Aug

27

Sports ministry toys with the meaning of sports

August 27, 2009 posted by indiatime | 5 Comments

India’s Youth Affairs and Sports ministry has now officially ruled that Formula 1 racing or F1 is not sports. The ministry’s ruling came in response to a private promoter’s request for about $36 million remittance for a license fee payment to the Formula 1 admin body. “…The proposed F1 race does not satisfy conditions which focus on human endeavour for excelling in competition with others, keeping in view the whole sports movement from Olympics downwards…”, ruled the sports ministry. A spokesman for the ministry, however, clarified the ministry’s stand, adding “….This project is absolutely beyond the realm of the common man. We expressed our inability to consider it…”.

The JPSK sports, floated by a private venture and officially and secretly backed by the Indian Olympic Association, had been closing in on the issue with their partnership with the UP chief minister Mayawati. So Mayawati, last year, created a special economic zone (SEZ) for her business partners in F1 racing, slating 2500 acres of prime land for the venture. But the differences between the ruling Congress and Mayawati’s BSP party, turned into a red flag for the F1 project. The Indian Olympic Association, has been controlled and ruled for years, by Congress party loyalist Suresh Kalmadi, whose connections to the party headquarters seem to have come up short for now.

Cricket, India’s biggest business (ahead of outsourcing), biggest religion (ahead of Hinduism) and biggest entertainment (ahead of Bollywood) and biggest sports (ahead of itself) is already beyond neck deep in politics, with the state and central bodies completely dominated and under the whim of powerful politicians. It wasn’t so all the time, however. It took Indian politicians a while to figure out the money equations involved in the sports entertainment industry. But now that they have wisened up, their eyes are on the other big prize in sports - the business of racing. The real reason Formula 1 racing isn’t getting a jump start is not about whether it is sports or entertainment. It is purely about which political players stand to make the most money out of it. So until that decision is made, the bureaucratic wordsmiths in the government will keep coming up with ways to rain on F1’s starting lineup in India.

When does a sport stop being a sport? When does it become ‘entertainment’? And at what point does the entertaining sport become a business? Looks like those questions will best be answered once all the business interests involved have been assured of their take in the matter.

Jun

20

Fast, industrious and innovative

June 20, 2009 posted by indiatime | 3 Comments

With a week, back to back, yet another new car gets introduced to the Indian market. Last week it was Honda Jazz. This week it is Fiat’s Grande Punto. The automobile market, already overflowing the infrastructural restraints, is about to explode even more within the next few years, as India is seen as an especially big and emerging market for cars.

But much more exciting than that, is a story about student hobbyists in India, designing and building new cars. All over India, small groups of students from local engineering colleges seem to be getting into the act. RV College of Engineering in Bangalore, MM college of Engineering in Ambala, Amity College of Engineering in Delhi, have recently produced students who have designed, produced and built model cars that could almost be considered roadworthy. Almost.

Earlier this year, Sramana Mitra wrote in the Forbes about the ‘big change’ in the Indian mindset whereby ’secure servitude’ in working with the government was replaced by the newly growing outsourcing servitude, stemming the tide of Indian innovation in the bud. A few years ago, in a series of detailed articles, Arindam Banerji wrote about India’s innovation hopes and obstacles, outlining the disruptive ways innovation happens or doesn’t in India.

One good thing about the car designing hobbyists is that it doesn’t take much to keep a young student interested in designing cars. It’s much, much harder to keep the students interested in some basic research that can cure a disease a hundred years later or work on something that has no immediate rewards or satisfactions. And although so far the only reward seems to be a good job offer at some automotive company, a little extra effort and a little extra mile can probably go a long way for some of these folks who are venturing out of the ordinary rigors of education.

It used to be that one would have to be a prime minister’s or an industrialist’s son to launch a car company in India. Not any more, hopefully.

