In a case relating to recovery of four secret government documents from RIL’s office, the trial court has finally framed charges against V Balasubramanian, AN Sethuraman and Shankar Adawal after the high court and Supreme Court rejected petitions filed by the accused
A trial court in New Delhi has framed charges against Reliance Industries (RIL) and three of its officials, 14 years after the first information report were filed. The officials include RIL's the then group president V Balasubramanian, vice-president AN Sethuraman, and general manager (corporate affairs) Shankar Adawal. In a relief to Mukesh and Anil Ambani (who were the then managing directors of RIL), the judge said there was no material to suggest that the documents received by the accused officials reached them.
Additional sessions judge Narinder Kumar said, "Prima facie case for an offence under Section 5(2) punishable under Section 5(4) (wrongful communication) read with Section 15 of Official Secrets Act is made out against Company accused No 4 (RIL). Prima facie there is material on record to infer agreement and criminal conspiracy between Balasubramanian, Sethuraman and Adawal from the manner in which the information has been received and communicated.
"Since prima facie case is made out against them, they have to face trial for an offence punishable under Section 120 B IPC (criminal conspiracy) read with Section 5(2) punishable under Section 5(4) of Official Secrets Act," the judge ordered.
Paving the way for framing of charges against the company and its officials, the judge said, "This court finds that Reliance Industries has business interest in the field of energy, telecom, petrochemicals, textiles, etc and the above document containing particular information pertain to areas crucial to the interest of this company".
Earlier in May 2011, the Supreme Court dismissed the petitions of the three officials saying that these petitions did contain any merits.
RIL and its three officials are facing a criminal case under the Official Secrets Act over the alleged recovery of some secret documents during search of the office premises of Mr Balasubramanian, the then group president of Reliance Industries, in 1998. A criminal case was filed in 1998 by the Delhi Police against the company and its three officials for the recovery of the photostat copies of four classified documents, but later considering the sensitivity of the case, the investigation was handed over to the CBI (Central Bureau of Investigation) which registered a complaint in 2002.
According to a CBI spokesman, the secret documents were recovered from a "locked office table drawer" of the group's office located in a five-star hotel in New Delhi. "The initial searches were conducted by the Delhi Police at the Reliance offices in Hotel Le Meridien in New Delhi on 28 October 1998 during which certain important documents were seized. On the basis of those documents a case under the Official Secrets Act was registered against the three accused. The case was then handed over to the CBI which conducted raids on 13 November 1998 at six places in Delhi and Mumbai, searched the offices and residential premises of the accused and recovered some more documents," the spokesman had told media persons in 2002.
On 28 October 1998 a search of the office premises of Mr Balasubramanian led to the recovery of photocopies of four secret documents (37 pages). The first document (D-7) dated 14 September 1998 along with annexure related to the cabinet meeting on "Core Group on Economic Matters - Challenge of Economic Sanctions against India (5th meeting)". Document no. 2 (D-8) was also dated 14 September 1998. Document no 3 (D-9) was on the subject "minutes of the 37th meeting of the core group of secretaries on disinvestment" relating to meeting convened by cabinet secretary along with annexure relating to disinvestments in public sector undertakings.
Document no 4 (D-10), which was not a secret document, was a letter dated 21 September 1998 from TS Vijayaraghavan, secretary, ministry of petroleum and natural gas addressed to Javed A Chaudhary, secretary (revenue), ministry of finance. The document pertained to "proposals in respect of rationalization of customs and excise tariff rates for the hydrocarbon sector."
"Prima facie it can be said that Reliance Industries had vested interest in having the information contained in the three documents (D-7, 8 and 9) so as to know as to what was going on at the level of the government on the subjects to which they pertain, and to take appropriate steps for the benefits of the company which is an association of persons and having a juristic personality in the eye of law," the trial court judge said.
Earlier when the matter was before the trial court and the high court, RIL had contended that the CBI failed to register the complaint within the time-frame of three years and as such the trial should not have been proceeded with. However, the high court refused to accept the contention that 142 days' delay in registering the complaint could be a ground to quash the proceedings before the trial court.
