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“In India, companies may fall sick, but promoters rarely do!”

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Day: November 26, 2014

Wednesday Morning ~ Sombre Thoughts on 26/11 & Dangers of Cricket

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Got up early this Wednesday morning with some Sombre Thoughts on 26/11 & the Dangers of Playing Cricket on & off the Field……

26/11 ~ Six Years ago on November 26,2008 on this very Day which too happened to be a Wednesday, Mumbai was shaken to it’s core by a Terrorist Attack on South Mumbai Targets that killed 164 & wounded 308 and scarred Millions of Mumbaikars…among those killed were quite a few known to my family and me….Praying for all & hope such a tragedy never occurs again

Cricket ~ Danger on the Playing Field ~Phil Hughes the South Australian Opening Batsman was felled by a Bouncer at the SCG and is in a Coma & on Life Support…fervently praying for him

…brought alive a Memory of the mid 1980s when I was just 23 and in Bahrain and while bowling at the Bahrain  Sports Club (now Indian Club) Practice Nets on a Matted Pitch I broke the Nose of a team mate who was batting…he bled profusely and had to fly to Mumbai for Surgery …he was really good about it…God Bless him…all rallied around me to say it was not my fault though I was feeling terrible and must have profusely apologised a million times…can really understand how Sean Allott,the NSW Bowler who bowled that Bouncer to Phil Hughes must be feeling right now…much worse than even I did

Danger off the Playing Field….also aghast at the dangers off the Cricketing Pitch that BCCI’s behaviour & Actions have raised to a feverish Pitch and Supreme Court has had to step in…There is Corruption in the Game we Know….Matches are Fixed we know…Betting is Rampant we know…Clear Conflict of Interest Exists we know….Yet these BCCI [email protected]#$%^&* continue to behave without basic morals  and without shame …there continues political patronage and godfather rules….even Mudgal Committee has exposed a Pandora Box in a report that is yet to be made public…Why has BCCI postponed it’s AGM again and again only to facilitate N Srinivasan who remains under cloud ? Why are so many State Cricketing Bodies supporting N Srinivasan despite knowing it is wrong to do so !? Why are Stalwarts Ex  Test Cricketers & Commentators keeping silent in this unholy mess!? Clearly their Bread is buttered by being on BCCI Payrolls !….Why are Top Indian Cricketers being shielded and continue to don the India Cap despite their wrongdoings !? Why is Supreme Court not yet naming these Cricketers named in the Mudgal Report !?…we all know who they are but till names are released all Cricketers will be viewed with suspicion….The Game of Cricket is bigger than the Cricketers who play it read more

Freeloading Promoters ~ Loved this Address by the RBI Governor Raghuram Rajan

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Freeloading Promoters ~ Love the RBI Governor,Raghuram Rajan’s Strong Speech at the Third Verghese Kurien Lecture at the Institute of Rural Development Anand yesterday

…resonates with the tagline of my blog “In India, Companies may fall sick but Promoters rarely do !”

Here are some superb extracts from the Address as linked above

” The Promoter enjoys riskless capitalism -even in these times of very slow growth,how many large promoters have lost their homes or have had to curb their lifestyles despite offering personal guarantee to lenders?” 

“We need a change in mindset, where the wilful or non-cooperative defaulter is not lionized as a captain of industry, but justly chastised as a freeloader on the hardworking people of this country,”

“In India, too many large borrowers insist on their divine right to stay in control…”

“…the promoter threatens to run the enterprise into the ground unless the government, banks, and regulators make the concessions that are necessary to keep it alive. And if the enterprise regains health, the promoter retains all the upside….!

“No wonder government ministers worry about a country where we have many sick companies but no “sick” promoters.”

“I also don’t want to argue against risk taking in business. If business does not take risks, we will not get architectural marvels like our new international airports, the “developed-for-India” low cost business model in the telecom sector, or our world class refineries. Risk taking inevitably means the possibility of default. An economy where there is no default is an economy where promoters and banks are taking too little risk. What I am warning against is the uneven sharing of risk and returns in enterprise, against all contractual norms established the world over – where promoters have a class of “super” equity which retains all the upside in good times and very little of the downside in bad times, while creditors, typically public sector banks, hold “junior” debt and get none of the fat returns in good times while absorbing much of the losses in bad times.

“The public believes the large promoter makes merry because of sweet deals between him and the banker. While these views have gained currency because of recent revelations of possible corruption in banks, my sense is that Occam’s Razor suggests a more relevant explanation – the system renders the banker helpless vis-a-vis the large and influential promoter.” read more

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