March 27, 2008

life in financial markets: blood steel

I was watching Blood Diamond for the 10th time an hour ago. At the end of the movie after the main part of the story is played out and Solomon Vandi, the Sierra Leone African, is invited to talk at a conference in South Africa there is a particular dialogue made by an Englishman that I find very pertinent to quote here:
"The natural resources of a country are the sovereign property
of its people. They are not ours to steal or exploit in the name of our comfort or our corporations or our consumerism."

I can not but feel that urban Indian consumers and consumers from affluent countries are responsible for what I term as 'Blood Steel' happening in the forests, mountains and villages of Orissa state and other states in India. Foreign companies and Indian companies like Vedanta/Sterlite are forcibly displacing locals from their homes in order to carry out mining of ores of iron and other earth metals. Not just consumers but financial markets worldwide trade in these metals. (the photo to the right is of an alumina refinery in Orissa & has been taken from

Moderate consumerism is the first step towards discouraging 'Blood Steel'. How many among us would take this step?

March 24, 2008

life in general: Bush-created "atrocity-producing situations"

The illegal and cruel occupation of Iraq continues. George Bush Jr, Dick Cheney and their other gang members are responsible for creating what one psychiatrist calls "atrocity-producting situations." Here is something I read today on the experiences of US soldiers who dare to speak out.

March 23, 2008

life in general: un-holy use of water in india

Many of us in Bombay realise the importance of water in our lives only during summer time when there is water shortage in the 4-5 artificial lakes that are 100-200 kms away from Bombay in village areas but from where laid down pipes get water to Bombay.

Just yesterday (22 March) was the festival of Holi in India and once again the eco-sensitive people could not but notice the enormous ignorance by the festival-celebrating citizenry. In particular, the affluent celebrate Holi by throwing at each other chemically-coloured powder and bucket-filled water or splash water through hoses that are kept running for 1-2 hours continuously. At least a million litres of water would have been wasted by the Holi revellers in just Bombay alone. Multiply this across the thousands of cities, towns and villages and the entire country's wastage of water on the day of Holi every year would add up to a mammoth amount. I consider this criminal given that millions of people in India still do not have access to clean drinking water and water for other domestic uses. See the photo alongside (taken from

Urban India has forgotten how to conserve water and also recharge the ground water. Four years ago, I wrote a one-off article for Humanscape magazine (of an NGO) on rainwater harvesting. The article talked of the whys and hows of rainwater harvesting.

March 18, 2008

life in general: SEZs - Selective Exclusive Zamindaris

On 11 January this year, as a part of a potential article on follow-up to special economi
c zones (SEZs) issues in the magazine I write for, I had visited Alibagh (about 140 kms from Bombay) to meet Admiral (retired) Laxminarayan (Ramu) Ramdas, a former chief of the Naval Staff in the Indian defence forces, who stays in his farmhouse residence in Alibagh.

Along with hundreds of other local villagers his home also comes in a notified SEZ area in Alibagh without their approval having been acquired. I was visiting him to request him
to contribute a column article for the potential follow-up story on SEZs in the magazine.

He did. I present it below:


It is by now well known that the original concept of government acquiring land on behalf of private parties, companies and industries for SEZs has met with stiff opposition and resistance from members of the public in most parts of the country. For me and my neighbouring 5000 households from 22 surrounding villages and wadis here in Alibagh taluka of Raigad district in Maharashtra, it all began after the state government notified the Gazette Extraordinary dated 27th October 2006. Without public discussion or notice, overnight 22 villages were declared an industrial area by invoking the MIDC (Maharashtra Industrial Development Corporation) Act for use as an SEZ by private developer Indiabulls Infrastructure Development Company.

It was fairly obvious that this sudden and extraordinary method employed by an industrial development legislation that led to re-designating a green belt area into an industrial one – was a thinly disguised action to meet the same ends of SEZ requirements, and avoid public reaction.

