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Friday, 27 June 2014

What they don’t teach you at Harvard Business School

Question: how do you convert Rs.50 lakh into Rs.1,600 crore? You won’t get an answer from any of the learned professors at Harvard Business School. But you will if you hire a clever Indian chartered accountant.
Here’s how it goes. You run a political party. You accept “donations” from the public. Your audited balance sheets show that, between 2004-05 and 2010-11, you received Rs. 2,008 crore in donations – officially. As a political party you are exempt from all taxes – income-tax, service tax, capital gains tax.

So you have a fairly healthy corpus of reserves which you are supposed to use – as per Election Commission (EC) guidelines – strictly for “political” purposes.

So what do you do? Why, you go right ahead and give an unsecured loan of Rs. 90 crore from your political party’s healthy fund reserves, built through public donations, to a defunct newspaper publishing company.
This company, by sheer coincidence, has a debt of Rs. 90 crore. The loan from your party extinguishes that debt and makes the defunct newspaper publishing company debt-free and employee-free.

But does the defunct newspaper publishing company have any value? Well, it owns, among other assets, a large building in the heart of Delhi on land specifically granted to newspaper publishing companies to publish newspapers. The estimated value of the building? Rs.1,600 crore.

So, here we have a defunct newspaper publishing company which does not publish anything, much less a newspaper, with zero debt, zero employees, near-zero sundry expenses – and a building worth Rs. 1,600 crore.

Now what? Your clever Indian chartered accountant, not all those learned professors at Harvard Business School, provides the answer: float a new non-profit company to buy up the defunct company’s shares for a token Rs. 50 lakh.

Kosher? Absolutely.

Laws broken? Perhaps.

But it will take a decade or more to prove they were – if they were – and public memory is conveniently short.

But, your spokesmen say, the political party made “no commercial gain” from the Rs. 90-crore loan transaction. Exactly. The political party in fact made a commercial loss of Rs. 90 crore (the unsecured loan). The commercial gain was made by the new non-profit company which now owns a building valued at Rs. 1,600 crore, having paid just Rs. 50 lakh to buy 100% shareholding in the defunct newspaper publishing company.

Interestingly, 76% of the shares of this new asset-rich but non-profit company belong to two senior leaders of the party. Since the defunct newspaper publishing company was owned by dozens of now-deceased shareholders of the grand old party, should not the shares of the new non-profit company belong to the party as a cooperative rather than to a few individuals? Ah, but this is no ordinary political party. It’s a family enterprise.

What next? No newspaper is being published from the building. All staff have left. The building is empty. The clever Indian chartered account regards this as a criminal waste of real estate.

Rent it out, he says, and you do. The income after all can always be set off against expenditure designated under the head “charitable purposes” so that your balance sheet shows no profit. That takes care of the letter, if not the spirit, of the law.

Is renting space in your building illegal? It may not be if your new company has as one of its objectives in its Articles of Association the business of renting real estate. And if it doesn’t, it can always be appended later by your clever chartered accountant.

If, on the other hand, you now restart the paper, under media and political duress, all floors of the building will be needed for operations. Hundreds of retrenched staff will have to be re-hired. The current income from rent will vanish. Expenditure will spiral. Daily newspapers can lose as much as Rs. 100 crore a year. Another Rs. 90 crore debt write-off may be required in the near future. So restarting a newspaper under duress is a poor option, your chartered accountant tells you.

But what would the Harvard Business School professor, having heard both sides of the story, recommend you do?

Simple. Reverse the entire transaction, he’d say. Return the Rs. 90-crore unsecured loan to your political party. Restore ownership of the Rs. 1,600-crore building to the original defunct newspaper publishing company by transfering back to it the 100% shareholding your new non-profit company bought from it for Rs. 50 lakh.

If you do that, this episode will become required reading as a Harvard Business School case study titled: “How to place public interest above private interest”.

And if you don’t? You might well lose the next general election and have to restart the newspaper after all.

Follow @minhazmerchant on twitter


Wednesday, 25 June 2014

US document reveals cooperation between Washington and Brotherhood

Studies commissioned by the president concluded that the US should back ‘moderate Islamists’ in the region
Gulf News Report
June 18, 2014

Dubai: For the past decade, two successive US administrations have maintained close ties to the Muslim Brotherhood in Egypt, Tunisia, Syria and Libya, to name just the most prominent cases.

The Obama administration conducted an assessment of the Muslim Brotherhood in 2010 and 2011, beginning even before the events known as the “Arab Spring” erupted in Tunisia and in Egypt. The President personally issued Presidential Study Directive 11 (PSD-11) in 2010, ordering an assessment of the Muslim Brotherhood and other “political Islamist” movements, including the ruling AKP in Turkey, ultimately concluding that the United States should shift from its longstanding policy of supporting “stability” in the Middle East and North Africa (that is, support for “stable regimes” even if they were authoritarian), to a policy of backing “moderate” Islamic political movements.

To this day, PSD-11 remains classified, in part because it reveals an embarrassingly naïve and uninformed view of trends in the Middle East and North Africa (Mena) region.

The revelations were made by Al Hewar centre in Washington, DC, which obtained the documents in question.

Through an ongoing Freedom of Information Act (FOIA) lawsuit, thousands of pages of documentation of the US State Department’s dealings with the Muslim Brotherhood are in the process of being declassified and released to the public.

US State Department documents obtained under the FOIA confirm that the Obama administration maintained frequent contact and ties with the Libyan Muslim Brotherhood. At one point, in April 2012, US officials arranged for the public relations director of the Libyan Muslim Brotherhood, Mohammad Gaair, to come to Washington to speak at a conference on “Islamists in Power” hosted by the Carnegie Endowment for International Peace.

A State Department Cable classified “Confidential” report says the following: “Benghazi Meeting With Libyan Muslim Brotherhood: On April 2 [2012] Mission Benghazi met with a senior member of the Muslim Brotherhood steering committee, who will speak at the April 5 Carnegie Endowment `Islamist in Power’ conference in Washington, D.C. He described the Muslim Brotherhood’s decision to form a political party as both an opportunity and an obligation in post-revolution Libya after years of operating underground. The Brotherhood’s Justice and Construction Party would likely have a strong showing in the upcoming elections, he said, based on the strength of the Brotherhood’s network in Libya, its broad support, the fact that it is a truly national party, and that 25 per cent of its members were women. He described the current relationship between the Brotherhood and the TNC (Transitional National Council) as `lukewarm.’”

Another State Department paper marked “Sensitive But Unclassified (SBU)” contained talking points for Deputy Secretary of State William Burns’ scheduled July 14, 2012 meeting with Mohammad Sawan, the Muslim Brotherhood leader who was also head of the Brotherhood’s Justice and Construction Party. The document is heavily redacted, but nevertheless provides clear indication of Washington’s sympathies for the emergence of the Muslim Brotherhood as a major political force in the post-Gaddafi Libya. The talking points recommended that Secretary Burns tell Sawan that the US government entities “share your party’s concerns in ensuring that a comprehensive transitional justice process is undertaken to address past violations so that they do not spark new discontent.”

The Burns paper described the Libyan Muslim Brotherhood: “Prior to last year’s revolution, the Muslim Brotherhood was banned for over three decades and its members were fiercely pursued by the Gaddafi regime. The Libyan Muslim Brotherhood (LMB) returned to Libya last year after years in exile in Europe and the United States, selected new leadership and immediately began to plan for an active role in Libya’s political future.” After a redacted section, the document continued, “The LMB-affiliated Justice and Construction party, led by Misratan and former political prisoner under Gaddafi Mohammad Sawan, was created in March 2012. Sawan himself was not a candidate in the elections but wields significant influence as the head of the largest political party and most influential Islamist party in Libya.”