It all started out with Via.com offering a name-your-price kind of scheme in India. Others like Yatra.com, Cleartrip and MakeMyTrip offered similar schemes to bargain hunters who did not care what airline they flew or the exact schedule. While you could potentially be saving money on these tickets, they are sure not worth the headache you’ll go through
The hunt for cheap flight tickets has been as old as the day when airlines moved to a dynamic pricing model and all seats on a flight stopped costing the same price. The guy sitting next to you on the flight could have paid a fraction of your ticket price.
The last couple of weeks have been a lot of conversation about "Opaque Fares". While most of us are not so confident of e-commerce in India yet, we are happy to go out there and book our air tickets via the multitude of travel portals, since it gives the power of booking in our hands as compared to the travel agents earlier.
Last year, in their bid to expand their product offerings, some sites went out to experiment with a new offering where you could buy an air ticket fitting certain parameters and you could get it for cheap as long as you were not fussy about the airline you were flying. Airlines were hand-in-glove because they would receive an upfront cash payment for a slice of their inventory, even though they had to sell cheap. Since you did not know the airline you were flying, the exact schedule of your flight before take reserving your ticket, this practice was termed as 'opaque' fares.
In the western world, this concept had taken off with Priceline and Hotwire quite a while back. Priceline accumulated all the last minute unsold inventory and gave it away to bargain hunters who did not care what airline they flew and the airlines would get some revenue for a seat which would have otherwise gone empty.
In the recent past, it all started out with an upstart site Via.com offering a name-your-price kind of scheme in India. You select your destinations, your timeslots and your price, and the site would tell you if you could buy a ticket at your price or not. You don't know the airline yet, nor the exact time of your flight, or other details like will you be flying direct or stopping at two stops on the way. Once you pay up, you'll get an email with your ticket and the exact details you need to know to board the plane.
They further took it forward with a pre-paid scheme where they went about selling Rs 2,500 vouchers to travel anywhere in India as long as the passengers were okay not to know the airline before they paid up. Via.com was followed by many a portals such as Yatra.com, Cleartrip and MakeMyTrip which offered similar schemes with anonymous airlines being sold to customers
While most players of the industry were happy to fill up those empty seats on their planes, industry leader Jet Airways called these promotions "scam fares" and refused to participate in these offers. It also asked the regulator to look into the matter and intervene to stop the practice.
Jet Airways has good reason to complain. Everytime we fly on a Rs3,000 ticket from Mumbai to Delhi, we are flying below cost of that seat on the plane. Thanks to government-backed market competition (called Air India); airfares in India have been depressed for a long while. Some airlines had finally taken the leap to hike up fares again to cut their losses after Kingfisher Airlines almost crippled to a halt. And these fares, if they became big, would just mean you go back to selling tickets at a lower price again.
Another theory, though not validated in the open, was that all the portals had paid upfront cash to buy Kingfisher Airlines seats in bulk, and now that the airline was in trouble, they wanted to sell out cheap and make the best of what they had. And hence, these special prices, under whatever name they went, were a way to sell you Kingfisher Airlines tickets which you normally wouldn't touch due to their recent issues.
Directorate General of Civil Aviation (DGCA), the aviation regulator in India, has also recently intervened in the "opaque fare" discussion, calling the practice of 'opaque fares' a violation of the regulations and issued an order to all airlines to withdraw from this practice immediately.
As I write this, some major portals have pulled out their opaque fare offers while some others are still continuing with these promotions. While you could potentially be saving money to the extent of Rs1,000-Rs1,500 or so on these tickets, they are sure not worth the headache you'll go through in case you end up being on a flight which is not to your preferences. So, buy only being aware of all the risks!
AJ writes a travel and aviation focussed blog from India at www.livefromalounge.com. You can follow him at @livefromalounge on Twitter.
SEBI tweaks Bimal Jalan Committee Report and makes a mess of it. The new rules may favour NSE management but the investors of NSE, BSE and aspirant MCX-SX feel let down
The Securities and Exchange Board of India (SEBI) has virtually junked the Bimal Jalan Committee report on key issues, without saying so. In the process, it has pushed the exchanges into a scenario where they are neither in a socialist regime (they were not-for-profit, members-only associations before demutualisation) nor fully capitalist institutions chasing profits and innovation. The hybrid model will be unworkable and like SEBI's other measures, will have the unintended consequence of slowing down change.
