Kathmandu: Nepal’s Unified Communist Party of Nepal (Maoist) Chairman has asked India on Tuesday to stop interfering in the country’s internal affairs. He also threatened to launch an indefinite strike from January 24 to restore `civilian supremacy’, reports the Hindustan Times.

Addressing a rally to mark the end of the Unified Communist Party of Nepal (Maoist) called three-day general strike, the former prime minister blamed India for its role in Nepal’s politics and sought a relook at relations.

“India shouldn’t assume that it can form and dissolve governments in Nepal at will. We are a sovereign nation and no one should try and interfere in our internal affairs,” said Prachanda.

Although they have been blaming foreign powers of trying to disrupt the ongoing peace process in the country, this is the first time any prominent Maoist leader has publicly blamed India for playing a negative role in Nepal.

Prachanda listed five points to `correct’ Nepal’s unequal relation with its larger neighbour including scrapping of the 1950 peace andfriendshiptreaty,resolutionof border disputes and a “balanced” trade treaty based on equality.

Prachanda also expressed anger at Indian Army chief General Deepak Kapoor’s reservations on integration of former Maoist guerrillas into Nepal Army. Kapoor had made such statements during the recent visit of Nepal Army chief General Chattraman Singh Gurung to India.

Accusing the ruling coalition government of turning a deaf ear to peoples demands, Prachanda announced the fourth phase of the party’s agitation to restore `civilian supremacy’, reports the Hindustan Times.

“The next phase will start from December 25 and end on January 24. If the government still fails to address our demands, we will launch an indefinite general strike,” he said.

Urging Nepali people to decide whether they want to remain independent or become slaves to a foreign power, Prachanda said that the monthlong fourth phase of agitation will “awaken masses and expose foreign agents”. Officials at the Indian Embassy in Kathmandu refused to comment on Prachanda’s statements.

- Based on report in HT, Jan. 23, 2009.

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By Julio Godoy* – IPS/TerraViva

BERLIN, Dec 7 (IPS) – Electricity is indispensable to modern life, but its generation is responsible for 40 percent of the carbon dioxide emissions that cause global warming and climate change.While wind and solar energy are carbon free, they are heavily dependent on weather conditions. No wind blowing or no sun shining means no electricity – and this simple equation becomes more apparent as the use of wind turbines and solar power plants grows.

Renewable energy sources are valuable in meeting electricity demand during periods of ‘high base load demand’ – the amount of power required to meet minimum demands based on estimations of consumer requirements.

As yet, this base load supply is met by power generated at plants that run continuously on environmentally questionable sources – nuclear or coal.

Better weather forecasting is one way to harness wind and solar power more efficiently. But researchers now talk about ‘smart grids’ and ‘negawatts’ – expressions that were current at the Nov. 26-27 conference in the German capital of Berlin on the ‘Smart Revolution of Electricity Management’.

”The grid that distributes electricity today is a dumb one,” said Eicke Weber, in charge of solar energy systems at the Frauenhofer Gesellschaft, the leading, state-owned, German institute on scientific research.

”This grid works in one way only – electricity flows from giant power plants to consumers,” Weber said. ”In the near future, however, electricity will be generated in small plants and it will flow in both directions – from generators to consumers and back. It will be consumed when it is the cheapest, and can be stored.”

”To manage this changing landscape of electricity supply, and at the same time solve the challenge of climate change, we need smart grids,” Weber said.

The smart electricity grid of the future will use digital technology to monitor all electricity supply flowing into the grid while controlling the consumer’s demand right down to household appliances to save energy, reduce costs, and increase reliability of supply, he explained.

In addition, a smart grid will use superconductive lines to increase the efficiency of transmissions and improve the capacity of the system to store electricity which is not being consumed and deliver it at periods of peak demand.

Storage capacity constitutes a salient feature in the management of fluctuating supply generated by solar and wind sources. Electricity that is not used immediately and stored for use during periods of peak demand is called negawatt.

Ulrich Foeken, manager of the regional German electricity provider EWE, which operates a wind turbine park in northern Germany, demonstrated how negawatt works.