The July 14 meeting was attended by both Secretary Burns and Ambassador Christopher Stevens. On September 11, 2012, Ambassador Stevens and three other American diplomats were killed in a premeditated terrorist attack on US mission and CIA facilities in Benghazi.

An undated State Department cable revealed further courting of the LMB and its Justice and Construction Party. “Mohammad Sawan, Chairman of Justice and Construction Party, received yesterday at his office in Tripoli, Ambassadors of US, UK, FR and IT. The Ambassadors requested the meeting to get acquainted with the party’s position on the current events in Libya, the Government, the Party’s demand to sack the Prime Minister, the Constitution, GNC lifetime arguments, dialogue initiatives and Party’s assessment of political and security situation in Libya and the region. During the meeting, which took an hour and a half and attended by Mohammad Talb, party’s International Relations officer, and Hussam Naeli, acting liaison officer, Sawan explained that the Government has not been able to achieve any success in the core files such as security and local government, which both are under the direct supervision of the Prime Minister. Such a failure resulted in the lack of security, continuous assassinations, kidnappings, crimes, smuggling and attacks on public and private property, halt oil exports and disruption of water and electricity supply. Sawan stressed that a solution is possible and the party presented a clear solution, but the Government is not in harmony. He added we are responsible only for ministries that we take part in.”

The State Department cable noted that “On their part, the Ambassadors praised the active role of the Party in the political scene and confirmed their standing with the Libyan people and Government despite its weaknesses and they are keen to stabilize the region... At the end of the meeting, Sawan thanked his guests and all stressed the need to communicate. The guests affirmed that they will assist through Libyan legitimate entities as they did during the revolution.”


Monday, 23 June 2014

Beyond the Nehruvian consensus

Through the long era of the “Nehruvian consensus”, Indian policymakers enjoyed a favourite occupation: introspection.

Every problem needed introspection. Every setback called for introspection. Every initiative required introspection.

After over 60 years of introspection, we have policymakers who still advise – yes – further introspection.
The new Indian government has laid the Nehruvian consensus to rest. Action and outcomes count. Introspection is fine. But too much of it can lead to sclerotic inertia.

Can an outcome-focused government lose sight of first principles? The Nehruvian consensus had three guiding dictums: socialism, secularism and non-alignment.

Socialism fell apart under Narasimha Rao, Manmohan Singh (when he was finance minister) and Atal Bihari Vajpayee. It was revived by Sonia Gandhi and Manmohan Singh (when he was Prime Minister).

Instead of growing the economy and then distributing its benefits inclusively, the Sonia Gandhi-Manmohan Singh government did the exact opposite. The fiscal crisis is the result of failed economic socialism.

The Nehruvian consensus on secularism (introduced into the Constitution along with socialism by Indira Gandhi during the Emergency in 1976) descended into farce under Rajiv Gandhi following the Shah Bano case in 1985-86.

Muslims have since become poorer than even Dalits. Communal polarization began not with LK Advani’s rath yatra in 1990 but with Rajiv’s terrible blunder over Shah Bano five years earlier.

The third pillar of the Nehruvian consensus, non-alignment, fell with the Berlin wall 25 years ago. In a unipolar world dominated by the United States, strategic policy requires India to be a regional leader, not part of an amorphous non-aligned bloc.

Jairam Ramesh recently compared Narendra Modi to Richard Nixon – the US President who opened up China to American blandishments at the height of the Cold War.

Weaning China away from the Soviet Union into a position of equidistance with the US was achieved by both Nixon and Henry Kissinger.

Can Modi do the same with China over Pakistan?

Modi’s visit to Bhutan was calibrated to achieve several key ends. Bhutan has conducted over 25 rounds of border talks with China since 1986. The next round of talks between the two countries is scheduled in July/August.

India sought and got an assurance in Thimpu that vulnerable border areas in the north and the east will not be compromised during the China-Bhutan talks.

India’s own border dispute with China in Arunachal and Ladakh can then progress without unnecessary impediments.

China’s growing concern over Islamist militancy in its northwestern Xinjiang province is a lever India will use to focus Chinese minds on restraining terrorism bred in Pakistan’s fertile jihadi soil.

As events in Karachi have shown terrorism, like water, is fungible. It can drown its creators and damage its neighbours. China has no wish to allow further Islamist radicalization of Xinjiang, where Muslim Uighars speak a Turkic dialect. China earlier this week executed 13 terrorists for a series of attacks by Uighars in Xinjiang.

The emergence of the Islamic State of Iraq and Greater Syria (ISIS) has further underscored the dangers Sunni jihadism poses to the world.

ISIS was initially funded by wealthy individual donors in Sunni Saudi Arabia and the Gulf states to weaken Shia-majority Iran and Iraq (which is 60% Shia, 20% Sunni and 20% Kurd).

Like all Frankensteins – including Pakistan’s Tehreek-e-Taliban — ISIS has now become a menace to its sponsors. It could in future threaten the Saudi Wahhabi princelings and spread its brand of unspeakable brutality from the Middle-East to north-west India.

ISIS will eventually be defeated by moderate Sunni rebel factions in Syria and Iraq once Iraq’s blundering Shia prime minister Nouri al-Maliki gives minority Sunnis a role in his government. ISIS’s lightning advance towards Baghdad has warned the world against allowing the culture of jihadism free rein. A rattlesnake has to be defanged before it spreads its poison.

India has long punched below its geopolitical weight. A colonial inferiority complex, corrupt governments and chronic misgovernance since, especially, 2004 have eroded India’s ability to influence events outside its own sphere.

The new government must change that. How?

The three Abrahamic religions – Christianity, Islam and Judaism – have been the fount of global conflict for centuries. India’s post-Nehruvian consensus must deal with the embers of that conflict by evolving a robust strategic doctrine. A future article will expand on that and more.


Thursday, 19 June 2014

The rise of ISIS: Are the answers embedded in Islam?

The rise of ISIS as an even more virulent version of al-Qaeda cannot be explained except with reference to Islam, which combines spiritual and political power like no other religion.

by R Jagannathan 19 Jun 15:40 pm IST

A new spectre is haunting the world - the spectre of yet another terrorist outfit - the Islamic State of Iraq and Syria (ISIS) - that has suddenly fought its way to capture huge swathes of territory in West Asia. It promises to be a nastier version of al Qaeda, and now accuses the old al Qaeda of forgetting its initial ideals.

Academics will again go about explaining how the failure of President Obama to act in time and the exclusionary nature of the Iraqi Shia leadership gave space for Sunni-based ISIS to grow, but this will be only a partial explanation. The real explanation lies at the heart of Islam and it goes back to the time of the Prophet.

Islam is not just a religion; it is also a system of accumulating and consolidating political power. Its ideology is perfectly suited for these goals.

This is what explains how a rag-tag bunch of thugs and extortionists morphed into an all-conquering army and now holds several towns and large territories in Iraq and Syria. Soon ISIS could be creating a caliphate - a dream aborted in Afghanistan after the American invasion pushed Mullah Omar out. If ISIS succeeds, it will become a new power centre for political Islam. But it won't be the only one, for we still have the Shia power centre in Teheran, and several others elsewhere.

Islam is unique not for its great messages of brotherhood and justice, which are certainly inspiring, but in how it formally allows spiritual and temporal power to reside together. They reinforce one another.

