The Raja-Radia Tapes

Source ;outlook India:| NOV 18, 2010

We have not edited or changed the style or spellings used in the transcripts submitted to court. 

Transcripts

22 May 2009, 09:48:51

Nira: Hello?

Raja: Raja here

Nira: Hi! I got a message from Barkha Dutt just now

Raja: Huh?

Nira: Barkha Dutt

Raja: What does she say?

Nira: She says… that she has been following up the story with Prime Minister’s Office tonight. In fact, she was the one who told me that Sonia Gandhi went there. She says that he has no problem with you, but he has a problem with Baalu

Raja: …but it has to be discussed with Leader

Nira: yeah, yeah… he has to discuss with the Leader. He has to tell…

Raja: It will be discussed in the morning… why unnecessarily Congress… [indiscernible] tie-up is going out

Nira: No, but then the question is about Azhagiri, no?

Raja: Huh?

Nira: Azhagiri’s people are saying: why is Maran getting Cabinet when he is such a senior leader himself?

Raja: That is different, but all these things must be explored and disclosed

Nira: That’s right. That’s right. I told her to get Congress…

Raja: At least, one to one, let it be disclosed to Leader

Nira: One to one?

Raja: One to one. Somebody should give a message, at least in a sealed cover, that we are having serious problems to Baalu

Nira: From Congress, right?

R: Yes

N: Okay, I’ll tell her. She is talking to Ahmed Patel, so I will talk to him

Raja: Let him [sic] call at least over phone: Sir, this is problem… we are having high regard, we are having no problem with Raja, but problem is Baalu. Tell.

Nira: Then how will you resolve the other problem?

Raja: Other problems we will take care of slowly, because now Leader comes down

Nira: Uh huh.

R: Don’t worry

N: Now Leader comes down to three, no?

Raja: Comes down for [sic] three…

Nira: Yeah

Raja: Even you are saying that Maran is not fit for infrastructure… he is having controversy… alright, let him be accommodated in the existing ministry… at least we will suggest

Nira: Maran?

Raja: Hmm… you suggest, you send a message

Nira: Uh, huh

Raja: Okay

Nira: Okay

***

May 22, 2009, 13:20:29

NIRA calling RAJA. Put on hold

RAJA: Tell me, Nira

NIRA: The thing is that the Congress has been totally confused as to who they need to speak to.

RAJA: Huh?

NIRA: Who they need to speak to in the DMK

RAJA: Ah… somebody should fly to Leader

NIRA: No, no… That is why, I am now… they’re going to speak to Kani in a little while, and then Kani is going to take them to Leader directly, and let Kani…

RAJA: That is good, that is good.

NIRA: Yeah? I have done… just told them that, because they’re completely confused who to talk to. Yeah?

RAJA: Let them talk to Kani

NIRA: Yeah, but Kani should also be sensible enough to say that she does not want anything for herself. No? I have told her that…

RAJA: Hmm

NIRA: …but you also make sure.

RAJA: No problem

NIRA: I told them. I told them that whatever…

RAJA: See, tell Kani: let her call Leader, (tell him) this is the problem, shall I bring the people?

NIRA: Yeah, because what they’re saying is that they will not give infrastructure to Baalu and Maran. They should say that to Leader directly, no?

RAJA: No problem. Look See… let them go along with Kani, and let them tell that we are having problem with these fellows

RAJA: That’s right. That’s what they have to do… they were confused… what happened is: for the UPA meeting, Maran went along… so they think Maran is the interlocutor, he is the person who’s going to talk, so there is this…

RAJA: Not at all. He came for assistance, that’s all

NIRA: No. I know, but you see this is a wrong message that has gone out, and they don’t know

[AUDIO ENDS]

May 23, 2009, 14:29:41

NIRA: Raja how are you?

RAJA: Haan, What she is telling, Kani is telling?

NIRA: She’s telling that she’s okay about it. She has no problem…

RAJA: Hmm

NIRA: …but the only thing is that somebody has to go talk to Azhagiri, which you have to do.

