Sunday, March 27, 2011


India is not new to scams. However, this round of scams, starting from the Hassan Ali hawala scam, the Common “Wealth” Games rip off, the burial of the Bofors case to the 2G scam has demonstrated that we Indians are deserving of the rank of the ‘top ten’ in corruption, worldwide.
What is interesting is that none of this has taken anyone by surprise, least of all the foreign investors, which include those institutions that raise a hue and cry about ‘corporate governance’, transparency and integrity. Now Libya is proof that all an ‘investor’ cares about is his own interest. Libya’s Gadaffi regime was tolerated and nurtured by the same set of foreigners who now want to topple him. We saw what happened at Iran, Afghanistan etc. All of this is proof that investment and transparency do not go hand in hand.
If the foreign investors were true about practicing what they preached, they should have exited our markets lock, stock and barrel. However, we do not have to worry about it. So long as markets are around, investors will be around. Investment and corporate governance have nothing to do with each other, so long as the company leaves enough on the table for the investor. Only when a company does a wholesale fraud like Enron or Satyam, do investors exit. Not even the dent on the reputation of a house like Tatas (courtesy the Radia tapes) has mattered to the institutional investor. We are a very tolerant nation, with absolute faith in our honourable Prime Minister. It does not matter to us if the government is unwilling to pressurise a willing Switzerland to disclose details of Indian money stashed out there. Every man on the street is aware of this and does not care a damn about whose money is stashed where. We know that all leaders from all parties are corrupt. It is not a matter of concern to us. We are very confident that anything can be done in this country, if there is enough ‘motivation’.
As I write this, there is a worry about whether this UPA government will last its full course. However, the stock markets do not seem to worry about it. What is probably bringing a lull in the market is the damp budget, tricky fiscal deficit numbers and inflation which seems to be beyond the control of monetary policy.
Indian companies have a way of surviving. Real estate companies flout the law. They finally pay a penalty and ‘compound’ offences. In fact, SEBI has been at the forefront. Most offences seem to get ‘compounded’ with the offender neither admitting nor denying guilt. This is integrity, American Style. Just go to the website of SEBI and check it out. After going through this, it is clear that for all offences in India, there is a ‘price to pay’, much like a menu in a hotel. Only thing is that the price is not printed and payments may be to more than one person/s.
So, do not worry about corruption or 2 G impacting investment.
If we take the 2 G scam, names being thrown about include a host of listed and unlisted companies in the telecom / real estate sector. Some companies have seen their share price dip sharply. It is perhaps best to keep away for the time being. Maybe they could be bargain buys if the assets they have on their books can be taken at face value. Maybe the scam will pass over. The risk in this assumption lies in the fact that some of these companies may be asked to pay fines that are huge. Will it happen? It would mean a wide range of companies coughing up money which ought to have been collected by the government. It is a tough call, legally as well as politically.
If I am an investor and have money to spare (clearly money that I do not mind losing in full), I would be willing to place some bets on the tainted companies. Apart from having money to burn, I also need a tremendous quantum of patience. It may take years and years to resolve. And this money is clearly a bet on the possibility that corruption is ok and does not matter. If that is true, I have a few multi baggers on hand.
Bets anyone?

Thursday, March 17, 2011



Since this is from Wikileaks, people may read it. It only confirms the image of India as nothing more than a banana republic, run by tyrants who come to power and then use the power to loot the state.
Inspite of all this, if the foreigner wants to be in India, it shows the conquest of money over morals.

Wednesday, March 16, 2011