Foeken cut off a wind turbine providing electricity to a model cold storage used by local fishermen and automatically, the cold storage reduced its electricity consumption. ”Normally, the storage house is cooled to minus 25 degrees Celsius,” Foeken said. ”But actually, we only need temperatures of minus 18 degrees Celsius for preserving the fish.”

The negawatts – the electricity the cold storage does not need to immediately consume – allow energy providers to avoid using a carbon or a nuclear fuelled power plant to meet peak base load demand, thus helping them to reduce greenhouse gas emissions.

”Peak electricity demand is particularly expensive, and from an environmental viewpoint, particularly dirty,” Ludwig Karg, director of the German state-led programme E-energy, told TerraViva.

E-energy, organiser of the conference on the smart revolution of electricity management, has started six energy model regions in Germany, aimed at ”demonstrating how the immense potential for optimisation presented by information and communication technologies can à enhance the efficiency and environmental compatibility of the power supply and ensure supply security,” Karg said.

”We want and need to create the Internet of electricity, for a flexible management of supply and demand,” Karg told TerraViva.

”All actors of the sector, from the generators to the consumers, passing through the operators of the grid, must be linked to each other. Every device, every appliance at the consuming end shall be connected to all electricity providers’ regulating mechanism, as in a plug and play system, supported by smart meters, to monitor consumption and ponder supply and prices at any given moment, to constitute a smart grid,” Karg added.

That means that household appliances such as washing machines can be started or stopped according to the availability of cheaper electricity supply.

Smart grids need accumulators to store the electricity provided by fluctuating sources at moments of peak supply, and deliver it at moments of high demand. Such accumulators could be used in the electric cars of the future.

But smart grids have a downside. They intrude into consumers’ privacy through devices controlling practically all aspects of a household’s life.

”Electricity is not just another merchandise,” Georg Stark, a psychologist working for a private market research agency in Cologne, some 300 km south of Berlin, said at the conference.

”You have to be aware that electricity is a particular good. Consumers blindly trust their electricity provider. When they go to the toilet in the middle of the night and switch on the lights, they do not think about anything,” Stark said. ”Now you want to invade this privacy with your smart grids. Better think twice about it.”

(*This story appears in the IPS Terra Viva daily online newspaper published for the COP 15 in Copenhagen)

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Legendary actress Bina Rai, who charmed Indian audiences with her performances in Anarkali and Taj Mahal and won a Filmfare award for Ghunghat, died of a heart attack in her Mumbai home on Sunday, reports IANS. She was 78.

Bina was married to actor Prem Nath, who was well-known filmmaker Raj Kapoor’s brother-in-law. She is survived by two sons – Prem Kishan and Kailash Nath.

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By J. Sri Raman
On November 26, 2009, India marks the anniversary of a nightmare. Around 9.30 p.m. this day last year began the terrorist strike in Mumbai (formerly Bombay), a tragedy watched on the television by the rest of the country and etched in its memory ever since. We can look back upon the event today only as an undeclared war, by other means, launched by enemies of South Asian people and peace.

The objectives of the war were obvious, even as 200 were murdered and many more maimed in the 60-odd hours that shook the financial capital of a helplessly furious nation. The gory killings by masked gunmen – at a crowded railway junction as well as in a five-star hotel, a popular restaurant, a Jewish community center and other places – could have been planned only to serve two political camps.

Inside India, the terrorists then seemed to have struck a blow for the far right preparing for elections – both at the national level and in the country’s most industrialized State of Maharashtra with Mumbai as the seat of its government. More importantly, it seemed a tailor-made tragedy for use by forces in both India and Pakistan opposed to a “peace process” between them.

The fortunes of war have proved mixed indeed. The war has been lost on one front but won on the other. Aided and abetted by a hysterical media, India’s far right with the Bharatiya Janata Party (BJP) as its political front hastened to adopt anti-terrorism as its fail-proof electoral platform. The party demanded the revival of a draconian Prevention of Terrorism Act (POTA), enacted when the party was in power in New Delhi earlier but scrapped by the elected successors.