RAJA: Hmm

NIRA: And tell him how Maranhas gone and told…

RAJA: Haan, I already spoke with him, I already spoke with him…

NIRA: You told him what he has told the Congress leaders in Delhi?

RAJA: I know. So who planted in the minds of the Congress saying that Azhagiri doesn’t know English… I know…

NIRA: No, no, no, no…. Not only that. Not only that. That he and Stalin tomorrow will be the only ones left to run the party because the old man is senile and he is not going to be around any longer, and therefore Congress will be happy doing business with him because it will be him… him eventually, and he controls Stalin.

RAJA: Hmm…

NIRA: This is what he has said.

RAJA: Oh, ho, ho, ho!

NIRA: And that Azhagiri is criminal…

RAJA: Hmm…

NIRA: And he has not even studied more than 5^th standard.

RAJA: Oh…

NIRA: That’s the exact thing that he has told.

RAJA: Okay, okay

NIRA: You go and tell him this, no?

RAJA: No I shared with Azhagiri…Azhagiri in turn went to speak with Leader.

NIRA: No, but he has also said this… that in Delhi, I am the only one that you have to deal with eventually because, any case, Stalin will remain in the State

RAJA: I know, see, I know what type of propaganda he will manage…

***

May 24, 2009, 11:05:11

Nira: Hi!

Raja: Hello?

Nira: Hi!

Raja: Tell me.

Nira: Mr Raja?

Raja: Yes?

Nira: Nira

Raja: Tell me, Nira, anything?

Nira: I sent you an SMS. I’ve been speaking to Kani, so I just thought that… basically what they are saying is that you should be there.

Raja: Haan

Nira: Leader is generally is saying that you should be there, because of the, you know, the Dalit dispensation, all that, you know. The Dravidian, the party, and all that… saying that Leader, if it was left to him, he would have focused on the party first. This is unfortunate that his family is coming in the way and Cho Ramaswamy has given a favourable remark that it should be limited to this thing

Raja: Okay

Nira: But I’ve been talking to Kani, she spoke to me, she said, “No independent.” They are not giving independent… just now.

Raja: My case is clear, yes?

Nira: Yours is clear, yeah. Your case was cleared last night only

Raja: Okay

Nira: No, but what is happening with Daya?

Raja: What?

Nira: Daya?

Raja: Rest of the thing is… Textiles or Fertilisers

Nira: Not for Daya…

Raja: Either of them.

Nira: But Azhagiri or Daya? Only one can come, no?

Raja: No, two. Two can come.

Nira: Both?

Raju: Baalu will be the problem. I hope [sic]

Nira: I think that will be difficult for the Leader to justify three family members.

Raja: That is it, that is… (chuckles) everybody knows

Nira: No, no, she said that. Kani told me this last night, that’s what the father told her yesterday.

R: Oh

N: That for him to justify three family members will become very difficult. He recognises that problem.

Raja: What can you do? We’ll see, let us wait.

Nira: Yeah. I think he will have to relook at that. You’re all meeting him individually now? Or the meeting is still going on?

Raja: Not at all, not at all.

Nira: Narayanan’s meeting is going on?

Raja: Narayanan’s meeting is over. He has gone to Delhi, with cover.

Nira: He’s gone to?

Raja: He has gone to catch the flight… with cover.

Nira: Narayanan, yeah?

Raja: List, list…with the list, he has gone out.

Nira: He has gone out with the list, no?

Raja: I didn't know what is inside the cover.

Nira: And Kani? Is with father?

Raja: Maybe yes… maybe she knows.

Nira: I will call her now. And you are not there?

Raja: I am not yet there.

Nira: You’re not there? And Maran? Maran is there, no?

Raja: (He is) there, yes

Nira: Why you didn’t go?

Raja: I didn’t go.

Nira: Huh?

Raja: Alright… why should we go?

Nira: You should be there, no?

Raja: No problem… morning I met, and thereafter I came back for another work

Nira: And Azhagiri… he knows what Maran has been saying about him?

Raja: …it is known to Azhagiri.

Nira: It is, no?

