The Department of Company Affairs (DCA) set a number of records last week. In just two hours on Sunday afternoon, it put together a team to search A.F.Ferguson’s offices in connection with the Tata Finance scam, proving that it could move as swiftly as other enforcement agencies.
The search operation itself was a first since independence. That it started with an audit firm, that too one that is not even a statutory auditor to Tata Finance (TFL), makes the action more remarkable.
It has sent shivers through the accounting profession. As for Ferguson, it virtually asked for an investigation when it hinted at ‘past misdeeds’ as one reason for sacking Y.M.Kale after the controversial TFL report was withdrawn.Lame excuses
The full-page Tata advertisements lashing out at the media for what they called a ‘vilification campaign’ against them had an interesting little comparison tucked away at the bottom.
Reacting to the fact that all sections of the media highlighted the tumble in Tata group shares after the withdrawal of the A.F.Ferguson report, the advertisement said that a similar sized group (read Reliance) had also lost a large chunk of its market capitalisation but the media chose not to highlight it. The implication seemed to be that the entire media was biased and influenced by this group.
Even a journalism student would have told them the ‘man bites dog’ rule for newsworthiness. Hence, the turbulence in Reliance shares was no big issue, while an across-the-board tumble of the shares of India’s most reputed group warranted a focussed report.
Moreover, Tata shares did not tumble because of the Ferguson report alone. Tata Power was also downgraded at the same time because of over Rs 2500 crore invested in the uncertain telecom business.
In fact, blaming real or imagined corporate rivals has always kept corporate houses from genuine introspection and is the easiest excuse for lazy PR professionals who do not have their ear to the ground.
Breaking steel barriers
Although steel prices in India have declined in recent days, the Bush administration’s rollback should please Indian industry. In March this year, the US President had thrown international trade agreements to the wind and imposed special “safeguard” tariffs of upto 30 per cent on steel.
It was alleged that this was done to help Bush’s cash-trapped friends in the steel business. Coming from a nation that threatened the world with Super 301 against trade restrictions, the action had stunned the world and underlined the US’s dictatorial ways.
On Friday, the Bush administration rolled back its high tariffs on 178 products. American producers are naturally furious at the removal of their protection, but with Japan and the European Union having filed complaints with the World Trade Organisation and threatened retaliatory tariffs on other American products, it was clear that the US protection would have to go.
In fact, soon after the March ‘safeguard’, the American government had already issued hundreds of exemptions to dilute the impact of barriers. However, it is expected that the US will be indicted in the WTO’s interim judgement that is due in a few months and may have to pay up a hefty fine. Ironically, if the US pays up such a fine, it would amount to a backdoor bailout of the American steel industry whereby the government protects it through ‘safeguard’ tariffs and the taxpayers pay for the protection by way of penalties imposed by the international court.
Welcome to India
Some things will never change. The government may raid dozens of customs and income tax officials and disgorge their ill-gotten wealth, but the harassment of ordinary citizens at Indian airports continues.
Last week, a young Indian returning for a holiday was harassed over the three bottles of liqueur that he was carrying along with some small gifts. He was grilled about his legitimate notebook computer, sneered at when he offered to pay duty and finally let off after they pocketed a pathetic Rs 25.
Another doctoral student was not only humiliated by the customs, but also tormented by the loaders of a private airline who were demanding $100 for the free transfer from the international to domestic airport. He missed his connecting flight to Vadodara.
Unless the government installs hidden cameras and monitors them and creates a redressal counter at the airport, where such victims can walk over and register a protest, we will allow corrupt officials to shame the country everyday. -- Sucheta Dalal