Jun

8

Move over Bernard Madoff, the now famous 50-billion dollar Ponzi fraudster from United States. Ahmedabad’s Manbai Rathod, a 60-year illiterate woman, is now turning out to be the brain behind a smarter financial scam, a scheme that duped tens of thousands all across India. Whereas Madoff promised a steady 10%-plus return, Manbai Rathod and her nephew promised a whopping 300% return over investment. And unlike Madoff, the Indian scamsters told investors to come back and collect their tripled wealth in days or weeks. What’s more, they delivered. For a while, that is.

Manbai Rathod and her nephew Ashok Jadeja are now the prime accused behind an investment scam that is said to have reached incredible proportions. Says The Times of the fraudulent scheme that lured many people across India,

…While some pawned jewellery and valuables, others halted construction of their dream house, some took a large sum on loan while others cheated on their husbands to lay their hands on some money….

The ‘money-tripling’ scheme initially targeted specific communities, Chharas and Sansis, promising them unimaginable riches. People from these communities were told that Sikodar Goddess (Sikodar Devi Mata) had blessed one Ashok Jadeja who was now willing to share the secret with the people from these communities. Soon, tipsters tipped the scale with people within and from outside these communities taking the goddess’s blessings way too seriously and handing over their bank accounts. With promises of their money doubling, tripling and quadrupling, gullibles all across the country gave in to their greed, pouring everything they had into Ashok Jadeja’s investment fund. The skeptics saw their neighbors doubling and tripling their monies in weeks and they too then, turned eager gullibles, pawning their smarts for the moneymaking opportunity of a lifetime.

Jadeja’s scheme was much simpler than his Wall Street counterparts, however. Jadeja and his wife sat outside a temple and financial devotees lined up and handed him their life savings. The devotees then came back after a few days to collect their now-doubled or tripled wealth. The easy money-tripling scheme spread like wildfire across many Indian states, from the western shores of Gujarat all the way to the eastern islands of Andaman and Nicobar, including Rajasthan, Maharashtra, Madhya Pradesh, Delhi, Uttar Pradesh, and Himachal Pradesh. Investors from Pakistan got into the act as well, expanding Jadeja’s reach beyond India’s borders.

Those smart-alecs who actually did manage to double their money and did not reinvest back into the scam, their riches will soon be confiscated by India’s police who are now going through fraudster Jadeja’s lists.

You would think all those devotees and victims who succumbed to the Sikodar Goddess financial scandal, would now be crying prayers to Goddess Kali, hoping that the famed demon-killer vanquish Rathod, Jadeja and their buddies. Instead, many of the scam victims - men, women and children, recently attempted mass suicide by sleeping on the railway tracks.

Jun

5

Richest Indians in American towns

June 5, 2009 posted by indiatime | 6 Comments

In his new book, ‘The Richest Man in Town’, W. Randall Jones, the founder of the financial lifestyle magazine Worth, writes about the richest individuals in 100 American towns. The book looks only at the richest person in a particular town, not the second or the third-richest. So some very rich individuals have been left out, just because there was a richer individual living in the same town.

Researching all these successful individuals, Jones found 12 common traits, attributes he calls his 12 commandments of wealth :

1. Don’t seek money for money’s sake
2. Find your perfect niche
3. Be your own boss
4. Get addicted to ambition
5. Be early
6. Execute or get executed
7. Fail so you can succeed
8. Location doesn’t matter
9. Don’t compromise your morals
10. Embrace selling
11. Learn from the best and the worst
12. Never retire

There are three Indian-Americans who figure in this unique book. They are not the richest Indian in the United States, but are surely the richest in the towns they live in. And they definitely seem to be practising the commandments of wealth common to this elite group.

Brothers Karthik and Guha Bala are the richest people in their town of Albany, NY. Co-founders of Vicarious Visions, a video-game powerhouse, they have created over 100 video games, selling more than 20 million units. The Bala brothers founded their company while in high school, a childhood dream that began in their family basement.

The other richest Indian in an American town is Bharat Desai, the richest man in two different towns - Fisher Island, Florida and Troy, Michigan. With a net worth of close to $2 billion, Desai is the founder of Syntel, a company he founded about 30 years ago, now said to be employing a workforce of almost 12,000. Desai’s company provides IT services to corporations, and has a huge workforce that is based out of India.

