Sunday, August 21, 2011

High Profile Guest in Tihar


Every day when Shahid Balwa comes to Patiala House from his 10 ft X 15 ft cell in Tihar Jail, he carries with him a sheaf of papers from the 80,000 page CBI chargesheet in the 2G scam. Some portions are highlighted, others underlined. The 39-year-old MD of Dynamix Balwas then discusses details of his case with lawyer Vijay Aggarwal. "We have to murmur because the constable watches us like a hawk," says Aggarwal. Balwa takes a break from the 10 a.m. to 4 p.m. hearing on the CBI chargesheet only to go to the lock-up for 15 minutes and eat his lunch, which consists of snacks purchased with coupons from the Tihar canteen.

Balwa, once in Forbes' list of India's 100 richest people, is in Jail No. 1. He is not the only high-flyer adjusting to life in Tihar's 400-acre prison in Delhi. Its most famous occupant currently is former Union telecommunications minister Andimuthu Raja, 48, who seems to have settled into a groove, reading Tamil books, eating home-cooked food twice a week and watching TV in his cell, which has a WC and tap attached. His former personal secretary R.K. Chandolia and the former telecom secretary Siddharth Behura-all were arrested in February for their alleged involvement in the 2G scam-have recently been shifted to the same ward due to what the jail authorities call "security concerns where they could be exposed to hardened criminals".

The Tihar occupancy chart in Director General of Prisons Neeraj Kumar's room reads 11,832. He's expecting the 11,833rd to be former Indian Olympic Association chief Suresh Kalmadi, 67, who is currently in CBI custody for eight days. "We will have to look for a place for him," says Kumar. Kalmadi could join his former CWG organising committee colleagues Lalit Bhanot and V. K. Verma who are housed in Jail No. 3, the most crowded with 2,011 inmates. He will have to eat lunch at 12 p.m. and dinner at 7 p.m., which is rotis or rice as well as dal and a vegetable dish. For breakfast at 8 a.m., he can have tea and two slices of bread and at 5 p.m., it's nimboo pani. If he's especially hungry, he can buy apples, samosa or bhajia from the canteen with coupons worth a maximum of Rs 3,000 a week. For entertainment, he can watch TV in his cell-Tihar has 1,000-odd sets in cells and ward common rooms-or borrow books from the library.

It helps to go in with friends though. Balwa is in the same ward as his brother Asif, who was arrested along with Rajiv Agarwal in March for their alleged involvement in transferring money to DMK's Kalaignar TV channel. All of them share food that comes from home (each prisoner is allowed home-cooked food twice a week and they take turns). Each prisoner is also allowed a visit by the lawyer every day but Balwa and DB Realty MD Vinod Goenka, 52, who Forbes said was worth over $1.18 billion in 2010, prefer to meet them in the courtroom these days.

Unitech MD Sanjay Chandra, 37, arrested on April 20 along with Goenka as well as three top officials of the Reliance ADA Group, Gautam Doshi, Hari Nair and Surendra Pipara, is also adapting to life in the slow lane in Jail No. 3. The former Delhi high society staple meets his family between 10 a.m. and 4 p.m. every day in Patiala House Court, and bides his time sleeping on a mattress and fighting mosquitoes.

Suddenly Tihar Jail seems to be on the itinerary of several topnotch CEOs and professionals in the country, which distracts from the conditions of those in the barracks, which house 30 to a room. Tihar's official capacity is 6,250, and it has almost double the inmates, a number likely to increase as CWG and 2G claim more scalps.

Shunglu panel found guilty....


Under the scanner, as per the six detailed reports submitted by the Shunglu panel, are Delhi Lieutenant Governor (LG) Tejinder Khanna, Chief Minister Sheila Dikshit, the then sports minister M. S. Gill and the then urban development minister Jaipal Reddy. Sources in the CBI disclosed that while Kalmadi remained the focus for the time being, their officials had started sweeping for evidence against the others too. "There are certain clear cases of irregularities pointed out by the Shunglu committee and we have directions from the Prime Minister's Office (PMO) to look into them," said a senior CBI official.

The committee had submitted five reports-on host broadcasting, Games Village, city infrastructure, Games venues, Organising Committee (OC)-and one main report on Organisation and Conduct of the Games. The report on city infrastructure is the one which implicated the Delhi Government. The pmo forwarded this report to the Ministry of Home Affairs (MHA) to seek a reply from Delhi Government. The MHA has given a month's time to Delhi Government to respond to the allegations. Dismissing these allegations, Dikshit said, "We are preparing a final report in response to the Shunglu Committee findings. It will be a paragraph-wise reply to every allegation. Our report is almost ready."

