Who is the worst? 

High seat to Jail! At whose cost?

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Recently we have seen a spate of financial defaults where the so-called giants in industry and business have financially played havoc. Mallya, Sahara Chief Subroto Roy, Unitech Chandras list goes on and on and on! Question came to my mind who is the worst of the lot? I missed on adding the name of our local hero from Pune D S Kulkarni, who has joined the elite list though not on that scale.

In such matters two major aspects need to be checked. Whose action has caused the problems to the health of banking & financial system, and whose action has caused the most damage to the livelihood of individuals besides the banking system? The first group which has caused the issues to banking system are led by Mallya. Before he could be “caught”, he managed to change ownership of companies and to my knowledge companies are running reasonably alright! It appears that both Mallya and the new management have managed to siphon money to tax free heavens. Mallya apparently has billions of dollars in his personal name and has managed to evade tax in many locations in the world. How to get money back from such people? Assets he created all over India have become tricky to dispose-off, now that these have become tainted assets. Same issue is there in case of Amby valley, near Pune, huge asset created by Roy!

How to decide who is the worst of the lot? My thought process tells me that those who have cheated individuals, many of them retired, who invested most of their life savings, are the worst culprits. By this test Mallya may appear to be a saint. No individual has launched any complaint against Mallya. By this logic other three appear to be major culprits. Roy and Chandra are in jail for some time, thanks to Supreme Court; has their families’ life style changed, no way! They have no money to return but have enough money to blow! Our friend D S Kulkarni’s family lives in rented flat! So sad! Not really, the flat is in Trump Tower in Pune with a rent Rs. 400,000/ per month! Extremely high by Indian standards. Mallya’s case is totally different. He moved to UK when there was no criminal case against him. So, when he entered UK, he was not “tainted”! The propah British law says that when Mallya entered Britain, he was not “tainted”. So procedures had to be followed, as he was not a fugitive when he entered Britain! British took their own sweet time to start the extradition processes. The Indian authorities are now tensed up and keeping their fingers crossed. In another similar case in Britain, the judge who will be handling Mallya’s case gave a decision that the concerned culprit will not be extradited, as jails in India are in extremely poor condition. Same logic may be applied in Mallya’s case!

I don’t have knowledge of various laws but my common sense tells me that such people’s factories shut down, businesses close down; the so-called owners are still having fun whether there is profit or loss.  The workers, financial institutes, and vendors are facing the main brunt. I remember when in Pune, Garware Nylons shut down, the loss was to the workers, vendors and banks! Garware’s have been moving around in their helicopters!

Why does this happen? How is this allowed to happen? Where is the lacuna? When any organization starts, it needs money; it gets money in the form of equity, loans and fixed deposits and working capital. The persons who start the company are also expected to put in the seed capital. Everything works quite all right in the initial phase. How business runs, depends on many factors some under control and some not under control. When people invest money in business as equity, it is a risk taken knowingly. When business does well people get dividend; and at some stage some investors liquidate their shares, based on share market variation and make their kill. But when the business does not perform well they are in for a loss. This is a known risk for investors. Same things happen in case of fixed deposits by people. Interests are paid on time, whenever requested deposits are refunded. Problems begin when businesses start floundering. Promoters, at this stage probably start treating FD’s as equity! If business conditions deteriorate further then the deposits become Ponzi schemes! Take deposits from someone promising high rate of interest and try to pay interest to older depositors. Vicious circle goes on and on and on till the court and Police cases start. Unfortunately for individuals, the first right on recovery from such organizations is with financial institutions!

In the meanwhile, the smart promoters have done something in between. They take deposit under the name of one company and transfer the money to their other businesses. This is done like hedging when intentions are not good . So, their other businesses run well. The assets and incomes made in these businesses are not in the name of original promoters of the main company. You don’t need to own a helicopter or a Mercedes to use it! 😃Holidays in cool climes continue because it is never done under parent company. Wealth is flaunted and social activities continue. I am by no means a socialist or a communist but what I have just explained is simply cheating. Small vendors, retired teachers, others are affected badly. This is what is happening in case of D S Kulkarni. He even has gumption to claim that his business started suffering when Lehman Brothers collapsed in 2008!

