Are these guys answerable to their shareholders?

CAPITAL VIEW

The Afternoon Despatch and Courier

As many as five of the eight existing franchises in the IPLare public limited companies, by virtue of being listed on the stockexchanges - Mumbai Indians owned by Indiawin SportsPvt Ltd, a Mukesh Ambani controlled Reliance Industries group firm,Royal Challenger Sports owned by UB Group controlled by Vijay Mallya,Chennai Super Kings owned by India Cements, Delhi Daredevils owned byGMR Sports part of GMR Ltd and Deccan Chargers Sporting Ventures ownedby Deccan Chronicle Holdings Ltd. Sadly, the level of complianceleaves a lot to be desired on the part of these companies.
On this path to transparency, on Thursday, Deccan Chargers was thefirst team off the blocks by sending a notice to the BSE and NSE clarifying onits etymology. As the ambit of the government investigation widens, itis imperative for the franchises to come clean on their antecedents.The three other franchises - Kolkata Knight Riders, Kings XI Punjaband Rajasthan Royals have fragmented holdings and as a consequencerequire even greater transparency. There is even an offshore Mauritiusand British Virgin Islands link with some of the franchsies which isbeing investigatedseparately by the Enforcement Directorate.
Despite being public limited companies, the level of opacity thatexists in this secret society called IPL is staggering. Look at theKochi franchise, only 1 per cent is held by a Keralite - VivekVenugopal of Elite Group. A clutch of Gujarati businessmen andMaharashtrians with diverse backgrounds own the balance 74 per cent.There is the small matter of 25 per cent free equity being given to abunch of disparate individuals for professional services rendered.This free or sweat equity structure contravenes the existing CompaniesAct guidelines on this matter.Together, they have forked out an astonishing $333.33 million forKochi which is far removed from both Gujarat and Maharashtra. Maybethat is why everyone is suspecting a Dubai real estate connection in thisenterprise. And Sunanda Pushkar provides just that since she works fora real estate fund Tecom Investments, a member of Dubai Holding. Thatis the genesis of IPL turning into a war zone.
Investors and shareholders of the five listed companies which own thefranchises have the right to know how and from where the funds havebeen routed into these entities. Most of them are 100 per cent whollyowned subsidiaries, others have some personal investments from theirowners, but very little is known about the financial architecture. Themath of running a franchise is two part like any other business -revenues and expenses. While the revenue model has improvedconsiderably in season three with the efficient and effective slicingof the rights pie, the expenses eco system is large and varied.
Tall claims have been made by research firms on the profitabilityquotient of the teams, but there is no empirical evidence forthcomingfrom the franchisees or BCCI/IPL. As the investigative dragnet'sgarrotte like grip tightens, there will be a mad scramble on the partof BCCI/IPL and the team owners to clean up the augean stables. It isimperative on the part of the listed entities to provide fulldisclosure on the routing of their investments, their ownershipstructures and concurrently complete profit and loss statements of allthree seasons so that shareholders of these companies and investors inthese companies know where they stand. Next few days will see manymore teams making a clean breast of it...Hopefully.
(The writer is a noted author and business journalist)

Uff, yeh opacity!

