Sunday, April 18, 2010

How much Sweet?

Prime Minister Manmohan Singh and Congress party boss Sonia Gandhi are capable to rescue the Government from the growing controversies with Shashi Tharoor mentored Rendezvous Sports World, the company which won the IPL Kochi Team franchise. In fact, income tax department’s raids at IPL headquarter and Commissioner Lalit Mody is part of government’s rescue operation. The recent raids at IPL head quarter is described as ‘survey raid’. The ‘survey raid’ means income tax department is free to halt the raids if it so desires. Off course, due settlement is often arrived at between the taxation department and the assesses. In such matters, finance ministry always claims no knowledge. They always say that they have nothing to do with the raids and government never interferes with taxation business. In the matter of IPL, it is almost certain government may claim no knowledge or promise the parliament about informing it after gathering the information. The information probably may be suitable to clear off Shashi Tharur fully or partially. It is also probable the government is likely to gather the information, which may be more suitable if needle of suspicion may lead pinpoint, the rivals of government or Shashi Tharoor either.

The Bharatiya Janata Party, the main opposition party in Indian parliament was not satisfied with the statement made by Shashi Tharur. Government party knew that Shashi Tharoor making statement is useless exercise; however, statements by members or ministers are allowed in parliament to make statements because such statements are a part of larger damage control exercise. Such statements are often used to encompass the irrelevant is that leads the parliament to no issue zone. The income tax department raids may reveal more information about ten franchisee owner companies. These raids may reveal much more details about ‘sweet equity’ given to Sunanda Pushkar, the fiancée of Shashi Tharoor also. There are strong roomers that lot of money laundering has happened in IPL franchisee business. The various franchisee companies are by cine artists, industrialists who involve in bidding for IPL franchisees including the Rendezvous Sports World mentored by Shahsi Tharoor, the junior minister for foreign affaires.

According to the provisions in taxation laws the survey raid proceeding can be called of any time if the raiding party satisfied with the sufficient material is presented to it. Instead of holding enquiry of Rendezvous Sports World, finance ministry decided to hold wholesale enquiry into the of all the IPL franchisees and entire biding business. Thus, the enquiry may through light on all the shady deals of all rival team owners. The rivals who have raised the outcry against Shashi Tharoor mentored company in which Sunanda Pushkar, the fiancée of Shashi Tharoor, owns sweet 70 crore rupee sweet equity. Anyway, nobody knows about sweet business of sweet equity. This sweet business may be sweeter to concerned industries. Sure, it is bitter for India, bitter than the Bofors scandal that damaged India’s political stability in nintieees. The sweet equity issue may damage company affaires in India.
–Ramesh Zawar
Senior Journalist

Tuesday, April 13, 2010

Who governs whom?

In India, bureaucracy is known for feuding. Most of the union government and state ministry bosses are known for their notoriety. With the issuance of notices to 13 insurers by SEBI, the security and exchange board of India the IRDA; the insurance regulatory development authority was annoyed. According to IRDA, these insurance companies are not under regulatory control of SEBI though they do invest big chunk of the money collected under the popular insurance product ULIP. The ULIP offers insurance cover as well as investment in select scrip. The buyer of ULIP need not pay the premium after certain number of years. If market does not perform as per expectation ULIP policy taker has to either top up the plan amount or has to loose the insurance cover benefits.
The recent feuding between SEBI and IRDA cannot be treated the typical example of bureaucratic notoriety so common in India. SEBI feels that if insurer sales the mutual fund type insurance policies they must be registered with SEBI because the insurance business is nothing but a mutual fund business in disguise. This business involves the gross issues of investments. For example, like charging commissions (Entry load, exit load etc.) are the issues, which needs the attention by SEBI. The SEBI chief C B Bhave who is due to retire in the month of August is very docile person. He is equally upright and known for eye for details. He is never victim of small talks or sort of grapevine in stock market. The disciplined development of insurance business, a comparatively new crop in India, is the responsibility of IRDA. With the end of government monopoly in insurance business, India is very much kin to have healthy growth of business. If IRDA fails, government feels, economy may have to face unnecessary trouble.
Although the Government has advised both the authorities to seek the court verdict, it is clear from the finance minister’s statement that Behave may be backed by Government if situations so demand. Investor is synonym god for government of India; therefore, any step taken in the interest of investor is welcome. Finance Minister Mukherjee desires the mutual fund industry in the country should grow on the line of mutual fund industry in USA. On this background, SEBI has to keep its order in abeyance. Bhave refused to comment and preparing to fight in Supreme Court of India.
-Ramesh Zawar
Senior Journalist

Friday, April 2, 2010

No laundry required!

It is no surprise that A.V. Birla group, one of the organized retail players in India, had to close down 39 retail stores in Gujarat. They may withdraw from remaining retail business in Gujarat. This withdrawal was forced upon Birlas as they could not compete with the gujrati businessmen, the real retailers in businesses. As Birlas entered retail business with take over of 170 stores in South India in the year 2007. They are not early birds in organized retail business in India. When they bought the Subhiksha chain in South India, the flame of their inner ambition was lit. With the ambition fired, they had little time to evaluate the business model developed by earlier Subhiksha chain. Hurriedly they set the target of starting thousand stores all over the country. Initially they began with Subhiksha model, the one that was rejected even in South India. Inclusion of Gujrat in expansion plan with the same model and fashion was, no doubt, a mistake. South Indian CEO obviously doesn’t know the Gujarat and gujratis. With such CEO, how Birla business house could succeed in Gujarat?
What I am surprised is how marwari business house chose to increase its retail stores business in Gujrat. The western Indian state of Gujrat is truly home land of self made business. The boys and girls are groomed to be sales persons and girls almost in every family. They even phoo phoo MBA courses: MBA atelay mool buddhino abhao ( MBA means lack of basic talent; they fanciful abbreviations of the letters MBA).
In marwari families like gujrati families, the business practices are taught to the boys and girls since childhood; however there is a slight difference. The thrust in Gujrati families is on salesmanship where as the thrust in marwari families is on account angle. Almost all the marwari boys and girls are groomed to be accountants since their childhood. Some may be cost accountant or auditors either! Most of the marwari business is run by young persons who enroll themselves for college education. While studying in colleges marwari boys (and recently girls too!) are handling petty works assigned by their parents who are in mid fifties. Off course, these boys have to work under the guidance and strict superintendence of their parents. No class room type lecturing or guru sermons either. The boys, if they make mistake, are seldom punished for the mistakes. The guidance mainly pertains to cost conciseness. Marwari boys can work out the funeral cost or can be entrusted to hire the wedding reception. If someone wants to buy the community hall including the current wedding reception, marwari boys are capable to do the valuation of that place including the reception its bridegroom , may start the bidding process within no time . The similar nature of job may take months to evaluate the business by established agencies!
On this back ground of such business environment in Gujarat and Maharashtra, it is surprising that A.V Birla Group Company started its retail stores in Gujrat. This decision is just like running a laundry business in a town where digambar sect of jains is dominating the township. The unclad digambar jain monks walk across the country to spread the spiritual message. They are most revered community in the country because they control the needs. Digambar monks themselves don’t require the laundry. The malls in Gujrat may prove as worthless as laundry for the monks

-Ramesh Zawar
Senior Journalist

Thursday, April 1, 2010

It is no surprise that A.V. Birla group, One of the Organizes rtail player in India, had to close down 39 retail stores in Gujrat. There is no point in running a laundry busness in Digamber monks