The Prophet was not just the spiritual leader of the early Muslims, but also their political leader and head of the army. The ideology of Islam - an extraordinary faith in one god, and none other - is exactly the right one for claiming and consolidating power and building empire.

Even though there are other religions that talk of only one god - Judaism, Christianity and Zoroastrianism, among them - all of them, at least in their modern forms, are more accommodating and pluralistic than Islam. The latter has been rigid in its belief not only about one god, but in not separating power from religion.

Sigmund Freud, in his book Monotheism, writes about how monotheism evolved as an important adjunct to the growth of empire. Most ancient societies were polytheistic and plural. The worship of many gods was the norm even though small tribal societies had their favourite gods. But once tribes became kingdoms and kingdoms became small empires, the rulers - both to consolidate power and to retain it - saw the need to adopt some form of monotheism as state ideology. At its basic level, monotheism is about concentrating power in one person or institution.

The first monarch who sought to go monotheist was the Egyptian Pharaoh Amenhotep IV, who in the 14the century BC declared Aten as the supreme god. His priests did not like it much, and his brand of monotheism - which some also called henotheism - did not outlive him in polytheistic ancient Egypt.

The Arab tribes living in and around Mecca before the advent of the Prophet were also polytheistic. This was what Mohammed decisively changed when he destroyed all the idols at the Kaaba and said only Allah was the true god.

The link between one god and power has been recognised all through history. Emperor Constantine wanted all rival versions of the Bible destroyed so that there could be a unified Christianity. Thus we had the Nicene Creed. In India, Mughal Emperor Akbar was declared secular both because of the diversity he allowed and also because he tried evolving a unified religion called Din-e-Ilahi. But his own ulema were not amused and the effort died an unsung death. Akbar's motives in evolving Din-e-Ilahi may have had less to do with secularism and more with the consolidation of power in a diverse empire.

But it was the Prophet of Islam who took this idea to its logical conclusion by making belief in one god central to his religion, and giving his followers the mandate to expand this to all of humanity. He created the ultimate masculine religion driven by the pursuit of both power and spirituality.

Was this unique, was this different from the two earlier Abrahamic religions - Judaism and Christianity? Both of Islam's predecessor faiths emphasised one god and opposed idolatry. The progress of the three religions was, however, different. Judaism resisted change and stuck to its belief that Jews were a chosen people. Much like Hinduism, it sought no conversions of other people to Judaism and ultimately posed no threat to temporal powers. But Christianity, once it grew out of its initial moorings in a Jewish reform movement that also resisted the Roman occupation of Palestine, became a proselytising faith that could have threatened kingly power. This is why Christianity had a difficult existence in its initial phases, till Constantine embraced it politically and made it a part of his power base. After that, church and state were often joint stakeholders in power, or shared an uneasy relationship, till the European enlightenment forced the two apart.

Islam never saw any of these pressures and tussles. From the start, the Prophet ensured the merger of state and god - and there has been no reformation, renaissance or enlightenment to force a change.

A key feature of religions that emphasise monotheism is that rival monotheists are a threat to it. It has to be my god, not your god. This is why even though Islam accepts the validity of Jewish and Christian prophets, its claim to having the final word of god ensured centuries of conflict with both Judaism and Christianity - with the crusades being the most logical outcome of extreme monotheism and the combining of temporal and spiritual power.

All consolidation of power needs an ideology that's larger than self-interest, and the Prophet created that combination in Islam where its followers think nothing of sacrificing themselves for achieving this ideal. This is why less than 100 years after his death, the warriors of Islam had reached all over Asia, Africa and Europe.

The power and weakness of Islam lies precisely in this mixing up of spiritual and temporal power. It means anybody can use the appeal of religion to seek power, and anyone with power can claim Islam as his own. This means ambitious warmongers can and will threaten not only other rival states, but even states that are formally Islamic. Genghis Khan ravaged many Muslim states during his campaigns, but his progeny embraced Islam. Taimur called himself the Sword of Islam. Anyone seeking power can merely say that he is the guardian of Islam, or his is the right version of Islam, and go for it. Thus Islamists after often a big threat to other Islamists. An Osama bin Laden was as much a threat to the Saudi monarchs as to America.

This is what explains the huge, bloodly schisms of Islam - Shia-Sunni, Sunni-Ahmaddiyas, etc. Every time you have managed to finish off an al-Qaeda, an ISIS will rise. When ISIS fails - as it surely will, for no terror can hold unnatural countries together - another "truer" version of Islam will rise. Pakistan is failing precisely because it made Islam its ruling ideology. The corollary to this ideology is: which Islam? This can only lead to more bloodshed.

The vision of Islam - of converting the whole world in order to have a peaceful world - is impossible precisely because the ideology is wedded to power. Anyone who seeks power can claim to be the better Islam and make a grab for it.

The world cannot do anything about this, and especially by demonising Islam - as the west and we in India sometimes tend to do. This is an issue internal to Islam and will be addressed only when enough Muslims begin to see the dangers to themselves and their faith from this. Let's remember, Christianity went through the same process and needed the reformation and enlightenment to separate church from state.

Islam will become a normal religion when two things happen: when enough Muslims see the damage they are doing to themselves and call for change, and when the secular process of women getting educated, empowered and emancipated expands. The antidote to a hyper masculine religion is feminine power.


