While the Pune police have issued three letters in the last quarter of 2012 directing TCS to have stringent security checks while hiring employees and to tighten security of its Passport Seva Kendra, no action has been taken so far. The high court had earlier observed that TCS’s passport employees should have background checks from the Intelligence Bureau
Besides inefficiency in delivering passports in the Pune division of its Passport Seva Kendra, Tata Consultancy Services (TCS) has also come under the scanner of the police department, for not taking action on its communication to carry out the background check of its employees as also to stringently upgrade security in the premises.
Police inspector Vishwanath Ghanavat informed the members of the Pune Passport Grievance Forum (PPGF) that a letter was sent on 29 October 2012 to Arti Adapwar, manager of TCS’s Passport Seva Kendra in Pune, asking her to conduct character and background check of all of its employees. “However, TCS had completely ignored this sensitive request, at the backdrop of terrorist activities that are not unfamiliar to Pune.”
Since August 2012, Ghanvat stated that three letters were sent to Pune’s TCS office located in Mundhwa requesting it to enhance security by stringent means. This included CCTV installation, armed guards and metal detector. However, none of these safety measures are in place. This was cross-checked by the members of the PPGF who easily walked into the area where documents of passport applicants are accepted and even a relative is not allowed inside. Besides, two men wearing a blue coloured uniform were checking documents of applicants who were in queue. On asking why they did not display TCS identity cards, they said there is no need as they have uniforms. The PPGF has raised eyebrows over this casual approach of TCS in not even following the fundamental rules of security, that of giving their employees an identity card.
Ghanavat also stated that in a security audit conducted by him for the Passport Seva Kendra, the report that he submitted to the police headquarters on 7 September 2012, has recorded serious security lapses there. However, despite bringing this to the notice of Arti Adapwar, no action has been taken. PPGF members have requested copy of this report under Section 4 of the RTI Act. It has been observed that the TCS office does not even have a Public Announcement (PA) system in case they have to address the crowd waiting outside, on some matter. The manager of TCS calls the police van and addresses people by sitting in the police van and using their PA system.
Interestingly, in an order of the Allahabad High Court dated 12 April 2012 of the Lucknow Bench of PIL petitioner Kashi Prasad vs Union of India, through joint secretary of Consular Passport Services, the judge had observed and served an order stating: “During the course of hearing, the learned counsel for the petitioner referred to Annexure-3 written by one Raju PGO dated 02 August 2011 referring to some incident wherein his digital signature was used without his knowledge and also without proper processing of the application form by Tata Consultancy Services. “
“Looking to the apprehension of security risk in the process it would be appropriate that only such TCS personnel who are screened by the Intelligence Bureau or local intelligence bureau or local intelligence units after verification of their antecedents are posted to work in the Passport Seva Kendra and entrusted with a job of processing of passport application forms.
“We are also informed that some personnel engaged in the process for issuance of passports can also have access to the server of National Informatics Centre (NIC) that contains and stores information and other allied matter,” the Pune police said.
In the meanwhile, the Pune Passport Grievance Forum (PPGF) is holding a peaceful agitation in front of TCS’s Passport Seva Kendra on Monday, 11th March. PPGF has appealed to affected passport applicants and citizens to join the agitation.
Based on the study done of the inconveniences faced by passport applicants, the PPGF would be making the following demands to ministry of external affairs and TCS, on Monday:
1. The online appointment system opens only at 3.00pm and most of the applicants get the status: “650 appointments have already been booked for the day” within 3-5 minutes of their having logged in. They continue to get this status for weeks or months on end.
However, if the same applicant approaches an illegal passport agent, he gets the appointment within a day. Sometimes, passport agents themselves call up the person who has tried getting an online appointment and failed. How does the agent know that the citizen was trying through the system? Solution is that the TCS must open the appointment time for a week or month, 24x7, like it is done by the US Consulate.
2. TCS and the MEA are refusing to put the Master Service Agreement in the public domain. This will help citizens to know the responsibilities of both the agencies. In absence of this, both TCS and the MEA blame each other for the deficiency of services. The end loser is the citizen. Being a PPP (public private partnership) associate, TCS is public authority under the RTI Act and so must be answerable to the public. TCS and the MEA must put up the MSA on their respective websites. TCS runs its 24x7 citizen grievance cell (one of the mandatory commitments in the agreement) and help citizens to keep him/ her abreast of his/ her status of the passport.