Equally shrilly, it called for a crusade against Pakistan. With a section of the middle-class elite and movie stars echoing and endorsing it in street demos, the party asked for “surgical strikes” on terrorist centers on Pakistani soil. Quite logically, the campaign led to the call by the more lunatic fringe of the far right for “a nuclear war” on the neighbor. The aim was to project the BJP as the only party capable of tough action against terrorism.

The far right did not forget about the internal dimension of the war on “Islamic terror,” either. Party leader and former Deputy Prime Minister Lal Krishna Advani called for an official inquiry into the event in order to identify the sources of “local assistance” for the terrorists. The nasty anti-minority axiom of Narendra Modi of the notorious Gujarat pogrom of 2002 – “all Muslims are not terrorists, but all terrorists are Muslims” – was repeated again.

To the great credit of India’s common people, the campaign fell flat. The voters in the elections of April-May 2009 to the Lok Sabha (the Lower House of India’s Parliament) left the BJP’s anti-terrorism plank in tatters. The substance of power eluded Shadow Prime Minister Advani once again, and the BJP has yet to recover from post-poll inner-party polemics and recriminations.

An even more resounding popular rebuff to the party and its macho talk on terrorism came in the elections to the legislature of the State of Maharashtra, of which Mumbai is the capital city. The city had more than just a taste of terrorism, but that did not make the party’s agenda of assaults on the rights of the minorities and others appetizing for the State’s electorate. The BJP and its far-right band have been rejected beyond all doubt. An alliance of its opponents has returned to power for the third time in a row, despite the famous volatility of the Indian voter and the consequent “anti-incumbency factor” that psephologists never fail to take into account.

The BJP might have lost electoral battles, but the forces behind the terrorist outrage have won the war on another front. Mumbai has certainly meant a severe setback for the India-Pakistan peace process, which had completed five years then. The terrorists struck at a time when the process seemed poised for resumption after being stalled for a while.

The same fateful day, the Home Secretaries of the two countries had met in Islamabad and announced further steps to advance the temporarily halted process. These steps included opening of several land routes for trade, relaxation in the visa regime, a soft and liberal policy on prisoners’ release and, ironically enough, even “joint efforts to fight terrorism.” On the same day, too, Pakistan’s Foreign Minister was in New Delhi, comparing notes on the process with his Indian counterpart.

More sadly for the peace movements in both countries, Mumbai came in the wake of some very welcome statements from Pakistan President Asif Ali Zardari on relations with India and a “nuclear-free” neighborhood. Mumbai left behind the promise of such a leap froward as an ever-fading memory.

New Delhi did not take much time to conclude that the terrorist strike was the handiwork of anti-India groups operating from within Pakistan. Prime Minister Manmohan Singh’s government soon took the stand that neither the peace process nor the “composite dialogue” between India and Pakistan could be resumed unless and until it was convinced that Islamabad had apprehended and acted against the authors of Mumbai and “dismantled the terrorist infrastructure” inside Pakistan.

Off and on since then, New Delhi has tried to suggest that it is not tenaciously clinging to this rigid position. But, governments can become prisoners of semantics no less than private individuals. The fact is that New Delhi has not succeeded in disowning its own words. Nor has Islamabad been able to convince either India or other concerned countries about its capacity to carry its Mumbai-related investigations to their logical conclusion. The resumption of the peace process has only become a perilously receding prospect.

The Indian security forces were able to capture alive only one of the gunmen – Mohammed Ajmal Am*+r Kasab in his early twenties – and have been quoting his “confession” ever since. He is said to have disclosed that he and other attackers were members of the proscribed Lashkar-e-Toiba (LeT) renamed Jamaat-ud-Dawa (JuD).

Known as an anti-India outfit of Kashmiri militants operating from Pakistani soil, the JuD is led by Hafiz Muhammad Saeed, linked with the attack of December 23, 2001, on India’s Parliament as well. New Delhi has been demanding action against Saeed as the “mastermind” behind Mumbai.