Sunday, 15 June 2014

Why NDTV did not disclose Rs450 crore tax notice to exchanges

NDTV has argued that the matter was “sub-judice” and that it has received a stay. Other listed companies, including Infosys, however, time and again have disclosed such information to the bourses
Prannoy Roy-led New Delhi Television Ltd (NDTV), was served a Rs450 crore demand notice by income tax (I-T) in February this year. However, NDTV did not inform the BSE or National Stock Exchange (NSE) about this, which it is a alleged violation of listing norms. When BSE and NSE asked NDTV about this, the company argued that the demand notice was "without any basis or justification and contrary to provisions of Income Tax Act, 1961 and had resulted only due to erroneous and incorrect view taken by the tax department". Hence NDTV saw it fit not to disclose anything about it. 
Although all listed companies are mandated to provide every piece of  information relating with them through regulatory filings, NDTV says, "it was felt that the disclosure of these events in isolation, without any reference to the steps proposed to be taken by the Company, was not desirable. In the event of ongoing proceedings before Income Tax Appellate Tribunal (ITAT), where a stay has been granted by ITAT, the claim made by the tax department cannot be deemed as an enforceable tax demand against NDTV due and payable by it. The demand has resulted only due to erroneous and incorrect view taken by the tax department."
Earlier in February 2014, in a major crackdown against listed companies not complying with regulatory disclosure norms, NSE and BSE imposed fines or suspended trading in over 1,100 cases of non-compliance, involving nearly 600 companies. After finding hundreds of companies of not adhering to various provisions of listing agreement, market regulator Securities and Exchange Board of India (SEBI) had asked the stock exchanges to put a stronger mechanism in place to ensure compliance. 
In March 2014, Vardhman Textiles Ltd, a listed company, also received a Rs97.64 crore demand notice from the I-T department and it conveyed the same to the bourses. Similarly, when Redington (India) Ltd received a Rs138 crore demand notice from I-T dept, it also informed the BSE.
Even, Infosys, the country's second largest IT company, was slapped with a Rs582 crore demand notice. This was in addition to the tax demands of Rs1,175 crore for FY2005 to FY2008, the company was contesting. Infosys in its regulatory filing informed the bourses about the tax notice and also its position to contest it.
The question then is why NDTV did not think it fit and proper to give the relevant information to the bourses? This non-disclosure of information prompted NSE and BSE to seek clarification from the company. While BSE has mentioned the notices it sent to NDTV, there are no details available at NSE. NSE just says that it sought clarification from NDTV based on a complaint. 
When NDTV failed to provide specific response to its query, BSE again sent an email on 27th May to the company asking it to give point-wise reply. In its reply, NDTV said, "...we have clarified our position with respect to the queries of exchange on various disclosures under listing agreement vide Company's letters dated 16 May 2014 and 22 May 2014, wherein the company categorically explained the position as to how the company has not violated the provisions of clause 36 of the listing agreement."
Here are the specific queries sent by BSE and the replies provided by NDTV...
1) Non-Disclosure of the tax demand of Rs450 crore raised vide the Assessment order dated 21 February 2014 at the time the same was raised.
NDTV Response: As stated in our earlier submissions, the matter relates to tax demand of Rs450 crore raised vide the Assessment order dated 21 February 2014 issued by the tax department for the assessment year 2009-10 (Financial Year 2008-09). The aforesaid tax demand has resulted due to erroneous and incorrect view taken by the tax department that the transaction vide which an investment of $150 Million was made by NBC Universal Inc and Universal Studios International BV in an overseas subsidiary of NDTV, is a 'sham' transaction.
NDTV submits that the said transaction was indeed a bonafide and genuine transaction, where funds were transferred from Universal Studios International BV, which was a GE Company at that time, an organization of international prestige and repute, for subscription of shares in overseas subsidiary of NDTV. The funds were raised with the involvement of intermediaries like law firms and bankers on the end of both the parties. The funds were transferred through normal banking channels and all the required compliances made in respect thereof. Further, the documents and confirmations required by the tax department during the course of assessment and investigation proceedings were provided to the tax department, including an apostilled copy of the confirmation from Universal Studios International BV to the effect that the investment of $150 Million was made by Universal Studios International BV, for subscription of shares in overseas subsidiary of NDTV.
It has also been highlighted by the Company earlier that the complainant Mr Sanjay Dutt, of Quantum Securities Pvt Ltd, has raised various matters with the Stock Exchanges and the income tax department, which also include the demand made by the tax department against NDTV. This demand has resulted from an investment made by NBC Universal Inc (NBCU) and Universal Studios International BV in an overseas subsidiary of NDTV. It may be noted that at that time, Mr Dutt headed, negotiated and closed various activities for the aforesaid investment, including negotiations on behalf of NDTV with the management and officers of NBCU. Further, the company had made the required disclosures with the Stock Exchanges and in its financial statements, with respect to the aforesaid investment made by NBC Universal and Universal Studios International BV.
In view of the above, it was concluded that the said demand was without any basis or justification and contrary to provisions of Income Tax Act, 1961 and had resulted only due to erroneous and incorrect view taken by the tax department. Based on the advise from external counsels, the Company is confident of a favourable outcome in the proceedings before Income Tax Appellate Tribunal (ITAT) challenging the aforesaid Assessment order. The Company filed an appeal before the ITAT challenging the aforesaid Assessment Order. The understanding of the Company was affirmed when the ITAT passed a stay order on the said demand in favor of the Company. Further, it may be noted that the challenge of the said claim, made by NDTV, is pending final determination before the ITAT and is currently sub-judice. 
Therefore, it was felt that the disclosure of these events in isolation, without any reference to the steps proposed to be taken by the Company, was not desirable. Such a disclosure would also be against the spirit of the Listing Agreement as an issue which is sub-judice, would lead to an incomplete representation of the matter to be made to the shareholders, before the relevant forum before whom the matter is pending has given its decision. Therefore, the Company was of the view that no disclosure was required in the matter, the same being sub-judice. It was deemed appropriate that a disclosure of the matter be made at a time when a decision has been taken by ITAT. 
2) Non-Disclosure of Company payment of Rs5 crore to the Income Tax Authorities pursuant to tax demand of Rs450 crore raised vide the Assessment order dated 21 February 2014 at the time of payment thereof.
NDTV Response: It may be noted that the Company didn't make any payment when the tax demand notice of Rs450 crore raised vide the Assessment order dated 21 February 2014 was received. Instead, as mentioned earlier, the Company filed an appeal before ITAT against the aforesaid Assessment order vide which the demand was made. In the course of the proceedings before ITAT, a stay order was passed by the ITAT (order dated 26 March 2014 and 21 April 2014), vide which an interim stay has been granted on the demand made by the tax department. It may be noted that in the present case, ITAT allowed the demand to be stayed on payment of an amount of Rs5 crore only. 
As highlighted earlier, the challenge of the said claim, made by NDTV, is pending final determination before the ITAT and is currently sub-judice. 
Therefore, in our opinion there was no requirement of a disclosure in this case.
3) Non-Disclosure of Rs450 crore as a Contingent Liability pursuant to the income tax demand of Rs450 crore raised vide the Assessment order dated 21 February 2014 when the company submitted its Audited Financial Results for the year ended 31 March 2014. 
NDTV Response: As already highlighted, the matter is presently sub-judice before the ITAT and based on the view of the external counsels, NDTV has a strong case on merits. In the event of ongoing proceedings before ITAT, where a stay has been granted by ITAT, the claim made by the tax department cannot be deemed as an enforceable tax demand against NDTV due and payable by it. The demand has resulted only due to erroneous and incorrect view taken by the tax department.
Further, according to a Senior counsel who has opined on the matter, the issues before the ITAT are presently pending final adjudication and NDTV has a strong arguable case, and in all likelihood the issues involved deserve to be decided in NDTV's favour.
Therefore no disclosure was applicable in this case. 
In view of the foregoing submissions, the contention of the Complainant that a violation of clause 36 of the listing agreement has been committed by NDTV, is baseless and without merit as the demand was levied on erroneous and incorrect view taken by the tax department . Further, it is reiterated that no violation of provisions of the Listing Agreement has been committed by NDTV as alleged by the Complainant or at all.
In June 2013, Moneylife wrote how Sanjay Dutt, director of Quantum Securities, has levelled a series of allegations about wrong practices and poor governance at NDTV. He made these charges in writing to almost every regulatory authority in India – the Ministry of Corporate Affairs, the Securities & Exchange Board of India (SEBI), the Reserve Bank of India (RBI) and other institutional investors. See our report: Allegations of NDTV’s Many Shenanigans.
Following our article, on 27 June 2013, NDTV sent a legal notice to Quantum Securities, Sanjay Dutt and directors of the company, through its law firm Amarchand Mangaldas accusing him of making defamatory statements, writing to various regulators and ‘launching a tirade’ against NDTV because he bears a ‘grudge’ against the broadcaster. This is probably the first time that charges by a significant shareholder have been termed ‘defamatory’ by a company, mainly because he was a ‘remunerated consultant’ sometime in the past. Mr Dutt and his firm Quantum Securities hold a significant stake in NDTV.
NDTV got listed on May 2004. Its first trade was at Rs100, a substantial premium over its issue price of Rs70 for its initial public offering (IPO). At that time, the NDTV IPO was oversubscribed within 15 minutes of opening the books. After hitting an all time high of Rs511.75 in 2008, NDTV shares are trading below its IPO price 2011 onwards. In fact, during 2011, NDTV recorded its all time low of Rs24.75 on the BSE.