That Gazette notification has not been removed. It is shocking and deeply disturbing to note that a department of a state government was apparently playing the role of a broker to acquire these lands which will be passed on to the interested parties later. No farmer should be forced to part with valuable, fertile, developed agricultural land by any government of the day.

It is common knowledge that there are thousands of hectares of land already declared as industrial areas under MIDC in Maharashtra, which are under-utilised or occupied by sick industry. If any additional land or space was needed with such urgency, the logical course of action would have been to identify all existing unused areas under MIDC control and make plans for full and effective utilization of the same.

The areas under SEZs in Raigad, Thane and greater Mumbai are in proximity to the urban mecca of Mumbai city. Here in brief is the story – not new, but ingenious in the devious ways in which high powered land grabbing is engineered across our `free and democratic’ country. It is ironic when we remember that over 500 Princely States were merged with the Union of India after our Independence in 1947. Today we are rapidly re-creating fiefdoms or SEZs which I call as `Selective Exclusive Zamindaris’. It is not just the real estate developers and industrialists. Behind them are politicians or their wards. In various cases they are actually just agents of their political masters.

Citizens of the Raigad villages have come together to form an association for the protection of their land and property – and have decided to embark on a struggle to prevent this unjust take over. They have also decided to wage this struggle without the help of any political party. At the very first meeting people were categorically told to leave their `party affiliations’ outside the hall along with their chappals! A group of seven villages, the most immediately affected by a Tata-Reliance power project in a SEZ covering their villages, have decided to boycott all forthcoming state and national elections. There is a raging storm in their hearts against being forced to evict their lands and homes for no fault of theirs. Someone asked whether we were living in a democracy or in a dictatorship. There is a united commitment to fight this monstrous decision.

Across the country, this anger is building to a quiet crescendo the repercussions of which can be anything. Our commerce minister bluffs his way through about millions of jobs in SEZs, but the SEZ-affected people of India are calling his bluff. They are asking is a return to status quo with regard to their lands, homes and their livelihoods. Is it too much to ask for?

Surely, there are limitations. Young villagers are being seduced by temptations of lumpsum money to sell their land which they can spend in a year or two on bikes and other distractions and then end up in penury. But not all villagers are gullible.

It also seems that the policy makers have not appreciated that a very large number of serving soldiers, sailors and airmen of our Armed Forces come from the villages of India. Indeed many of their families would or have already become victims of this land grab. Needless to say this would adversely affect the morale of our valiant Jawans, who are standing vigil round the clock. The irony is that whilst our Jawans are defending our borders; the SEZ,s enjoy the nomenclature of being treated as “foreign territories” and being handed over on a platter. It took the great Sardar Patel and Mr V.P Menon, Secretary to The Government of India, many days and nights to integrate over five hundred Princely States into the Union of India. Here we are reversing the entire process and selling both our self respect and sovereignty and creating these SEZ’s.

It is now the turn of the ‘West India Company’ which seems to have convinced us to open up our markets and our territory for their exclusive use! Let us not repeat the same mistake all over again. Here too the corporate world wants special facilities, as did the East India Company; no taxes, no labour laws, no courts, but wants instead golf courses, five star hotels, bars and casinos!

March 17, 2008

life in financial markets: indiabulls, congress party, SEZs, farmers...

If you commute on the western branch of Bombay's suburban railway line you would be aware of the large advertisement hoardings/billboards on the eastern side of the flyover connecting western and eastern side of Bandra. This is to your right side as the train going from Churchgate/Dadar to Andheri/Borivli/Virar nears Bandra station, or to your left side when train going from
Andheri/Borivli/Virar to Churchgate/Dadar as the train just leaves Bandra station.

For quite some time I have been seeing the advertisement hoarding of Indiabulls among the couple of advertisement hoardings at this place. See the two pictures alongside this post (they are from the same photo, one full blown and one a portion of it) that I clicked from my mobile phone's camera when I was returning home on 10 March (i commute from Lower Parel/Elphinstone Road/Dadar to Kandivli while returning home).

