benchmark nifty etf investors suffer post-acquisition by goldman sachs

In the Indian mutual fund industry, till last year, there was one asset management company whom one could count on to come up with useful passively-managed products and serve their existing one well. This was the Benchmark Mutual Fund managed by Benchmark Asset Management Company (BAMC) which kicked off operations in 2002 with India's first ETF on the 50-stock Nifty index.BAMC was committed to offer only passively-managed products such as ETFs and index funds, and nothing else.

Therefore, it came as a shock last year (2011) when it became known the top management and shareholders of BAMC were selling out the fund and schemes to Goldman Sachs.  It became clear to ETF investors that Goldman Sachs will not be interested in doing much justice to the running of ETF schemes and will expend their time and energies in coming out with, and managing, actively-managed schemes. 

This is already seen to be happening. After acquiring Benchmark Mutual Fund in July 2011, Goldman Sachs India Mutual Fund, the new name of the fund, began filing offer documents with the regulator for the launch of actively-managed equity schemes. The first one was launched last month (October 2012).

But what is the most dismaying is that investors in the erstwhile Benchmark Nifty ETF, now known as GS Nifty ETF, are being hit due to the deliberate negligence of Goldman Sachs.  Sadly, the shareholders and management of BAMC betrayed the trust put in it by the investors by selling out to Goldman Sachs and got big cash as a result.

Below is a news analysis I did recently for the newspaper I work on how the performance of GS Nifty ETF has lagged peers since the July 2011 acquisition.

Here is what I wrote:


Goldman Nifty ETF lags peers post-Benchmark acquisition

The re-christened Benchmark Nifty ETF gave 1.2 per cent return against 2.9 per cent of peers

Mutual fund investors run the risk of the performance of their schemes getting adversely affected when the asset management company (AMC) managing their schemes gets taken over by another AMC or see significant stake changes. At times, in real life, this risk does unveil itself, as investors in the first-ever exchange traded fund launched a decade ago have been discovering lately.

When Benchmark Mutual Fund launched its Nifty Exchange Traded Scheme (Nifty ETF) in 2002 it was the first ETF in the country. The mutual fund's investment manager, Benchmark Asset Management Company (BAMC) was taken over by the Goldman Sachs group with effect from July 14, 2011 and was effectively run by Goldman Sachs since then.

For one month BAMC stayed as a distinct company but as a part of the Goldman Sachs group. From August 22, 2011, Goldman Sachs Asset Management (India) formally took over the management of all the schemes managed by BAMC. But post-mid-July, the performance of its most popular scheme, Nifty ETF, has, for the most time in its decade-old history, under-performed the underlying benchmark index as well as its peer schemes.

This was revealed in a FC Research Bureau analysis comparing the performance of GS Nifty ETF before and after the July 2011 acquisition with that of Nifty Total Returns Index (Nifty TRI) and two of its Nifty ETF peer funds--Quantum Index Fund-Nifty ETF and Kotak Nifty ETF.

From the average of its net asset values of July 4 to July 13 last year to the average of its NAVs in the current month of November till the 9th, GS Nifty ETF has given an absolute return of 1.20 per cent, below that of corresponding Nifty TRI's return of 3.14 per cent, Quantum Nifty ETF's 2.95 per cent and Kotak Nifty ETF's 2.85 per cent.

The was not the case in the earlier comparable periods. In the 1-year period upto mid-July last year, GS Nifty ETF's return of 5.91 per cent was in sync with Nifty TRI's 6.16 per cent and a little ahead of Quantum Nifty ETF's 5.63 per cent and Kotak Nifty ETF's 5.82 per cent. The previous 1-year period from July 2009 to July 2010 also saw the same pattern (see table).

	GS Nifty ETF	Quantum                Nifty ETF	Kotak  Nifty ETF	TRI Nifty
Jul '11* to Nov '12**	1.20	2.95	2.85	3.14
Jul '10 to Jul '11*	5.91	5.63	5.82	6.16
Jul '09 to Jul '10	23.90	23.68	NA	24.77
Figures represent returns based on monthly average NAVs/index values
Nifty TRI: Nifty Total Returns Index
* till 13th
** till 9th
Source: Respective MF websites, NSE. Analysed by FC Research Bureau

Post-expenses, index-linked ETFs are supposed to mirror the returns of the underlying index's total returns values which includes the impact of dividends received from the member-companies of the index. The expense ratios range from 0.2 per cent to 0.5 per cent in the case of Indian mutual fund industry's ETFs.

A month before the Goldman Sachs acquisition of Benchmark MF, Benchmark Nifty ETF had a corpus of Rs 533 crore in June 2011. In September this year, the average corpus of (rechristened) GS Nifty ETF was Rs 563 crore.

Interestingly, in other comparable performance records of Goldman Sachs India MF's ETFs, no under-performance was seen. As per NAV data from Capitaline NAV, GS Bank ETF and Reliance Banking ETF, both linked to CNX Bank index, the absolute return from July 13 last year to November 9 this year was the same -- 4.36 per cent. Another ETF, linked to CNX PSU Banks index, the GS PSU Bank ETF has given a negative return of 15.2 per cent which is better than peer Kotak PSU Bank ETF's negative return of 16.10 per cent.

government, constitutional auditor, natural resources & corporate contractor

 In a recent editorial contribution for the newspaper I work for, I touched upon the dynamics of the role of India's Comptroller Auditor General (CAG) in the matter of the government's contracting of natural gas exploration and production to Reliance Industries in the Krishna-Godvari basin in eastern India.         