Islamabad accepted Kasab’s Pakistani nationality only on January 7, 2009, and after establishment of the fact by enterprising Pakistani media persons (arrested the other day on unrelated criminal charges). In February, Prime Minister Syed Yousaf Raza Gilani’s government confirmed that parts of the attack had been planned in Pakistan and vowed to catch the culprits. All this, however, has meant no advance in anti-terrorist cooperation between the two countries.

The Gilani regime did initiate legal action against Saeed, but the court has repeatedly dismissed what it considered a weak case. It is not official circles alone in India that are indignant at reports about the radical cleric continuing freely to issue inflammatory calls to congregations in Lahore.

New Delhi claims it has been giving Pakistani authorities dossier after dossier of evidence. Islamabad counters repeatedly that it is not getting the kind of evidence from India that can stand in a Pakistani court of law. The jibe from India’s Home Affairs Minister P. Chidambaram (himself a lawyer) – that this just shows the quality of legal assistance available to Pakistani authorities – has made no difference, with Islamabad’s stand drawing much support in the media and elsewhere.

The security establishment and experts in India do not see much real scope for anti-terrorist cooperation between the two countries, as they are not talking of the same terrorism at all. According to this theory, Islamabad may have turned upon the al Qaeda terrorists on its western frontier at last, but will continue to treat the anti-India groups with kid gloves. Exactly opposite is the argument of pro-official Pakistani experts. According to them, it is India that seeks to serve its interests in Afghanistan by forcing Pakistan to focus attention on a bigger threat on the border with India.

The upshot of it all: the two countries together have little to show today by way of legal and investigative progress on Mumbai. On the Indian side, in June, a special court of the metropolis ordered warrants of arrest against 22 suspects believed to be in Pakistan, without anyone really expecting the order to be carried out. There are obvious limits to which India can learn the truth about Mumbai from the interrogation and trial of Kasab alone.

As for Pakistan’s progress, Islamabad-based Indian journalist Nirupama Subramanian sums it up thus: “Fewer than 20 hearings since the case was registered on February 12, one change of court, two changes of judge, the proceedings still in the pre-trial stage after one failed attempt at indictment, and a chance that the suspects may be formally charged by the court this week. This is where the…Mumbai attacks case stands in Pakistan.”

On the eve of the anniversary have come reports of leads provided by Western agencies in the case. The US Federal Bureau of Investigation (FBI) arrested last month a David Coleman Headley (originally Daood Gilani) and a Tahawwur Hussain Rana, on charges of plotting terror attacks against India and a Danish newspaper. On November 21, the Italian police arrested two Pakistani men, father and son, accused of providing logistical support for last year’s terror attacks in Mumbai. It will be a long way before even such concrete leads can encourage India-Pakistan cooperation on the issue.

A year after Mumbai, the organizers of the outrage can look back and laugh. The people may have let them down, but the rulers of the subcontinent have rewarded their labors.
– Truthout, 26 November 2009

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Roxana Saberi

BERKELEY, California, Apr 20 (IPS) – Since Iranian-American journalist Roxana Saberi was sentenced to eight years in prison last week on the charge of spying for foreign governments, human rights and press freedom groups have become increasingly critical of the political nature of her case and the harsh and unprecedented penalty.
In a statement Monday, Amnesty International said that ”U.S.-Iranian journalist Roxana Saberi is a pawn to the ongoing political developments between Iran and the USA and should be considered a prisoner of conscience.”
”The fact that Roxana Saberi faced a shifting tide of accusations from the time of her arrest until her trial is an indication that the Iranian authorities were looking for any excuse to detain her,” said Hassiba Hadj Sahraoui, deputy director of Amnesty’s Middle East and North Africa Programme. ”There is no reason for holding Roxana Saberi, unless the Iranian authorities can provide convincing evidence that she committed a recognisable criminal offence.”
Meanwhile, Iranian-Canadian blogger Hussein Derakhshan, has been in prison since November 2008, accused of insulting religious leaders.
- IPS Edited story

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Click www.southasiatimes.com.au for counting reports and results on May 16 direct from India

By Rajiv Sharma in New Delhi.