How do these people maintain their lifestyle even after they are in jail or court cases are on? Here is an example from building trade. It is pretty simple. Company A buys a plot of land. B, C, D and E are other companies from the group. The plot is finally purchased by E following the straight path via B/C/D. By the time plot is in possession of E its price maybe five times! This is loaded on the project to sell homes to us. A is the company who takes FD’s from people but income of A is meagre and this money is routed to “other” companies. A & E ownerships may have some connect but B, C, D are owned by other family members or are trusts. These companies will have high profits! Another way of making the killing is that when E sells a home either B/C/D gets say 3 % commission on each sell as they are “Sells Agents” for E! Got it.

What is the solution? Believe in market rumours! Smoke is seen only when there is fire! It is impossible to know which organization can go into difficult times. The moment you hear some story, withdraw money from such organizations. Don’t keep on hoping that they will come up again! If they do come up put your hard money with them again! After all it’s your money! My take is that those who put individuals in difficulty are worst of the lot!

Heart or Brain?

Many a times, humans take decisions in a way that it becomes difficult for others to fathom. Sometimes the brain is required to take precedence over heart and other times heart is supposed to take precedence over brain. In love, about family and friends, heart should take precedence over brain; emotions do overcome brain in these cases but in other cases it should be the reverse. But this sometimes does not happen.

Recently a term has been coined “Post Truth”

Post-truth relies solely on personal beliefs and ignores any facts that may conflict with those personal beliefs.

Initially, humans lived in small groups, with evolution many things changed. This included communication, travel, language and many other things. When small groups were not connected, most of the decisions taken were based on personal beliefs because knowledge acquired by other groups could hardly be known as inter group communications were either non-existent or were very poor and not wide spread. Human race has evolved over a period especially about communications.

In modern world, the knowledge and information gets spread so fast that we can know many things, if we want to. This gave the opportunity to know how people behave in different ways for same situations. Also many facts and figures became easily available. With this change, migration also increased. Initially people looked at migration as globalization; effect of globalization was assimilation of global population with different skills, to manufacture stuff/provide services from anywhere in the world at the lowest possible cost. Globalization did spread with the advent of knowledge and information and better communication. It had its great effects, initially. Second “industrial revolution” was even faster and more wide spread. This “industrial revolution” was digitalization and computerization of our world. Its effect has been to democratize the global economy to some extent.

But in recent couple of years, a different effect of this revolution was felt by the local population e.g. losing jobs to “outsiders”. Now the thought process has started changing from global to local. This has led to the creation of term “Post Truth”. So called “Global Thinking” people have started thinking “locally” to get their jobs back. The effect is for all of us to see e.g. Trump becoming President, Brexit and so on. Apparently Post Truth is more prevalent in Public Domain but sometimes it’s prevalent in personal domain too! We cannot say that US population is not aware of “could be effects” of  Trump presidency. Britishers are very much aware that coming out of large single market is not good for Britain. But in spite this knowledge, decisions have been most unexpected. 

EVM (Electronic Voting Machines) episode, challenging the Election commission by political parties was a typical Post Truth case. EVM voting sanctity was well proven over a period but Political parties did not look at the facts and just challenged the Authorities. In 1971 India Pakistan war, Pakistan had two very distant fronts to fight on, Mukti Bahini was strongly fighting the guerilla war, Indian Forces were far superior but Pakistanis had a notion that one Pakistani soldier is good enough for 10 Indian soldiers! Rest as you know is history. Alienating Qatar by other Gulf Countries is another Post Truth decision. Qatar is a small nation but is also the richest. All concerned countries on both sides openly support terrorist organizations. So most of these countries have same issues so how alienating Qatar is going to solve that areas problems is difficult to understand.  

Why the Post Truth? Under what circumstances does emotion take over the brain? At what stage “globalization” becomes less important than “localization”? One important aspect that has come forward is that very large part of population gives in to “Post Truth” phenomena. Is it because of fear psychosis? In many cases, the “Post Truth” thinking actually becomes believable. In case of Trump phenomena, it was real justified fear of the so called “White Trash” in America or “Rednecks” and Right supremacists. In case of Brexit it is probably the fear of Muslim refugees landing in Europe. In England already there is a large population of Asians which has come legally and has been causing stress to the white population and “Post Truth” thought process must have been simmering beneath the surface. In both cases the large population has ignored the facts and taken decision solely on personal beliefs; this phenomena is difficult to explain.

In case of personal relationships, life and decision making is too simple and emotional. When Jaya and I decided to get married, we were both students. Both had rudimentary information about each other’s families. Both of us were below 20 years of age, it was simple and “to hell with the consequences” was the attitude. But who any way knew what is marriage? That things turned out to be okay over a period was a different matter. Folks, what do you consider yourselves about things in public domain or even somethings in personal domain which needs brain over heart? Or are you a heart over brain person?