(the pic on the right has been taken from http://www.hardyoil.com/Assests/nelpiii/KGBAsinMap3.jpg)

Here is what I wrote:

Gas imbroglio

A legally-tenable solution has to be found in the KG basin gas production audit dispute

We are at a juncture in society's evolution that there is a case and a counter-case for everyone. Simultaneously, we are at that juncture in the evolution of commerce and industry where complexities multiply by the day. Given this, it is not surprising to see the conflict in the central government and the Comptroller Auditor General of India over the impending audit of the past couple of years' accounts and records of the Krishna-Godavari basin gas block which, under a government contract, is being operated by Reliance Industries. 

The government, through its petroleum and natural gas ministry, had recently approved last few years' increase in expenditure to step up production of gas from the KG basin block on the condition that CAG will carry out the audit of recent years. Interpretation of the term 'audit' is now what is causing trouble. The company interprets the word to strictly mean only a financialaudit pertaining to the KG basin contract as also covered by the production sharing contract it signed with the government. 

The CAG, on the other hand, says it has the right to sift through any and all records, going beyond the accounts, pertaining to the KG basin activities since the revenues from the KG basis gas accrues to the government's revenue account. If not under this specific audit request the CAG still has the power to comprehensively audit KG basin records when it audits the petroleum ministry. 

The natural gas produced under the joint ventures and the new exploration policy is governed by the respective production sharing contracts (PSCs) between government and private producers, unlike that produced by ONGC and Oil India which can be governed by government's administrative order. RIL is a private producer and so the PSC becomes the driving force as far it is concerned. The government could have chosen any auditor, other than CAG, when it put the condition of audit to the KG basin block production-increase. 

It was not constitutionally bound to ask CAG to do this particular audit. But CAG is not supposed to be an auditor available for hire as per the terms and conditions of the hirer, in this case the government itself.  It is answerable to the Parliament of the country and not to the government or any of its ministries. Only if the PSCs had been through a legislation cleared by the Parliament would CAG have been obliged to carry out a specific audit. But this would again have been under the terms and conditions laid down in the legislation and surely one on the natural gas production would not have been restrictive as they are now. 

Under the Constitution of our country, the CAG is required to submit its audit reports on accounts of the central government to the president who is bound to lay them before each house of the parliament. RIL's contention is under the existing PSC the audit report of the KG basin block, can only go to the petroleum ministry and not to the Parliament directly. The company is not comfortable with an auditor who it perceives is technically not clued in with the many complexities of a project such as the KG basin. 

But CAG too can not be the auditor behind such an audit report if it finds the conditions to be onerous. The company and CAG are both right in their own ways. It is for the petroleum ministry and the government to find the most legally-tenable solution instead of passing the buck to the company or the CAG.

rigging elections in US

It has happened in the past at least on both the occasions when Bush Jr won the presidential elections in 2000 and 2004, and it could happen again. I refer to rigging of presidential elections in US.


Indian national elections too are not rigging-free. Last one in 2009 saw all the vulnerabilities one can have in the electronic voting machines and electronic tabulation of votes, and gauging from some results these definitely appear to have been exploited.

Anyways, below is a write-up on the US elections which provides more insight, and a technical one at that as well, on rigging of presidential elections.



http://agonist.org/election-fraud-november-6-watch-for-vote-flipping-and-fixed-exit-polls/#more-96599

Election Fraud, November 6 – Watch for Vote Flipping and Fixed Exit Polls

By Michael Collins, on November 5th, 2012

Michael Collins
(Washington, DC) Our elections are officially privatized.  They are hidden from our view by design.
On November 6, your votes will be cast and tallied on voting machines manufactured and serviced by private companies.  The computerized voting machines run on software that is closely held as a trade secret by these companies.  Our elections officials are barred from examining the most important aspects of the software.  Why?  Because those same officials signed away our right to open access and inspection of the voting systems that tell us who won and who lost each and every election.  (Image: WikiCommons)
This is the most profound election fraud imaginable.  It affects every citizen, all 311 million of us.
Privatization occurred without our knowledge or consent.  Was our vote cast and counted properly?  We have no way of knowing.  Can we observe vote tallying at precincts and central tabulation locations?  Not likely. If you could, what good would it do to watch an encased computer running indecipherable software?  This violates prohibitions against secret vote counting in many state constitutions. Our elected officials could not care less.
But wholesale election fraud began long before voting and tallying machines entered the picture. That will be discussed at the end of the article.
As we approach November 6, it is important to understand two major sources of current election fraud.
The Amazing Anomaly and Vote Flipping for Romney – 102 Electoral Voted at Risk
A hard working team of volunteer researchers and analysts gathered raw data, precinct votes, for the 2012 Republican primaries.  Rigorous statistical analysis showed a specific pattern of suspected vote flipping that lead to highly improbable victories for Romney. This was termed the amazing anomaly by the research team.
Urban Density was factored out of the analysis, yet the anomaly remained. All precinct-level demographics available were tested to see if they could cause such an anomaly to no avail. Again, this amazing anomaly remained in the results.
Vote flipping involves exchanging votes from one candidate to another or several others. It is a clever way to benefit a candidate, victimize his or her opponents, while at the same time keeping the precinct vote totals the same. The researchers discovered that often, election officials count and compare only precinct totals with the Central Tabulator count. This simple, yet highly effective fraud strategy could have been undetected for years. In state after state, allegedly because of vote flipping, Romney showed unexplainable increases from the smallest to largest precincts.  The process was outlined recently in two articles: Rigged Elections for Romney? 10/22/12 and Part II – Rigged elections for Romney? 11/1/12.
The following eight states represent 102 electoral votes.  They all have two things in common.  They are tossup/battleground states and they all showed clear signs vote flipping during the Republican primaries, always in Romney’s favor.  Romney won six of the states (seven if you include his Iowa win, which was reversed).  These states will deploy in the Nov.6 general election the same voting machines, central tabulators, and election officials and their partners, staff from the private voting machine companies.
Here is the pattern found in the states above and others.  The pattern was always in Romney’s favor.  How likely is that?The graph of the Ohio primary below shows Romney’s increases from smallest to largeset precincts.  The probability of that pattern is an amazing anomaly since it is so improbable, statistical packages cannot estimate such a small probability; they round it down to ZERO. In other words impossible.  As you can see, Romney’s vote accumulation accelerates while Rick Santorum’s and Ron Paul’s decline.  At the end of the day, typical of Ohio’s close elections, Romney’s gains, the green line, pass over Santorum’s totals for a 12,000 vote victory.  Had Romney failed to gain 5.42% of the total vote through suspected vote flipping, he would have lost the Ohio primary. (See chart for details of election shift from vote flipping.)
See Graph of Ohio primary anomalies Graph from Francois et al. research team.
Download of Excel for Ohio statewide precinct analysis The graphs and impact of suspected vote flipping in Wisconsin’s 2012 primary are even more dramatic as shown here.  Romney would have lost Wisconsin, as well, were it not for the unexpected, highly improbable phenomenon reflecting suspected vote flipping. Certainly, after losing these two key states, a brokered convention would have ensued.
Romney’s vote total always expanded due to the suspected vote flipping pattern.  The other candidates lost votes in almost every case.