Even though the CBI has officially not been asked to start investigations against the Delhi LG and the chief minister, the agency has started its preliminary probe. "At a certain level, the investigations against all those named by the Shunglu panel converge and overlap. They were all a part of the Group of Ministers (GoM) which cleared all projects," said the CBI official.

Kalmadi wasted no time as he blamed Gill during his bail application hearing in the court. Gill, as sports minister, was in charge of building nine of the 17 stadia, and responsible for ensuring that the Games were fully funded. Despite several attempts made by india today, Gill was not available for a comment. The Shunglu panel dealt with it in its fourth report on venues, and noted wasteful expenditure and delays in execution of works. Reddy is under the scanner for the Games Village, where dda bailed out its PPP partner, Emaar MGF with a package of Rs 766 crore.

In its third report on projects to upgrade city infrastructure, the panel pointed out that there was no special preparation by the city Government and blamed the chief minister for her decisions that led to cost escalation in CWG-related projects. "All projects require a host of preparatory actions before the start of the project on ground. These actions have to be initiated well in advance as they take a considerably long time. The work should have started during the year 2005-06," the report observed.

It added that unfair cost advantage was given to contractors due to compressed time frame and noted indication of "collusive bidding" in tenders floated by PWD. According to a conservative estimate by the panel, the Delhi government had carried out works worth over Rs 5,500 crore with the PWD executing a majority of the works. The major projects handled by the department included Barapullah elevated corridor (Rs 52 crore), Ring Road Bypass (Rs 47 crore), Uttar Pradesh Link Road (Rs 43 crore), streetscaping (Rs 16 crore), street lighting (Rs 63 crore), signage (Rs 46 crore) and 21 flyovers, in addition to the three Games and training venues (Thyagaraj, Chhatrasal and Ludlow Castle).

The report also questioned as to why the expenditure finance committee was centralised under the chief minister and on what basis it give clearance to all types of projects. The panel also faulted Kalmadi and his aides over award of contracts, saying there was "extreme concentration of power at the top and conflict of interest among OC officials".

Sources say that now with Kalmadi safely tucked away, more people will come forward with evidence. "So far nailing Kalmadi was the difficult bit. He had hardly signed any document personally. His style was to browbeat the others under him into doing the dirty work. Not that the others did not benefit from it," revealed an official involved in the investigations.

In addition to the irregularities in contracting Event Knowledge Service (EKS), a Swiss company to advise on event planning and workforce support, there were other clear cases of forgery, falsification, record creation, delays and financial bungling against Kalmadi. Other contracts for which Kalmadi is under the scanner are on appointment of Australian firm Sports Marketing and Management (SMAM) for arranging sponsorships and the one for catering. According to the highly dubious agreement between SMAM and the oc, the former was the "sole and exclusive negotiator and procurer of sponsorship for licensing contracts," and it stood to gain a commission of 15 to 20 per cent on each sponsorship that came for the Games, even if it was not arranged by SMAM.

The CBI is also probing the catering contract which was first awarded, then inexplicably cancelled, re-tendered and awarded to the same company, which had hiked the cost three times, causing a loss of over Rs 100 crore to the OC. With all the various players in the CWG mess, the CBI is hoping that it will gain from one singing against the other.

Could Rajat Gupta be innocent of insider trading


Could Rajat Gupta be innocent of insider trading? On March 1, the United States Securities and Exchanges Commission (SEC) chose to file a civil, not criminal, case against former McKinsey chief Rajat Gupta for his involvement in the biggest hedge fund insider trading case in US history. Gupta is accused of giving illegal tip-offs based on confidential information from Goldman Sachs and Procter and Gamble-he was on the boards of both companies-to Galleon hedge fund chief Raj Rajaratnam between June and October 2008.

The Sri Lankan-born Rajaratnam is accused of having netted $45 million in illicit profits from insider trading with the help of Gupta and others. If convicted by a special sec-designated court, the worst that could happen to Gupta is a heavy fine and a permanent bar on being appointed to any company board. Forty-six people, including Rajaratnam, have been charged in the insider trading case. Twenty-nine have pleaded guilty. Gupta is the only one facing civil, not criminal proceedings.