Ironically, while SEBI has scrapped the Jalan Committee's recommendation not to permit listing for five years, it has, in fact, ensured that the bourses are no longer attractive investments either to retail investor or institutions. Under the new rules, the stock exchanges will be mandated to transfer 25% of their profits to the Settlement Guarantee Fund (SGF) of the clearing corporation to meet contingencies and 'black swan' events. How will investors react to this? Investors invest in companies on the assumption that its management and employees will strive to maximise profits for shareholders and that their effort will be fully reflected in the stock price discovered through fair trading on the bourses. But with 25% of the profits forced to be stashed away in a SGF, would investors still be interested in exchanges and listed entities? The answer lies in the fact that the Bombay Stock Exchange (BSE) has not issued any press release expressing delight at SEBI's recommendations. The idea exposes how bureaucrats and bankers sitting on the SEBI board are clueless about the basic philosophy and mechanics of a joint stock company.
Even if the BSE and its members manage to get it listed under the new rules, valuation is hardly likely to be attractive since it will only be based on 75% of the earning potential. This will also mean that if the BSE is listed at all, it will be fully focussed on maximising revenues by working in the interest of pattern traders, speculators, algorithm traders and other high volume operators. This is already distorting price discovery, affecting retail investor who hopes for short term gains and even mutual funds in getting the best price.
Most importantly, SGF is a critical part of maintaining stability of exchange operations. Why should it be funded out profits which will fluctuate from year to year? And if MCX-SX is allowed to launch its equities segment, it may not even be profitable. Will it then not need to contribute to a Settlement Guarantee Fund? Clearly, SEBI has not thought of the implications. What is also not clear is what happens to the current mechanism of SGF, where clearing members contribute. Will this be disbanded?
As for the NSE (National Stock Exchange), it has always been reluctant to get listed even though it has accepted large institutional investors and even individuals as shareholders. With the NSE's 'professional' top management already having wangled salaries that are among the highest in the corporate world, it would hardly want to be in a situation where this pay is directly linked to performance. The near monopoly bourse is now in a happy position-even if its lists its shares, in order to provide a "market determined" exit route to investors, it can always blame the SEBI for undermining its valuation.
The irony is that SEBI has taken the bourses, which are essentially market utilities providing an efficient trading platform, and left them in a vague space that is neither a capitalist venture, focused on the bottomline, nor a not-for-profit association that bourses were in the past. NSE chairman Dr Vijay Kelkar repeatedly refers to the bourses as utilities, although the NSE itself is a hugely profitable monopoly paying top salaries to its senior management.
SEBI's attitude is probably the outcome of blindly aping the failed American model and not having the vision and depth of understanding to work on a model that suits the Indian market. The SEBI board has retained the Bimal Jalan Committee's recommendation to cap variable pay, make it payable after three years and bar stock options. But we understand that this too will only affect the BSE, not the NSE.
As for future competition, SEBI rules as cleared on Monday (2 April 2012) make the business unattractive for MCX-SX, which was seen as a potential threat to NSE's monopoly. We also learn that the battle over the permission to permit it to start equity trading is far from over. SEBI, says sources, seems all set to appeal to the Supreme Court against the Bombay High Court verdict, essentially to avoid controversy or allegations that it is favouring MCX-SX.
The upshot is that neither brokers (stakeholders in the BSE which has got de-mutualised) nor bourses are happy with SEBI's new set of rules for stock exchanges. Another expert source told us, "The new rules spelt out by SEBI will make exchanges more bureaucratic and mechanical. They will go back to being a utility without room for innovation or competition". The consequence, he says, will be the inability to attract management talent.
A leading broker could not hide his disappointment. He says, "Demutualisation of bourses was the first mistake. But we are now hoping that the exchange can get listed and we can extract some value out of our membership at a time when investors seem enthusiastic about bourses after MCX's successful listing".
He is also angry at the decision to keep brokers out of the governing board. He says, "We are tired of being treated as non-trustworthy". However, this decision is prompted by the need to avoid conflict of interest issues that could arise if brokers were on the board and exerted influence over office bearers.
SEBI's policy on Market Infrastructure Institutions (MIIs) released on Monday says, "The stock exchanges will have diversified ownership and no single investor will be allowed to hold more than 5% except the Stock Exchange, Depository, Insurance Company, Banking Company or public financial institution which may hold up to 15%". But it will be interesting to see who lines up to acquire the shareholding and at what valuation given, the peculiar hybrid SEBI has created.
(Additional reporting by Aditya Govindaraj)