May

26

The payoff of stability

May 26, 2009 posted by indiatime | 4 Comments

With Indians electing to elect the same government, the word about India’s political stability is out in the international investor community who now believe India to be one of the few bright spots to make a fast buck. It’s not that there aren’t any other bright spots at the end of the recession tunnel elsewhere. But with an impressive 28% registered returns for the month of May so far, India has made an impressive showing which was almost 4 times that of China and about 50 times some of developed markets around the world.

Some analysts are calling it the beginning of the super bull market for India. Most global fund managers who have put in their trust in the upswing of the world markets for later this year, are betting on India’s recent upsurge that began a few weeks before the national elections and has continued in the wake of the political stability following it.

Also helping India are the numbers showing its continuing leadership in the offshore arena, with the competing countries only managing to cut a very tiny slice of India’s share. And although some investors continue to worry about of the uncertainty over currency exchange rates, India’s upswing is expected to drive large chunks of investments towards the Indian market, at least until some of the other major markets do not start showing healthier returns.

So make hay while the sun shines folks. Barring an unforeseen crisis, the next few months promise to make the India investor a lot of money. And knowing that the global funds are impatient for some solid returns, this window of time, at least the next few months, might mean real happy days for India Inc.

Apr

29

Accidental murder in Mumbai

April 29, 2009 posted by indiatime | 2 Comments

The India Inc. is ripe with speculations and rumors about a foiled murder plot that would almost have killed one of the richest in the world. Anil Ambani, the younger one of the Ambani duo and a multi-billionaire several times over, must be grateful to a small-time technician at the Air Works office that maintained Ambani’s private chopper. That small time technician named Bharat Borge, found an open fuel cap and sand and pebbles inside the oil tank of the chopper’s gearbox, a certain sign of industrial sabotage.

Bharat Borge surely saved Mr. Ambani’s life by finding the sand sabotage, but himself met dust yesterday, and was found dead lying on Mumbai’s railway tracks. As is routine in such cases, the local government and law enforcement, who typically move around with their feet in their mouths, were quick to draw stupid and politically convenient conclusions, declaring the chopper sabotage not to be a case of corporate rivalry and maintaining Borge’s death to be an accident and a suicide at the same time.

Of course there was a suicide note found on the body of Mr. Borge, but the note failed to mention why he killed himself, instead mentioning that some people from Mr. Ambani’s Reliance company had met with him the day before. No way of knowing if those people who met and probably threatened Bharat Borge were indeed representing the company they said they were from. The suicide note also mentioned Borge’s discomfort after witnessing how the Mumbai police treated another witness in the case. That the Indian police can cause a little discomfort to their witnesses is an old fact that few would dispute. But it seems unlikely that a man who seemingly feared for his life would just go ahead and take it himself.

Did Bharat Borge know more than what he already talked about before his death? He almost certainly did. And he most certainly would have come into a substantial cash reward from Reliance and would have had his 15 minutes of fame, had their not been a vested interest involved on behalf of the saboteurs who hatched to harm Mr. Ambani.

For now, Anil Ambani’s associates have alleged that his rivals might have wanted to kill him. That would eliminate most of India’s 1 billion population, leaving only a handful of suspects. Not surprizingly, it is rather unlikely that any of those suspects would ever need to fear the local law enforcement.

What is evident so far is the habitually tepid and ineffective response of the Indian police that has, yet again, failed to protect the man in the middle of an important investigation - this time the most important industrial sabotage investigations in India. There is nothing accidental about a man in the news lying on train tracks. And there is nothing accidental about a diligent technician finding pebbles inside the fuel tank. The only accidental thing in this entire story is the accidental politicians and accidental police agencies of India - people who have no business to be governing or policing, people who have no idea how to investigate and people who routinely, willingly, unhesitatingly, and shamelessly drop the ball in every important investigation that matters to this country. These people live in a lala land where every incident, no matter how serious, is another accident.