Raja: It is known to Azhagiri, but he cannot talk with father… timely (sic) he will speak, only thing is, Maran will start the campaign against me…

N: Hmm

R: …that has to be taken care of

Nira: You have to fight differently.

R: Hmm… he may tell the press Prime Minister is coming again... this and that… spectrum…

Nira: No, no… we are handling… don’t worry. We have to take so much off, you know, even Congress had to make that statement, no? I spoke to Sunil Mittal…Did Chandoliya tell you?

Raja: I didn't know

Nira: I told him to stop. I told him, it doesn’t help…

Raja: Hmm …tell Sunil Mittal, you have to work along with Raja for another five years. So, don’t …

Nira: I told him that. I told him that. But then you also have to distance yourself from Anil. You must be neutral.

Raja: Ah that we can keep.

Senior bankers arrested in India 'scam'

 Scource :BBC News: South asia:24 November 2010 

Police in theIndian city of Mumbai say that they have arrested eight people, including senior executives of top state banks, over a suspected scam.

They say that the alleged fraud involved bribes paid to secure large corporate loans.

Senior figures from the Bank of India, the Central Bank of India and the Punjab National Bank were arrested.

The Bombay stock exchange recorded significant losses after the arrests were made public.

The arrests are the latest in a series of corruption scandals to hit the country, including alleged financial irregularities at the Commonwealth Games, an alleged scam involving homes for war widows in the state of Maharashtra and the resignation of a government minister in a row over the issue of multi-billion dollar mobile phone contracts.

At a news conference in Mumbai, police said that raids had taken place across the country and officials were arrested in Delhi and Mumbai.

There was no immediate response from any of the arrested officials or the institutions for which they work.

Among those arrested was the chairman of Mumbai-based financial services group, Money Matters, and two other executives from the firm, the Central Bureau of Investigation (CBI) said.

Correspondents say that the company specialises in advising corporate clients on how to borrow money.

The CBI said that Money Matters was "allegedly bribing senior officials of public sector banks and financial institutions for facilitating large scale corporate loans".

CBI official P Kandaswamy told the BBC that the "financial proportions of the scam were not known and investigations were going on".

All eight officials appeared in court in Mumbai on Wednesday and were remanded in custody for five days.

SAIL FPO to be appropriately timed: Verma

Source :KOLKATA: 25 NOV, 2010, 11.05AM IST,PTI 


State-owned Steel Authority of India Ltd (SAIL) has said that the process of its follow-on public offer (FPO) has begun and the issue would be appropriately timed according to market conditions. 

"The issue will be appropriately timed, based on market conditions. The process of FPO has already started. We have appointed six book-running lead managers as well as the domestic and international legal advisors for the issue," SAIL chairman C S Verma told PTI. 

The board sub-committee on the FPO has also appointed Crawford Bayley as domestic legal counsel in consortium with Dorsey and Whitney LLP as the international legal counsel. A meeting with the bankers has been scheduled today, he said. 

At present, the government holds a stake of a little over 85 per cent in SAIL and post-FPO, its equity in the company is likely to go down to about 69 per cent. 

SAIL wanted to part-fund its ongoing Rs 70,000 crore expansion programme with the proceeds from the share sale. The stake dilution will help the government to attain the disinvestment target of Rs 40,000 crore for this fiscal. 

Turning to SAIL's collaboration with the Railways, Verma said that both the organisations were in close talks for expanding their business relations and exploring new avenues of partnership. 

While mentioning that SAIL has recently entered into a JV with RITES Ltd for setting up a wagon manufacturing factory at Kulti in West Bengal, Verma said the company was open to more such collaborations with the Railways to meet the growing transportation needs of the country.

Sahara barred from tapping stock market

Source :ET :25 NOV, 2010, 02.49AM IST,ET BUREAU 


The Sahara Group, known for its political connections, proximity to Bollywood stars and enigmatic chairman Subrata Roy , has received a severe blow from capital market regulator, Sebi. 

