Archive for January, 2009

Blame it on the media…

Tuesday, January 20th, 2009 January 20th, 2009 Joydeep Ghosh

I am angry.

Every time something goes wrong, it’s the media’s fault. Just today, I received a mail that read something like this:

“Attached are the new Sebi guidelines for FMPs. No portfolio, no indicative yield, no exit.
This product just got killed. I hope the media is happy. Every one is going into bank deposits where the loan book is very, very transparent!!!”
(A confession first…I did a spell check on this letter.)
Whether it is coverage of the Mumbai attacks, undoing of some fund houses, or even the Satyam fracas, it’s always the media that’s to blame.

More ridiculous is that some websites or columnists have even said the media should have delved deeper into Raju’s machinations before promoting or giving him awards.
Can someone answer this simple question: With Price Waterhouse as auditors, very capable (now, very maligned) independent directors and Fortune 500 companies as clients, why should the media get the flak?
Or is it a crime to report anything negative?
When the going is good, no one complains. That is, if there are a few frauds (and there are quite a few ones) during boom time, they are overlooked. Even if there are strong reports, positive sentiments override them. The attitude then is, “arre, aise choti choti baatein hoti rehti hain“.

But when everyone is strained, jobs are under threat and making money becomes a difficult task, people are quick to pounce on the ‘messenger’.
As if the messenger caused it.
Let’s get this clear. Skeletons have to come out of the cupboard for them to be reported. And these things happen more during a downturn because there are fewer places to hide.
The Satyam saga and the World Bank’s strictures on Wipro were reported following a confession in the first instance and the second being put up on the bank’s website. And the media has not tried to hide it under the carpet.
Of course, there could be more similar violations. But we, more often than not, do not have the manpower or the expertise to explore such areas. No wonder, we have to rely on secondary and sometimes, even tertiary sources. And sometimes when investigation is done and gets reported, it is conveniently termed witch-hunting.
The media’s role is to report…often unsavoury things. But they did occur in the first place, right? That’s why we reported them.


making music

Friday, January 16th, 2009 January 16th, 2009 Abhilasha OjhaAbhilasha Ojha

As an Indian artiste, singer Abhijeet loathes the fact that Pakistani singers, who are allowed free access into India, make all their music — and money — in Mumbai and go back to pay taxes in Pakistan. He also hates the fact that while Indian artistes aren’t allowed to perform shows in Pakistan, artistes from across the border are happily doing so many live shows in India. So he’s happy that the MNS is picking up these artistes in Mumbai and forcing them to go back to Pakistan.

On the face of it, you want to catch hold of Abhijeet’s ear and reprimand him. Isn’t culture, after all, supposed to transcend all barriers? And of course, a majority of his contemporaries will be giving TV bytes and print interviews condemning him of such outlandish remarks. But trust me, just switch off the dictaphone and you’ll end up hearing very similar remarks from other musicians and singers too.

Some years ago, I attended a press conference for a music show which showcased artistes from India, Pakistan and Bangladesh. Since I was attending the conference as a friend of one of the bands, I was personally happy to hear positive remarks on how Pakistani artistes should be encouraged to visit India, perform and release audio cassettes and CDs through Indian companies. The bands shook hands, hugged each other while camerapersons clicked away happily. They shared jokes, exchanged numbers and had a hearty lunch with each other. So art really could bring countries together, I wondered, happy to see my friends who had made their ”new” friends so comfortable.

Conference over, my pals (including a lead singer from a well-known Indi-pop bands) decided to spend some more time in the hotel’s coffee shop and have their own little party. And that’s when the ground reality left me stumped: “These Pakistani artistes… they come here, eat our market, our music companies sign them on… ab dekhna boss, T Series hamara album Adnan Sami ke baad hee release hoga… (just wait and watch, T-Series will release our album only after Adnan Sami’s released his). These #$%@!$^ shouldn’t be allowed access into India… humko Pakistan mein jakar live shows karne denge ye log? (will they let us go and perform live shows in Pakistan?) Kabhi nahi (never). These guys come to India, make money, get fame and then proceed to get noticed internationally.” The rant went on and on, till our coffees went cold and soft drinks, warmer… I’d never seen my friend so angry and I thought Abhijeet had finally found another voice to join his “ban Pakistani artistes” club.

