January 14, 2013

mukesh ambani's intolerance towards media's airing of criticisms against his company

Mukesh Ambani, the promoter-cum-chairman-and-managing director of Reliance Industries (RIL), appears to be excessively intolerant towards any severe criticisms made against RIL and media's airing of it.

If the below report is true, then it appears he and RIL has threatened TV media with defamation suits for airing Arvind Kejriwal's statements on him and RIL last month.

I wonder whether all of RIL's non-promoter shareholders who own 55 per cent of RIL will agree to such intolerance. Yes, it is fair for a company to defend itself against false accusations but Kejriwal's serious allegations do not cross the limits which should invite a legal action. As a shareholder of a company, I would never approve it resorting to threatening legal action against the media. If it does, it will only make me sell its shares because a free media is a must for a vibrant democracy and a honest company should have the courage to take the severest criticisms in its stride without fear of a loss of reputation.

Here is the report which provides details on the legal action threat by Mukesh Ambani and RIL and if this report is true then it is a threat to India's democracy by one of its few largest corporate conglomerates:


Mukesh Ambani ‘sues’ TV channels on Kejriwal

10 January 2013
SHARANYA KANVILKAR writes from Bombay: India’s richest man, Mukesh Ambani, and India’s most powerful business house, Reliance Industries, are believed to have served a legal notice on several TV news channels for airing anti-corruption activist Arvind Kejriwal‘s allegations against them in October and November last year.
However, it is not known if Kejriwal, a former IRS officer, and his advocate-partner, Prashant Bhushan, have heard from RIL’s lawyers on the charges made by them at the  press conferences which were covered “live” by the TV channels with accompanying commentary.
It is also unclear if  newspapers which reported Kejriwal’s allegations of Ambani’s Swiss bank accounts and hanky-panky in the Krishna-Godavari basin by RIL have attracted similar legal attention from the less-litigious of the two Ambani brothers.
In the seven-page legal notice shot off in the middle of December 2012, Mukesh Ambani and RIL have demanded “a retraction and an unconditional apology in the form approved and acceptable to our clients” within three days from the receipt of the notice.
The notices have been served by the Bombay legal firm, A.S. Dayal & Associates.
Besides accusing the channels of “deliberately and recklessly” airing “false and defamatory statements” with an intent to “defame our clients and bring them into disrepute”, the legal notice makes the following points:

# “Your TV Channel provided a platform and instrumentality for wide dissemination of the false and defamatory statements and allegations made at the said press conference.”
# “Live telecast of these press conferences amounts to permanent publication of defamatory material relating to our client by you.”
# “Each of the two press conferences were telecast live without making any attempt to verify the truth or veracity of the statements and allegations being made during the press conference.”
# “Apart from having telecast the press conferences live, Your TV Channel  in the course of several television programmes and televised debates that followed after the said press conferences, continued to telecast, transmit and retransmit the defamatory footage of the press conferences.”
More ominously, the Ambani-RIL notice reminds the channels:

# “Our clients have instructed us to state that Your TV Channel is bound by the Guidelines for Uplinking and Downlinking from India dated 5th December 2011, issued by the ministry of information & broadcasting, government of India.
# “Our clients have instructed us to state that since Your TV Channel is a news and current affairs TV Channel, the provisions of the Uplinking and Downlinking Guidelines apply to Your TV Channel, which inter alia provide that a Company, like Your TV Channel, which runs a news and current affairs TV channel, is obliged to comply with the Programme Code as laid down in the Cable Television Network (Regulations) Act, 1995, and the Rules framed thereunder.
# “Our clients have instructed us to state that in telecasting the aforesaid press conferences and repeating the false and defamatory material relating to our clients in the manner aforesaid Your TV Channel is in complete violation of the said Uplinking Guidelines, and the said Downlinking Guidelines as also in complete and material breach of the Programme Code prescribed under the Cable Television Network Rules.”
The RIL legal notice brings to question the wisdom of broadcasting “live” Kejriwal’s near-weekly press conferences towards the end of last year, sans any filters or fetters.
On the other hand, the authoritarian tone of the legal notice—reminding the recipients of uplinking and downlinking norms—throws light on the egg-shells on which private TV stations are walking in the “free” Republic.
The legal notice also swings the spotlight on big business ownership of and shadow over the media, especially when it is alleged to have both the main political parties, the Congress and BJP, in its pocket.
For the record, RIL is in the media business too. Both CNN-IBN and IBN7 are part of the Reliance stable following a controversial and circuitous takeover at the turn of 2012 that now has earned the OK of the competition commission of India (CCI).