See graph of how Romney benefited from vote flipping
The research team shared its methods and findings with over 150 academics with specialties in election integrity, elections officials, and the general public.  The first two groups provided encouraging responses, but were unable or too busy to evaluate the compelling evidence of election fraud or to consider the implications.  There have been over 100 inquiries by motivated members of the pubic, however.  So the project continues.  It is clear that the people have to protect their own elections. Watch the Post-Election Polls and Analysis
Rich Charnin has been studying and writing about election for early ten years.  He was one of the first researchers to discover the inconsistencies in the media consortium’s exit polling and the first researcher to look beneath the surface of the 2004 election. Charnin predicted the exact electoral count of the 2008 election and updates his blog daily.
His latest book, Matrix of Deceit: Forcing Pre-Election and Exit Polls to Match Fraudulent Vote Counts, shows how the media consortium uses their exit polls to ratify questionable elections.  The official exit polls released by the networks and major news outlets are adjusted before release to match the official election results.  Charnin was the first to point out that that nearly half the official media consortium’s  state presidential exit polls exceeded the margin of error in favor of Republicans and only three did so in favor of the Democratic presidential candidate.  The probability of that happening is one of those unfathomable improbabilities, one in several trillion.  Where are the experts, academics, and elections officials who prop-up an indefensible election process?  What do they have to say in their defense?  Nothing.
Election Fraud Didn’t Start Yesterday
Black citizens in the former Confederate states were the first targets of wholesale election fraud.
During the Reconstruction Era following the Civil War, black citizens were able to vote.  The Union Army troops stationed in the former Confederate states protected that right.  Black participation in elections was as high as 80% in some areas.  When Reconstruction ended as a result of the Compromise of 1877, Southern blacks lost everything, including their right to vote.  This lasted for nearly a century until the passage of the Voting Rights Act of 1965.  Between 1890 and 1960, each presidential election had at least five million fewer votes due to the loss of voting rights by black citizens in the South.  Imagine the change in elections without this theft of voting rights?

Stealing the vote from minorities was deliberate post-Reconstruction strategy developed by none other than the Ku Klux Klan and the Redeemers movement.  Programs like photograph identification found in key states are a descendant from the original efforts to disenfranchise Southern blacks. Laws that strip the vote from ex-felons also trace back to these racist efforts.  Nearly six million former felons are denied the right to vote.
Why is it so important to lock people out of the voting booth?
Why is it so important to keep private company voting systems that consistently produce odd and unexplainable results?
Power and control are the central motivations.  If your political program is to keep the majority down, you favor election fraud as an exquisite tool.  Treat the people like chumps by creating a façade of democracy and belittle anyone who questions the system by calling them conspiracy theorists.  Most importantly, never, ever admit that there might be something very wrong.
The manipulation of “official” exit polls or the complete cancellation of such polls in 19 states this year, teamed up with suspected vote flipping (in the most blatant way imaginable) represent an improvement of sorts.  Instead of targeting the minorities and poor, these programs are truly egalitarian. They target everyone.

This article may be reproduced with attribution of authorship and a link to this article.

The Money Party
Republican Primary Election Results Amazing Statistical Anomalies_V2.1
2008 – 2012_Elections Results Anomalies and Analysis V1.6
Rigged Elections for Romney 10/22/12
Part II – Rigged elections for Romney? 11/1/12 .
Polite Fascism Contracts the Right to Vote, May 13, 2008

bravo, rbi

The central bank and banking regulator of India, Reserve Bank of India, came out with its FY 2012-13 (April 2012 to March 2013) quarter review of monetary policy.I contributed an editorial on the RBI review for the newspaper I work for.

Here is what I wrote:

Bravo, RBI

By maintaining status quo on policy rates RBI has rightly looked at long-term benefits for the economy

In the prevailing atmosphere over the last many months the government, mostly through its finance ministry, has been able to successfully bulldoze its way in several areas of the Indian economy and financial system in order to prove a point or two to its detractors in the domestic industry and vested international circles that there is no economic policy paralysis in the country. From speeding up policy initiatives such as foreign direct investment to prodding financial sector regulators such as Securities and Exchange Board of India and Insurance Regulatory Development Authority to accede to demands made by the mutual fund industry and the insurance industry, the government has been able to get what it wanted. 