CONTACT: 0421 677 082 (Melbourne) or satimes@gmail.com

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The DMK supported the LTTE for many years. But with LTTE’s fortunes declining in Sri Lanka, in an about turn it has dumped the LTTE. Ground realities and changing political equations in India and Sri Lanka seem to have made the DMK change policy on the issue. Here is a related news item from the Indian Express.
- Editor

CHENNAI: DMK president and Chief Minister M Karunanidhi on Tuesday said the LTTE had lost the sympathies of the party way back in 1987 itself as its chief V Prabhakaran was planning to adopt a dictatorial form of government in Tamil Eelam for which they were fighting.

The DMK chief made this remark while speaking at the party’s executive committee meeting here.

Recalling the ‘sibling rivalry’ indulged in by the Tigers, killing senior leaders of other groups which were working for the Tamils’ cause, Karunanidhi referred to an interview given by Prabhakaran to a magazine in 1987 wherein he had favoured a dictatorial rule for Tamil Eelam.

“I was shocked to read the reply of Prabhakaran. From then on, I became sick of the Tigers’ war… later, many people were killed by the LTTE and the sympathy towards that movement was dwindling gradually and at one point, it completely vanished,” he said.

To highlight the LTTE cruelty in killing their Tamil brethren, Karunanidhi cited how veteran leader Amirthalilngam was killed in front of his wife. “But the DMK has ignored these incidents… only to help the suffering Tamils in Lanka…but it is being viewed as support to the LTTE…this view is totally wrong…our support is only for the Lankan Tamils and not for individuals there,” he said.
- Indian Express

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By Rita Manchanda

NEW DELHI, Jan 20 (IPS) – A visit to India by a delegation of civil society activists from Pakistan as part of a ‘peace offensive’ is expected to help keep the two South Asian neighbours from going to war over the Nov. 26-29 terror attacks on Mumbai city.
The Jan. 21-23 high profile ‘track two’ visit hopes to woo Indian political leaders, reason with hawkish security experts and appeal for cross border solidarity and, at a people-to-people level, make the point that both countries are common victims of terrorism.
Although the delegation is led by Pakistan’s best known human rights activists, Asma Jehangir and I. A. Rehman, and bolstered by politicians from Pakistan’s main political parties and leading journalists, the impact they are likely to make is still uncertain.

So far, except for India’s Left parties, no Indian political party has made any commitment to meet the delegation. ”We’re still trying,” said one of the Indian hosts Shabnam Hashmi of Act Now for Harmony and Democracy.

However, Ravi Hemadri of the Pakistan India Peoples Forum for Peace and Democracy (PIPFPD) was more candid, ”Given that India’s Republic Day, Jan. 26, is just days away, and with the jingoistic rhetoric already being ratcheted up, it’s doubtful if politicians would risk being seen as soft.”

This is especially so against the backdrop of ‘megaphone diplomacy’ via the media with Indian army chief Gen. Deepak Kapoor telling journalists that ‘’all options are open”.

Similarly India’s home minister P. Chidamabaram hinted to the ‘The Times’ of London about the possibility of curtailing trade and people-to-people contacts. ”Why should we entertain Pakistani business people? Why should we entertain tourists in India? Why should our tourists go there?”

An opinion poll conducted by ‘The Indian Express’ newspaper recorded 92 percent of respondents saying ‘Yes’ on ”Should road, rail links with Pakistan be snapped if no action taken…?”

”This call for suspending links will hurt thousands of ordinary people for whom peace has meant the ability to cross the border,” said Syeda Hamid, speaking in her personal capacity and as founder of the Women’s Initiative for Peace.

”The Parthasarthys, the Maroof Razas [top security experts frequently seen on TV], who do they speak for? Not for the ordinary people. It is the peace groups who speak for the ordinary people, not the hawks on TV. It is civil society that reflects the voices of the millions on both sides who stand to suffer,” Hamid said.

Such sentiments motivated leading social activist Swami Agnivesh to launch the ”Joint Signature Campaign by Citizens of India Pakistan Against Terrorism, War Posturing and to Promote Cooperation and Peace”, and travel to Amritsar to join a public rally for peace mobilised by groups that will, on India’s Independence Day stake a candlelight vigil on the Indo-Pakistan border.