The regulator has barred Mr Roy and some of the Sahara directors from raising money by issuing securities and also show-caused two group firms as to why they should not be directed to refund nearly Rs 5,000 crore they had mobilised. The move puts a question mark on the long-awaited IPO by the group’s real estate arm, Sahara Prime City, which has been hanging fire since September 2009. 

The Sebi order follows complaints by investors that the draft IPO prospectus did not disclose that two group companies — Sahara India Real Estate Corporation (SIRECL) and Sahara Housing Investment Corporation (SHICL) — were issuing convertible bonds. 

The regulator, subsequently, found out from the Registrar of Companies, or RoC, that SIRECL had mopped up Rs 4,800 crore while it could not ascertain the amount raised by the other group company. This, according to Sebi, is “material information of interest to prospective investors.” 

“Considering the quantum of money solicited by these companies, it is only to be presumed that the prima facie violations have taken place with the connivance of the promoters,” said the Sebi order issued late Wednesday evening. In all likelihood, Sahara will challenge the interim, exparte order. 

The Sahara spokesperson said: “They (Sebi) have taken wrong action against us with sole allegation that we have not supplied the document they asked for. We have written earlier in this regard, where it is clearly mentioned that this convertible bond matter is definitely out of the jurisdiction of Sebi and we had given them clear opinion that it is a ministry of corporate affairs’ matter. The clear opinions were given by Justice AM Ahmadi, former chief justice of India; C Achuthan, former presiding officer, Securities Appellate Tribunal; Justice SP Kurdukar, former Supreme Court judge, and few others. All these opinions clearly stated that this matter is not under the jurisdiction of Sebi.” 

Besides the Sahara chief, other promoters and directors impacted by the Sebi order include Vandana Bhargava, Ravi Shankar Dubey and Ashok Roy Choudhary. All of them have been barred by Sebi “from issuing prospectus, or any offer document, or issue advertisement for soliciting money from the public for the issue of securities, in any manner whatsoever.” 

Sahara has argued that the information was not disclosed because the convertible instruments were privately placed and the companies had no intention to list the securities. However, Sebi thinks that since the number of investors subscribing to the securities was more than 50, the offerings were ‘public issues’ and not ‘private placements’. Thus, according to Sebi, the issuances were under its purview. 

“It may require detailed scrutiny of the balance sheet of the Sahara Group to examine the flow of funds in and out of the companies. Prima facie, it appears that in the guise of private placements, these companies are rampantly tapping huge amount of money by not disclosing the source of funds by circumventing the applicable framework of law,” said the order. 

The resolutions passed in the AGM of the two companies make it clear that the promoters of the companies were completely aware about the mode of raising money, the order said. 

As per the prospectus filed by SIRECL and SHICL with the RoC, each company had a project cost of Rs 20,000 crore. Referring to the non-disclosure, Sebi said that it “raises serious concerns for the safety of the funds of the investors who have subscribed to the optionally fully convertible debentures issued by the said companies.” 

Sebi’s decision comes almost two years after the group flagship and one of the country’s largest finance companies, Sahara India Financial Corporation, was barred by the Reserve Bank of India from raising money through public deposits. 

Following the move, which had come as a big blow, the group began focusing on real estate. A year ago, Sahara Prime City filed the draft prospectus. Enam Securities, JM Financial Consultants, Edelweiss Capital , IDBI Capital Market Services and Daiwa Securities SMBC India were named as lead managers. 

The two Sahara companies that have been show-caused have been asked to file their objections within 30 days of the order.

Bank of Maharashtra lays thrust on lowering NPAs

Mr A.S. Bhattacharya

Source :Anjana Chandramouly:Parvatha Vardhini. C.:Bangalore, Nov. 21

One of the priorities for the new Chairman and Managing Director of Bank of Maharashtra, Mr A.S. Bhattacharya, would be to bring down the bank's high non-performing asset (NPA) level in the next six months.

“Our gross NPAs at 3.58 per cent may be one of the highest in the industry, and we want to reduce it to less than 3 per cent by March,” he told Business Line. He hoped to reduce net NPAs to less than 2 per cent, from the current 2.18 per cent.

NPAs were high on account of Rs 120 crore of agriculture debt waiver added during the quarter.