What stands out, and we are glad it does so, is that enormous pressure being put on the Reserve Bank of India by the finance ministry in recent weeks to cut policy rates did not bear fruit on Tuesday when RBI announced its FY13 second quarter review of monetary policy. It maintained status quo on the repo rate retaining it at 8 per cent level but cut cash reserve ratio by 25 basis points from 4.50 per cent to 4.25 per cent. 

The RBI governor, D Subbarao, while appreciating the downside risks to domestic growth from further deterioration in global macroecnomic conditions, was emphatic that the monetary policy had to focus on doing its bit to reign in the un-relenting high inflation levels which RBI has no doubt is not conducive for investment climate and consumer confidence without which no high growth can be had in the medium-term.

Despite the fact the CRR cut will enhance liquidity in the banking system by upto Rs 17,500 crore and the CRR has been bought down sharply by RBI from the 6 per cent level of last year, the finance minister expressed his disappointment at the lack of a repo rate cut. Such un-fettered expectations of the government from the banking regulator does not augur well for the independence. It is understandable for the industry associations to demand the lowest interest rates on the bank borrowings by their member companies but the same demand made subtly but surely by the government does not jell.

 
The government has itself done hardly much on the real macro-economic problems of high fiscal deficit and high current account deficit. Raising diesel prices by a meagre Rs 5 and putting a cap on subsidised domestic cooking gas cylinders will hardly make a dent in the rising fiscal deficit. These measures too came belatedly after all earlier political compulsions arising from state elections and presidential elections had expired. 

A fiscal roadmap laid out by the finance minister on Monday is welcome but without detailed plan of action on individual subsidy items it is only a promise and meaningless at that since the approaching 2014 general elections will soon give re-birth to political compulsions. Moreover, an actual implementation of the fiscal measures will translate into short-term pain of higher inflation as prices will be tuned to market forces. 

The RBI has, therefore, done right by not cutting the repo rates at this juncture. Capital investment by corporate borrowers will surely if rates are cut and lead to better economic growth but it will, if inflation does not subside, diminish the inflation-adjusted real rate of return for savers. 

India has perhaps the highest number of savers in the world and this fact should not be under-appreciated. It is not wise to assume that the long-term worst-case scenario of severe fallout from a very high fiscal deficit can be reasonably averted if economic recovery happens in the short-term by through low lending rates

mukesh ambani's reliance's unhealthy influence in cabinet reshuffle seen...

I share below a message received in my mailbox from a coalition of civil society groups on the unhealthy influence of Mukesh Ambani's Reliance Industries (RIL) in the latest round of cabinet reshuffle in the central government of India.

From: NAPM India
Date: 28 October 2012 17:37
Subject: Press Release 28th October, NAPM condemns UPA reeling under Reliance Pressure, Challenges transfer and pricing of Natural Resources against Nation’s Interest
To: napm-india , napmconveners

 National Alliance of People’s Movements (NAPM)
National Office: A Wing First Floor, Haji Habib Building, Naigaon Cross Road,
Dadar (E), Mumbai – 400 014 Phone - 9969363065;
Delhi Office: 6/6 jangpura B, New Delhi – 110 014. Phone: 9818905316
E-mail: napmindia@napm-india.org | Web: www.napm-india.org

Press Release                                                                         28th October 2012, Hyderabad
 

NAPM condemns UPA reeling under Reliance Pressure

Challenges transfer and pricing of Natural Resources against Nation’s Interest

No Privatization of Minerals and No forcible Acquisition for Private Projects

The news that the Petroleum minister Jaipal Reddy is again to be replaced by someone else, repeating the incidence that took place few years ago when Mani Shankar aiyar was replaced by Murli Deora, Ambani’s childhood friend. The very fact that Jaipal Reddy was the one who questioned the irrational demand by Mukesh Ambani’s Reliance Industries Limited (RIL) on escalating the prices of natural gas ,irrespective of the decision and agreement by the union government and RIL on the price to be steady till 2014,  this is one more example, just one of many related to RIL, one of the largest corporates in the country, pulling strings to change the player in the political domain that challenges its activities ,especially huge or even vulgar profit making.

NAPM condemns this, as an evidence of politician-corporate nexus and joint crime against people, who are left deprived when not the State exchequer but the corporates’ accounts are filled and swelling. It is Shocking and disgusting that even when the congress and NCP leaders are challenged at the center and in states, for their involvement in illegal allocation and transfer of land and other resources, at the cost of the public interest; they still have guts to take such an action mainly to give the Ambani’s a clean field. A stratergy to counter this will be worked out in its upcoming National Convention (9th biennial), from 17th to 19th November, at village Kiraloor, 15 Kms from Thrissur, Kerala.

While the loss that would occur if the price hike was accepted is quoted to be $ 6.3 billion, with the undue spread and spell of the RIL across the country and the sectors ranging from Oil & Gas to Infrastructure, telecommunications, theatres, retail, health, education.. right up to Satyamev Jayate, there is no doubt that it may go much beyond even the DLF’s swell, already exposed. It is the wicked game of acquisition of lands, with minerals attached to land, allocation of deep sea blocks, or transfer of the richest of our Nation’s Natural Resources to these private players; that is the worst and the highest level of misappropriation by the present rulers.

The millionaires such as Ambanis have been putting all undue pressures either through PMO, Minister or even through media, seeking concessions; while farmers without subsidy are compelled to commit suicides. It is high time that country demands total nationalization of our mineral resources, the only wealth that is luxuriously expended without any concern, neither for the State’s earning, nor for the environmental impacts and loss of livelihoods to the local populations of farmers and fish workers.

