25.03.2010

Politics & the Nation

• On the status of women directors in India Inc
• In India, it is estimated that majority of the corporate boards do not have a woman independent director and only 5% of directors are women. Out of these women directors, only the large companies have professional independent directors and majority of women directors are from the promoter families. In China also around 5% of board seats are with women, but most of them are professional women. In the US roughly 15% of the board members of the Fortune 500 companies are women as reported by Nicola Clark in her recent article in the New York Times. In the EU nearly 10% of the board members are women.
• How does it help to have women directors on corporate boards?
• Having woman directors, it is believed, will improve board's effectiveness and quality of its decisions. It will help the boards become more sensitive to issues faced by women employees including unequal opportunities, working conditions, safety and sexual harassment. Boards will be able to take advantage of additional opportunities due to better customer insights and intuitions of women directors. It will reduce the risk of the enterprise by having different points of view at the board level. Because of women's greater association with children, schools, healthcare, and community issues, it is likely that corporate social responsibility performance will improve. The basic proposition is that the diversity achieved by having more women directors is in the longterm interest of any company, its employees and customers and creates superior shareholder value.
• Another petition to recover black money stashed abroad filed in Supreme Court
• You might remember that noted lawyer Ram Jethmalani had filed a similar petition earlier. The same is pending before the Supreme Court.
• Now another petition is filed by some prominent personalities. They include -- former Mumbai Police commissioner Julio F Rebeiro, former chief election commissioner JM Lyngdoh, former CAG VK Shungu, former air chief marshall S Krishnaswamy, former Planning Commission secretary NC Saxena, former University Grants Commission chairman Hari Gautam, among others.
• The issue has taken centre-stage in political circles, with NDA working chairman LK Advani demanding that the government come out with a white paper enumerating its efforts to bring back money illegally stashed abroad by Indian citizens.
• The petitioners say that over $1.45 trillion belonging to Indians has been lying unreported in Swiss banks alone.

Finance & Economy

• Unitech under ED lens for money laundering
• The Enforcement Directorate (ED) has registered a case under the Prevention of Money Laundering Act (PMLA) against real estate major Unitech.
• The case stems from an investigation by the Central Bureau of Investigation (CBI) into the award of 2G licences in 2008 by the Department of Telecom (DoT). Unitech was one of the companies to get the licences under a controversial process followed by DoT.
• The investigation may or may not result in a chargesheet against the firm, but it once again highlights the controversial nature of business dealings in the telecom industry.
• ED’s move springs from a CBI investigation into DoT’s process for awarding licences to companies for launching telecom operations. DoT awarded 2G licences to nine companies, including Unitech, in January 2008. The process was controversial from the very beginning, as DoT advanced the cut-off date for submitting applications suddenly and then incorporated a first-come-first-serve clause in the letter of intent which some winners got to know in advance.
• A few months later, two companies, Swan and Unitech, sold a substantial stake in their operations to foreign companies for an astronomical sum. This generated a lot of heat and dust, as the companies were yet to launch services and the sale happened at valuations much higher than the amount paid to DoT for the licences.
• In its FIR filed in November last year, the CBI has alleged that the government has lost Rs 7,105 crore by way of higher licence fees in just these two transactions. The licences were also sold at a very nominal rate based on prices fixed in 2001 without any competitive bidding, the agency said in the FIR.
• The FIR also said that a large number of applications from competent and established telecom operators were not considered by the DoT based on an arbitrary decision to advance the cut off date for submission of 2G applications.
• Bharti on the verge of acquiring Zain telecom's Africa assets
• Bharti Airtel stood on the cusp of transforming itself into an emerging-market multinational after the board of Kuwait’s Zain Telecom on Wednesday approved the sale of most of its African assets to India’s largest mobile phone company.
• The $10.7-billion deal for Zain’s operations in 15 countries will give Bharti a firm foothold in the relatively untapped African market and take it past China Unicom, Sweden’s TeliaSonera, and Germany’s TMobile as the world’s seventh-largest mobile phone company by subscribers.
• The Bharti-Zain combine will have revenues of $13 billion and earnings before interest, taxes, depreciation and amortisation of around $5 billion.
• The acquisition is the second largest by an Indian company, after the $12-billion takeover of Corus by Tata Steel in 2007.
• Two previous attempts by Bharti to enter Africa by acquiring MTN failed in full glare of the media, after months of tortuous negotiations.
• The deal, which includes $1.7 billion of Zain’s debt, values each customer at $252. When Bharti was negotiating to buy MTN, each user of the South African mobile phone firm was valued at $349.
• Bharti will be inheriting an operation that made a net loss of $112 million in the nine months to September 2009.
• Update on Internet users
• According to Trai data, India had only about 8 million broadband users, compared with 546 million mobile users at January end.
  
• On Viability Gap Funding (VGF)
• We have noted time and again about this.
• But any amount of repetition will not be a waste for learning about important concepts. Take a look at this ET in the Classroom column on this. Good one.

Timepass

• Could you ever imagine that somebody will break into a jail?
• But that's what precisely a prisoner on parole tried to do and got 15 years for it! Interesting. Read about it here.

Language Lessons

• gnawing: Verb
• Bite or chew on with the teeth; Become ground down or deteriorate; Cause lingering anxiety, torment, etc.
• eg: The Indian IT industry has survived the global financial slowdown, but gnawing competition and increasingly stingy customers are haunting the $50-billion segment that is padding up for the annual earnings season beginning April.
• mulch: Noun
• A protective covering of rotting vegetable matter spread to reduce evaporation and soil erosion
  
• eg: Precisely because they have escalated matters to the level of an internal security threat, there is hope that this will lead the polity to address the gaping deficit of democracy and development in large swathes of rural India, in whose mulch of misery and oppression the seeds of Maoism germinate.
• middling: Adjective
• Lacking exceptional quality or ability
  
• eg: "the performance was middling at best"