In August 2011, Moneylife wrote: “NDTV got listed in 2004 and was trading below its listed price after seven years. It had given a negative return of 19% compounded in the past five years and a total shareholder return (TSR) of negative 66% for the same period. Its viewership claims, like those of all TV channels, are impossible to verify. Its credibility is at a nadir (after the phone-tapping controversy) and its finances are in a mess. NDTV has rarely made money from operations. For the past few years, its consolidated operations have been making cash losses and it has been running on money made by selling loss-making subsidiaries to strategic investors.”
We further pointed out how marquee institutional investors always line up to acquire this loss-making company’s bits and pieces and exit at a loss at regular intervals, only to make way for other big name investors! The latest was DE Shaw, which provided an exit to Goldman Sachs in 2011 by acquiring a 14.2% stake. After this, NDTV acquired a significant investor—Abhay Oswal, who owns nearly 15% of its equity but seems to have no presence on NDTV’s board of directors. Mr Oswal happens to be the father-in-law of Navin Jindal, an industrialist and Congress Member of Parliament.
In all these years, no investor has complained, or uttered a word of public criticism, about the losses and operations of this strange company. Then last year in June, Mr Dutt, in an email to Moneylife, made some startling allegations about NDTV’s capital structure. He alleged that chairman Prannoy Roy received irregular promoter funding to the tune of a massive Rs375 crore by pledging NDTV shares which, according to him, is against the Reserve Bank of India (RBI) rules. The loan was made to a company called RRPR Holdings Private Limited in October 2008 against the pledge of NDTV shares. (Read more Allegations of NDTV’s Many Shenanigans)
As per the listing agreement, companies are required to submit documents like annual reports, shareholding pattern data, quarterly and full-year financial results, as also corporate governance compliance reports within stipulated time periods. The question is now, will NSE and BSE, the first line of regulators would initiate any action against NDTV, similar to the one the bourses took on several companies for failing to disclose the information on tax notice? In addition, will market regulator SEBI also probe NDTV and its apparent violation of listing norms?


Friday, 13 June 2014

Six Delhi NGOs in IB watchlist say thank you for noticing us

Written by Amitav Ranjan , Shalini Narayan | New Delhi | June 13, 2014 4:41 am


The document claimed INSAF used foreign funds during 2009-12 to pay “at least 15 non-FCRA and 26 FCRA organisations.

Six non-governmental organisations, which figure in an Intelligence Bureau report on NGOs stalling development projects, operate out of a single building in Katwaria Sarai in South Delhi.

The IB report on the ‘Impact of NGOs on Development’  said inquiries into “pattern, design and funding of protests at nuclear plants and uranium mines” revealed a “superior network” of pan-India organisations closely linked to territorial outfits that were also indulging in agitation against GM foods and the POSCO steel plant in Orissa.

“The manner of free-funding for these NGOs is observed from the fact that ASHA and its IFSF campaign are headquartered with four prominent anti-nuclear NGOs at a single address — A-124/6, Katwaria Sarai, New Delhi — which is an unmarked, small, two-room flat,” the report stated.

“These four NGOs are Indian Social Action Forum (INSAF), Coalition for Nuclear Disarmament & Peace (CNDP), Popular Education & Action Centre (PEACE) and Jan Sangharsh Samanvaya Samiti, the latter being the focal point for anti-Fatehabad nuclear power plant,” it added.

Its section on anti-nuclear activism said CNDP, INSAF and PEACE were at the forefront of protests against building of nuclear energy plants in India and accused them of coordinating radiation leak studies and instigating protests to stall construction work at nuclear sites.
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ASHA (Alliance for Sustainable & Holistic Agriculture) and IFSF (India For Safe Food) have been identified in the IB report as among the four NGOs — the other two being Navdanya and Gene Campaign — which have been leading anti-GM food activism in India.

“The above NGOs were active facilitators of news articles, liaison with other activists and social media activism which contributed to the four-year old moratorium on Bt Brinjal and the ban regimes recommended by parliamentary standing committee (August 2012), Technical Expert Committee appointed by the Supreme Court in October 2012,” the IB said.

INSAF, involved in the anti-Jaitapur nuclear plant activism, was accused of organising and paying for anti-POSCO events “with active participation of most NGOs headquartered with it at Katwaria Sarai”. The IB cautioned that INSAF was now opposing the Delhi-Mumbai Industrial Corridor, asking activists to warn farmers that they would become landless owing to government acquisition of land for the project. The document claimed INSAF used foreign funds during 2009-12 to pay “at least 15 non-FCRA and 26 FCRA organisations”, including an individual to protest against the extra-judicial executions in Manipur. Its FCRA registration was frozen in 2013 as transfers by an FCRA NGO to non-FCRA NGOs violated Section 7 of FCRA 2010.

When The Indian Express visited the Katwaria Sarai building on Thursday, it found that two of the three floors there are occupied by the four NGOs mentioned in the report — INSAF, CNDP, PEACE and Jan Sangharsh Samanvaya Samiti.

Anil Chaudhary, convenor of PEACE, said there was nothing wrong if they were all operating out of the same address since “we are all like-minded organisations and there is no harm in allowing cost-cuts for infrastructure, especially when we are fighting for a common cause”. He said a monthly rental of Rs 15,000 was being paid for each floor.

Chaudhary, who is also a member of INSAF, said the CNDP was not a registered NGO but “a campaign by individuals with no foreign funding, no membership record… the primary focus of the campaign is nuclear disarmament and its financial repercussions”.

“CNDP was formed in 2000 after Pokhran and became part of PEACE which was formed in 1995. My only question is how has a document of national security been leaked? And if there is a ban on NGOs going against government policy, why aren’t such rules specified in the FCRA?”

“PEACE and INSAF are registered under FCRA. The IB report has not been formulated overnight. It has involved years of investigation. IB personnel have visited us every time there has been a campaign or an awareness programme. During President Clinton’s visit to India in 2000, the IB personnel visited our office to inquire what we were up to,” he said.

PEACE has 16 members and five trainers who deal with various issues relating to displacement, water, NREGA. They also train field workers of smaller NGOs. Nuclear disarmament, Chaudhary said, is only one of the many issues they raise.

The INSAF, he said, is an umbrella body comprising 750 organisations, including PEACE. “INSAF cannot have individuals as its members. Only organisations can be part of it. Elections are held to top posts every two years. INSAF and PEACE each receive funding of Rs one crore a year, the main foreign contributor being Germany. All this has been submitted in our annual report to the FCRA. Why are they creating a problem now,” Chaudhary said.

Last year, the registration of INSAF was suspended for 180 days in “public interest” and its bank accounts frozen. This order was challenged in the Delhi High Court  and the suspension order was subsequently withdrawn.

“We learnt of the IB report only through the newspaper, we never received any official correspondence from the department. We entertain the personnel the same way we entertain any and every visitor who comes here. We are very clear on what we are fighting for. The IB may say what they want. But as a small
organisation, we can’t be behind a mass movement. Our only way to spread awareness is through small competitions in schools and workshops. If there are rules, we are following them. In fact, we are glad the IB has named us. At least now our voices will be heard,” Chaudhary said.


IB report to PMO: Greenpeace is a threat to national economic security

Written by Priyadarshi Siddhanta , Amitav Ranjan | New Delhi | June 11, 2014 9:58 am

The allegations are part of the IB’s report, dated June 3, submitted to the Prime Minister’s Office.  
The allegations are part of the IB’s report, dated June 3, submitted to the Prime Minister’s Office.

The IB report claims Greenpeace’s “funding of research bodies” is a “massive effort” that has not attained high visibility so far.

An Intelligence Bureau report on foreign-funded NGOs “negatively impacting economic development” in India has called Greenpeace “a threat to national economic security”, citing activities ranging from protests against nuclear and coal plants and funding of “sympathetic” research, to allegedly helping out an Aam Aadmi Party candidate in the recent Lok Sabha elections.