The Krishna Godavari basin issue was distortedly and deliberately presented as if the RIL were to limit its extraction of Natural gas worth approx $ 3 billion dollars, very recently. The fact is that on one hand this has been the tactic to get higher and higher price for their “Natural Product”, while on other hand it is the high incidence of subsidence (sinking of land) in the KG basin that should have compelled them to do so. Resulting in the sea ingress and destruction of paddy lands, as also threatening the habitats and livelihood of millions of people in the Basin, such an ecological impact should have been monitored by the Ministry of Environment and Forest. MOEF, just as other ministries have also been relying upon not laws or policies, nor public hearings but the RIL to plan its targets and profits, violating the laws.

Other examples of this include the power projects granted to Ambani, one in the name of Common wealth games and others without checking the economic feasibility and environmental sustainability, in fact the Reliance work in a threatened eco system of KG basin must come to a halt and this giant monstrous corporate must be prevented from any further investment and favours to facilitation for adding to its unconstitutional wealth, that is costing crores of toiling citizens in the country, destitution, malnourishment, unemployment to homelessness and hunger.

In this regard the Supreme Court can if it wishes to take a suo moto cognizance of the CAG reports to media reports, even in the frame work of its own judgment on 2G spectrum and beyond. If it does not, the People’s Movements that are fighting for no forcible acquisition of natural resources by the State for the private and PPP projects, simultaneously questioning pushing of plans and projects that transfer the resources from people to profiteers; will have to raise voice against “Unreliable  Reliance”.

The new Bill soon to be put up before the parliament is another attempt to continue the forcible acquisition for the private corporates and builders; bypassing the unanimous report by the all party parliamentary Standing Committee on Rural Development. This needs to be questioned and plans of, not only Ambanis but of Jindals, Tatas, Mittals, Adanis, Hiranandani to DLFs all are to be curtailed.

In Place of a weak Land Acquisition and Rehabilitation Bill; National Alliance of People’s Movements demands a Democratic Development Planning Act following the constitutional frame work of local self governance.


Medha Patkar              B.Ramakrishnam Raju          Saraswati Kavula         Shashank Rajwadi

For Details contact Madhuresh - 09818905316
===============================================
National Alliance of People’s Movements
National Office: Room No. 29-30, 1st floor, ‘A’ Wing, Haji Habib Bldg, Naigaon Cross Road, Dadar (E), Mumbai - 400 014;
Ph: 022-24150529

6/6, Jangpura B, Mathura Road, New Delhi 110014
Phone : 011 26241167 / 24354737 Mobile : 09818905316
Web : www.napm-india.org
Facebook : www.facebook.com/NAPMindia
Twitter : @napmindia

unwise safety net for ips

A month ago, a proposed safety net for IPOs was in the news. 

I wrote about it then in an editorial for the newspaper I work for. I share it below.

A net full of holes

The proposed safety net framework for IPOs is not a good idea

There is no dearth of props in the financial system and more so in the current economic situation fuelled by the government's pursuit of high growth, aggressively cheerlead by financial market players. Yet another one is being sought to be given to them. This time, the capital market regulator, Securities and Exchange Board, has moved ahead in its earlier consideration of a mandatory safety net mechanism for initial public offers in the capital market. 

This new measure aims to protect retail investors from a large dip in the price of an IPO in the first three months after its listing. Not only is the idea of a price protection regressive in modern financial markets as it distorts the natural price discovery process in the market, the convoluted nature of Sebi's proposed safety net mechanism will make the distortions only more worse.

In the past couple of months, the primary market advisory committee followed by the Sebi board have given their approval for the safety net measure and after formalising its broad framework Sebi, late last week, made public a discussion paper on it  on their website inviting comments from investors and other parties in the capital market before October 31. The discussion paper is just three and a half pages long and while length need not be an issue, for a measure which will be the first of its kind for primary market issues in the last 20 years. 

Earlier, before the 1991-92 financial market reforms abolished the Controller of Capital Issues, the central government had administrative control over price and premium of shares in IPOs. It was direct and full price management then and now, under the proposed new safety net measure, it will be indirect and partial. If, and only if, a couple of conditions are met will small retail investors be eligible for the safety net. In all of the three months immediately after the listing of IPO-issuing company's shares, the volume-weighted price has to be more than 20 per cent lower than the issue price and the gap between this fall in the company's price and that in the fall of either of the broad market indices, S&P CNX 500 and BSE 500, is also more than 20 percentage points. 

Effectively, it means the fall in the post-listing price fall should be at least 20 per cent and 20 percentage points over and above the general fall in the market. Once this  happens, then as per the other complex conditions set out by Sebi's proposed safety net framework, the actual cost for the promoters will range from just 1 to 7 per cent of the issue size. To make matters worse, as per yet more conditions, eligible retail investors could see only one-seventh of their allotted shares receive the benefit of price protection.

The convulated conditions will ensure that the final objective of restoring the diminishing confidence of primary market investors on account of fall in post-listing prices of IPOs is never met. Sebi and the finance ministry who is subtly applying pressure on Sebi to do this would do a better job of protecting investors' interests if they empower the retail investors with the discerning ability to choose the right IPO for investments. IPOs thrive only when secondary market is in a bull run and their pricing is inflated since most secondary market share prices are also inflated. 

Hefty commissions paid to lead managers and distributors during IPOs are the root cause of badly timed, aggressive mis-selling of IPOs at inflated levels. Coming down hard on these commission levels would automatically lead to retail investors being left alone to choose the right IPO.

give justice to the little girl if french consulate man in india did indeed sexually abused his daughter

It is not just Indians having influence or power, whether they be politicians, industrialists, financial market biggies, bureaucrats, CBI, police or any rich citizen, who try to get away from shameful and criminal acts. 