On April 12, Gupta's lawyers filed a request in the New York court of US District Judge Jed Rakoff, who is hearing all Galleon-related cases, requesting that Gupta's case, like the others, be heard in a federal court. "Gupta is the only Galleon-related defendant faced with the denial of the right to a jury and important protections available only in federal court," said Gupta's lawyer, Gary Naftalis, in papers filed in court.

If convicted in a criminal insider trading case in a federal court, Gupta could face up to 20 years in prison. Why would Gupta want to trade a relatively innocuous civil trial for a criminal one? Because it may be easier for him to prove his innocence in a federal court where a jury (for conviction it has be a unanimous verdict of all jurors) requires the case to be proved beyond reasonable doubt before determining guilt than in a special administrative court where an sec-appointed judge will adjudicate his fate, with a slightly lower burden of proof. Hearsay can be used as evidence in civil proceedings but not in criminal proceedings. This is crucial because much of the evidence is in the form of wiretaps of conversations between Rajaratnam and the other accused, including Gupta, whose lawyers clearly believe the case against their client is weak. Perhaps the sec lawyers secretly hold the same view.

Gupta has a reasonably good chance of getting his case transferred to a federal court. The sec has used the 2011-enacted Dodd-Frank Act to bring administrative proceedings against Gupta. Under the earlier law, the sec could only bring civil administrative proceedings against a person registered as a broker-dealer. Gupta's lawyers will argue that the Dodd-Frank Act cannot be applied to their client with retrospective effect-Gupta's alleged offences were committed in the second half of 2008.

Judge Rakoff may yet agree with Gupta's lawyer. Hearing the case against Adam Smith, a former Galleon trader, Rakoff expressed bewilderment over the charge against Gupta. He said, "I don't understand why Gupta is the subject of an administrative proceeding before the sec while everyone else is the subject of a proceeding before a district court judge." Rakoff also expressed concern about the Dodd-Frank Act in early April, "One concern I have about Dodd-Frank is that it puts more adjudication in the hands of the SEC," he said at Fordham University Law School.

Gupta's fate will depend on what happens in the criminal trial against Rajaratnam and 27 others that is being heard in Judge Rakoff's court. The prosecution, led by US Attorney Preet Bharara, has finished presenting its case. The defence has rounded up its arguments. The jury will deliver its verdict in the next fortnight. The prosecution has tried to prove Rajaratnam used illegal tip-offs from friends and top corporate executives, all of whom disclosed information not publicly available, to help Rajaratnam make a profit of $45 million. Gupta's name featured frequently in the prosecution case against Rajaratnam, though he is by no means the key co-conspirator. The evidence against his former McKinsey colleague, Anil Kumar, is much stronger. Kumar and two others have turned approver and are helping the sec nail Rajaratnam. The defence lawyers continue to argue Rajaratnam based his trading on a "mosaic" of publicly available information.

Two sets of wiretapped conversations were used to link Rajaratnam to Gupta. In the first conversation, Rajaratnam asks Gupta about a rumour that Goldman Sachs was considering buying either Wachovia or AIG. Said Gupta, "Yeah. This was a big discussion at the board meeting?Buy a commercial bank. And, you know it was a uh, divided discussion in the board...A, AIG, it was definitely on, in, in, in, the discussion?"

According to the prosecution, there was another conversation in October 2008 in which Rajaratnam tells "employees" that "he was told by a Goldman Sachs board member that the investment bank was losing $2 a share". Gupta is not named in the conversation.

Compare those wiretaps as evidence with excerpts from a conversation Rajaratnam had with Gupta's former colleague Anil Kumar on August 15, 2008. Kumar is giving him information about investments from sovereign wealth funds in chipmaker AMD:

AK: So yesterday, they agreed on, at least they've shaken hands, and said they're going ahead with the deal.

RR: Should I buy?

AK: Yeah, go ahead and do that.

The Rajaratnam-Kumar conversations are evidence of illegal tip-offs being used to trade shares and make profits. The Gupta conversations are not. There is more evidence.

Prosecutors told the court that a tallying of phone records and trading records showed that Rajaratnam, on more than one occasion, traded in Goldman Sachs shares within seconds of talking to Gupta. The prosecution has alleged that phone records show that Gupta called Rajaratnam right after the Goldman Sachs board had approved a $5 billion investment by Warren Buffet's Berkshire Hathaway in Goldman Sachs in the last week of September 2008. Within a minute of that conversation, Galleon bought 175,000 Goldman shares.