The LEAGUE OF EXTRAODINARY GENTLEMEN AND A FEW LADIES

SUNDAY GUARDIAN

>> At the very kernel of this IPL whirligig is the etymology of>> Rendezvous Sports World which bagged the Kochi franchise for an>> astounding $333.33 million. A clutch of disparate individuals bagged>> the franchise cocking a snook at their more well heeled adversaries ->> Videocon and Gautam Adani - who were bidding for Pune and Ahmedabad>> and appeared to be sure shot winners. This obviously upset Dhoot and>> Adani who had powerful backers in the cricket board. This is the>> genesis of the latest avalanche which has enveloped the IPL. This when>> IPL Commissioner Lalit Modi decided to pull the rag tag bobtail outfit>> blessed by a union minister a notch or two down. And he had the goods>> on them. Which he used effectively and efficiently. Modi claims that>> Shashi Tharoor pressurised him into not revealing his lady friend>> Sunanda Pushkar's name as one of the beneficiaries of the sweat>> equity, but the reality is that while authenticating the consortium>> members, he found the perfect weapon to destabilise the Kochi>> franchise bid. He found free equity amounting to 25 per cent having>> been given to a clutch of individuals. Armed with this incendiary>> nugget of information, he tweeted last Sunday outing Pushkar and her>> relationship with Tharoor. Since then all hell has broken loose. For>> the last couple of years, there have been rumblings of discontent>> amongst franchise owners and sections of the BCCI on the level of>> unilateralism shown by Lalit Modi.>>>> But nobody has come out openly against Modi because nobody wants to>> upset the equations in this secret society called IPL which doesn't>> have any semblance of transparency from day one. Modi managed to keep>> media on his right side all this while, but when the Modi-Tharoor>> public spat got out of hand, the same media turned on Modi himself.>> The sharks began to circle smelling blood. Suddenly information flows>> began to do the rounds on Modi's extended family connections with>> franchises. But all this was known for a long time. Modi was truly>> pater familias for the IPL brood.>>>> Fact 1 - Lalit Modi's borther in law Suresh Chellaram was the lead>> investor in Jaipur IPL Cricket wholly owned by Mauritius based>> Emerging Media Sporting Holdings, owner of Rajasthan Royals.>>>> Fact 2 - Lalit Modi's step son in law Gaurav Burman, director with UK>> based Elephant Capital is Kings XI Punjab franchise co owner Mohit>> Burman's brother. Modi's step daughter Karima Sagrani is married to>> Gaurav.>>>> Fact 3 - Subsequently, Gaurav Burman, director with Elephant Capital>> Plc forked out Rs 44.4 crore last November to acquire 50 per cent>> stake in the Mauritius based Global Cricket Ventures. So far so good.>> But guess what - GCV - won the lucrative digital, mobile and image>> rights of the IPL and also became the exclusive licensee of digital>> rights to the Airtel T20 Champions League till 2017.>>>> Fact 4 - Amar Bindra, son of former BCCI president and presently>> Punjab Cricket Association president IS Bindra was appointed general>> manager in season one by Kings XI Punjab. Kings XI having won the>> Mohali franchise.>>>> Fact 5 - N Srinivasan, vice chairman and managing director of India>> Cements and BCCI treasurer in 2007-8 won the Chennai franchise>> christening it Chennai Super Kings. Since then he has become the BCCI>> secretary and is slated to take over as the BCCI president by rotation>> in September.>>>> Fact 6 - Chairman of the national selection committee Krish Srikkanth>> is officialy the brand ambassador of Chennai Super Kings.>>>> Hasn't anyone in the cricket board heard of the term conflict of>> interest? No, if even they had, they were oblivious because the BCCI>> is a cosy private club, practically autonomous since it is registered>> as a charitable society under the Tamil Nadu Societies Act. What is>> galling is that if the BCCI is a cosy club, then the IPL is a secret>> society bound by a code of omerta. A society where paisan helps>> paisan, where paisan protects paisan's interests and where like minded>> individuals close ranks against any interloper. Now view the entry of>> this rag tag bobtail outfit - Rendezvous with a gargantuan sized bid.>> Obviously, the movers and shakers in the secret society were outraged.>> And Videocon and Adani more so, because they thought they had got the>> short shrift. So when the Sunanda Pushkar piece was unravelled in the>> Rendezvous jigsaw, the game was afoot.