”Civil society has to respond to terrorism. It cannot leave everything to the state whose instruments are the army, intelligence and diplomacy. For 10 years peace groups have worked to create an atmosphere for both governments to commit that peace is ‘irreversible’. That’s why even after Mumbai, there’s been no war,” he said.

Were tall claims being made about the peace lobby? ”Ask the 51 Pakistani citizens jailed in Jodhpur, Rajasthan for visa tampering? They would still have been locked up had the PIPFPD not taken up their cause. Despite the war jingoism, in December they were freed and returned home,” Hemadri said.

The peace lobby which seemed to have withdrawn into a defensive silence after the Mumbai attacks has now found a confident voice. Most were ”fearful to speak up, to examine, lest they be seen to be excusing the Mumbai attacks,” said Nitya Ramakrishnan, a civil liberties lawyer.

A joint resolution by 30 civil society groups has appealed for ‘Sanity in Our Neighbourhood,’ asserting that they ”will not to be consumed by fear, terror and war. That is the agenda of the terrorists”.

There are signs that the peace initiatives are gaining momentum. On Jan. 11, at New Delhi’s first public meeting on ‘War, Democratic Rights and Peace Processes’ there was backing from peace and democratic rights groups, feminists, labour and teachers’ organisations.

Tweaking the Indian media’s force multiplier phrase of ”enough is enough” as a goad to military action, Pamela Philippose, a well-known columnist, said: ”Our way is to say ‘enough is enough’ to war mongering”.

Tarun Tejpal, editor of the ‘Tehelka’ newspaper, emphasised ”the need to look at the root causes of the making of a terrorist, the grievances that motivate people to these heinous terrorist acts”.

The visit of the high profile Pakistan delegation may catch media attention, but can it shift the hawkish public sentiment? Even the scheduled public meeting will be less than public. Security concerns have entailed an ”invitees only” entry, as vigilante groups propagating hate politics have stepped up their activities.

On Jan.14, Pakistani TV comedian Shahid Siddiqui was thrown out of a studio in Mumbai by a sons-of-the-soil group, the Maharastra Nav Nirman Sena. Earlier, the same group motivated the Mumbai police to pressure the Oxford Bookstore to take Pakistani books off its shelves, ”lest they be targeted”.

The peace lobby, however, is determined to keep up the pressure. Shabnam Hashmi said: ‘’We can’t allow ourselves to be dispirited by mainstream media’s jingoism. Let us not trivialise the grave threat that the people of both India and Pakistan face by reducing it to cross border talking heads of TV trading blame charges.”

They see as a triumph the fact that the Lahore-based Ajoka Theatre troupe was able to come to India and perform its ‘Hotel Mohenjodaro’ to a packed audience at the 11th Bharat Rangmahotsav Theatre Festival in the national capital on Sunday.

Amal Allana, chair of the festival’s host, the National School of Drama, dismissed reports that the Pakistani troupe was denied visas. ‘”Everything went according to schedule and their visas arrived on time.”

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By Praful Bidwai

The Satyam scandal has been wrongly called “India’s Enron”, after the gigantic fraud at the US energy-trading company, which came to light in 2001 and became a metaphor for corporate crime. In fact, the Satyam scam is much bigger in absolute magnitude and likely impact. The amount stolen from Enron was Rs 2,866 crores at current exchange rates. In the Satyam case, according to its promoter-chairman B Ramalinga Raju, Rs 7,136 crores were involved. Also greater are the number of defaulting agencies and their failures.

The impact of the Satyam scandal won’t be confined to the 53,000 people on its payroll—a number higher than the 40,000 Enron employees. The entire Information Technology industry will be singed by the swindle just when the global economic slowdown is already hurting it. The World Bank’s ban on IT-India’s No 3 Wipro, and Megasoft, besides Satyam, for unethical practices will further aggravate the industry’s difficulties.

