World
Whistle-blower Hears an Echo
It pays to keep your mouth shut
 
At the end of this piece, one may well ask the question, “Whom does one trust?” If one feels that the police are to be avoided, by the innocent and the not-so-innocent, there is no misgiving. Worse, any involvement with the cops, outside one’s constitutional duties, is fraught with danger. A Gujarati saying goes thus: ‘doorthi doonger ralyamna’. It means that mountains are best seen from afar. 
 
There are clauses, in almost every Romanesque form of law, against self-condemning and self-convicting evidence. In short, it pays to keep your mouth shut. We have invalidity of confessions, except before designated magistrates. And even then, a judicial authority will ask for concrete evidence. Why? We will touch on that at some later date. Right now, we see the hazards of hobnobbing with the cops. Invitation to danger!
 
One hears of informers. In local parlance, they are called, ‘khabris’. They are the ones who pass on the ‘aaj-ki-taaji’ news to the cops. Since no one does it for free, neck-in-noose being the aftermath, it requires compensation. Payment in cash? If funds permit and accounting is possible. Otherwise, the modus operandi is implied blackmail: arm-twisting, threats, pressures on family members or worse. To the honest citizen, it may seem fair play. Is it? 
No country will have such a system as open policy. It flies in the face of democratic institutions, governed by the rule of law. Yet, it exists almost everywhere; and the cops are ingenious. They go after the soft underbelly. 
 
Zaraukas was an informer for the United States Fish and Wildlife Service (FWS). His brief was to tell-tale on smuggling of contraband into the USA. The operative words being, “… into the USA.” Cross-border stuff, not native transport. He was persuaded to be the eyes and ears of the FWS. He lived in Maine, in the north-east of America. A border state, it shares a common boundary with Canada. And therein lies the rub. 
 
One bad apple spoils the others. More infectious than AIDS or Zika or Ebola, the virus of monetary greed took hold of Zaraukas. Proximity to easy cash, and the presumed shelter of being hand-in-glove with the law enforcement agencies, put our man over the line. This is how it all ended. The FWS men met Zaraukas at the Café Vivaldi. Prophetic name for a man about to sing. No opera star, Zaraukas realised that the meeting was a trap. Prevarication seemed in order. Was he there to inform or be interrogated? He was arrested on charges of smuggling and allied violations. The matter went to trial. He was convicted. He appealed.
 
Americans are, correctly, fond of their Constitution, and also in quoting its amendments. In over 200 years, they have had 27 amendments. (By contrast, we have had almost two a year!) The Yanks are especially fond of the first and the fifth amendment and rely on them incessantly. Zaraukas ‘… took the Fifth’, American lingo for relying on the law against incriminating oneself. He complained that he had a right to remain silent and the jury was prejudiced against him for that very fundamental right. 
 
You be the judge. Would you allow his appeal? Or dismiss it?
 
After some convoluted reasoning, the judges kept Zaraukas locked up for 33 months. Guilty, as charged. But the questions that were never asked, raised or thought about were these: Did the authorities suspect Zaraukas of smuggling and take him on as a khabri in order to trap him? 
 
Most informers have their problems with the police; otherwise, they would not take the risk. Did his closeness to a thriving trade, suck him in? His claim to have dealt in non-imported stuff was nullified by his emails and the volume of business he had conducted. Yet, he was not caught with the goods at the border, trafficking and transport being two different things. They were hidden in his home. Above all, was the jury prejudiced by the prosecution harping on Zaraukas insisting on keeping quiet? The judges remained unaffected by his pleas.
 
Whistle-blowing is a hazardous occupation. Zaraukas was lucky. In India, one pays with one’s life. Khabar (information) and kabar (grave) seem synonymous. Adjacent plots? 

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Bank consolidation, a positive development in the long term
Chennai : Global credit rating agency Fitch Ratings on Thursday said a consolidated Indian banking structure would be a positive development in the long term.
 
"We believe that consolidation coupled with higher capital requirements and governance reforms would position the banking system better in support of a more open and higher-growth economy," Fitch Ratings said in a statement.
 
According to the agency, more stable banking systems tend to be structured around a number of large "pillar" banking groups.
 
"These large banks in a consolidated banking system enjoy scale benefits leading to better diversification of risks and stronger overall profitability contributing to higher credit ratings," the statement added.
 
The agency said the financial systems would benefit from more banks of a similar size to State Bank of India (SBI).
 