>>>> But there are imponderables in the path of any tactical gambit. In>> Modi's case, the weapon was lethal, the target high profile, but when>> media get the bit between their teeth, then they start asking>> uncomfortable questions. So, the media which was suffering from>> temporary or selective amnesia was suddenly reminded of Modi's>> connections and misdemeanours. The cupboard was replete with skeletons>> and it didn't take long for the Indian Parivar League to tumble out.>> In the process, media and the government's investigative agencies>> widened their dragnet. Yes, they wanted a piece of Rendezvous and its>> antecedents, but they also wanted to probe deeper into the dark and>> secretive world of the society bound by omerta, the code of silence.>> They wanted to know the financial architecture and ownership structure>> of the eight existing franchises. Rendezvous is an easy target, but>> amongst the eight franchises are some pretty big fish with connections>> which go right to the top of the Indian political pyramid. An>> implosion is unlikely, but the franchises are suddenly feeling a bit>> uncomfortable. They had played their cards pretty close to their chest>> and no one was asking uncomfortable questions. Now things are>> different, the heat has turned on the big boys. Nobody wants strife.>>>> Opacity always existed within the IPL. There was no transparency>> whatsoever. Five of the eight franchises are public limited companies>> by virtue of being listed on the stock exchanges. They have a>> conglomeration of foreign and domestic investors and shareholders. The>> majority of the vehicles that own five franchises are wholly owned>> subsidiaries of the listed entities. And yet there has never been any>> disclosure of the financial details of the investment route, vehicle>> or profit and loss statement. Not so much as a by your leave.>> Investors and shareholders have never been informed by these>> companies. Reliance Industries, GMR, India Cements, U B and Deccan>> Chronicle Holdings are all listed. And they are team owners. Why is it>> that it took Deccan Chronicle till the end of season 3 to make a clean>> breast by sending a notice to the Bombay and National Stock Exchanges?>> Why did they take so long to inform the BSE and NSE that Deccan>> Chronicle Sporting Ventures is a 100 per cent subsidiary of DCHL.>> There was talk that global media investment management company Group M>> had taken 20 per cent equity in Deccan Chargers. Has DCHL informed the>> BSE and NSE about this minutae of detail? Is it true in the first>> place? Again the same issue of transparency is thrown into stark>> relief.>>Let us try and examine each and every franchise's ownership structureor at least attempt to unravel it for it is very difficult to draw abead on these things given that nothing much is known in the publicdomain.In the beauty parade that took place onJanuary 24, 2008, Mukesh Ambani's Reliance Industries emerged as thebuyer of the Mumbai franchise for $111.9 million (Rs 441 crore). Whatis the ownership structure of Mumbai Indians? This is what is known -RIL group firm IndiaWin Sports Pvt Ltd owns 95 per cent while DeutscheBank's Anshu Jain owns 5 per cent. But is it possible that theshareholding structure of the franchise has changed over time? RIL's100 per cent subsidiary Reliance Industrial Investment Holdings Ltdthrough which 68 per cent equity is held in two investment arms -Shinano Retail Pvt Ltd (18 per cent) and Teesta Retail Pvt Ltd (50 percent) -owns majority interest in the team, while two private companiesowned by Mukesh Ambani - Claris Trading and Sharanya Trading own thebalance 32 per cent in the venture. Claris and Sharanya Tradingentered the equation between season 2 and season 3, thus altering theshareholding pattern. Sunday Guardian asked IndiaWin Sports whetherthis had happened and in a statemnt the same was confirmed. It is alsounderstood that RIIHLhad given a Rs 78 crore loan to IndiaWin Sports Pvt Ltd, owner ofMumbai Indians earlier. The statement made available to SG is:"Since its inception, it is a well known fact that the Mumbai Indiansfranchise is owned by IndiaWin Sports Pvt Ltd. Reliance Industries,through its investment companies has invested in the entire equity ofIndiaWin Sports Pvt Ltd. Over the last three years, there have beenchanges in the holding by investment companies, however there is nochange in the original position i.e. Reliance