The Indiabulls advertisement hoarding talks of loans of Rs 5 crore and more for builders and companies. As I was seeing this advertisement yet again on 10 March I remembered the news report of that day (or some recent previous day's) covering Congress Party's president Sonia Gandhi's and prime minister Manmohan Singh's speech at a farmers' conference in Delhi. They were harping on the Rs 60,000 crore worth of waiver of farmers' loans announced in this year's budget (it is another matter that the budget documents never specified any detail of how the amount of loans was arrived at).

I could not but be struck by the anomaly of it all. On the one hand, you have financial companies like Indiabulls whose promoters/management (Bangas) are/is reportedly close to the
top guys of Congress Party (including perhaps Sonia Gandhi and Manmohan Singh), lending huge sums of money to builders who then go on to, among other projects, attempt to grab land under the Special Economic Zone (SEZ) Act which is nothing but a dirty land grab disguised as export-oriented economic development. Indiabulls itself has set up--and is trying to set up more--SEZs across the country.

The SEZs land grab forces farmers and other land owners across the country to sell their land to the government or the companies even though they do not want to sell it or if they want to sell then at one-twentieth or one-hundredth of the true potential vale of their lands. This is done through the abuse of the British-era Land Acquistion Act of 1890s that is still in existence in so-called free democratic India.
In most cases, the companies are actually only agents of their political masters.

Isn't is, therefore, hypocritical of the Congress Party to harp about their concerns about farmers when supposedly their own corporate cronies are grabbing the lands of farmers? Then, again, the loan waivers are meant to benefit the already well-off farmers who could afford to borrow from banks and government financial bodies, and not those small farmers to whom banks and government bodies do not lend and so who are forced to borrow from private money lenders at extremely high interest rates.
Being in power, the last 4 years, why hasn't the Congress Party adequately raised the minimum support price for the purchase of foodgrains from farmers? Why is government policy giving a free hand to the international seed companies to force/trick farmers into buying/making dependent on their expensive seeds? The Nationalist Congress Party and its politicians like its chief Sharad Power are a prime example of how to manipulate agriculture for their petty purposes. Not that any other party's government in power would have fared any less worse.

India, today, is faced between the devil and the deep sea. On the one hand you have Manmohan Singh-Sonia Gandhi-Kamal Nath-Sharad Pawar-Narayan Rane-Prakash Karat-Buddhadeb who end up destroying the ecology of the country through extreme and distorted so-called development projects and in the process uprooting millions of tribals/villagers/others from their homes. On the other hand you have religious fanatics like the BJP-Shiv Sena-VHP-Bajrang Dal-RSS who kill minorities. Then you have people like Mulayam Singh, Mayawati and Raj Thackeray who pretend to do good for their relevant caste-based or community-based constituencies.

March 13, 2008

life in journalism: shameful reportage of the Goa rape case by DNA newspaper

All the Indian media has been covering the shameful incident of a rape of a British girl in Goa recently and how that girl's mother is trying to seek justice in a state where the police and politicians are more mafia-like then probably the mafia itself. Read about it here, here, here, here and here.

But I have noticed that at least one newspaper has completely lost is sense of values in reporting on the issue. I refer to DNA newspaper. Read this story on front page of DNAs' Bombay edition today. The second statement in the opening para states "But the 'home' they will be returning to is far from the idyll she would have us believe."

So what if the Scarlett family is staying in caravans? How does that matter in the rape case? Staying in caravan is not a crime and neither are those staying in caravans criminals. It is like saying all slum dwellers in urban India live in ramshackle homes so they have loose values and are criminals. The editors at DNA have become anti-democratic in their writings of late if one goes by their stance on the Goa rape case. I wonder if the DNA editors have carefully read the constitution of India or any other democratic country for that matter? Does it say that people not living in cement-and-brick fancy apartments be treated as having loose character? I am ashamed to see the abuse of journalism by DNA.