The next morning, my friend was quoted in a leading newspaper’s city supplement. “We are like brothers. I’m happy our Pakistani friends have come to India to perform with us. I look forward to creating music with them.”

Some music, this.

Courage under Satyam fire?

Wednesday, January 14th, 2009 January 14th, 2009 Joydeep Ghosh

So, Ramalinga Raju has high blood pressure, acute ulcers and even diabetes. Just a fortnight back, I was not aware of such intricate details about the (now ex) chairman’s health of India’s fourth largest IT company.

Isn’t it funny that no one seems to get such serious diseases while swindling over Rs 5,000 crore? Didn’t his blood pressure go up sharply every time he was fudging those numbers… how many zeros did he have to add every quarter and, if I have to believe his confession, for seven years, to ride a ‘non-existent’ tiger?

Over the years, we as journalists or citizens, have watched helplessly as politicians and white-collared criminals have `fallen ill’ or used other ways to evade the law.

Let’s take Raju’s case. On Thursday, market regulator Sebi summoned him at 5 pm. His lawyer appeared and said that he will appear on Friday at 4 pm because he was ill. On Thursday night, the man and his brother went and surrendered themselves to the Andhra police and were promptly arrested. Now Sebi cannot get access to him till January 16.

But there are other important questions.
Why haven’t his bank accounts been frozen? No one has any idea. Newspaper reports suggest that he has confessed to the authorities that he fudged the numbers. Then why can’t his accounts be frozen as a precautionary measure, so that Satyam’s shareholders and employees will not be left in the lurch? (Was he even paying the company’s contribution to the Employee Provident Fund for the 53,000 employees?)
Or will shareholders be simply have to be told that only invest in companies after doing proper research, look at the management’s past and stupid numbers like cash flows?

But even professional fund managers were fooled. Aren’t they supposed to have a whole lot of research data from so-called analysts, who are paid exorbitant salaries?

In fact during the month of December and I suspect, when the Maytas merger deal did not fructify, many fund managers bought Satyam shares because their ‘analysis’ said it was cheap and did not reflect the company’s fundamentals. Many brokerage houses also put a ‘buy’ call on the company.
So as investors, who do we trust? Fund managers cannot make the right call and brokerage houses are as clueless.
Does anyone suspect, why the small investor, is always scared about the stock market. Whether it is Harshad Mehta or Ketan Parekh or C R Bhansali or Raju… small investors suffer.
In some ways, it is good that the retail investors’ participation in the stock market is quite low. Our institutions are incapable of protecting them…There is ‘no courage under fire’.

Ratatouille Raju…

Friday, January 9th, 2009 January 9th, 2009 Joydeep Ghosh

Surely, he is a great chef. To have cooked a Rs 7,000 crore or $1.4 billion dish, he needed some special talents. Sadly, the 50,000 plus employees and lakhs of shareholders are not in a position to appreciate it.

What is scary is the lack of action on the part of our institutions.

In the US, two firms have already gone for a class suit action. In India, the central government is claiming that the Centre cannot ask the state to arrest Raju (as it is a state subject). And even now, the state has not filed any criminal charges.

Instead the state chief minister has urged that the good offices of N R Narayan Murthy (Infosys) and Azim Premji (Wipro) should be used to provide credibility to the company.

At present, market regulator Sebi is checking the books of both Satyam and audit company PriceWaterhouse.

Both the exchanges have said Satyam will be replaced by other companies from Monday, January 12. Compare that with NYSE, which banned trading on Wednesday itself.

What is worse is that according to the letter written by Raju, there was no one other than him and the managing director had any idea about this scam.

Someone please make me believe this one. The board members, CFO and others in the finance department, marketing heads… wasn’t anyone aware that the company revenues weren’t actually so or for that matter, their spread was a mere 3 per cent vis a vis the 30-plus per cent that the company claimed. Sounds preposterous…

And the last and the best one, where is Raju? – His lawyer claims he is in Hyderabad. Some others say he is in Dubai, yet others in London. Have any of the authorities met or spoken to him? – At least, no one is saying so. By now, in most countries, he would have been at least questioned by the authorities and put under some kind of house arrest.

