February 22, 2008
February 21, 2008
Great Indian IPO Trick
I loved T.R. Ramaswami’s article in LiveMint so much that I had to post it in ENagar.
Who is the greatest magician? David Copperfield? P.C. Sorcar? There is a new extremely talented magician. In specific, he can (to use a term favored by magicians) “vanish” the law and transform any amount of money as many times as necessary in four months. However, his little (or not-so-little) tricks are as susceptible to deconstruction as those of any other magician’s and can be broken down into sleight of hand (also called prestidigitation orléger de main), misdirection, deception, collusion with a member of the audience, apparatus with secret mechanisms, mirrors, and other tried and tested trickery. Subject to the caveat of a statutory warning (“This trick can be performed only by him or those who share the same surname and should not be attempted by others”). Here’s how to do it:
Step 1: Float a shell company (i.e., a company that exists on paper, is a legal entity but does not have any economic activity). Name the shell company XYZ Ltd. Paid-up capital Rs1 lakh only.
Step 2: Increase the share capital of the shell company from Rs1 lakh to Rs1,000 crore by passing a resolution.
Step 3: Another shell company of the magician, say ABC Ltd, and a listed associate, say PQR Ltd, each invest in the shell company XYZ Ltd. These are nothing but book entries, the financial equivalent of magic.
Step 4: Immediately apply to the court for the merger of XYZ with DEF. The reason for the merger as stated in the application “XYZ has put in considerable efforts in acquiring necessary technical and manpower skills, which are ancillary to the business of DEF which can take benefits of this specialized skill sets and technology available with XYZ to undertake mega power projects and implement them more efficiently and successfully.” This “expertise” has been acquired by the shell company within days of increasing the capital.
The real reason is to comply with regulatory guidelines supposedly designed to prevent fraudulent transactions, but which actually aid and abet them. This relates to recognizing the minimum capital brought in before a public issue as promoters’ contribution. The promoters’ contribution would have to be at many times the face value otherwise. A merger sanctioned by the court qualifies as promoter capital, which it would not have otherwise. The unsuspecting court allows the merger, since both the companies are private companies not knowing that there is no expertise involved except that of manipulating the market for a public offering of shares at a premium of 45 times within a period of four months. The merger is sanctioned.
Step 5: Millions of shares of PQR are allotted to the owners of the shell company, XYZ, and ABC called a Project. (The word ‘project’ could only refer to multiplying money many times in four months.)
Step 6: Engage top-notch intermediaries for a gigantic public issue. Select rumors and stock market manipulation push up the price of all shares in the same industry (there are not many) to dizzy heights to justify the premium and ensure subscription. Advertise aggressively and hijack the caller ring tone of captive telecom customers without their consent to play the advertisement.
Step 7: Engage a top-notch lawyer to obtain a blanket gag order from the highest court against various petitions in various courts.
Step 8: Get the issue subscribed and have it quoted at a further premium to the initial public offering (IPO) price in grey market operations.
Step 9: Say “Oops” and make pious statements of long-term returns when the market crashes.
And all this is within the “law”!!
Where are all the investor protector forums and champions?
February 19, 2008
Sub-Prime mess Explained
Here is a wonderful presentation explaining what actually caused the sub-prime mess.
courtesy Jonathan J. Miller
(more…)
Eunuchs to dance in Bangalore discos
I was reading this news in NDTV and was kind of appalled.
Any ways, I hope it a a temporary phenomenon and the Eunuchs don’t stay there for ever.
PS: sorry if I come out insensitive in this post, but please understand I really feel uneasy around these people and had a couple of shocking prior experiences.
February 18, 2008
Kumar Parvat TREK..Experiences and Lessons learnt!
Train journey was good.! Few of us were missing the late night sync up calls though! We reached the place around 7′o clock in the morning.A jeep was hired from the station to Subramanya…That was a thrilling roller coaster ride..The driver seemed to have undergone Coaching for F1 racing! Then, we rushed into a nearby hotel and had breakfast. Filled up our bags with everything possible..little did we realize that they would become the biggest burden for the rest of the day..!
The mountain looked so inviting when we saw it from the bottom…Everybody started the journey with a smile on their face…But none knew they would curse it so much in the coming few hours..!
The journey was exciting in the beginning.. Green forest around and a thin damp path…Wow..!!
After 1/2 hr, Shibu the guy with the heaviest bag(14.5 kg) was down first..! So few of us unloaded the bag and threw away few extra stuff! BTW..FYI..He had Smirnoff, Teacher’s, Antiquity, 3 60ml bottles of VODKA and Red Bull, SOYA drink and many more( these are few names I got to hear) from him…!
Stopping now and then, having Glucon-D, lemon water, Arun’s cucumber, Cashews, Grapes,Oranges etc was simply too good..!
The scenic beauty was no longer appreciated after some time and a glimpse of the Bhat’s house was the most awaited one..!The fastest people could reach the Bhat’s house at around 12.30pm and the rest followed them. Hogged food there..rested for a while! We discussed a lot, gave up the idea of cooking on the top and left behind all the vegetables, rice, etc that we had got with us and resumed the journey again..!
The second half of the journey was terrible I shud say with the destination being right in front of us and we struggling to reach it..!
Nisar and Sathya, the most energetic guys in the group had almost reached the top and slept for an hour waiting for the rest of us..! Half of the group managed to reach the Pushpagiri top( one next to Kumara Parvat) by 6′o clock!
Then starts the camping preparation!…Few of us stayed back to accompany the ones behind and the rest went ahead looking for a right place for the camp. A small water body is what we wanted and we had to even crawl on a huge boulder for that. Manoj and Sathya had found a good place for camping and settling for the night. Then, Manoj and Nisar take up the duty of helping people crawl up the boulder and Ankur and Sathya pitching the tents in the meanwhile.Finally we reached the camp at 8′o clock in the night.
Now starts the hunt for firewood..! few of us were successful in getting firewood and boiled our Ready-to-eat’s and hogged food like we’ve never seen before..! A special mention , Shibu, the man of class had non-veg biryani for the night..!!
We had 5 tents pitched, played PING-PONG for a while and then the terrible, chill, windy night! everybody tried to sleep in their tents but hardly anyone could sleep..!!
We got up as soon as possible in the morning being extremely happy that the night is over.! Gathered firewood and lit fire to keep ourselves warm! Tried to make breakfast too but were unsuccessful!! We then went to our final destination, the top of Kumara Parvat(you could see the flag in the photograph). You can observe the triumph in everyone’s face..:D!
Then, packed up all our things, cleaned the place and started the journey back! Climbing down was much less tiring than climbing up but toes were badly aching!! few of us reached the Bhat’s place at around 12.00 and the rest followed after an hour. Had food there, collected the items left in the Bhat’s place and started the journey down with the heavy bags again! Time just flew by and we really dint knew how we could make it to the bottom again..! So the journey was both fantastic and deadly!!
The greatest achievement according to me is that all 13 of us (mostly first timers) reached the top and camped on the Peak.
Some famous one liners:
Every gram of weight matters !
one more VODKA please..!
- Aswani
Some snaps (taken by an unprofessional amateur) can be found here
Ankur Aggarwal
sree
Sandip Chaudhuri
vbr
shobhendrasrivastava