3. There is a complete lack of security at TCS as well as the RPO’s office leading to a danger to the national security as passport offices are sensitive government outfits. TCS and the MEA’s passport office should immediately upgrade security and check the background of its employees.
4. Very often, police verification takes a long time and even if the verified documents are sent to the RPO’s office in time, the TCS officials take a long time to manually upload them. To date, 900 entries are still pending at Pune RPO office. Also, the status of the passport shows “awaiting police verification” even after the documents are sent by the police to the passport office. Solution is to direct TCS to increase its staff and improve its software in order to give the correct status of the passport applicant.
5. The passport applicant is made to run back to the passport office several times, on the pretext of bringing additional documents and other details. As a result, notaries that have sprouted outside the passport office for all kinds of affidavits are making a fast buck. This is also causing a delay in getting a passport. The solution is to direct the TCS and RPO to put up boards at the entrance of both the offices, listing the list of documents required to get the regular as well as tatkal passport so that there is no harassment by passport officials. Boards should also be put up, informing the time limit for issuing passport to the citizens.
6. Visitors to the passport office are made to wait in the heat and on the road with no facility for shelter, drinking water and toilets. TCS and RPO should be directed to immediately provide these facilities.
7. Courtesy should be shown by the security staff in the TCS and RPO offices as they are rude to visitors who come there.
8. The enquiry counter at the RPO’s office is open only for two hours, four times a week. The helpline numbers of TCS and RPO are generally not answered by the staff. This leads to complete confusion for the passport applicant. The solution is to ensure that helpline numbers work efficiently.
9. Both the offices of TCS and RPO have illegal agents roaming freely and even entering inside the premises of the offices. Whereas, citizens are rudely told that they can get in only with an appointment. Solution is to direct TCS and RPO not to entertain passport agents.
(Vinita Deshmukh is the consulting editor of Moneylife, an RTI activist and convener of the Pune Metro Jagruti Abhiyaan. She is the recipient of prestigious awards like the Statesman Award for Rural Reporting which she won twice in 1998 and 2005 and the Chameli Devi Jain award for outstanding media person for her investigation series on Dow Chemicals. She co-authored the book “To The Last Bullet - The Inspiring Story of A Braveheart - Ashok Kamte” with Vinita Kamte and is the author of “The Mighty Fall”.)
According to the version given by the prison authorities, the 33-year-old accused hanged himself with the help of his clothes from the grills of his cell in Jail No 3 at around 5.00am
Ram Singh, the prime accused in the 16th December gang-rape of a 23-year-old Delhi girl, allegedly committed suicide in a high-security cell in Tihar Jail early this morning.
According to the version given by the prison authorities, the 33-year-old accused hanged himself with the help of his clothes from the grills of his cell in Jail No 3 at around 5.00am.
“There is already an inquiry which has been ordered by Tihar Jail on suicide of the main accused. We are enquiring into the matter,” RPN Singh, minister of state for home affairs, said.
“Singh was not alone in the cell. Other inmates were present and a guard was also posted. But nobody came to know about it. Around 5.00am he was found hanging,” a senior jail official said.
Singh, prone to violent behaviour and mood swings, had suicidal tendencies and was under “suicide watch,” the official said.
The accused, who was to be produced before court for its daily hearing, was rushed to the jail hospital where he was declared brought dead. His body will be taken to Deen Dayal Upadhyay Hospital for post mortem.
Forensic experts have visited the jail premises to collect samples.
Mamata Sharma, National Women’s Commission Chairperson, raised questions about the functioning of Tihar Jail, saying it was “shocking” that the administration could not protect the undertrial and demanded an inquiry.
Former Tihar director general Kiran Bedi said only an inquiry will tell under what the special watch was he and what happened to that watch. “How did this man give this watch a slip? I think we need to wait for the inquiry,” she said.
Sources said he was under depression for the past couple of days and last evening, he even did not have food.
Singh was arrested a day after the 16th December incident from near his home in RK Puram. His brother Mukesh is also an accused in the case along with four others.
The girl was raped in the bus by Singh and his five associates, including a minor, in south Delhi after brutally beating her and also her male friend. The girl died in a Singapore hospital on 29th December.
Singh was the driver of the bus in which the girl was raped. His brother was driving the bus when the girl was sexually assaulted allegedly by them.