Fiona MacKeown left her daughter alone for a few days. So what? Does that give Indians a right to rape all daughters whose mothers leave them alone. How many journalists in the urban offices of DNA newspaper are young women journalists who are staying far away from their families. Does that mean if, God forbid, they are sexually abused in the city, their mothers won't have the right to seek justice?

In my journalistic career, many of my female colleagues have been single girls living alone in Bombay away from their families who stay in other cities or towns. Some of these collegaues are rebellious and are working here alone against the wishes of their mothers and fathers. Does that make them easy objects for sexual offenders? The DNA editors should take a poll of all their female reporters to find out.

Even if Fiona (the mother) was on drugs, as some newsreports suggest, on the day her daughter was raped, her rights for justice don't evaporate. Don't affluent Indians taken fancy designer drugs themselves at most parties? Does that mean that if their loved ones get sexually abused when they are in their drug stupor they don't have a right to seek justice?

Come to your senses, DNA. I have not very often seen such extreme form of distorted reportage from any English Bombay newspaper in the last three decades since I started reading newspapers here in Bombay (I am 38 years now).

March 12, 2008

life in general: exactly 15 years ago in bombay

Exactly 15 years back to this day, on 12 March 1993: I was not a journalist yet. I was working as an executive in Stock Holding Corporation of India Ltd. I was in my company's 2nd floor office at Mittal Court in Nariman Point working as usual. It was a little after lunch time when suddenly a loud bang noise shook us and the building. One of the bombs of the dastardly serial blasts had just gone off at Air India building in Nariman Point, about 300 metres from my office building.

As a 23-year old youth, I had already undergone severe disillusionment looking at and reading about the cold-blooded murder of Muslims in January of that year by the goondas of Shiv Sena, BJP, Bajrang Dal, VHP and even Congress and RPI. This was the infamous post-Babri-masjid-demolition violence in Bombay.

So, that Friday, on 12 March, I was again shocked at what was happening in my dear Bombay where I have lived all my life. The bomb blasts were the design of Pakistan and Dubai-based underworld elements in retaliation for the violence against Muslims in Bombay in January that year.

The bomb blasts were terrible. Here are some excerpts from S.Hussain Zaidi's non-fiction book, Black Friday, on the issue:

"....At 2.55 pm, a bomb seemed to go off in a crowded double-decker BEST bus outside the regional passport office (RPO) at Worli. It was so powerful that the five-ton bus was lifted into the air, and the upper deck blown into the hutment colony of Nehru Nagar. Residents panicked as pieces of metal and bodies rained down on them. There were no survivors on board; not even the bodies could be identified. The body of the driver was hurtled across the road into the colony. Vehicles around the us too caught fire, and four buildings—Rupala Sadan, Ramodaya Mansion, Malkani Mahal and Manjrekar Sadan—along the road, which housed shops and an Udipi restaurant, were badly damaged. Many buildings in the area had their windowpanes shattered, including the RPO, the Brown Boveri building and Century Bhavan. On the road, a deep crater marked the spot where the bomb had exploded.

The sights were gruesome. A paanwala's head was severed from his torso and deposited on the counter in front of him. The body of Neogi, manager of the Bata shop, was found sandwiched betweeen two walls that collapsed on each other. Flying shrapnel was lodged in the stomach of Darius Khavarian, who had come from Iran to see his brother Minocher, owner of the Asian Stores and Restaurant. Sudesh Bhandari of the Blue Star Laundry died when shrapnel pierced his heart. Karim Ramodaya and his brother Rajabhai, the owners of Ramodaya Mansion, who were standing outside the Taj Cake Shop, were also killed.

Pradeep Manjrekar, the owner of Manjrekar Sadan, was using the telephone at the wine shop on the ground floor of his building when the blast occurred. 'First there was a cloud of dust, followed by thick white smoke, and then came the bang that shook the bottles in the wine shop. I saw limbs and objects flying all around, and vehicles on fire.' He said he saw at least five BEST buses and some fifteen cars burnt completely.

Raj Nath Ganjoo, the marketing manager of BASF, never stepped out of his office during working hours. But on that day, his watch had suddenly stopped working and he had been feeling uneasy about it. The bomb went of as he went out to get his watch repaired at a shop a few yards away. He was killed instantly.