Apr

19

Our own peerless playrights

April 19, 2009 posted by indiatime | 1 Comment

Meenakshi Kumar writes today about ‘hamara Shakespeare’, the English genius whose writings are making it into India’s tribal culture and becoming a part of the Indian literary and cultural scene. In the northeastern hills of Mizoram, in the rich theaters of the south, in Bollywood’s repertoire, and everywhere, Shakespeare can easily be found writing scripts for lovers of great stories and plots.

But India’s rich tradition of theater and drama dates much further back, to at least several hundred years earlier, and probably a few millenia. Manohar Varadpande, a noted scholar, has traced it back to the ‘Natyaveda’ - the fifth veda - written by God Brahma himself. Says Varadpande, “The Gods created it to reflect all future actions of the people and to be the meeting place for sciences and arts and to become the giver of wealth, fame, good counsel and knowledge of one’s duty’.

So Brahma the creator took the text from the Rigveda, the music from the Samveda, acting from the Yajurveda and the aesthetic from the Atharvaveda, and wrote a fifth one - the natyaveda. Eventually, another wise man, Bharat Muni rewrote the natyaveda into the earliest available treatise on the subject - the Natyashastra, written a few hundreds years B.C.

Taking hint, many dramatists and writers and poets filled the void in the field of fine arts. Thankfully, their works of art exist to day, and are revered and read around the world. Shudraka’s Mrichhakatikam or The Little Clay Cart is a classic written back in 2nd century, discussing romance between a poor lover and a royal dancer, complicated by a wealthier pursuer in the king’s court. And then came Kalidasa, Shakespeare’s baap (as in a daddy or a grand daddy) from the 4th century, who wrote hauntingly moving pieces of romantic words, including Malawikagnimitram, Vikramoravsheeyam, and of course, Meghadoot - the masterly woven tale about lover’s wait.

Shakespeare would not be born for another millenium. I, too, am a great fan of Shakespeare - the bard. But no offense, Indian culture kicked some major ass back in the 1st millenium before India became the target for outside invaders. Shakespeare was lucky not to have his works burnt by Nazi invaders and Britain was lucky to have a friend from the west who was a good friend in need. India fought the invaders alone and the invaders got plenty of help from inside as well. Because divisiveness, you see, has been a part of Indian culture long before fine arts and natyaveda made it to the scene.

Mar

23

Fordability and affordability

March 23, 2009 posted by indiatime | 11 Comments

In another hour or so, the Nano, Tata’s people’s car, the $2000 automotive wonder, opens for sale at the Taj Hotel in Mumbai. For the Tatas to pull this off is a remarkable testament to the Indian auto giant and its owner’s drive to make yet another mark on the industry that Tatas have virtually owned in India for a good part of the last hundred years. In achieving that mark, Tatas had to clear two major hurdles - Fordability and affordability.

Fordability, if one were to define it, is the ability of an industry to bring the right people to the table, use the right tols and materials, innovate and revolutionize the past ways of working, and forge new methods of producing quality goods in mass quantities. Henry Ford did just that exactly a hundred years ago, revolutionizing the modern world with his Tin Lizzie.

Affordability, if one were to define it in Nanospeak, would be the car’s Rs. 1 Lakh price tag. With the ongoing global economic meltdown, amidst the job losses and the stock market woes, for a company to manage to introduce an inexpensive new car to the first time buyers, brings hope not just to those first time buyers, but to the suppliers and vendors and all the related industries who will be hoping for a turnaround in their fortunes, pinning their big fortunes on the little Nano.

There’s no question that the little Nano has miles to go before Tatas and everyone around them can rest and sleep. There are questions that won’t be answered until the first batch of consumer feedback hits the tarmac. For Nano’s most affordable non-AC version to hit the market right at the beginning of the hot Indian summer can cool some consumers’ enthusiasm. On the other hand, many consumers might be looking at it as not their first but their second family car, still an uncommon phenomenon in India. Then there are questions of burden on India’s already inadequate infrastructure, worsening environmental consequences in the already polluted metros, and fear of additional accidents to the already incredibly rising numbers on India’s crowded roads and highways.