Industrial Investmentsand Holdings Ltd, the 100% subsidiary of Reliance Industrieseffectively owns 100% economic interest in Indiawin Sports Pvt Ltd.">> >>>> What is the premise that IPL works on? In many ways the principle is>> the same as the stock market. The name of the game is valuation, based>> on the forward earnings potential of the company, in this case the>> franchise. So, let me thrown another example to highlight this. In the>> original team auction, Rajasthan Royals was purchased for the lowest>> price - $67 million. A year later, an inflated valuation was shown>> when Raj Kundra and Shilpa Shetty picked up 11.7 per cent for $15.4>> million, ratcheting up the valuation to $140 million. When Sahara>> Adventure Sports and Rendezvous Sports World pumped up the volume>> bidding $370 million and $333.33 million, the bar was raised>> significantly. If Kings XI Punjab purchased for $76 million by Dabur's>> Mohit Burman, Bombay Dyeing's Ness Wadia, Apeejay Surendra's Karan>> Paul and Priety Zinta is asking for $300 million as exit price, then>> their valuation has grown 4x in three seasons. That is what this game>> is all about. Sunanda Pushkar has reportedly received 4.7 per cent of>> free equity with vesting rights for only two years. Which means that>> if her free equity is worth Rs 70 crore now, in another two years by>> the same yardstick apllied in the case of Kings XI promoters case, she>> can exit at a price of Rs 280 crore. All for rendering professional>> services. Wow. Now, that is sweat equity.>>>> By bringing billionaires like Mukesh Ambani, Vijay Mallya, superstars>> like Shahrukh Khan on board, Lalit Modi had revolutionised the game.>> High jinks liquor baron Vijay Mallya came to the party and bought the>> Bangalore team - christening it Royal Challengers. The team owned by>> UB Sports under Mallya's flagship firm UB Group now has his son>> Siddharth Mallya managing the team. Mallya paid $111.6 million for the>> team. Deatils are sketchy with regard to the exact ownership pattern,>> but it will probably be the cleanest deal.>>>> The curious case of the Emerging Media consortium needs to be looked>> at in greater detail. Last year when rumours of Manoj Badale promoted>> Emerging Media picking up a direct stake of 50.3 per cent in IPL>> franchise Rajasthan Royals abounded, Emerging Media dispelled the>> notion by saying that there was no change in the franchise's>> shareholding pattern. The franchise spokesperson had then said, "There>> have been reports in a cross section of the media on Emerging Media>> picking up majority stake in the IPL franchise, Rajasthan Royals. We>> wish to clarify that all these reports are completely unfounded and>> baseless. There has been no change whatsoever in the shareholding>> pattern of Rajasthan Royals." Rajasthan Royals, the franchise is owned>> by Jaipur IPL Cricket, wholly owned by Mauritius based EM Sporting>> Holdings. It was largely believed that Manoj Badale was the majority>> owner of the franchise, but as it turned out, the Nigeria NRI>> Chellaram family (Suresh and Aditya) owned 44.1 per cent in the>> Mauritius holding company. Badale is a minority partner in the holding>> company with 32.4 per cent while the balance 23.5 per cent is divided>> between Blue Water Estate owned by Lachlan Murdoch and Kuki>> Investments owned by UK based Kundra (Raj) family and Shilpa Shetty.>>>> Shadowy investment companies are the bane of IPL now. Particularly>> those routed through Mauritius or the tax havens of British Virgin>> Islands. That is why the ED and tax sleuths are so excited. Prominent>> southern based industrialist and owner of India Cements, N Srinivasan>> is the owner of Chennai Super Kings. Chennai>> Super Kings is a fully owned subsidiary of India Cements and in all>> likelihood, CSK will be first off the blocks to list on the stock>> exchanges next year. At a recent analyst meet, Indian Cements>> management indicated this. If Mukesh Ambani and Vijay Mallya>> represented big business in IPL, then Shahrukh Khan brough the glam>> quotient or X factor to the platform. SRK's presence meant that the>> confluence of cricket and entertainment was complete. So King Khan is>> reportedly the majority owner with 65 per cent through his production>> firm Red Chillies Entertainment, while the balance 35 per cent is>> vested with actress Juhi Chawla and her husband Jai Mehta.