The allegations are part of the IB’s report, dated June 3, submitted to the Prime Minister’s Office. As reported first by The Indian Express, the IB claims the negative impact of the NGOs’ role on GDP growth to be “2-3 per cent per annum”.

The report, signed by IB Joint Director S A Rizvi, accuses Greenpeace of contravening laws to “change the dynamics of India’s energy mix”. The bureau says Greenpeace’s ‘superior network’ of numerous pan-India organisations has helped conduct anti-nuclear agitations and mounted “massive efforts to take down India’s coal fired power plants and coal mining activity”. Greenpeace will take on India’s IT sector over e-waste among other “next targets”, the report says.

While several NGOs are named in the IB’s 21-page report, that lists seven sectors/projects that got stalled because of NGO-created agitations against nuclear power plants, uranium mines, coal-fired power plants, farm biotechnology, mega industrial projects, hydroelectric plants and extractive industries, the main international one singled out for criticism is Greenpeace.

Throughout, the IB report sees Greenpeace as the prime mover of mass-based movements against development projects. “It is assessed to be posing a potential threat to national economic security… growing exponentially in terms of reach, impact, volunteers and media influence,” it notes. The efforts are focused on “ways to create obstacles in India’s energy plans” and to “pressure India to use only renewable energy”.
The report also accuses Greenpeace, “actively aided and led by foreign activists visiting India”, of violating the provisions of the Foreign Contribution (Regulation) Act of 2010 (FCRA), and financing “sympathetic studies” at the Tata Institute of Social Sciences (TISS) and at IIT-Delhi.

While FCRA provisions debar organisations getting foreign funding from political activity, former Greenpeace consultant Pankaj Singh stood as an Aam Aadmi Party candidate from Sidhi Lok Sabha seat in Madhya Pradesh in the recent general elections. Mahan coal mines, against which Greenpeace has been protesting, fall under this constituency.

The IB report says that Singh’s organisation Mahan Sangharsh Samiti, which is leading the agitation in Singrauli district against both public and private sector coal mines, received regular funding from Greenpeace. Singh is the Samiti’s co-founder.

Singh, however, denied any truck with Greenpeace. “I do not know who is telling you this, but we have no connection with them.”

Responding to an e-mail from The Indian Express, Bharati Sinha, communication director at Greenpeace, said, “To take part in political activities for elections, Greenpeace employees or consultants have to resign from the organisation… Singh followed the same principle.”

She added that Greenpeace “does not support any political party, but engages with all”.

The IB report claims Greenpeace’s “funding of research bodies” is a “massive effort” that has not attained high visibility so far. “To encourage Indian-ness of its anti-coal approach, Greenpeace has financed Tata Institute of Social Sciences to study health, pollution and other aspects at Mahan and plans to use this case to ban all coal blocks,” it says.

TISS told The Indian Express in an e-mail that it needed more time to give information on the issue.
On the issue of coal, the IB report further says that since 2010-11, Greenpeace has gradually expanded its activities to oppose coal-fired power plants and associated mining. In March 2013, the IB notes, Greenpeace and the Urban Emissions Conservation Action Trust published a “questionable technical report which claimed 1,00,000 deaths in FY 12 due to health problems arising from 111 existing coal-fired power plants in India”.

Greenpeace refused to answer questions regarding funding of “sympathetic studies”, adding: “Through our fight in Mahan for a single coal block, we hope that the new government uses innovative thinking and bold measures to take India away from dependence on dirty coal and dangerous nukes… India surely needs to grow, but India also needs to play its part in keeping global temperatures from growing (more than) two degrees.”

Among Greenpeace’s “future threats”, the report talks of the organisation renewing its campaign internationally to highlight that Indian IT/ITeS firms do not meet global standards on e-waste emissions.
Greenpeace Bangalore has focused its attention only on Indian IT firms while staying mum on multinational IT firms, the report says.

Asked about the source of funding of Greenpeace, Sinha said: “Greenpeace is an independent campaigning organisation that does not accept any donation from corporate or government entities. In the year 2013-2014, Greenpeace India raised around Rs 20 crore from over 3 lakh individual supporters in India.”


Professional Agitators - Killing India Softly


Imagine life without mobile phones now. But there are many who are suffering from the waves of those towers and they do complain. What’s the option? Reduce connectivity? How many would like that? The only option, therefore, is to strike the best possible balance between development and pain. Our population has grown from around 36 crores in 1947 to 1.2 billion currently. That doesn’t seem to bother anyone anymore. And the demands of this huge population are varied and endless. Under these circumstances the objective of the govt is “the greater good of the greater number”. This is why an IB report pointing to a number of NGOs stalling the development of India, various projects, causing delays and acting for foreign vested interests has rattled the media and a lot of the NGOs. Almost all of these NGOs are extensively funded by foreign agencies.

Much of what the IB report says is nothing new and has been in the public domain for long. I don’t even think the report got “leaked”.  I believe it was deliberately handed over to TimesNow by a rogue in the Home Ministry to sound a warning to many of these NGOs. Some of the smooth-criminals who have been a nuisance to various projects are in this pic: 

Medha Patkar has been agitating against the Narmada dam for ages. Tagging along with her was Genocide Suzy (who hates everything about India). The SC had approved raising the height of the dam to 138 metres. On June 12, when the GOI approved the increase of 17 metres to the dam to the approved level, Patkar called it “illegal”. So even the SC ruling is illegal for her. Having realised the stupidity of calling it “illegal”, in later statements she calls it “undemocratic”. I believe we have all seen how all the Commie undemocratic forces gathered under the comforter that Kejriwal has covered himself with. The Narmada dam provides water to millions of historically water-starved people in Saurashtra and Kutch besides other parts of Gujarat. Naturally, many residents around the dam would be displaced. It is right to protest and seek the best compensation for the displaced people but to agitate that dams shouldn’t be built and they are illegal is essentially an anti-people, anti-national activity. That apart, Patkar’s dubious foreign funding comes from vested interests which enables her to personally live a life of comfort while scavenging on the pain of others (read this detailed post).

Then there are others like Harsh Mander, Teesta Setalvad, and Shabnam Hashmi who have scavenged on riot victims of Gujarat. The more they lied the more funds they got from India, political parties and from abroad. I don’t need to provide links because these rogues are now known for their fraudulent financial activities. Teesta has even reportedly used the “riot funds” for her personalshopping, jewellery and fine wines.SP Udaykumar is quite a character. On Timesnow he disclosed he had received lakhs of rupees from abroad, including some research funding from Ohio University. All that research money had nothing to with nuclear projects and nobody knows what research he did. Some “hippy” that Udaykumar referred to as a contact turns out to be an “agent” who carried hand-sketched maps of 16 nuclear plants in India. Oh yes, normal people do carry maps of nuclear plants in India, don’t they? This scumbag led a serious and long protest against the Kudankulam nuclear plant in Tamil Nadu with no legitimate reason except fear-mongering. Obviously, Udaykumar was being influenced and funded by foreign crooks that have their vested interests in blocking some project or the other in India. And sure enough, the current “rent-an-agitation” warehouse manager, Arvind Kejriwallanded up in Kudankulam too.