Topsy-turvy!

Modern world is changing so rapidly that whatever was thought politically correct till very recently, is turning topsy-turvy. I am sharing a poem below which is very appropriate.

Topsy-turvy Land

by H. E. Wilkinson

The people walk upon their heads,
The sea is made of sand,
The children go to school by night,
In Topsy-Turvy Land.

The front-door step is at the back,
You’re walking when you stand,
You wear your hat upon your feet,
In Topsy-Turvy Land.

And ‘buses on the sea you’ll meet,
While pleasure boats are planned
To travel up and down the streets
Of Topsy-Turvy Land.

You pay for what you never get,
I think it must be grand,
For when you go you’re coming back,
In Topsy-Turvy Land.

Similar thoughts came to my mind when I read in the papers recently that, Amruta Fadnavis wife of Maharashtra Chief Minister dancing with THE Amitabh Bacchan for a video being shot! Ok you will argue that Bacchan danced with her because she is CM’s wife! Of course it is obvious but then it goes with the territory. Once you are in the stratosphere of social circle, you remain there as much as you can. Now what is topsy-turvy is that banker Amruta Fadnavis is turning into a dancer for a video, simultaneously! I am absolutely happy that Amruta is attempting this move. Now how does Axis Bank take to their VP openly moonlighting for a filmy video? During bank timings she sanctions loans or does whatever bankers do in the bank; do waiting customers see her video, on bank waiting lounge entertainment TV , while they wait for their meeting with her? This creates an interesting scenario. I am absolutely for women doing whatever they want to do as professionals, so on that front I have no problems. But how will Axis Bank handle this? This is the topsy-turvy I am talking about. Let’s see how this moves forward.

This topsy-turvy trend had started somewhat when Vilas Rao Deshmukh was the CM and his actor Son Riteish stayed with him. Deshmukh faced the wrath of people when a film maker Ram Gopal Varma tagged with him to take a round of devastated Taj Hotel during 26/11 terrorist attack.

Then we have Mr. Trump winning the US presidential election. Trump the man who made below the belt, rough, nasty, ugly political statements and was supposed to be also ran. Everybody said there is no way he can win the election. The topsy-turvy happened and now he is President Elect! Till very recently everybody was talking of globalization but Trump’s inward looking policies have hit a raw nerve. When he talks of getting jobs back to US, not allowing any more jobs to be moved out of the US, globalization gets tossed out of the window. I recently read a book “Hilly Billy Elegy by J D Vance; this book explains the inward looking phenomena and its reasons. Trump does not say these things discretely and is proposing them openly. Same about his statement regarding Muslims.

Same inward looking stance was never visualized by outsiders in Britain but during Brexit it came out and ensured the vote to take Britain away from European Union. A few years back this was unthinkable. How is the world going to handle such topsy-turvy scenarios?

Till 8th November “Cash is King” was the motto in India! We loved to do everything in cash. According to some experts cash kept the wheels of the economy greased! Biggest topsy-turvy as far as we are concerned happened. The demonetization, a frontal attack on strong black-money hoarders was unthinkable even a few days before 8th November. I have seen the world of certain people turning topsy-turvy in an unthinkable manner. Similar attempts were made in olden days but were damp squibs. In days of KYC, Aadhar card linking, direct linking of TDS to PAN card, in short various forms of electronic linking are going to make it very tough for people to hide their undeclared incomes. People have said that Govt had no plan and acted without going into details. It is not so they have an action group which is creating new methods of helping people to overcome tough times, at the same time making it difficult for defaulters to hide behind Jandhan Yojana!

All the events mentioned above have happened in the year 2016 which can be considered as watershed year. One may argue that where does Amruta Fadnavis story fit in these other major events? Yes it does. It’s changing the definition of political correctness. Will be it ok for a lady Collector of a District to give public dance recitals as she is trained dancer too! Is it ok for Senior Vice President of a large Private organization to be in advertisement as he/she started their career as a model? Or you need to be CM’s wife to be able to do both? Trump the candidate and Trump the President, will they be speaking the same language, the so called politically incorrect ones? Because when President says some such thing it becomes a policy! Friends I think we are at a very interesting phase in this world of topsy-turvy changes so let’s see how it works out in the end. I am sure 2017 will be even more interesting!