Although the government’s efforts have not been rewarded with either inflation or a healthy economy, it has resulted in the highest sovereign debt in the world at a whopping 200% of GDP. The only reason why Japan is immune from bond vigilantes is because most of the debt is held by locals at home
It appears that Japan is on a roll. Since the election of Abe Shinzo last fall the Japanese stock market has risen by 41% since last November. As the market has risen, the Japanese yen has fallen. Traders have knocked 15% off its value compared to the dollar. What ignited this change? Oddly enough, more of the same: Abe promised more free money and stimulus. He has proposed one of the largest stimulus packages in history. He has also appointed Haruhiko Kuroda an advocate of unorthodox monetary policies to head the Bank of Japan. The process is supposed to create inflation and end 20 years of deflation.
The fly in the ointment is that this programme is not really all that new. Various Japanese governments have been borrowing money to stimulate their economy for more than a decade. During that period the economy has never grown faster than 2% and usually has a negative quarter once a year. Before Abe took office, Japan was in the midst of its fifth recession in 15 years. The market has never risen above 18,000—less than half its 1990 high of 40,000. The recent run up is still less than a third of its all time high. Although the government’s efforts have not been rewarded with either inflation or a healthy economy, it has resulted in the highest sovereign debt in the world at a whopping 200% of GDP (gross domestic product). The only reason why Japan is immune from bond vigilantes is because most of the debt is held by locals at home.
Apparently the failure of the policy in the past does not mean that it should not be tried again. In fact, the plan of continued ultra loose monetary policy is imitated and admired. According to the president of the US Federal Reserve Bank of Chicago, Charles Evans, the reason it did not work was that there was not enough of it. According to Mr Evans the worry is that accommodative policies might be taken away too early: "It is the spectre of repeating the Japanese experience that now keeps me up at night.” The obvious question is after 20 years, what is early and what is enough?
But politicians in all countries love the idea of free money. It seems to boost equity markets and carry few risks. When there is at least the illusion of economic growth and stability, politicians in many countries do not feel the need to do anything. We saw in Europe that the momentum for structural reform exists only when it appears that there is the possibility of a collapse. Without market discipline policy makers only congratulate themselves on a job well done and do nothing.
This is a real problem with the issue of bankruptcy. It is a fundamental tenet of capitalism that bad companies need to fail. But failure is anything but pleasant for the people involved. Bankruptcy hurts the owners or shareholders, management and employees. All of these people lose money and jobs. Generally, the people who benefit from the process are the creditors, banks and bond holders, the people who supplied the loans and the credit in the first place.
Bankruptcy suffers from a fatal flaw. There are usually more and better organized shareholders, owners, managers and employees than there are banks, depositors, creditors, and bondholders. So the political power usually ends up with the former rather than the latter. Often even the banks join the constituency against bankruptcy. Bankruptcy forces them to recognize a loss that could conveniently be rolled over. The result is that governments and central banks will often do anything and everything to prevent bankruptcy.
In developed rule-based countries like the US, this is generally not a problem. While it is true that the Federal Reserve, Bank of England and the European Central Bank have been doing everything in their power to keep marginal companies afloat by providing an endless supply of cheap money; their authority does not extend to the bankruptcy courts.
In the US, these have been quite successful. During more placid economic times in 2008 there were 21,000 bankruptcies in the US. Not surprisingly these rose to 61,000 in 2009 at the height of the recession and have since fallen to 42,000. In contrast, the relationship based Japan, companies hardly go bankrupt. In 2007 they had only 1,100. This increased a bit in 2009 to 1,500 and decreased to 900 last year. The same problem exists in Europe. The northern more rule based countries had relatively high rates of bankruptcy compared to the more relationship based systems in southern Europe. In Luxembourg and Denmark, they had 316 and 182 bankruptcies per 10,000 businesses respectively. In Greece and Spain, the numbers were five and 18.
In emerging markets, bankruptcies that follow a legal process almost do not exist. In Brazil, for example, insolvency takes four years and recovers only 15% of the claims. India takes a little longer but recovers a bit more. It takes 4.3 years for a bankruptcy to wind its way through Indian courts but creditors get about 25% of claims. The OECD average is 1.7 years with a recovery rate of 70%.