>>>> Which brings us to the two lesser mortals in this league of>> extraordinary gentlemen. Two franchisees who used the platform to make>> a statement of intent. A vehicle to promote themselves, their>> companies and their brands. T>> Venkataram Reddy, owner of newspaper group Deccan Chronicle Holdings>> bought the Hyderabad franchise for $107 million. Sometime last year, a>> valuation exercise was conducted which discovered a price of Rs 1240>> crore for the Chargers. This is when top rated media investment>> management firm Group M reportedly came on board by picking up 20 per>> cent in the club. Infrastructure player GMR owned by G Mallikarjun Rao>> bought the>> Delhi franchise - Delhi Daredevils. Naresh Ganaparthi of GMR was the>> bidder officially. It made eminent sense for GMR was building out>> Delhi's multi million dollar airport project. GMR Sports is the>> holding entity of Delhi Daredevils.>>>> Modi versus Tharoor is a subset of a larger malaise in the cash awash>> Indian Premier League - one of a complete lack of transparency and>> disclosure on who owns how much of what? The sleuths will obviously>> follow a paper trail to uncover these tracks. One hopes that all this>> is made public otherwise this will be an exercise in futility, one>> which will have the government merely baring its fangs and letting>> sleeping dogs lie. That will be a travesty. This thingie needs to be a>> given a real spin dried wash and then a thorough tumble dry.>

Reinventing a beleaguered Indian Army

GROUND ZERO

THE SHRINKING HALO
Lately, the Indian Army's halo has shrunk. Riddled with tales ofcorruption, nepotism, indiscipline and factionalism at the highestlevel, the Army's credibility has been dented. Perhaps notirreparably, but dented nevertheless. Known as a highly disciplinedforce, the Indian Army faces a severe crisis of confidence. Sukhna,unfortunately is now inextricably woven into the lexicon of IndianArmy. Which is a shame. On Sunday in between the IPL double header, Iwas channel surfacing and found myself face to face with Ashutoshgrilling the newchief of Army staff - General V K Singh - a third generation Army officer. Thechannel was IBN 7, one that I never watch and I was pleasantlysurprised by the pace of the interview, General sahib's tone and tenorand his overall no nonsense demeanour. The General was clear that hewon't field posers on the Sukhna land scam, but at the same time made himselfabundantly clear that he will not tolerate any sort of indiscipline. He isworried about the Army's image and its internal health, more sobecause the Army as an institution is different from civil society. Itpractices its own code of conduct, honour and tradition. His messagewas loud and clear - improve the decaying discipline, bring confidenceback into the institution and remove all opacity from the systems andprocesses. Further, he was categorical that the Army has no factions.Incidentally, Singh as GOC Eastern Command had recommended the summarydismissal from service of tainted Military Secretary Lt GeneralAvadesh Prakash. The man allegedly responsible for Sukhnagate. Singhobviously wants to do right. And he has to right many wrongs. Fromeggs to rations, senior officers have been accused to filching stuff.But Singh seemed like the man for the job on IBN 7's Hot Seat.
That is only one facet of the new Army chief's job. He also has to addressissues relating to preparedness, the intense pressures on the force todeal with domestic, read counter insurgency and border strife. He hasto make changes in order to improve the combat capacity andcapability, so that India has a constantly motivated and agile Army.He was rapid in his responses saying that there was no colonial legacyin the Indian Army. But it had learnt lessons from different conflictsand as such evolved a new War Doctrine to watch over the borders atall times. As the man in charge of the sensitive Eastern Commandbefore his elevation, V K Singh dispelled all notions ofencroachments from the Chinese side, saying that in the absence of awell defined border, some transgressions have taken place. At the sametime, he was unequivocal in his assessment that the Indian Army coulddeal with all pressure from China. Officer intake was another issue ofvital importance as a constant erosion in the Army's equity vis a visthe new competitive set has seen it lose its lustre and sheen as asafe haven for quality officers. I was glad I watched this interviewfor it was comforting to know that it is his hand that rocks thecradle. I tried to connect some of the dots in my mind's eye.