The news story from a weekly magazine, which I share below, highlights the probability of a French consulate man sexually abusing his 4-year old daughter. If true, it provides yet another example of how many citizens of western countries are wrong in their assumption they are the most civilised people on our planet. If they weren't blinded by such dangerous assumptions than the French consulate man would have probably not dared to do what he is alleged to have done and think he could get away with it.

If the incident given in the news below did indeed happen, I pray for the little girl to come out of her trauma and lead a healthy life, and for the abusive father to be brought to justice quickly. 

Here is the magazine news story:

http://www.tehelka.com/story_main54.asp?filename=Ws210912CRIME.asp

Posted on 21 September 2012

Wife harassed for reporting French diplomat for child abuse

While the police has filed a chargesheet against Pascal Mazurier, wife Suja is being victimised, reports Imran Khan

The high profile case of a French consulate official allegedly raping his four-year-old child not only caught the headlines in Bengaluru but also sent shockwaves across the French expatriate community in India. The fact that the complainant was the child’s mother resulted in an outpouring of support for the victim and anger against Pascal Mazurier, the consulate official. However, as the case is heading towards a legal conclusion, the indifference of the police and the French consulate and their sympathy with her husband has made the battle to get justice much tougher for Suja Jones, the mother.

On 19 June, Pascal Mazurier, 39, Deputy Head of Chancery at the French consulate in Bangalore for the last four years, was arrested by Karnataka police on charges of sexually abusing his four-year-old daughter. The complainant, his Keralite wife for the last eight years Suja Jones Mazurier, 37, who had for long doubted her husband’s intentions towards their daughter, had instructed her maid to keep a watch on Pascal when he came home for lunch.

The maid, who found Mazurier locked up with the girl for four hours, immediately informed Suja, who later took her daughter to Baptist hospital for medical examination. Suja Mazurirer’s doubts were confirmed when doctors at the hospital informed her that an attempt to rape was made on her daughter. A distraught Suja, based on the medico-legal report and help from the local NGO Enfold India, filed a complaint against Pascal on 14 June at the Cubbon Park police station alleging rape of her daughter. Apart from a daughter, Pascal and his wife have two sons aged seven and two.

Even though a complaint of attempt to rape was filed, it took police five days to arrest Mazurier, who contrary to their belief, did not enjoy diplomatic immunity. “The consul general of France Dominique Causse himself had pleaded with the Commissioner of Police, Bangalore not to arrest Mazurier,’’ informs Suja Mazurier. Buckling under pressure, the Bangalore police later charged her husband under Section 376 of the Indian Penal Code.

Even before the dust could settle, she came under intense attack from the expatriate community and from the French consulate. There were email campaigns against her questioning her intention. Since both Pascal and Suja hold a joint bank account, it was alleged that she did it to gain complete access of his money. "After much effort, I have finally been able to access some funds present in our bank account in France. As a result, I believe I can at least provide for my family for now. I would like to extend my gratitude to a French-speaking well-wisher who had to call on my behalf because the professionals involved repeatedly ignored my calls and emails over the weeks. Even then, it required a lot of convincing and further letters to finally get through. I was not aided in any way by any consulate officials to do this. Parallel pleas, numerous and fervent, to the consulate for help ultimately were rewarded with an offer for assistance from the consul general, which was not only encouraging but no longer necessary as my own independent efforts with the bank had yielded results." adds Suja Mazurier.

During the investigation, aggrieved Suja had to even write a letter to the city police commissioner asking for change of investigation officer who subjected her to intense questioning. “Were you sexually abused as a child? Do you hate France? Do you hate your mother-in-law? Did your parents know about your pre-marital relationship? If you lied to your parents about that, what proof that you are not lying now?” These were some of the questions thrown at her by the previous investigating officer.

The police also did a physical examination of Suja's daughter in the labour room of the government-run Bowring hospital. “There was blood everywhere on the floor. My daughter was screaming and I was crying,” recounts Suja. The swab samples of her daughter were later sent to the Forensic Science Laboratory in Hyderabad, which gave a report saying that they didn’t find Pascal’s DNA in it. However, the doctors didn’t even find the girl’s DNA in it, leading to a suspicion that the sample was tampered.

The police is now demanding that blood samples of the girl child should be given to clear this doubt. Investigating officer in the case Assistant Commissioner of Police Venkataswamy speaking to TEHELKA said, “This is the first time we are taking the blood sample. We want to send blood samples to other laboratory as the DNA report is inconclusive. Further clarification is required but we cannot compel her to give it’’.

“We have no issues of giving the blood samples but they should state it for what reason they are taking it,’’ says Suja Mazurier.

Meanwhile, the Bangalore police have filed a 160 page chargesheet on 17 September accusing Pascal of rape based on circumstantial evidence. The police however have refused to give them a copy of the chargesheet asking them to approach the court. Suja’s counsel advocate Pramila Nesargi said, “The defense lawyer has already been given a copy of it. But it is being denied to us.’’ Pascal’s lawyers have moved the High Court demanding bail. The next hearing is scheduled on Monday 24 September.

Imran Khan is a Senior Correspondent with Tehelka.
imran@tehelka.com

indian prime minister's violent colours

Akin to Narendra Modi's violent mindset and deeds towards Muslims and other minorities, India's prime minister, Manmohan Singh, has a violent mindset against anybody which opposes his un-justified biases on the issue of nuclear power plants  (ostensibly for civil use of electricity generation but practically also available to be used in nuclear bombs) which are completely reliant on foreign technology and partnerships. 