There are other instances when phone records show that Gupta and Rajaratnam spoke soon after Gupta learnt of Goldman Sachs' quarterly earnings from ceo Lloyd Blankfein, well before they became public. There is evidence of Rajaratnam trading in Goldman shares right after these conversations.

Not everyone is convinced that any of this is smoking gun evidence of insider trading. Jeff Ifrah, co-author of "Federal Sentencing for Business Crimes", told Bloomberg Businessweek, "Intent is hard to prove. The disclosure of the information in and of itself is not a crime."

Jacob Frenkel, a sec lawyer, is also sceptical about the evidence. Speaking to Bloomberg Businessweek he said, "The government is unlikely to bring criminal charges against Gupta because the proof against him appears circumstantial."

Gupta's lawyer Naftalis has been insisting that there is nothing to show that his client was engaged in a quid pro quo with Rajaratnam. According to Naftalis, Gupta lost the entire $10 million he had invested with Rajaratnam in the GB Voyager fund during the financial crisis.

What, if not money, then motivated Gupta to break rules of confidentiality? Rajaratnam had a theory which was revealed in a wiretapped conversation between the Galleon founder and Kumar. Said Rajaratnam about Gupta, "He's enamoured with Kravis, and I think he wants to be in that circle. That's a billionaires circle...I think he sees an opportunity to make $100 million over the next 5-10 years without doing a lot of work."

Kohlberg Kravis Roberts and Company was one of the biggest private equity firms in the US and Gupta knew its boss Henry Kravis through their common passion for philanthropy. In the years of boom between 2003 and 2008, private equity and hedge funds emerged as the new poster boys of corporate America, acquiring money, stature and influence that far exceeded management consultants in McKinsey, Bain or Boston Consulting. In 1994, when Gupta won an election to the first of his three terms as head of McKinsey's global practice, management consultants and investment bankers were the elite of corporate America. By the mid 2000s, finished with the top job at McKinsey, Gupta wanted to move into the charmed circle of private equity.

In 2006, Gupta founded a fund called New Silk Route with Parag Saxena, Victor Menezes, and Rajaratnam. He would have been aware of their dodgy reputations. Saxena had paid a fine of $250,000 to sec in 1994. Menezes, a former Citibank senior vice-chairman, had paid the sec $2.7 million in fines after dumping Citibank stock before bad news from its Argentine subsidiary became public. In 2005, Rajaratnam's Galleon group had paid $2 million in a fine to settle claims for improper trade. His ambition had got the better of his judgement. By 2008, he was discussing the possibility of a role in Galleon. It didn't materialise.

Gupta may or may not be convicted of insider trading. What is certain is that the one-time business icon will never recover his reputation. His conversations with Rajaratnam may not be a smoking gun in a court of law. But they lay bare the almost casual manner in which he broke confidentiality rules and violated codes of ethics. Even if he is acquitted, no reputed company is likely to ever appoint Rajat Gupta to its board.

The arrest of Congress MP and disgraced Chairman of 2010 Commonwealth Games (CWG) Organising Committee Suresh Kalmadi is only as the beginning. The Central Bureau of Investigation (CBI) is now widening its scope of investigations to include others who were part of decision-making for the Games and those who awarded contracts in an arbitrary manner.

Jhajjar District in Haryana has the Country's Worst sex ratio


At 774 girls per 1,000 boys, Jhajjar district in Haryana has the country's worst sex ratio in the 0-6 age group. Two of its villages-Behrana and Dhimana-have incredibly low sex ratios of 378 and 444 respectively. In the same age group, Haryana has over four lakh fewer girls than boys-4,07,370 to be precise. The gap was 3.31 lakh in the last census. Over all, the state has 1.35 crore men, compared to 1.18 crore women. A difference of 17.57 lakh. In 2001, the figure was 15.83 lakh.

The reasons are obvious. The assumption is that girls are a burden and it's coupled with burgeoning ultrasound centres-1,174 now-mostly functioning clandestinely. "You can get a woman for Rs 30,000 any day while a well-bred buffalo costs Rs 70,000," says Ajit Singh, 45, a bank employee. He gets approval from four other friends taking turns at smoking the hookah at a chaupal. "In fact, getting a girl could cost you less but you have to spend a lot on fares travelling to far off places such as Assam," adds Ranbir Yadav, 42, a local landlord.