"The system is quite fragmented at present, with around 50 domestic banks - with PSB's (public sector bank) accounting for around a 70 percent asset share," Fitch Ratings said.
 
According to Fitch Ratings, SBI has performed much better than its PSB peers through this credit cycle, thanks in part to greater scale benefits which enhance pricing power from a funding perspective and diversification.
 
SBI has stronger capital ratios and is better positioned to absorb the asset-quality issues that have plagued the sector.
 
Agreeing on implementation challenges during the consolidation process, Fitch Ratings said the long-term benefits far outweigh short-term challenges that tend to be associated with a consolidation process that is forced on the sector.
 
However, notwithstanding the talk about potential consolidation, the need to address the PSB's asset quality and potential capital shortfalls are the more immediate issues that need to be addressed.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Nifty, Sensex getting overbought – Wednesday closing report
Rally has been on lower volumes
 
We had mentioned in Tuesday’s closing report that Nifty, Sensex had hit a resistance but as long as Nifty does not dip below 7,350, bulls are safe. The major indices of the Indian markets were on a minor rally and the indices closed with gains of around 0.6% over Tuesday’s close. 
 
 
The Sensex closed in the green for the sixth consecutive day on Wednesday and Nifty closed above its crucial psychological level of 7,500, powered by buying in capital goods, realty, power and banking shares.  In the early part of the day, there was profit taking in metal stocks after last week's rally. However, late buying in blue-chip stocks such as Reliance Industries, Larsen & Toubro, Infosys and HDFC Bank helped the indices recover from the day’s lows. For about a week now, the investors in the Indian stock markets appear to have been receptive to FM Jaitley on his budget proposals, and the major indices have been on an upswing.
 
The Supreme Court on Wednesday issued notice to beleaguered liquor baron Vijay Mallya on a plea by a consortium of 17 banks led by the SBI seeking his personal appearance before it along with his passport as it was told that Mallya has already left the country. The Supreme Court case is making waves in the banking industry, which is over-burdened with non-performing assets, due to default in repayment by many borrowers. Bank Nifty rose 0.88% on the NSE to close at 15,279.05.
 
In other news of severe action being taken in the banking industry, the Central Bureau of Investigation (CBI) had registered a case against five officials from Syndicate Bank, a CA, three private people and others on charges of causing a loss of Rs1,000 crore to the bank by discounting of fake cheques and bills against fake insurance policies and overdraft limits against non-existent policies. 
 
With the acquisition of Pivavav Defende formally in its fold, Anil Ambani-led Reliance Group is eyeing a sizeable share in the potential $60-billion pie of the Indian and overseas defence-related market where it now has a presence, sources said. Towards this, the government has already approved 12 industrial licenses for Reliance Defence, a subsidiary of Reliance Infrastructure for the manufacture of a wide range of equipment required by the armed forces in India and abroad. Listing the potential, sources said in the aerospace segment, where Reliance Group has a nod for military aircraft and choppers, the potential is Rs.9,000 crore in amphibious aircraft for Indian Navy, light choppers worth Rs.20,000 crore and medium-to-heavy choppers worth Rs.50,000 crore. Reliance Infrastructure shares closed at Rs515.60, up 6.94% on the BSE.
 
Crompton Greaves will sell its power business overseas to a US private equity fund for an enterprise value of 115 million euros, the company said in a regulatory filing on Wednesday. The statement said the company will sell its European, North American and Indonesian power transmission businesses to the US private equity fund, First Reserve International Ltd. The company manufactures fans, air coolers and power transmission equipment. Crompton Greaves shares closed at Rs151.85, up 8.81% on the BSE.
 
Tata Power Renewable Energy Ltd (TPREL), an arm of Tata Power, has inked a share purchase agreement with Indo Rama Renewables Ltd (IRRL) to acquire 30 MW wind farm, the company announced on Wednesday. Indo Rama Renewables Jath Limited (IRRJL), a 100% subsidiary of IRRL, has a 30 MW wind farm in Sangli district of Maharashtra. The transaction is expected to be consummated within the next few weeks, TPREL said in a statement. Tata Power shares closed at Rs58.85, up 0.09% on the BSE.
 
Market regulator Securities and Exchange Board of India (SEBI) on Tuesday finally held that Reliance Petroinvestments Ltd is not guilty of insider trading in respect of Indian Petrochemicals Corporation Ltd (IPCL). IPCL was merged with Reliance Industries Ltd (RIL), after it was acquired by the latter.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 

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