The agitations by Patkar and other scavengers of misery have cost a lot. According to an estimate the delays in the last 10 years has cost nearly 45000 crores to the Narmada dam which is more than the cost of the project itself (Read here). The mysteries of that wonderful gang, called Greenpeace, is just about unravelling. It was long known that this group is in India to only create ruckus and nuisance for any project that benefits India. However, the crooks from this organisation, which originates from Canada, targeted only Indian organisations and projects and not projects by MNC. This series of tweets by IBTL shortens the story:

Greenpeace not only funded agitations in general, it even funded agitations by an AAP party member. If one looks closely, the AAP party is nothing but an Apex body of all such foreign-funded NGOs, most of them involved in anti-national agitations and activities. They are hell-bent on stopping every project that India wants to undertake in any territory. It’s hardly surprising, therefore that the most popular form of management by Arvind Kejriwal is street agitations and dharnas. Nothing else suits them. For more on the various other NGOs like CRY, World Vision, MARAG who have been involved in unusual funding and money-laundering please read these posts: “Children as leverage” – Part1 and Part 2 as also “Confederation of Indian agitators”. Some of these NGOs operate as children’s services but are missionaries in disguise who seek to convert children to Christianity. That’s their “return on investment”. Some of them operated as “professional agitators” against projects in Gujarat.

Cordaid and HIVOS are Dutch organisations that are strangely exercising great interest in India. On June 11 in a discussion on Timesnow it turned out that Cordaid first operated in Kashmir for Human Rights and later suddenly turned to the North East sector. From human rights in Kashmir their attention turned to Palmolein and mining and Uranium in the NE. Both these NGOs are also known to have contributed a good deal of funds to, you guessed it, Arvind Kejriwal and his NGOs and IAC (read this post which has links to various reports). General Bakshi (retd) on Timesnow pointed out that there are 90000 tons of Uranium deposits in the NE but till date not 1 gram of Uranium has been extracted due to these NGO agitations and the influence they bring from the foreign govts controlling them. Given this, the following passage from the Sunday Guardian (April 2014) should not shock anyone at all:

Hillary Clinton likes to operate through NGOs, which are given funding through indirect channels, and which target individuals and countries seen as less than respectful to her views on foreign and domestic policy in the target countries," a retired US official now based in Atlanta said. He claimed that "rather than US NGOs, (the former) Secretary of State Clinton favoured operating through organisations based in the Netherlands, Denmark and the Scandinavian countries, especially Norway" as these were outside the radar of big power politics. These NGOs were active in the agitation against the Russian nuclear power plant at Kudankulam in Tamil Nadu, with "funding coming mainly from a religious organisation based in Europe that has close links with France.”

The IB report was probably put out to scare some of the errant NGOs but there is definitely a desperate need to get rid of foreign NGOs and foreign-funded NGOs whose actions are motivated not by genuine causes but by “political” persuasions of the country funding them. Some of these NGOs don’t even have much cause to exist anymore. There was a time when the govt did not have a ministry for environment or statutory clearances as a requirement. Our courts too have been very active on these concerns. So for these “specialist” NGOs for quite a few causes are not really needed anymore. The only lame argument that will come up against this is “Govt is corrupt” but then these NGOs have proved equally corrupt too. The NGO domain itself has become one big profitable “business” industry and a tool for money-laundering. There are many politicians who operate NGOs to launder black money. They run educational institutions under such spurious NGOs.

One can’t want to fly in jet aircrafts and complain about the noise. It’s not a design flaw in the engine; it’s the nature of the beast. The same applies to air force jets. Even their training flights cause enough noise to upset neighbouring residents. Ask the residents near Pune airport what noise those Sukoi training flights cause. Do away with those jets? The Mumbai airport is bang in the middle of the city and residents around the airport have to live with the noise of an aircraft every minute. Stop all flights? Airports at other metros are somewhat away from the city but residents still have to bear with the noise. There is a new Mumbai airport that is ready but that too will be surrounded with population. Of course, aviation engineers are constantly working on technology to reduce the noise levels of engines. Our “needs” turn into “wants” in no time and India is a country where a large population is still grappling with basic needs of life: water, housing, food, sanitation, jobs and so on. This lofty ideal of leaving a better planet for the future is adorable but it shouldn’t imply much of the present population should live a miserable life. 

There are, definitely, thousands of NGOs who are into genuine social service and healthy activities. However, the rogues mentioned in this post are the ones who are darlings of our media and get the most attention due to their constant “rent-an-agitation” operational mode. We have 3.3 million NGOs says Indian Expresswhich is nearly one for every 400 Indians. By that measure all of India’s problems should have been well under control. If the poor are getting poorer and farmers commit suicides, then many NGOs too have to bear some responsibility for standing in the way of progress. I am in no doubt that most of the NGOs covered in the IB report (even far-fetched as accused by some) are not here to serve India. They are here to kill India. Softly!


Thursday, 12 June 2014

First official estimate: An NGO for every 400 people in India

Archna Shukla : New Delhi, Wed Jul 07 2010, 09:05 hrs

India has possibly the largest number of active non-government, not-for-profit organizations in the world. A recent study commissioned by the government put the number of such entities, accounted for till 2009, at 3.3 million. That is one NGO for less than 400 Indians, and many times the number of primary schools and primary health centres in India.

  Even this staggering number may be less than the actual number of NGOs active in the country. This is because the study, commissioned in 2008, took into consideration only those entities which were registered under the Societies Registration Act,1860 or the Mumbai Public Trust Act and its variants in other states.
Such organisations can be registered under a plethora of Acts such as the Societies' Act, 1860, Indian Trust Act, 1882, Public Trust Act, 1950, Indian Companies Act, 1956 (Section 25), Religious Endowment Act,1863, The Charitable and Religious Trust Act, 1920, the Mussalman Wakf Act, 1923, the Wakf Act, 1954, and Public Wakfs (Extension of Limitation Act) Act, 1959, etc.

According to the government study, the largest number of NGOs are registered in Maharashtra (4.8 lakh), followed by Andhra Pradesh (4.6 lakh), UP (4.3 lakh), Kerala (3.3 lakh), Karnataka (1.9 lakh), Gujarat (1.7 lakh), West Bengal (1.7 lakh), Tamil Nadu (1.4 lakh), Orissa (1.3 lakh) and Rajasthan (1 lakh). More than 80 per cent of registrations come from these 10 states.

While the government will begin studying the finances of the sector in the second phase of the survey, estimates from within the sector suggest that NGOs, or NPIs, raise anywhere between Rs 40,000 crore and Rs 80,000 crore in funding annually.

The government has been the biggest donor — Rs18,000 crore was set aside for the social sector in the XI Plan — followed by foreign contributors (according to the latest figures available, around Rs 9,700 crore was raised in 2007-08). Around Rs 1,600-2,000 crore was donated to established religious bodies such as the Tirumala Tirupati Devasthanams.

Individual donors are emerging as the biggest and most lucrative source of funds. According to an internal study by a leading foreign NGO headquartered in the UK, donations by individuals are expected to have grown from around Rs 2,200 crore in 2005 to Rs 8,100 crore by a conservative estimate, and to around Rs 21,000 crore by more liberal estimates.

The increase in the number of donors has coincided with a sharp increase in the number of new NGOs in the past decade. According to the government study, there were only 1.44 lakh registered societies till 1970. In the following three decades, the number rose to 1.79 lakh, 5.52 lakh, and 11.22 lakh. The maximum increase in the number of registrations happened after 2000.

Private sector companies, one of the biggest donors in the developed world, are, however, yet to wake up to the phenomenon of charity and philanthropy in India. Indian companies spend less than one per cent of their annual profits on such activities, against 1.5 per cent to over 2 per cent spent by their UK and the US-based counterparts, says the study by the international NGO.

"The government study included, these are all broad estimates. Nobody really knows the ground reality because this sector has grown very fast in the past many years. Besides, there have been no efforts to maintain an official database or even to encourage such entities to be transparent about their activities as well as fundings," said Soumitro Ghosh, founder CEO, CSO Partners, a Chennai-based organization set up to encourage transparency in the functioning of the sector.