While, we wait for investigations and committees to come to with their findings, for now, an important point to note is that that whether it is actual terrorism or financial terrorism, we are equally inept at handling both.

No wonder, whatever’s on the menu – guns and grenades or vanishing cash – in our country, the chef always gets away.

Wow it is recession…time to buy a supercar then!

Wednesday, January 7th, 2009 January 7th, 2009 Bijoy Kumar YBijoy Kumar Y

The Audi R8 is an amazing piece of kit. Enough aluminium to make Boeings jealous, a potent
V8 engine that is giving severe headaches to Italians from the Bologna area and Quattro all-wheel drive that sucks terrain like a PR upstart who just landed a big account it cannot chew. When Audi officially launched the car in India there were a few who laughed out loud – after all it was a bad year for the stock market and the news was not looking good for 2009. Not exactly the year to launch, hold your breath, a Rs 1.17 crore (ex-showroom) supercar then, right? Or so thought you and me.

Audi India has managed to sell its quota of 15 R8s for 2008 and is now in the process of delivering the cars to supercar starved super rich Indians who certainly do not belong to the set who checks the price of socks they buy at a supermarket (heck, am sure they don’t collect their free mugs too!). And Audi did a wonderful year selling 1050 cars including 350 Q7s (yup, those machines that answer to the tag ‘mother of all SUVs’).

2008 will also go down in the history of Indian automobile industry where imported motorcycles made their mark. Following the launch of the Yamaha R1 and MT01 (Rs 14 lakh odd for each) it was Suzuki’s turn to launch the world’s fastest production motorcycle, the Hayabusa and the 1800 cc power cruiser called the Intruder.  Recession? Is it another name for the season when everything is up to 50 per cent off?

(We hear there are only 20 Audi R8s coming to India in the year 2009, so act fast before your shareholders come to know!)



Google launches Google Video for businesses

Tuesday, January 6th, 2009 January 6th, 2009 Priyanka JoshiPriyanka Joshi

Google is launching Google Video for business, a customized video platform aimed at businesses for internal use. Google is targeting Heads of training and HR and anyone that uses internal videos at the company. The product will be included in Google Apps Premier Edition for free, with 3 GB of storage per user account.

This is a “Zero billion dollar market today” said the director of product management Matthew Glotzbach in a briefing about the product. “But we will change this and Google video for business will be easy to use.” See Google Video Overview here.

These videos will basically have the same features and limitations as YouTube, including upload size and file type limits. Videos have access control, even if they are embedded outside of the intranet or Google Apps, and can be tagged and commented on just like YouTube. These videos are quick and easy to create and can be uploaded and shared in a number of ways: for training, to communicate end of quarter results, to showcase employee achievements and finally just for some laughs and fun during a stressful overworked the day.

So, what do you think as head of training or Human Resources at your firm? How will you use this? Will this replace your in-house video production crew? Will you use video more in video sharing sites to describe a new service or for quick updates?

Economy and the bar-coded fish

Tuesday, January 6th, 2009 January 6th, 2009 Bijoy Kumar YBijoy Kumar Y

There was a time not so long ago when, as a single ‘not so large’ income family, we had to account for every penny that came our way. That meant we maintained a monthly budget card with ‘in’ and ‘out’ sections and a ‘balance’ column that normally read on the negative. Lion’s share of the money went to EMIs for the house in any case. But when we saved say, Rs 2000 a month, we ensured that the money was put to good use – no, no recurrent deposits for us, but we spent happily on a nice dinner or even a small party for friends from office.

Every month I stood in a queue to ‘take’ some money from the bank, which we would systematically spend over the month.

Malls were not a suburban phenomenon yet and that meant my wife shopped from a wholesale store and hauled stuff home. She used to buy vegetables for the week and never ordered stuff over the phone. Every Sunday I rode my motorcycle to the market and enjoyed buying fresh fish or visited the poultry shop to buy fresh chicken. And as a rule we never kept a ‘credit’ account with the local kirana store. And the maximum I would spend at a time at a fuel station was Rs 500 (Rs 200 if I was filling diesel).  And I drove carefully and braked well before the signal turned red to save fuel.