Still, all those things notwithstanding, today is a special day for the Tatas. Like its founder Jamsetji Tata, the pioneer of the Tata group, who was born in Navsari, Gujarat and died in Bauheim, Germany; the little Nano is now expected to travel globally, cheerlead India’s industrial prowess, and jumpstart the new century’s joyride for India’s erstwhile profit corporation. For India Inc, that nanoramic transformation from Navsari to Nanover is a justifiably proud moment, no matter what the little devil has in store for us.

Mar

13

Kakodkar dares IITs to innovate

March 13, 2009 posted by indiatime | 2 Comments

Holi, the fantastic festival of colors, passed us by the day before, amidst all the so-called dark clouds of economic crisis and the security concerns and the political opportunism. I remember how life was once a happy hopping memory, from one festival to the next, a never-ending fun-filled gathering of friends and family, so vividly colorful & noisy.

Yesterday, speaking at the 50th anniversary of the Mumbai IIT campus, Anil Kakodkar, India’s eminent nuclear scientist, asked the country’s foremost learning place to provide a holistic learning experience. “…Can this be the institute where ideas germinate and take shape? Can you play a crucial role in the country’s decision-making process….”, he asked.

Kakodkar’s words about holistic learning, make one think of learning as a fun-filled gathering of ideas and experiments and thoughts and debates. The reason Kakodkar is throwing a challenge at and daring India’s most famous technical school to innovate is because IIT, the powerhouse and the showcase of India’s technical prowess has underdelivered. Majority of its alumni have done great for themselves and some have done way better than those that have done merely well. But IIT isn’t MIT yet and after almost 50 years, isn’t anywhere close to being the leading innovation factory that many once thought it would be.

IITians probably need to come out of their campuses and start building and innovating for the rest of us, who weren’t born as bright. On the 50th anniversary of the Mumbai IIT campus, Kakodkar’s message is a reminder that India once used to be the place of open universities and brilliant gatherings of Gurukuls, when most of the outside world was in the stone age. But that holier-than-others position has long been relinquished, and the reality check is long overdue. Still, innovators-at-heart can definitely find it within themselves the good old festive spirit of learning and education, something that would jumpstart the innovation movement, an inventive fire in student’s bellies.

In the area of innovation and inventions, some of the rest and much of the west is now light years ahead, but India is still in the stone age. Hopefully, Kakodkar’s words will help spark the fires. He isn’t Shah Rukh Khan, he isn’t Shilpa Shetty and he isn’t Sachin Tendulkar. So what he says may not mean much to most. But what he said were the most important words anyone spoke in the country yesterday. And the picture of the future he painted on the colorful day of the holi, is the kind of India that will one day bring sunshine, taking away all those dark clouds of economic gloom and doom.

Feb

27

Ethics alert for India Inc.

February 27, 2009 posted by indiatime | 1 Comment

There is growing concern in India about President Obama’s singling out the American corporations that currently outsource to India. That decision has more to do with the current economic crisis and less to do with the havoc wreaked by Indian companies like Satyam. Still, the list of Indian companies showing up on the malpractice radar seems to be growing every month, threatening to malign India’s hard-earned stature as a reliable trade partner.

Early last month, Satyam Computers, one of the biggest names in India’s IT outsourcing world, became synonymous with fraud and falsification when its CEO confessed to cheating on company’s books.

Earlier this month, several Indian-origin owners of American companies were arrested for H-1B visa fraud. The arrests marked but a drop in the bucket in the H-1B visa malpractice routinely being carried out mostly by Indian consulting companies, ranging from falsifying documents to disrespecting labor laws.

In the area of Pharmaceutical outsourcing, Ranbaxy laboratories, the largest Indian drug manufacturer was recently found to have faked lab tests and data to seek approvals for its drugs. This week, the US Food & Drug Administration decided to end drug evaluations at Ranbaxy’s India plant, citing significant questions about the reliability of data.