January 06, 2013

(part 5) abuse of women/girls -- india's shame

This young man who was a friend of the young woman, who lost her life 2 weeks after being raped by 5-6 men in a moving bus in Delhi, and who was accompanying her on that day has given an interview to an Indian TV channel, Zee News, two days ago. The TV channel has not recorded that part of his interview in which he is giving the details of what happened in the bus during the heinous act of rape because it would have been extremely shocking to listen to. The police of Delhi has, instead of hanging its head in shame, has registered a criminal case against the TV channel for airing the interview. The Delhi police, acting on orders of the government of India (headed by such supposedly honourable men as the Prime Minister Manmohan Singh, Congress president Sonia Gandhi, and other ministers), does not want the Indian media to show any thing pertaining to that day's crime which would show the police and the administration in bad light.

This is the link to that interview:


January 03, 2013

adverse effects of subsidising gold purchases

For too long, and for no genuine purpose other than pampering the rich and affluent, the government of India has been subsidising the purchase of gold (which in volume terms would involve the rich and affluent accounting for a big chunk of it) by keeping the import duty (customs tariff) on gold at zero or near-zero levels which leads to a lower price of the domestic price of gold.

Here is something I wrote early last month in an editorial contribution in the newspaper I presently work for:

Golden problems
Rising imports of gold continue to raise hackles of policy makers and banking regulators

The gold import curb debate, which started a few months back, is only set to intensify in the next many weeks or as long as macro-economic concerns on the rising levels of current account deficit and the rupee appreciation. Last week on Saturday, three former Reserve Bank of India governors and the present one were all present together on one panel discussing banking and economic matters. 

Of these four distinguished experts two of them, former RBI governors, thought it fit to dissuade the government from curbing imports on gold; one former one did not comment and the current governor explained RBI's current desire to see gold imports level controlled. C Rangarjan, former RBI governor, and current chairman of prime minister's economic advisory council, was the most vocal against having any gold import curbs strongly stating that it was ineffective to fight against what he believed was a deep-rooted propensity of Indians to buy or have gold. 

He even believed and referred to un-named revenue department sources telling him of a rise in smuggling-related gold seizures being higher than normal in the last three months due to a slight raising in excise duty on gold. While it may not be wise to argue with him on this matter given what YV Reddy, another former RBI governor, saying (in the same panel discussion) about there being none knowing about gold in the history of India's gold management more than Rangarajan, the other side of the story is equally relevant and important. 

This side was well articulated by the current RBI governor, D Subbarao, who said RBI was concerned about gold and lending against gold by non-bank finance companies because of financial stability concerns and also due to the pressure it puts on the current current account or capital account. 

Gold imports have certainly gone up sharply in the last one year and contributed signficantly to the gap between sharply-rising imports, led by petroleum products and gold, and stagnating exports. It is fair to find the true cause by debating whether this is led by, as most believe, by population's deep-rooted propensity for having gold or not. 

But it is also fair to pose the question whether a rapidly rising current account deficit will deeply hurt our national economy and our rupee currency or not. Both the sides of the debate are valid points. Strangely, though, no one seems to be questioning the never-ending concessions in import rates being granted to gold imports. 

The import tariff on gold and other precious metals, in different forms and shapes and whether domestically consumed or re-exported is 10 per cent. But for a large part of the past couple of decades this rate has been exempted in full, that is, there is zero customs duty. The gold rush is also partly due to it being exempt from basic levies which are otherwise collected from all other imported products. 

Thus former RBI governor Reddy's poser that if Mercedes Benz and aftershave lotion can be imported, why not gold, is flawed. The Mercedes car and aftershave lotion is imported after payment of the levied customs duties. Gold is imported without any duties or extremely low rates of it, and this is done in the name of "public interest" if one reads the exemption-related phrase in the customs department's notifications. 

Forget the impact on current account deficit this has had in the form of sustained rise in gold imports the loss it has caused the country's ex-chequer has been stunning. In 2011-12, for instance, customs duty foregone on gold and diamond was around Rs 57,000 crore and this was about 15 per cent higher than the previous year's level of foregone customs duty. 

This is a prominent and almost-permanent member in the government's list of items which sees the highest levels of tax incentives and which results in the highest quantume of revenues foregone. Import of gold, therefore, should not be curbed but at the very least the concessions on customs duties should be immediately removed.