlier.
Mr Sandilya, however, said India became the second fastest growing passenger vehicles market in the world with 9.90% jump in sales during January-August period. Germany topped the list with 11.20% rate.
India was followed by the US, Brazil and China with 9.30%, 7.50% and 6.05% growth, respectively.
On the commercial vehicles segment, India was the fourth fastest growing market in the world, with an increase of 15.80% in sales in January-August this year. Germany topped the chart with 23.30% growth.
UK and Brazil found berths at second and third positions with 21.10% and 16.60% growth respectively, SIAM said.
“The global economy is going through turbulence, but the Indian economy is going strong. Besides, there is a good rainfall in this year. These are some positive factors,” Mr Sandilya said, adding commodity prices and international crude prices are likely to soften in the coming months.
In a memorandum to the RBI, AIBOC has raised several questions over Dhanlaxmi Bank’s business operations
After whistleblowers raised a red flag raising questions about the operations of Dhanlaxmi Bank, the All-India Bank Officers Confederation (AIBOC) has alerted the Reserve Bank of India (RBI) regarding the bank’s wrongdoing. Specifically, it has alleged that the bank has manipulated accounts and provisioning, has a mismatch in asset-liability resources, maintains poor capital adequacy ratio and has huge dependence on call money borrowing.
It has also accused the bank for ignoring social banking and financial inclusion.
AIBOC’s Kerala committee, through a memorandum sent to the RBI, has appealed to the apex bank and the finance ministry, to initiate investigations against the bank management and asked it to merge it with any public sector bank to safeguard the interest of employees and the customers of the bank.
Speaking about the obvious mismatch in the asset-liability, it is stated in the memorandum that, “The Bank’s liquidity position is potentially dangerous with the enormous proportion of Inter Bank deposit in its deposit mix. Out of the Rs13,000 crore of deposits (that) the Bank has, around 70% are purchased funds, i.e., Inter Bank deposits (Rs1,600 crore), Certificate of Deposits (Rs2,500) crore and other ‘special-rate’ quoted deposits (at) Rs5,000 crore.”
According to the memorandum, the bank is heavily dependent on call money borrowing. “The average call money borrowing in the last one year is Rs300 crore per day. In fact, the Bank is borrowing from the call money market heavily since the last two years and is lending it with a margin in violation of the guidelines of the Reserve Bank of India.”
AIBOC says in the memorandum that the bank’s growth has be stunted with 50% fall in current deposits, from Rs1,500 crore to Rs790 crore, and sharp decline in its profit to Rs3 crore in the first quarter of 2011 from Rs55 crore in 2009. It also says, “Advances grew by 10% (Rs900 crore), but out of this, Rs550 crore are not retail loans, but “buyouts”.
The memorandum has cautioned the RBI about non-performing assets (NPAs) turning into bad debts, which would severely affect the bank. “The Bank’s capital adequacy ratio at present is touching 9%, and this can come down at any moment, in case a big loan turns (into an) NPA. The asset portfolio of the Bank is also equally daunting with more than 20% constituted by ‘buyouts’ and another 40% by corporate advances. The composition and health of these loans are not individually scrutinized and therefore have grave risk (of) further mounting of NPAs once these loans turn into bad debts for which there is every possibility.”
It further states that the bank has manipulated accounts and various provisions. “The available information is that the Bank adopted a lot of unscrupulous methods to show at least a nominal profit in the last one year. Deferring expenses like salary paid to executives, telephone, rent, ATM expenses, capitalizing revenue expenses like salary paid to staff etc are frequently practiced by the Bank.”
According to the AIBOC’s memorandum to the apex bank, Dhanlaxmi Bank recruited many new officers without uniform salary structure. “There is no policy for fixing remuneration of C to C employees. It depends on the relative bargaining strength of the new recruits. There is no transparency on the “performance linked bonus” or “joining bonus”, or “committed bonus” paid to C to C employees.”
AIBOC’s Kerala unit says, “The organizational structure has been revised umpteen times in the last 30 months. New “verticals” have come up but not stabilized because of the frequent changes. Some functions are duplicated, others neglected.”
The memorandum said that the bank has been avoiding granting loans to the priority sector such as small agricultural loans, educational loans, etc.
In fact, according to sources close to the development, AIBOC’s Kerala State Committee is holding a dharna in front of the regional office of the RBI in Thiruvananthapuram on this contentious issue.
Incidentally, according to AIBOC, there was detailed inspection by the RBI on Dhanlaxmi Bank. The apex bank, after coming out with “detailed inspection in Dhanlaxmi Bank, has come out with alarming facts about all the above and has asked the Bank to provide more than Rs100 crore towards the unaccounted expenses and provisions by debiting the net worth of the Bank.”
Dhanlaxmi Bank has refused to comment on the issue. It said that, “Like all banks, we are also regulated by the RBI and the growth is monitored by the regulator periodically. The baseless allegations are being spread by some people who are trying to spoil the image of the bank.”