Another pharmaceutical company called AM2PAT, this one based in North Carolina but owned by one Dushyant Patel, an Indian-American, is also in the news for selling lifesaving medicines mixed with sediment and debris. AM2PAT’s product quality was so screwed up that people had noticed food particles, among other things, in its heparin syringes. It has been revealed that this Indian American company’s chief microbiologist was a teenager who had dropped out of high school. AM2PAT president Dushyant Patel is absconding and has apparently fled to India.

Indian companies will not be booted out as many have feared, watching President Obama speak to the congress the other day. But Indians will need to be ready for thorough scrutiny, detailed diligence and tougher times ahead, thanks to the crooked corporations that have maligned the majority of Indian companies aspiring to expand their horizons. I think it may be comparatively easier to recover from IT and accounting malpractices, but areas such as pharmaceuticals would need to be very, very careful since any fatal negligence in that area can spell prolonged or even permanent doom for the rest of Indian companies in that field.

Jan

21

Back to business school? naahh…

January 21, 2009 posted by indiatime | 3 Comments

The Times reports today that the job market slowdown is prompting executives to go back to school and get some value additions to their resumes and portfolios, readying them for a hopefully better job market in another few years. Executive management programs all over the country are reporting a 15-20% rise in number of applications, a significant portion of the workforce that is either laid off or just taking a break to make the most of the current downturn.

Here are some alternate ways to kill that downturn time without spending all your life savings so far:

1. Finding opportunities with social or non-profit work:
I know of several instances where laid off executives began working with non-profits just to keep busy and eventually found opportunities that benefited not just the non-profits they were working for, but also their own career paths. One of my former colleagues who was laid off a few years ago, turned her technical skills to help build a fundraising platform for a non-profit. While doing this work, she came in contact with the philanthropic arm of a industrial empire where she’s now been an advisor for several months. Another laid off colleague who helped recycle network equipment for a non-profit, hit upon a disposal idea for some of that recycled junk and created a business opportunity for himself.

2. Rekindling your entrepreneurial urge
One of the good things with the downturns is that they allow people who are otherwise busy to fill up their free time with entrepreneurial and creative thoughts. A group of my friends who had made and later lost some money in the internet bubble a few years ago, built a microbrewery business that is successful and moneymaking enough for them not to have worked ever since.

A couple I know used their sabbatical leaves to build a novel kindergarten school in their neighborhood. They were unhappy with the kindergarten schools nearby and thought they wanted to put their ideas into action. In a matter of 4 months, they had more than enough enrollment to begin a full-fledged kindergarten and neither of them returned to their workplaces.

Another executive friend, fed up with his mundane job and recently back from a trip abroad, put his money into starting a hip hair cutting salon and turned it into a moneymaking machine.

3. Building your health
Although this sounds like old advice, this is exactly what a close friend did after getting laid off. He had many health issues while he worked and many of us feared those health issues would exacerbate when he was fired. It was another 7 months before he found a new job, but during that time he reinvented himself healthwise. 7 months of consistent exercise, good sleep, home-cooked food, and quality time with his kids, worked like magic and I honestly believe that my friend has added at least 3-4 healthy years to his life.

4. Spending quality time with family
You can never go wrong with spending quality time with your parents, spouses, kids or friends (When people die, they do not remember moments from their workplace. But they do remember best times with their close ones). Two years ago, a friend and his wife decided to extend their family when the wife lost her job. Today, they are blessed with a beautiful one-year old daughter, and are the happiest they’ve ever been in their lives.

So why not play your cards right and build something worthwhile so you can employ some of those executive MBAs once they get out of those business schools?

Jan

16

Funny money

January 16, 2009 posted by indiatime | 3 Comments

When the state of Zimbabwe introduced its first dollar in 1980, the value of that Zimbabwe dollar was one and a half times that of the US dollar. In less than 30 years, the Zimbabwean dollar has taken a path that, if you were riding that dollar bill as a rollercoaster, would have made you so dizzy your mamma wouldn’t have recognized you after the ride. Even Philips Kagan, the American economist who first spoke about hyperinflation (in the mid 1950s), would be shaking his head in wonderment at the ridiculous rate of inflation in Zimbabwe, which recently stood at quarter billion percent (231,000,000 %) and has been re-revised at around 500 quintillion % (billion times billions).