In other countries like the UAE, insolvency and even bouncing a cheque are considered crimes. A single bounced cheque can result in a three year prison sentence. Whether it is a crime or if a legal process does not exist, often the only way to go bankrupt is to just leave the country. In some countries this has become institutionalized. Criminal gangs are hired by nervous creditors to wipe out all of the assets before other creditors know about a company’s financial problems.
In China private firms usually just shut down, but state-owned firms have developed the process of managed insolvency to a high art. Insolvency though is really not the right word, because the companies never really shut down.
According to the World Bank, more than one in four Chinese state firms lose money. Many of these firms are owned by local governments. These governments are not likely to see both their investment and the largest local employer go under. So they find ways to keep them afloat.
One example is Shandong Helong, a manufacturer of rayon and other fibres for clothing. Shandong is located in the city of Weifang which owns 16% of the firm. During better times, the company, like many other state firms, moved into other lines of speculative businesses often real estate. Shandong was no exception. It overextended itself in real estate and cargo port development. The increase in commodities prices for its fibres added to its woes.
In order to make up some of its losses it borrowed from a state-owned bank. Some of these loans to the tune of 1.7 billion yuan ($272 million) were guaranteed by Weifang. But these loans did not prove sufficient, so it took advantage of some of the recent reforms and borrowed $60 million in commercial paper from investors. When the firm continued to lose money, these loans became questionable. Defaulting on a state-owned bank loans is easier than defaulting on commercial paper. Unlike state-owned banks, investors in the commercial paper might cause social unrest. Besides it is hard for banks to enforce their claims. These claims have to be enforced in the courts of Weifang, which are not about to bring judgment against a local firm. So the holders of the commercial paper were paid and bank loans in the amount of 919 million yuan ($147 million) were ignored.
Some of these managed bankruptcies can go on for years. The state-owned firm Huludao Zinc Industry (HZI) started losing money in 1998. Part of the problem was that the factory had huge social costs. To get around this problem in 2002 HZI was stripped of its debts. The debts were placed in Huludao Nonferrous Metals Group (HMNG) in exchange for a controlling interest in HZI.
As a state-owned business HMNG was able to access loans from state-owned banks. Although it lost 700 million yuan ($112 million) between 2003 and 2005, it was still able to get loans worth 4.5 billion yuan ($720 million) from the banks plus a dividend of another billion yuan ($160 million) from its subsidiary HZI which was profitable at that time. Sadly by 2007 HZI’s days of making money ended.
To solve this problem, the Chinese relied on a favourite tactic. They merged the money losing companies HMNG and its subsidiary HZI with a stronger and larger firm, in this case Metallurgical Corporation of China. Both companies were relieved of their debts and listed, but the listing did not make them profitable. Between 2007 and 2008, HZI amassed another 1.6 billion yuan ($256 million) worth of losses. Despite its terrible balance sheet, it’s was still able to borrow another 1 billion ($160 million) and its immediate parent HMNG was able to guarantee 3 billion yuan of its subsidiary’s HZI debt.
The debts came due last September when MCC announced that its two subsidiaries were in deep trouble. HMNG had defaulted on a one billion yuan loan and it had guaranteed 90% of a 2.5 billion yuan overdue loan of HZI. The punch-line is that after the announcement MCC shares dropped 11% while the shares of its partially-owned subsidiaries HMNG and HZI rose!
Chinese investors, like their American counterparts, all assume that the government will bail them out. In this strange world good news is bad, because it means that government money might stop flowing. While bad news is good because the government will step in. The result of this distortion is that the economy loses efficiency. Money gets lent to the most inefficient of firms and is withheld from younger and more entrepreneurial companies. The rotten firms lose money and can’t hire, so employment gets stuck. Without constant signals as to which firms are good and which firms are bad, information within the market is corrupted which furthers the distortion. The end is quite predictable. Either continued recession as in Europe, sub-par growth the US and declining growth in China. So eventually, by preventing the destruction of capitalism everyone turns Japanese.
(William Gamble is president of Emerging Market Strategies. An international lawyer and economist, he developed his theories beginning with his first hand experience and business dealings in the Russia starting in 1993. Mr Gamble holds two graduate law degrees. He was educated at Institute D'Etudes Politique, Trinity College, University of Miami School of Law, and University of Virginia Darden Graduate School of Business Administration. He was a member of the bar in three states, over four different federal courts and has spoken four languages.)