“And now all NPAs are system driven, and an alarm is generated by the system when any account shows signs of sickness,” he pointed out. For loans of Rs 1 lakh and below, any signs of sickness would be addressed by the branch office, while the regional office would address sickness in loans of Rs 1 lakh to Rs 10 lakh and the head office will handle loans above Rs 10 lakh.

According to him, 64 per cent of the bank's NPAs was from small and marginal borrowers, and to “arrest gross NPAs and net NPAs, we plan to set up five micro-asset recovery units in Maharashtra for the recovery of small loans,” he said. The exclusive teams will only work on recovery of these loans.

Since the bank has over 900 of its 1,500 branches in Maharashtra, these units would be set up there, and if the experiment is successful, “we will set up such units in Bangalore, Hyderabad and Uttar Pradesh,” he added.

As of now, the bank is not looking at Chennai, “but if small loan recovery does not happen in Chennai, we will set up a unit there,” said Mr Bhattacharya.

On the dip in profits in the second quarter of this fiscal, he pointed out that provisioning was doubled during the quarter to strengthen the bank's balance sheet.

The bank was also hopeful of growing its net interest margin to 2.7 per cent by the fiscal-end from current levels of 2.54 per cent. With the bank's cost of deposits at 5.24 per cent now, Mr Bhattacharya felt that it will increase as a result of the recent monetary policy.

By March, he expected it to be between 5.3 per cent and 5.35 per cent.

This would put pressure on net interest margins, he admitted, adding that the silver-lining was that the bank's yield on advances, which was 9.14 per cent during the second quarter, would increase to 9.6 per cent soon.

This would be achieved mainly by re-pricing the below-the-base-rate advances of about Rs 4,000 crore. “And this would increase our net interest margin slightly,” he said.

Shedding high-cost deposits

The bank also hoped to grow its balance sheet by shedding high-cost deposits. As on March, the bank's high-cost deposits stood at Rs 11,000 crore, which has now been reduced to Rs 6,000 crore.

The bank targets a 20 per cent growth in business to Rs 1.2 lakh crore by the fiscal-end, with targeted deposits and advances of Rs 70,000 crore and Rs 50,000 crore respectively. Mr Bhattacharya said he expected the CASA (current account savings account) ratio to touch 41-42 per cent by the year-end from the current 39 per cent.

On whether the bank would increase its base rate, “as of date, we will not increase our base rate. But it will be market-driven,” he said. The bank's base rate is 8.25 per cent now.

Banks use ‘negative list' gambit to make defaulters pay up

Source :K. Ram Kumar:business line:Mumbai, Nov. 21

To recover dues, bankers are trying to put the fear of God into obstinate defaulters to pay up. 

And how? 

By making it plain that they could get reported to the Credit Information Bureau, bankers have been able to achieve a modicum of success in recoveries.

Some defaulting borrowers do see the writing on the wall when they are sensitised about the deleterious consequences of finding their names on the bureau's negative list, say bankers.

By delivering the simple key message that the doors of other banks will be shut for the defaulters once they are on the negative list, banks are gradually making headway in recoveries.

Before knocking on the doors of the debt recovery tribunal or resorting to recovery under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002, bank recovery officers are trying to warn headstrong loan defaulters that they could end up in the credit bureau's negative list. 

The prospect of future banking relationship getting jeopardised convinces some defaulters to repay loans.

The ‘negative list' gambit is apparently working for banks. According to a senior Union Bank of India official, the bank's staff at Rohtak (Haryana) branch employed this tactic successfully when a young entrepreneur did not repay his education loan despite having the wherewithal. Impressing upon this entrepreneur the adverse fallout of getting reported to the credit bureau did the trick for the bank.

According to the Credit Information Companies (Regulation) Act, 2005, every credit institution has to become member of at least one credit information company. Credit institutions, including banks and housing finance companies, have to provide credit data (positive as well as negative) to the credit information company. By tapping into a credit information bureau, credit grantors get complete picture of the payment history of a borrower.