The Satyam swindle has tarnished the image of India’s IT industry and cast a shadow over its remarkable 30 percent annual growth, which is generally attributed to virtuousness, brainpower and hard work, not inherited wealth. It has lowered the profile of Andhra Pradesh as a land of gutsy businessmen—fondly paraded by successive Chief Ministers as “Andhra-preneurs”—who combine a robust native business genius with a modern extrovert outlook.

Above all, the scam has exposed huge cracks in India’s corporate governance structures and system of regulation through the Securities and Exchange Board of India (SEBI), Ministry of Corporate Affairs and the Serious Fraud Investigation Office. Unless the entire system is radically overhauled and made publicly accountable, corrupt corporate practices will recur, robbing wealth from the Exchequer, public banks and shareholders.

The Andhra Pradesh government has treated Mr. Raju with kid gloves. It failed to arrest him for 3 days after he made a public confession, thus giving him time to sanitise/destroy incriminating evidence. His detention by the state police means that SEBI has been effectively barred from questioning him. This has bred speculation that Mr. Raju has cut a political deal under which his family would be protected and certain officials rewarded. The Centre too is preparing to spend Rs 2,000 crores to rescue Satyam and public sector units haven’t shifted their IT operations to other companies.

Mr. Raju’s January 7 confession and surrender to the police should fool no one. Contrary to his earlier claim that “neither me, nor the Managing Director (his brother) took even one rupee/dollar from the company …”, he now says he has been cooking Satyam’s books for 7 years. He’s estimated to have made Rs 2,065 crores by artificially jacking up the price of Satyam’s shares and selling his holdings (14 per cent of the total). Satyam’s Chief Finance Officer Vadalamani Srinivas has said the fixed deposits shown in the books were fictitious.

We still don’t know the scam’s true dimensions. But two things are abundantly clear. First, it’s extremely doubtful that Mr. Raju inflated Satyam’s income by Rs 5,000-plus crores and even put in Rs 1,230 crores of his own money. It simply doesn’t stand to reason that he would do this and not siphon off large sums. Equally dubious is his claim that Satyam’s operating margin was as low as 3 per cent, compared to the 25 to 30 per cent for top-ranking IT companies.

If Satyam’s margin was indeed higher, then thousands of crores were spirited out of the company. It’s imperative that this trail is rigorously traced. It would be surprising if it doesn’t lead to real estate scams or to benami accounts held by politicians. Former Union revenue secretary EAS Sarma, a public-spirited civil servant of exceptional integrity, has tried to find some of these tracks through the Right to Information Act (RTI).

He looked at a private company which is building Gangavaram Port in Andhra and found that 18 per cent of its equity is held by Lakeside Investments Ltd., a Mauritius-based company, “apparently… a smokescreen for tax evasion.” Mr. Raju reportedly owns a company with a similar name, Lakeview Investments, and with the same address.

Mr. Sarma has also raised serious questions about the way the state has handed out thousands of acres without competitive bidding to Maytas (Satyam spelt backwards) Properties and Maytas Infrastructure. Maytas Infra alone has projects worth Rs 30,000 crores in Andhra, including the Rs 12,000-crore Hyderabad metro rail and irrigation projects worth Rs 13,000 crores. All this warrants an in-depth investigation.

Secondly, surrendering to the police in India was Mr. Raju’s best guarantee against extradition to the United States, where numerous criminal cases have been filed against him and where the punishment will be more rigorous and prompt than in India. For instance, Enron’s Kenneth Lay was charged on 11 counts and set to be sentenced to 45 years in jail when he died. If Mr. Raju is tried for criminal breach of trust in India, he could get away with as little as 3 years. Even if he gets a life sentence, he may end up spending 10 years or less in prison.

The Satyam swindle became possible because all supervisory mechanisms failed, including the statutory auditor, PriceWaterhouseCoopers (PwC), independent directors, and SEBI. PwC didn’t verify the authenticity of the account-books. It had similarly failed with Global Trust Bank, which collapsed. Irregularities were noted in PwC’s handling of Satyam accounts in 2001, but mysteriously, no probe was conducted. Similarly, a complaint was filed with SEBI by MP Ramdas Athavale in 2003. But under political pressure, this was not pursued.