So Zimbabwe is now introducing a 100-trillion dollar currency note. A month ago, the exchange rate stood at 13 Quadrillion Zimbabwean dollars to one US dollar (one would still need more than a 100 100-trillion dollar notes to make it to one US dollar). A professor at the University of Rhodesia (his last name happens to be Rupiya) recently said that his country is surviving (if one can call it that) by printing money.

One of the questions I’ve always had since childhood was why poor countries didn’t just print more money and distribute it to their people so everyone can be wealthy and rich and there is no poverty anymore. Well, Zimbabwe seems to have introduced my childhood idea. The dollar-printing business has been going very well. So well in fact, that amongst all of that country’s businesses, the companies that are making any money at all are the companies in the business of printing dollars and transporting the huge amounts of dollar bills.

A famous Indian author once wrote a funny story about an Indian village that wakes up to crores of Rupees when a truck carrying Rupee notes overturns on the highway passing through that village. Within hours after the accident, every family in the village becomes millionaires with money stashed into flour and wheat and rice and inside religious books and everywhere. For the next few weeks, everybody in the village knows that everyone else is a millionaire, but nobody wants to spill the village secret and the whole village lives in a fog of wealth.

Colonial Zimbabwe missed out on India’s real secret however. Much before he began his campaign in India, Mahatma Gandhi initiated his peaceful movement in Africa. That movement totally failed to take roots in Zimbabwe. And where Indian bank notes today flaunt Gandhi’s face, Zimbabwean dollar has long lost its luster.

Jan

12

Spotlight on India’s Inc’s business ethics

January 12, 2009 posted by indiatime | 3 Comments

After banning Satyam from its premises for 8 years, the news is out that the World Bank has also come down hard on two other Indian IT companies - Wipro, which it has banned since June 2007 and Megasoft which it has barred from December of 2007.

If the World Bank ban happened more than 18 months ago in Wipro’s case and more than a year ago in the Megasoft case, why is it only now that the average investor comes to know of this? Would the investors have treated their investments in these companies differently if they had known about these details that are emerging only know, and that too as repainted sketches?

The disclosure today is not because of a change of heart from Wipro or Megasoft. It is because the World Bank, today decided to disclose all its debarments under corporate procurement program. Although the three software companies debarred by the World Bank did not make its fraud and corruption list of companies & individuals, there were two Indian companies and two Indian individuals who did.

The Satyam saga may have put the spotlight back on Indian companies for now, but the World Bank fraud list contains 37 companies/individuals from UK, 16 from Indonesia, 11 from Sweden, 10 from US, 6 from Nigeria and 5 from Russia.

Amazingly, India does not seem to fare in the top 5 debarred countries in that list. But the Satyam fiasco has opened up something that will now hound Indian companies who have had no part of this sordid saga. Unlike Satyam that greased the palms of the then World Bank CTO Muhseen to procure hundreds of millions worth of contracts, Wipro’s visible problem was the seemingly unethical benefit package accorded to its World Bank contacts and their families allowing them to buy shares through an IPO. And although Wipro and Megasoft tried to minimize the significance of the World Bank debarment, the ripple effect through other Indian companies will reverberate for a while, especially given the current skeptical and tough economic environment where the World Bank conducts its business.

Someone once said that the term business ethics was an oxymoron. It doesn’t have to be. In Wipro’s case, the fact that it sent a little gift package towards the World Bank staff that had been friendly and nice, is probably easier to understand and digest than the fact that it hid the news about World Bank debarment for 18 months. But had there not been a debarment, the same investors who are upset today, would probably have asked others to take a chill pill, telling us that this is how business is conducted at those levels (The investor sentiment in Satyam’s case was similar with them going along with all its malpractices as long as it suited their greed).

