Is there big money in investigation? (10 September 2001)
Tehelka.com may be struggling for survival after their defence sting recoiled sharply. But until their escapade with the prostitutes led to allegations about entrapment, they seem to have been on to a good profit opportunity with their sting jobs. Media owners may like to know a little piece of information ferreted out by the government agencies—that Buffalo Networks earned a cool Rs 56 lakh on ‘sale of investigative story’. Was it the cricket betting story that fetched such a good price ? Who were the buyers? A media company or a government investigative agency? Or was it actually money received for conducting the defence sting job? The balance sheet has a curious entry for this income and no details. It is categorised as ‘income’ under schedule E of the Buffalo Networks accounts—but is set off from the broad expense head of website development. If the number is so large, media groups should be developing investigative journalism and sting operations as a ‘revenue stream’. If only they knew who was willing to pay such big money to get hold of an investigative story. Is Tehelka talking?
Splitting hair, Tata-style
On July 27, we asked Tata Sons if Tata Finance (TFL) or any of its subsidiaries had lent Rs 130 crore to Global Telesystems and whether the money had been returned. The answer: ‘TFL has never lent money to Global Telesystems so the question of Global Telesystems returning the same does not arise’. On August 24, we persisted and asked if TFL still maintained that Rs 130 crore had not be lent to Global Telesystems and pointed out that it was documented by the AF Ferguson report. The answer: ‘Yes we maintain that neither TFL, Niskalp or any of TFL’s subsidiaries has lent money to Global Telesystems’. We now have a copy of the Tata’s first information report filed with the police against TFL’s former managing director Dilip Pendse. It categorically states that ‘In March 2000, a proposal was made by Global Telesystems for the placement of an ICD of Rs 130 crore by NITCL (Niskalp) with Integrated Call Management (a special purpose vehicle of Global Telesystems)’. TFL placed the ICD on March 26. The FIR goes on to describe how money was routed to TFL through Niskalp through Integrated call Management in order to get around the problem of TFL’s capital adequacy—through a set of ICD placements. Clearly, the TFL deal was with Global Telesystems and only because TFL believed that Integrated Call Management was part of the company. So what does it say about the Tata’s replies? They may have been technically correct, but were clearly aiming to obfuscating the truth. It does nothing to lift the battered credibility of the Tata name. In fact, the FIR goes on to show that TFL had a close relationship with Global Telesystems and it was this scrip which was chosen by Pendse for backdating transactions.
Circular deals anyone?
Among the many curious deals that emerge out of the Nishkalp is a proposal cleared by its board on February 16, 2001. It says that a short term loan of Rs 100 crore would be taken from IndusInd Bank Ltd ‘typically for a week at a time to be rolled over from time to time for different mutual fund.’ The actual resolution says that the loan would be ‘for marketing or dealings in mutual fund products’. When asked what this seemingly circular, short term borrowing for mutual fund products meant, Tata Sons directors Ishaat Hussain and Kishore Chaukar seemed completely flummoxed. They said that though there was a resolution, the arrangement with IndusInd had never been activated and there was no such borrowing. If that is indeed true, then it has saved the group from having more egg on its face.
Yahoo! is faster
The National Stock Exchange (NSE) has been getting a lot of kudos for outstripping the Bombay Stock Exchange (BSE) in the equity segment and being by far the dominant player in derivatives. But when it comes to its website—the NSE is number three or worse, despite recent attempts to kick its recently relaunched site into shape. Earlier the ticker used to freeze. It rolls now but the site is just too slow, its first page is too sparse and its data is not even updated properly. Embarrassingly, the Yahoo finance site updates its Nifty (and Sensex data) much faster than the NSE official website. NSE’s Nifty chart is not updated fast enough and one day last week it had even posted an old chart of a few minutes of trading. The data on call and put options is also a nightmare. It streams across the screen in random disorder—calls and puts are not segregated, nor is the data in alphabetical order or sequenced according to expiry. Maybe NSE should start speaking to users and seek inputs.