Prachee Vartak and Sandhya Roy, traineee airhostesses at East West Airlines, were driving down the road in a company car. This had been Prachee's first day at work, and she was just returning from her first flight from Vishakapatnam. She was looking forward to going home to Worli and telling her parents about it. Hers had been a long battle to get the job, for her sister Aruna was already employed with East West and their company policy did not permit employing family members. The blast destroyed the car. The driver Rajan was charred beyond recognition. Prachee was rushed to the King Edward Memorial (KEM) Hospital with thirty-five per cent burns, and died after three days. Sandhya sustained only minor injuries.

Darshan Lalan, in his first year at Lala Lajpat Rai College, had gone with four friends to see the 3 p.m. show at Satyam Theatre. His friends had already crossed the road to enter the theatre when the bomb exploded. Darshan, who had stepped back to dodge a speeding taxi, was blown to bits. His friends were fine; only one suffered a minor leg injury.

This was eventually to be deadliest of the blasts, killing 113 and injuring 227."

March 10, 2008

life in financial markets: choppiness is still on

Last week, I wrote (in Business World) a news story on the state of the equity markets in India and elsewhere:

Choppiness is still on

From the autumnal gloom of in last August to the jitters early this year the world markets have moved to the ides of March. These are taking as much a toll of the Indian equity market as the global bull run of the earlier three years had hustled it up. In the markets worldwide, whether a market is emerged or emerging, most of their equity indices (see chart below) are reflecting the continued worries on recession in the US and the growing impact of sub-prime mortgage crisis on global equity fund managers' need to book profits.

In the Indian market, such an impact is continuing to manifest itself in the net sell-off by the foreign institutional investors (FIIs). "The FII factor is also influenced by the Yen's continued appreciation against the dollar due to the 'Yen carry trade' effect," says Dipen Shah, vice president-private client group research at Kotak Securities. "Due to several losses suffered by the domestic retail investors in last few months there is an absence of their participation too."

The professional wizards in the hedge funds are also feeling the heat. The first two months of this year saw Eurekahedge (EH) hedge fund indices take a beating. On a year-to-date basis, at the end of February, the EH Asian Index was down 3.5 per cent, EH Emerging Markets Index was down 3.2 per cent and EH European Index was down by two per cent. Indian hedge funds were reported to have the worst fall in January giving negative return of 11.5 per cent.

The tides are likely to remain choppy. "We expect the uncertainties to continue in March especially after more Fed data on housing revealed further problems," says Shah.

life in financial markets: suggestions for new sebi chairman

The Indian securities market regulator, Securities and Exchange Board of India (Sebi), has a new chairman since the last three weeks.

Here are some areas which I think Sebi needs to look at on a priority basis:

1) The clauses governing the client-broker agreement and the client-DP agreement are heavily tilted in favour of the broker and the DP. A major chunk of all obligations are passed on to the investor while the broker and the DP retain very little and that too are stated in no unambiguous terms.

The power of attorney clause needs to be controlled with restrictions.

A revist of the agreement by Sebi is long overdue. Not just that, there should be a direct random sample investigation of BSE-NSE brokers and CDSL-NSDL DPs every year to detect violations. Sebi should not just rely on what the stock exchanges and the depositories tell it.

2) If Sebi wants to rely on the exchanges and the depositories then a thorough investigation of them needs to be carried out by Sebi every year. The details of the findings from these investigations must be shared with the public.

There are a lot of problems being faced by investors in their dealings with brokers and depositories. The stock exchanges and depositories are doing extremely little in taking action against the errant brokers and DPs. Cases of fictituous contract notes that includes more than contract note being issued by a brokers with the same number are not taken seriously by NSE and BSE when it is brought to their notice. Heavy manipulation by the brokers of their ability to change client codes is also a anti-investor activity that the exchanges have not taken adequate action on against the brokers.