You see, the problem with palm-greasing is that the handshake can never be strong enough. Then again, are there any companies out there that are really not in the business of a little palm-greasing? I believe there are companies that are doing a better job at ethics than others and are reasonably honest with their investors to the extent that they need to be in the environment they operate in. Let our readers know of those that you know about. I will be doing the same throughout this year.

Jan

7

Good riddance..bye bye Satyam

January 7, 2009 posted by indiatime | 6 Comments

The final nail in Satyam Computer’s coffin may have come today with the resignation of chairman Ramalinga Raju. Satyam’s shocked investors now know for a fact that 93% of Satyam’s reported balances were falsely reported. The investors have been kind to Satyam so far, since its shares have fallen only 70%.

And what does Mr. Raju, the award-winning chairman have to say to the domestic and foreign investors? A not-so-contrite admission of ineptness and stupidity - Revealing that none of the board members, past or present, had any idea of the company situation, he pretended to seriously analyze the issue at hand. “…What started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years….”, said the Satyam chairman, “….it was like riding a tiger, not knowing how to get off without being eaten…”. Chairman Raju didn’t get off that tiger easily, until the anger of the enlightened foreign investors kicked both his and his tiger’s asses.

Some experts are calling this India’s own Enron. Many others fear this sordid saga might cast a long shadow on other Indian companies. You can bet that there are other Indian companies out there who have probably done similar falsifications. At the same time, there are many that have not.

The timing on the fall of Satyam’s star couldn’t have been better for the average investor and it has come right in the midst of a deep fear psychosis among the overall investor community. It is almost like having an altogether separate serious condition being diagnosed while the patient is already in intensive care for some other ailment. It would have been much deadlier, had the revelation come with the patient (or the market) in recovery.

What now? At this moment, the Indian market sure feels stinky. But this is good riddance. This is actually a good day. And we’ve learnt something, haven’t we? Just because a company’s name literally means ‘the truth’ and just because its chairman’s name literally means God’s sex organ, that doesn’t make the company a good buy.

Jan

6

The scent of money

January 6, 2009 posted by indiatime | Leave a Comment

Reading about some tough and bearish predictions about India’s stock market in 2009, I couldn’t help thinking how unpredictable the Indian scenario really is. Unpredictable it may be, but I do not believe it is as gloomy as some would think it is.

Most of the current assessments are based on the usual suspects such as high P/E ratios, high P/B ratios, low dividends, market capitalizations to GDP ratios, decline in foreign capital inflow, etc. Add to that uncertainties with the political climate, impending elections, war on terror, winter fog, and what not. Then add all the negative news about potential decline in outsourcing jobs to the US. For most investors, that is definitely not the rosy scenario they have been used to for last few years.

I am, however, going to predict a much more positive picture for the Indian market. Partly because I believe the global downturn accords India some unique possibilities and opportunities that were never encountered before. And partly because I believe the Indian market is more resilient than most foreign markets because of the Indian investor.

Where foreign experts predict uncertainty due to an election year, I want to stress that this election year will bring another round of democratically elected government, once again asserting India’s political stability even in the midst of geopolitical uncertainties in the subcontinent. No matter how concerned the foreign investors are at this moment, there aren’t many places else where smart foreign investors would rather be than here.

Are the Indian investors up for a few heart attacks? Sure, they are. But those who have not put their eggs in one basket, and those who have left some liquid assets that can suffice for a year or so, will find that bear markets like these are goldmines if you learn to find your nuggets. I bet you there are more than a few of those nuggets in the Indian market today. Take some time to make your mind up with the sector that you understand a little about.

Within the next year, I plan to make you aware of some of those nuggets. I also plan to make you aware of your own potential as innovators and inventors and ways to go about executing those plans. We’ll talk about ideas, business plans, venture firms, all that exciting stuff. We’ll also talk about individual finances, credit cards, and ways to beat the credit demons. I promise not to make it a boring, number-crunching exercise. And I promise not to indulge in any unethical bank-breaking ideas. And along the way, we’ll also talk about giving and philanthropy, which is an absolutely essential habit for everyone.

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