Not only does Manmohan Singh provides the foreign companies complete immunity from liabilities from any future potential dangerous mishap from the nuclear plants but he also indulges in violence against Indian citizens who protest against the use of deadly nuclear fuels in their towns and villages.

The newsreport given below from a weekly newsmagazine throws more light on an event that emanates from Manmohan Singh's fanatical obsession with dangerous nuclear technologies which almost every other country, other than India, is dumping.


http://www.openthemagazine.com/article/nation/first-strike

September 2012
First Strike
The State’s response to the Koodankulam nuclear plant protest is outright brutal

Shahina KK


BURIED ALIVE Protestors at a beach near the Koodankulam nuclear power plant

 

The Lourdu Matha Church on the beach at Idinthakarai in Tamil Nadu’s Thirunelveli district is the nerve centre of protests against the Koodankulam nuclear power plant. About 5,000 people—men, women, and children—have made the church their home. They go to their homes in the morning, spend an hour or two, cook food, feed the elderly at home, and come back. A community kitchen in the church compound serves two meals a day. They live, feed their children and sleep under the sky on the beach, waiting for instructions from their leaders on what next. “Either we will die, or the nuclear plant will run,” says Rosamma, a 58-year-old woman of Idinthakarai village.

Though the people around here have been protesting for more than two decades now, it is only recently that their struggle has entered the limelight. It all began here in 1988, the year that the power project was signed between India and the Soviet Union. In these 24 years, Koodankulam locals have held demonstrations, public meetings, seminars, signature campaigns, foot marches and hunger strikes. The Government, meanwhile, went ahead with its construction of the plant, which has now reached the final stage—of fuelling the reactors. Last year, the protestors intensified their agitation by going on indefinite hunger strikes. Alas, it did not make the Government change its mind, and the Atomic Energy Regulatory Board has also given its go-ahead to begin fuelling the reactors.

On 9 September, the agitation took a bloody turn. Around 6,000 people marched towards the plant. The police responded with a lathi charge and firing of tear gas shells. A fisherman was killed and several others injured. The days that followed showed how the State was at war with its own people.

A journey through the villages of Koodankulam, Tsunami Colony, Perumanal, Bhairaavikinar and Idinthakarai offers a tour of police brutality. On 10 September, the day after the lathi charge and firing, the police barged into each and every house in these villages and wreaked violence. This correspondent reached half an hour after a raid in East Kamaraj Nagar Colony in Koodankulam, only to be met with broken window panes, and damaged bicycles, rickshaws and jeeps. Gopinath, a 12-year-old, was lying semi-conscious in his home. There were injuries on his face and he was still bleeding. His left arm was broken. He had been beaten up in the presence of his father Dharmapandi and mother Bala. “When the police arrived, we tried to close the door. They forcibly opened it and started beating up my husband who was sleeping. When I cried, a policeman kicked me with his boot. My son tried to prevent the cops from beating up my husband. Then they turned to him,” says Bala. Dharmapandi was taken into custody. Of the 300 odd houses in the colony, few were spared.

Thankamani, who is 80 years old, was asleep at home when the police barged in. They asked her where the men were hiding. She tried to tell them that there was no one at home. “They kicked me in my stomach,” she says. That Tuesday, around 20 men were picked up in Koodankulam village. From Tsunami Colony, which is within a 2 km radius of the plant, residents fled fearing further police violence. Even the elderly and the sick took refuge at the Lourdu Matha Church. On Wednesday, 11 September, I could see only abandoned houses in the Colony. Inside, I spotted broken television sets, kitchen utensils and clothes strewn around. The police later denied any role in the chaos and attributed the violence to protestors.

Robin, son of Roslin and Britto of Idinthakarai, is seven years old. He had an injury on his face. Asked about it, he takes a minute to find his voice. He tries, but only ends up weeping. His grandmother Violet then narrates their story. Robin was among those injured by the police the previous day. When the lathi charge started, young Robin got lost in the scattering crowd and was trapped right in front of the police, who were loading tear gas shell launchers. Robin was so close to the police that a launcher hit his face after a shell was fired. It might not have been an intentional attack, but they ignored the injured boy who’d fallen down, and continued firing shells into the crowd.

Journalists were not spared. Times Now cameraman PS Sujesh was roughed up by the Rapid Action Force (RAF) and Tamil Nadu Police commandos. Sujesh had been capturing belligerent cops battering bikes parked along the seashore. After they saw him, the RAF men kicked him and struck his forehead. They snatched and smashed his camera.

Rajesh Das, Inspector General of South Zone, refuses to answer questions on the police vandalism. “Many cops were injured in the violence committed by protestors,” he says, “A policeman would have died if we had not reached on time.” Asked for specifics—when and how the policeman was attacked and what his name was—Das says this is ‘not being polite’ and a little too under-appreciative of the police’s role in maintaining law and order. “Write whatever you want to write, I don’t bother,” he says, asking me to leave.

MP Jasuraj, a member of the coordination committee of the People’s Movement Against Nuclear Energy (PMANE), which leads the agitation, says that the police top brass had warned them that they would smash the colonies if their leaders did not surrender. “We got a clear message from them,” he says. The day after the crackdown, Dr SP Udayakumar, the agitation’s leader, announced his decision to court arrest. Despite the village being completely cordoned off, he made a dramatic appearance at the satyagraha venue to huge applause. He said that a national leader would arrive by evening and that both Udayakumar and, another leader, M Pushparayan, would court arrest in his presence. The leader turned out to be Arvind Kejriwal.