Presently, the investing public is expected to blindly trust Sebi and Sebi too arrogantly expects the investing public to trust it blindly. To make financial markets healthy this attitude needs to change.

3) In a T+2 settlement system, brokers are demanding payment of monies and delivery of shares earlier from investors. This has forced brokers to ask for it before the trades even happen to or to force investors to give them a power of attorney. An investor might be comfortable with the former (delivering shares or making payment before transacting) and not with the latter (giving PoA to broker).

But he wants a legal protection under the exchange rules and regulations. Today, the exchanges regulations activate investor rights only AFTER a trade takes place and NOT BEFORE. Sebi should make the exchanges modify their rules/byelaws/regulations to bring the pre-trade transfers made by the investor to the broker.

If there is a fear that brokers can mis-use this provision too then innovative clauses can be considered – for instance, a pre-trade transfer may be valid only for 2 days or 5 days, and brokers would be mandated to transfer back shares/money if the investor has not traded. (The broker should not be allowed to get investor undertaking to maintain a running account. Even the running account system should be bought under the protection of the broker having to transfer back shares/money if no trades are executed by the investor for 2 or 5 days.)

There could be a pre-trade contract note-like system too, where unique numbers are given for each pre-trade transfer. Exchanges should then grant the same rights (grievance redressal, arbitration etc) on these pre-trade contract notes as it does after the trades are executed and contract notes generated.

4) The entire arbitration system of exchanges and depositories appears to be to make it easier for exchanges and depositories to not take on legal responsibility for disputes between investors and brokes/DPs. The quality of arbitrators is extremely poor as is seen from the track record so far.

Sebi needs to do something about this urgently. If the financial compensation aspect is extremely difficult to bring under exchanges/depositories purview, at least the exchanges/depositories should be made liable to conduct investigation of broker/DP for the purpose of levying penalty or suspending it or whatever and the findings of this investigation would have to be mandatorily disclosed to the complaining investor.

5) In the DIP norms pertaining to primary market issues, there is no enforcement of any kind whatsoever on the liabilities laid down on the lead managers (investment banking companies). For instance, the lead managers are supposed to "weed out" multiple application bids.

In the 2005-06 benami application scam in more than 20 IPOs, the lead managers could have nipped the scam at the application stage itself if a simple software would have been run on the addresses of the applicants. Even if in near future the DP system is integrated with the IPO system the lead managers should still be required to run a software check on the addresses of the applicants.

6) The mid-October Sebi press releases on the FII-Pnotes issue has not be converted into any amendment in the FII regulations. This has opened the doors for corruption among Sebi officers.

March 08, 2008

life in journalism: not being straight-forward

In my 14 years as a journalist in the Indian media, I have seen—and heard from my journalist colleagues—that more often than not the top 2-4 editors in any print publication or any TV media channel very rarely play with a straight bat with regard to the stories (news or feature articles) and with regard to the other writers (whether referred to as correspondents or assistant editors).

They are the worst people-managers in the entire corporate world. They easily get blinded by their own ego. Hidden agendas get played out cunningly. Worse, they develop subtle or blatant antipathy towards any writer who hold a different viewpoint on a particular issue, and will cunningly mis-use their power as an editor to spike such writers' stories or at least subdue them.

What this means is that things do not necessarily happen on merit in Indian journalism. Its a major blow for the freedom of expression in India. Unfortunately, a majority of the readers and viewers can not see this. The dishonest editors are intelligent enough to apply a plastic surgery to their publications/channels and display the artificial fair face in front of the readers and viewers.

To be sure, the editors/journalists other than the top 2-4 editors (whom I have talked about above) have their shortcomings too. But, at least, there are very little powers vested in them for them to abuse it in any significant way. One of their shortcomings is, in fact, their not standing up to subtle or direct intimidation by their senior-most editors (it gets much worse when some of them cosy up and allow themselves to be used for petty short-term career benefits).

I pray to our universal energy that things improve so that not just the journalists but also the readers aand viewers get to experience a clean and straight-forward media.