When we wanted to travel to our home town, I stood in a queue and booked a train ticket. Flights, you see, were meant for emergencies only. And we shopped for clothes twice a year – for festive occasions.  But then things got a bit relaxed.

It has been ages since I visited my bank to ‘take’ money. To begin with it was the convenience of ATMs which dispensed crisp notes and later the culprit was the debit card that was wielded with a vengeance. The economic downfall of the average Indian middleclass family and the beginning of the global meltdown was er…beginning.

Three, I repeat, three super stores around our house meant that we were not buying things for the month any more. We succumbed to temptation and paid Rs 120 for bar-coded chicken from the rather nice ‘chiller’ room at the mall. The said ‘chiller’ room also had fish ‘cleaned and cubed’ for double the money and we could do with that too. What the heck, we even bought bar-coded pumpkin slices and bananas too. While at it, the guilty parents that we are (who hardly found time to spend time with children) bought creamy, sinful pastries for them as well as us. Needless to say, we grew sideways and children learnt the primary steps of blackmailing.

 I drove into fuel stations and started spending Rs 1000 at a time, because with my debit card, I could, and I stopped keeping an account of fuel consumption in my car. And our children got so used to air travel (it was cheap in the interim, mind you), now they wonder why any other mode of transport exist. And we shopped as and when Pantaloons, Big Bazaar and Westside announced sales.  Mind you, ‘as and when’ as against ‘when we needed’.

Alright I woke up last Sunday determined to fight the meltdown – at least get ready for it before it struck us hard. I woke up my wife and daughter and we drove to the ‘big market’ next to the railway station. ‘Do they have a toy section?’, asked my seven year old which made me realise that she has seen one mall too many. There it was, in all its glory – Food land, Reliance Fresh, True Mart and D-Mart all combined to one. So what it was not air-conditioned. My wife screamed as she discovered that tomatoes were Rs 10 a Kilo and half while we were paying Rs 20 at Food land. Ditto ladies fingers and whole pumpkins. We bought a car load of veggies and headed for the fish market. Kingfish which retailed at Rs 250 per kg with a barcode was almost alive at half the price and in our bag. We ate local sweets and drove back and easily saved Rs 500 in the process. We would have saved more if we were not greedy at the sight of so much good stuff for so little money. Meltdown? What meltdown?

Next in the agenda is fighting the withdrawal symptoms – as in avoiding ATMs as if they don’t exist and not attending sales. And we are booking train tickets two months in advance for summer holidays – second class, where children can peep out of the windows and see the beautiful world out there. A world without malls, ATMs and bar-coded fish.


Response to stimuli

Monday, January 5th, 2009 January 5th, 2009 Joydeep Ghosh

Four rate cuts in four months, two stimulus packages … the important question to ask is whether things would improve after all this.

No. And it has nothing to do with the government’s action or inaction. Some have complained that the package is too little. China and even, Thailand have spent more. But I believe that given the leakages that happen in our developmental schemes, it’s best to give targeted packages.

As I understand it, growth is a function of demand and supply. When there is demand (for anything), either rising supply has to match it or there will be a rise in prices (inflation).

But in today’s market, the question is how does one generate demand?  In an uncertain environment, when there have been job and salary cuts across sectors, a very few would be willing to purchase a new residence or car. It’s simply too risky.

On the contrary, there have been stories about young couples, who have sold their house and paid off the bank as they are unsure if they would be able to pay hefty EMIs in months to come. With such drastic measures being taken, it is unlikely that there will be too many big expenses lined up.

Even banks have been wary about extending loans as well. Already, there have been quite a few defaults. Scared, many banks have started cutting credit limits to their customers, especially cash limits.

Further, investors in the stock market have already seen their investments eroding by over 50 per cent.

In other words, when salaries are not steady, credit is unavailable and a negative return on investments… where’s the money to spend?

To stimulate demand, salaries and incomes will have to rise or at least, be steady. More importantly, safety of jobs will have to be ensured. And I don’t know how much of a role can the government play in ensuring these, especially in the private sector.

The bottom line: Till people start making money, they will not spend. And that means no or little demand.

The response to the stimulus packages will be slow… perhaps, even painfully slow