Apart from Credit Information Bureau (India) Ltd, (existing credit information company in operation since January 2001), the Reserve Bank of India has issued certificate of registration to Experian Credit Information Company of India Pvt Ltd and Equifax Credit Information Services Pvt Ltd in the February-March 2010 period to commence the business of credit information.

Repco Bank names new MD

Source :Business line Bureau :Chennai, Nov. 23

The Ministry of Home Affairs, Government of India, has appointed Mr R. Varadarajan as the Managing Director of Repco Bank, a Government of India enterprise established for the rehabilitation of repatriates.

 Mr Varadarajan is a Post-Graduate in Agriculture with CAIIB and Diploma in Management. 

He was earlier holding the post of Executive Director in the Bank for over four years and General Manager for six years.

CBI arrests LIC Housing chief, senior bank officials on graft charges

Source :Business Line :Mumbai, Nov.24

The Central Bureau of Investigation on Wednesday arrested eight senior officials of banks and financial institutions on charges of taking bribes for sanctioning loans.

The arrested officials are: Mr R.R. Nair, Director and Chief Executive, LIC Housing Finance; Mr Naresh Chopra, Secretary (Investment), Life Insurance Corporation of India; Mr R.N. Tayal, General Manager, Bank of India; Mr Maninder Singh Johar, Director (Chartered Accountant), Central Bank of India; Mr Venkoba Gujjal, Deputy General Manager, Punjab National Bank; Mr Rajesh Sharma, CMD, Money Matters (India) Pvt Ltd, Mr Sanjay Sharma and Mr Suresh Gattani, employees of Money Matters, a listed, Mumbai-based financial services company.

All the accused have been remanded to CBI custody till November 29 by the Sessions Court in Mumbai. In its remand application, the agency has accused them of causing wrongful gain to themselves and wrongful loss to the public exchequer.

The agency said it conducted searches at various locations in Mumbai, Delhi, Chennai, Jaipur, Kolkata and Jalandhar and seized incriminating documents. It has registered five separate cases.

According to the CBI, it has busted a racket in which the private financial services company, Money Matters (India) Pvt Ltd, its CMD, Mr Rajesh Sharma, and other associates were allegedly bribing senior officials of public sector banks and financial institutions for facilitating large-scale corporate loans.

The accused were also gathering confidential business information from banks and financial institutions, said a senior CBI officialat a news conference here on Wednesday.

“Officers of top management and middle management of various public sector banks and financial institutions were receiving illegal gratifications from the private financial services company who were acting as mediators and facilitators for corporate loans and other facilities from financial institutions,” said Mr P. Kandaswamy, Joint Director, CBI.

The companies whohave been mentioned as getting loans in the CBI's first information report include Lavasa, Vatika, Krishna Group, Suzlon, JP Group, MBD, Gold Sukh Project, EmaarMGF, and DB Realty. Loans to these companies, most of them in the realty sector, were sanctioned by the banks and financial institutions in 2009. Officials from these banks and customers were not immediately available for comment.

CBI officials said it is a clear-cut case of top bank and financial institutions' officials receiving kickbacks from a financial services intermediary for sanctioning large project loans to corporations. These loans, which could run into a few thousand crore rupees, may not be in jeopardy. This means that loans, by themselves, are not bad ones.It is only the manner in which they have been obtained and the role of public servants that are under the scanner.

These cases are unlikely to have a systemic impact as these are isolated bribery cases, said a bank official. Loans have to pass through a several-layered sanctioning process. Large loans are passed by a committee of senior officials at banks.

The LIC Housing Finance chief is alleged to have received a bribe of Rs 45 lakh from Money Matters.

He is accused of providing undue favours to companies such as DB Realty, Mantri Realty, Entertainment World (Lucknow), Indore City Treasures and Pashmina Developers.

Another accused, Mr Naresh Chopra, Secretary (Investment), LIC, has been allegedly providing insider information on dealings and investment matters at Life Insurance Corporation of India relating to Adani, J P Hydro, JSW Power and Pantaloons. He is alleged to have received a bribe from Mr Rajesh Sharma, CEO of Money Matters, to provide this insider information.