99% NGOs are fraud, money-making devices: HC

Harish V Nair, Hindustan Times  New Delhi, March 05, 2013

The Delhi high court has called for toughening of licensing norms for NGOs observing that 99% of them are "fraud" and "merely money making devices".

"Most private run so called philanthropic organizations do not understand their social responsibilities. 99% of the existing NGOs are fraud and simply moneymaking devices. Only one out of every hundred NGOs serve the purpose they are set up for", a bench headed by Justice Pradeep Nandrajog said.

"There is a need for toughening of licensing norms and legislature has to keep this in mind", the bench said.
The stinging remarks came while the court was hearing a petition filed by children homes Chatravas and Arya orphanage challenging government's refusal to grant them license under the Women and Children's Institutions (Licensing) Act, 1956 and insisting on registration under the Juvenile Justice Act.

The Delhi government and union women and child development ministry opposed the plea saying that all children homes in the country have to be registered under the JJ Act 2006 which subject them to supervision, monitoring and periodic inspections by child welfare committee of the government even if they have licenses under any other law.

Arguing for the homes, senior lawyer Maninder Singh said "an institution which has licence under the Women and Children's Institutions (Licensing) Act, 1956 did not require registration under the JJ Act.

"The JJ Act has its own field and does not override the women and children's institutions act. Moreover JJ Act is not applicable to independent private philanthropic institutions but for those run by government", argued Singh.

The stand of the centre was that a clear policy framework for the entire country has been laid out and Women and Children Institutions (Licensing) Act has no value as it stood repealed even since the JJ Act came into being in 2006. But Singh said the option should be licensing under Women and Children's Institutions (Licensing) Act or Orphanage and other charitable institutions Act even if the JJ Act was applicable in a state.


Saturday, 7 June 2014

Explosive Truth about India Bangladesh Border

Explosive Truth about India Bangladesh Border Part -1

 Explosive Truth about India Bangladesh Border Part -2

 Explosive Truth about India Bangladesh Border Part -3

 Explosive Truth about India Bangladesh Border Part -4

‘Child-trafficking’ stirs row in Kerala

Monday, 02 June 2014 | VR Jayaraj | Kochi

The incident of suspected trafficking of about 600 children from Bihar, Jharkhand and West Bengal into Kerala by Muslim orphanages in the State has triggered a political row with the Sate Home Minister terming it as illegal and Muslim outfits describing it as part of social service even as more evidences came up to suggest that this could indeed be a case of human trafficking.

The Railway Protection Force at Palakkad had detained 589 children belonging to four-to-14 year age group since May 22 as they were being brought to Kerala to be taken to orphanages run by Muslim outfits in Kozhikode and Malappuram. Also, eight people were arrested on the charge of suspected human trafficking. The children are currently kept in an orphanage in Palakkad.

As many as 336 of these children did not have valid travel tickets while the people who brought them could not produce the required official papers issued by the respective State Governments for taking them to Kerala. Some of these children have already been taken back to their homes by their parents after the incident sparked a controversy.

The Muslim League and other Muslim outfits are claiming that the children were being brought to be put up in reputed orphanages in Kerala and that there has never been any complaint about such arrivals. BJP’s national executive member Sobha Surendran had petitioned the Union Child Welfare Ministry regarding the suspected child-trafficking.

A five-member team of officials from Jharkhand, who visited Palakkad on Sunday, said that the incident had all the signs of child-trafficking. “The Jharkhand Government is providing children with free education and boarding. Why should they opt to leave the State in this manner? Our Government has taken this as a serious matter. There will be further inquiries,” said an official.

Meanwhile, Deputy Inspector General of Police S Sreejith, Nodal Officer in the Kerala State Human Rights Commission, held an inspection at the Muslim Orphanage in Mukkom, Kozhikode on Sunday. He seemed to be in agreement with the Jharkhand officials. It was to this orphanage the first batch of 456 children was brought from the other States.

After the inspection, held on the basis of a complaint that children had been put up there without authorisation, Sreejith said that the incident could be defined as human trafficking. He said the orphanage authorities had not fulfilled the mandatory requirements while bringing the children, adding that a decision on sending the children back would be taken if necessary.

The political row over the incident started after Home Minister Ramesh Chennithala came out against the way in which the children were brought into Kerala by jam-packing them into a railway compartment without travel tickets and proper documents. He asked the responsible outfits not to put the children into such hardships in the name of social service.

Chennithala also advised the Muslim outfits responsible for bringing these children into Kerala to start orphanages in other States instead of bringing them to Kerala in this way if they were serious about social service. This infuriated the Muslim League, the Congress’s biggest ally in Kerala, and Muslim outfits like the Jamaat-e-Islami and Sunni sect’s ‘Samastha’.

KPA Majeed, general secretary of the Muslim League, criticised Chennithala for his statement saying that most of the orphanages in the Malabar region were law-abiding institutions known for their philanthropy and asked for immediate withdrawal of all the moves to include the incident in the category of human trafficking.
Samastha said that the State Home Minister had humiliated the entire Muslim community with his statement. “Who is the Home Minister to advise a particular community regarding where it should open its institutions when the Constitution guarantees every citizen the right to live, study and work anywhere in the country?” asked a Samastha office-bearer.

The Kerala State Minority Commission also found fault with the Railway Protection force and the Palakkad District Child Welfare Committee for showing “unnecessary haste” in detaining the children and arresting those who were accompanying them. Commission chairman M Veerankutty said that the incident had nothing to do with child trafficking.


Delhi court cites Mahomedan Law to absolve man of raping minor

New Delhi, Mon Aug 05 2013, 18:40 hrs

A Muslim man has been absolved of charges of illegally confining and raping a minor from the same religion, whom he later married, by a Delhi court which cited the Mahomedan Law that allows a 15-year-old girl to marry against the wishes of her parents.

The accused was charged with rape and illegal confinement of the minor under the IPC.
The IPC treats a girl as minor, in relation to the offence of rape, till she attains the age of 16 years and establishing physical relations with her, even with her consent, is an offence entailing life term as maximum sentence.

"Both, the girl and accused are Muslims by religion and though, prosecutrix may be minor under the Indian Majority Act or within meaning of some of provisions of Indian Penal Code, under her present law, she having reached age of 15 years i.e age of puberty could have married accused even without the consent of her guardian, though in the present case, the prosecutrix appears to have married the accused with the consent of her parents," Additional Sessions Judge (ASJ) Illa Rawat said while acquitting the man of the charges.

The court also said that the girl was at the verge of maturity when she voluntarily eloped with the accused last year and her parents were also aware of their love affair.

It said she was neither restrained nor confined forcibly and they got married after an FIR was registered.
The court said the Mahomedan Law does not consider as an offence the marriage with a 15-year-old girl.
According to the prosecution, the girl and her mother had lodged a complaint with the police alleging that the man had raped the minor last year when she was alone in her house. The accused had also threatened the girl not to disclose the incident to anyone otherwise he would kill her entire family and thereafter he raped her several times, the prosecution said.

The girl, however, told the court that she was in love with the man and they wanted to marry but his mother was not agreeing.

A complaint was also lodged by the girl with the police praying that her marriage be allowed to be solemnised with the man, she had said.

She added that later the man's mother also agreed to their marriage and they tied the knot.
While acquitting the man, the court said, "As far as any forcible marriage or taking away of the girl for the purpose of said marriage is concerned, there is not even an iota of evidence on record."