PwC, which has audited Satyam’s accounts since 1991, is guilty of grave misconduct and should have faced punitive action from the Institute of Chartered Accounts of India (ICAI). Ironically, PwC has two members in the ICAI disciplinary council!. The council met, but failed to take action against PwC. ICAI, like the Bar Council or Medical Association of India, shields, and rarely acts against, even the most errant of its members.

Satyam’s independent directors did no better. They asked no questions about the accounts. When the board met last month to approve the scandalous proposal to invest $1.6 billion in Maytas, it didn’t even refer to the conflict of interest in buying a company in a completely unrelated business, floated by the promoter. It only went into technicalities of conformity with SEBI guidelines, and valuation of assets. Indeed, one of the independent directors, Krishna Palepu of Harvard Business School, waxed eloquent on the merits of real estate investment.

These directors collect fat annual fees ranging from Rs 13 to 92 lakhs just for attending a few meetings, but clearly lack independence, if not competence and integrity too. Many independent directors in India see board memberships as sinecures or lucrative pastimes unrelated to corporate governance and public responsibilities.

Even worse was SEBI’s failure to investigate Satyam and refuse to approve its patently foul transactions including the Maytas deal, which was aborted by investor protests. SEBI also ignored a December 18 letter on Satyam sent by Mr. Sarma. Other authorities also turned a blind eye to various complaints about the illegal allocation of 17,000 acres of land to Satyam group companies in different cities, in violation of their master plans.

India lacks adequate corporate regulation, and its enforcement is pathetic. For instance, as many as 1,228 of the Bombay Stock Exchange’s 4,995 listed companies have failed to submit reports required by Clause 49 of the Listing Agreement, including information on their boards’ composition, audit committees, CEO/CFO certification of accounts, and related-party transactions and subsidiary companies.

Corrective action is overdue if corporations are not to cheat stakeholders and the public. Indian capitalism has always had a criminal side to it. Our corporate nabobs often milk their companies by appointing procurement and distribution agents, by under- and over-invoicing imports/exports, evading taxes, indulging in insider trading, and dressing up balance-sheets. Satyam fits this pattern, which is widely prevalent in most brick-and-mortar companies.

Some corrective steps are self-evident. Statutory auditors aren’t enough. We need a Board of Audit, which like the Comptroller and Auditor General of India, is authorised to conduct surprise audit on its own or on whistle-blower complaints. Besides, no auditor should be allowed to continue beyond 3 years. The government should create a pool of independent directors from amongst citizens of high integrity. Impartial authorities, not company managements, should appoint them and fix their remuneration. Cross-directorships must be banned. All agent appointments must be thoroughly scrutinised. Penalties must be stiffened. The conviction rate in corporate frauds, currently under 5 per cent, must be improved.

Breach of trust and fraud must be heavily penalised. If an auditor fails in his duty in India, he faces a ridiculous penalty of Rs 10,000 and maximum imprisonment of 2 years. The US Sarbanes-Oxley Act, passed after the Enron and WorldCom scandals, awards imprisonment for 20 years. The US has greatly improved fraud detection by reforming audit methods and offering incentives to whistle-blowers.

We must learn from all this and acknowledge that deregulation promoted in the name of “trusting” CEOs and creating a “favourable investment climate” is dangerous.
- IPA

Related posts:

1. Satyam scam: Raju arrested, Directors sacked, Books siezed INDIAN police have arrested Satyam Computer Services founder B. Ramalinga...
2. Satyam boss quits, admits inflated profits The boss of Satyam, India’s fourth-biggest software firm, has resigned...

Massive crowd at the mela
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South Asia Times at the Mela

Main sponsor ANZ stall

Fun at the mela- Pt. Patil, Babu & Yogen Lakshman

At the Haldiram Stall: Tasty Samosas

At the Mod Oz Cafe: Chinese food Indian style

Mehandi lagi mere haath

Dance item at the cultural show

Kids rides at the Mela

Dancing to the music of Musicfactory DJ

Read full report on the Mela in South Asia Times Nov. 2008 issue.
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