Medically terminating an unwanted pregnancy costs between Rs 1,000 and Rs 20,000 and the mushrooming of non-registered centres has only fuelled the menace of female foeticide. Not surprising in a land where the saying goes: "Chora mare nirbhag ka, chori mare bhagwaan ki (son of a doomed dies, daughter of a blessed dies)."

What's shocking is that women are often responsible for continuing this ghastly practice. "Believe me, women are mostly responsible for it," says Jaipal Singh, 42, a former soldier and now a farmer in Behrana, one of the 6,759 villages in Haryana. "Nurses or auxiliary nurses and midwives (ANM) get in touch with pregnant women and take them for detection and then termination of pregnancy. We men are generally kept in the loop but don't care to know where it happens and how. Of course, they have our consent." Behrana has a population of nearly 8,000 and is dominated by Jats. In every neighbourhood here, one will find a serving or a retired soldier. The contempt for daughters is universal.

"Don't blame us," says Chand Ram, a Behrana octogenarian and an ex-soldier. "Blame the system. Even parents of MBAs or post-graduate girls with jobs have to give away a luxury car as dowry. What's the point in having girls? We don't need girls." Argues Umed Singh, 73, a farmer, "If we hate daughters, it's not without reason. What do you do with them? You send them out for education and they only bring a bad name to the family."

Strange in a state where several women have brought national glory. Haryana produced astronaut Kalpana Chawla. Miss India World Kanishtha Dhankar, 22, comes from Jhajjar. Though Mumbai is her birthplace, she has her roots in Kasni village and her father Raj Singh Dhankar, a commodore in the Indian Navy, often visits the village with his family. "It's an extremely sad state of affairs in Haryana that never gave women the status they deserved. Women can actually do much better than men. It's a cause of concern for all but people like you and me do nothing about it. We need to educate them," says Kanishtha Dhankar. Only last year, Haryana's girls had done the state proud by winning laurels at the Commonwealth Games in Delhi and then the Asian Games in Guangzhou.

Absurd logic abounds in the region to justify the decreasing female population. In Dhimana, which has nearly 190 households, residents refuse to believe that foeticide is behind the skewed sex ratio. "It's God's gift that most of the children born in this village are boys," claims Dhimana village sarpanch Om Parkash, 70, a bachelor. Varinder Kumar Narula, 67, headmaster of Sunrise High School, offers another reason: "It has to do with diet. People eat well here and so give birth to boys."

The state officials though make a valid point. "The ultrasound centres are the single largest factor behind the skewed sex ratio," says Director General (Health Services) Narbir Singh. "We do our best but the problem is that most of these illegal activities take place in unregistered ultrasound centres that operate with small devices, making it difficult for us to catch them. But unless people have the will, the problem cannot be rooted out."

The will to tackle the problem doesn't seem to be there. "In 90 per cent of the cases where a couple is going for a second child, they opt for a sex-detection test," says Narinder Popli, 43, a Jhajjar businessman.

It was long believed that things would change with literacy. The latest census has deflated that theory as well. Jhajjar has a literacy rate of over 80 per cent. Mewat, with the lowest literacy rate of 56.1 per cent and considered the most backward district in the state, has Haryana's highest sex ratio at 906 females to 1,000 males.

"Literacy and modernisation have worsened matters. People are aware of abortion as well as sex determination options now and it has become much more acceptable now in society," says Ranbir Singh, consultant with Nilokheri-based Haryana Institute of Rural Development. "In places such as Jhajjar, land prices are very high and people don't want their daughters to get a share of property that they are legally entitled to."

The skewed sex ratio has had a social impact. It's causing a huge bride shortage. Theoretically, it should have checked dowry but a large number of those who get married demand hefty dowry. At many places, barter marriages are taking place; people marry their daughters and in return get a bride for their sons. Those who cannot get brides locally are buying them from Assam, Uttar Pradesh, West Bengal, Bihar and other poor states. "I know we won't get married and it's very depressing," says Manoj Kumar, 21. "We keep talking about it. But you need a job to get a wife. We don't see either of the two happening," adds Mandeep Ahlawat, 19.

The bias against girls, rooted in short-term economic considerations, is slowly but surely leaving behind long-term scars that Haryana will find difficult to heal. A lot of its men may just be forced to stay single with brides hard to come by.

JPSC 4th PT 2011 Result Discussion Board



JPSC 4th PT result ....

Repeated UPSC  questions...

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.what do you think?