The rest of the day was a study in how people subvert their leaders’ best laid plans. Udayakumar could not finish his emotional farewell speech, as a crowd—mostly women—rushed onto the stage, wailed at his feet, hugged him, and begged him not to surrender. Udayakumar and Pushparayan were rushed to the beach by a crowd. Press photographers who followed were blocked by a human chain that suddenly took form. They did not want the media to know where he was being taken. He was then whisked away on a boat.

Kejriwal, who arrived late at night, had nothing to do but declare solidarity and request Udayakumar not to surrender. “The Government is waging war against people,” he said, “Udayakumar should not surrender. The police should disclose the charges against him and the others.”

The legality of the police action remains hazy. The Koodankulam protestors have no clear idea of the number of people arrested or detained. An idol of Mother Mary at Lourdu Matha was found in pieces. Protestors allege that the police had barged into the church and smashed it.

House-to-house searches continued late into the evening on 12 September. Protestors also say that drinking water and power supply to their villages has been cut off since 10 September. That’s not all. As a pressure tactic, according to PMANE activists, even water tankers have been blocked by the police. It’s bad enough that the villages were in complete darkness for two days.

The least that PMANE expects the Government to do is address legitimate questions about the plant’s environmental impact, safety and viability. “Only six out of 17 safety measures have so far been implemented even in this final phase of fuel loading. The Government resorts to the strategy of cracking down on our protest instead of engaging us,” says Udayakumar, chairman of PMANE. “Reports of environmental impact assessment, site evaluation or safety assessment have not been shared with either the people or the press.”

Protestors are also keen to invite those suspicious of their ‘funding’ to stay with them for a few days. “Why do we need foreign funds?” asks F Jayakumar, an activist. “People here are living on the bare minimum. They eat only twice a day, they do not need luxuries or entertainment.” Villagers contribute Rs 10 a day to the common pool. “Do you think that a people’s movement to which the people contribute a portion of their daily income would ever face a shortage of funds?” asks 50-year-old Sharlet, a fisherwoman who is now a PMANE activist.

That it is a genuine people’s movement is beyond doubt, by the evidence all around. This correspondent saw farmers coming in from neighbouring districts like Thoothukkudi and Kanyakumari in trucks loaded with rice and vegetables. They are aware of the issue, and are agitated about the nuclear plant. And despite the State’s strongarm tactics, they are determined to keep up their agitation.

On 12 September, the 395th day of the indefinite struggle, 3,000 odd people—half of them women and children—moved to the sea. This jal satyagraha came to a temporary halt after Francis Sahayam, a 38-year-old protestor fell off a seaside rock as a Coast Guard aircraft passed closely by. He succumbed to his injuries on 13 September, and PMANE activists objected to a post-mortem, as the police had not filed an FIR against the Coast Guard. This standoff was resolved only later, once an FIR was registered and the district administration agreed to order a judicial enquiry.

The agitators are unlikely to give up. In fact, their methods of protest are turning more inventive by the day. On 15 September, locals of Kootapuli near Idinthakarai dug symbolic mass graves for themselves on the seashore, and around 500 of them buried themselves partly in the sand to signal the fate they believe awaits them. Laying siege to the plant site is next on the agenda, as Udayakumar said on 18 September, re-appearing in public after a week. Clearly, it’s going to be one long battle.

+++

Why PMANE is Saying ‘No’

The Koodankulam Nuclear Power Project (KKNPP) reactors are being set up without sharing the Environmental Impact Assessment (EIA), Site Evaluation Study and Safety Analysis Report with the people.

» Tamil Nadu Government G.O. 828 (29.4.1991 – Public Works Department) establishes clearly that “area between 2 to 5 km radius around the plant site, [would be] called the sterilization zone.” This means that people in this area could be displaced. But the KKNPP authorities promise orally and on a purely adhoc basis that nobody from the neighboring villages would be displaced.

» More than one million people live within the 30 km radius of the KKNPP which far exceeds the Atomic Energy Regulatory Board (AERB) stipulations. It is impossible to evacuate this many people quickly in case of a nuclear disaster.

» The coolant water and low-grade waste from the KKNPP are going to be dumped in to the sea which will have a severe impact on fish production and catch, affecting the food security of southern Tamil Nadu and southern Kerala.

» The plant would be emitting Iodine 131, 132, 133, Cesium 134, 136, 137 isotopes, strontium, tritium, tellurium and other such radioactive particles into air, land, crops, cattle, sea, seafood and ground water.

» There have been international concerns about the design, structure and workings of the untested Russian-made VVER-1000 reactors.

» The then Union Environment Minister Jairam Ramesh had announced some months ago that the Centre had decided not to give permission to KKNPP 3-6 for violating the Coastal Regulation Zone stipulations. It is pertinent to ask if KKNPP 1 and 2 are not violating CRZ terms.

» Political leaders and bureaucrats say there will be no natural disasters in Koodankulam area but how can anyone ever know? The 2004 December tsunami did flood the KKNPP installations. Since a nuclear disaster cannot be effectively dealt with, it is more prudent to prevent it from occurring. Germany has decided to phase out nuclear power plants by 2022. Switzerland has decided to shun nuclear power technology. In a recent referendum, 90 percent Italians voted against nuclear power. Both United States and Russia have not built a new reactor for two to three decades since the Three Mile Island and Chernobyl accidents. In India, the Mamta Banerjee government has stopped the Russian nuclear power park project at Haripur. Like West Bengal, even Kerala has decided not to host nuclear power projects.

» The issue of liability for the Russian plants has not been settled. Defying Indian nuclear liability law, Russia insists that the Inter-Governmental Agreement (IGA), secretly signed in 2008 by the Indian and Russian governments, precedes the liability law and that Article 13 of the IGA clearly establishes that NPCIL is solely responsible for all claims of damages.