I was immediately reminded of two excellent stories written by RajatPandit in ToI. The more recent one was after Air Chief P V Naik'selevation as chairman of chiefs of staff where Pandit expounded onIndia's two and a half front war doctrine. The story went like this:"India's worst-case scenario is a two-frontwar. Add the insurgencies in Kashmir and North-East, and rampantnaxalism in other parts, and it becomes a complex two-and-a-half frontsituation. Even as the top military brass undergoes a changeover, withAir Chief Marshal P V Naik becoming the new chairman of chiefs ofstaff committee on Tuesday and General V K Singh the new Army chief onWednesday, the armed forces feel they have to be prepared to tackleany eventuality on either of the two fronts as well as asymmetricalwarfare in the hinterland. Towards this end, in addition to thewestern front with Pakistan, India is now also concentrating hard onthe long-neglected eastern sector with China to swiftly build`capacities' and `capabilities' in tune with `threat perceptions'."
An earlier story by the same writer in December 2009 had said prettymuch the same thing, but in greater detail: "The Army is now revisingits five-year-old doctrine to effectively meet the challenges of apossible `two-front war' with China and Pakistan, deal with asymmetricand fourth-generation warfare, enhance strategic reach and jointoperations with IAF andNavy. Work on the new war doctrine -- to reflect the reconfiguration ofthreat perceptions and security challenges -- is already underwayunder the aegis of Shimla-based Army Training Command, headed byLt-General A S Lamba, said sources. It comes in the backdrop of the1.13-million strong Army having practised -- through several wargamesover the last five years -- its `pro-active' war strategy to mobilisefast and strike hard to pulverise the enemy. "This `cold startstrategy', under a NBC(nuclear-chemical-biological) overhang, emerged from the `harshlessons' learnt during Operation Parakram, where it took Army's strikeformations almost a month to mobilise at the `border launch pads'after the December 2001 terrorist attack on Parliament. This gaveample opportunity to Pakistan to shoreup its defences as well as adequate time to the internationalcommunity, primarily the US, to intervene. The lack of cleardirectives from the then NDA government only made matters worse. Thestory ended by saying thatapart from analysing the evolving military strategy and doctrines ofChina and Pakistan, the Army is also studying the lessons learnt fromthe US-launched Operation Enduring Freedom in Afghanistan in 2001 andOperation Iraqi Freedom in 2003 and their relevance to India.
What is worrisome and even irksome is that immediately after Sukhnacomes the whiff of a similar scandal which may well be in the works inMumbai. As DNA's Rajshri Mehta reported on April 2, "Four months afterrecently-retired army chief Gen Deepak Kapoor ordered disciplinaryaction against four generals for granting a no-objection certificate(NOC) to a private developer to set up an educational trust outsidethe corps headquarters in Sukna, West Bengal, the army authoritiesappear to have turned a blind eye in a similar case in Mumbai. Underthe Works of Defence Act, 1903, development within 1,000 metres of adefence establishment needs a defence NOC. The alleged irregularitypertains to the near-complete Adarsh Cooperative Housing Society, a30-storey residential tower located on a prime piece of land — onceknown as Kukri Park — abutting sensitive army and navy establishmentsat the Colaba military station in south Mumbai. Admeasuring 6,000 sqmetres, the building, located next to the Cuffe Parade bus depot,offers a scenic view of the Mumbai coastline." All is clearly not wellwithin the hallowed portals of the Indian Army. And General Singhcertainly has his hands full as he attempts to clean the augeanstables. When the General spoke about the lack of quality officerintake in the Army in his interview to Ashutosh, maybe that is thecentrepiece of the malaise that grips this great establishment. Tokeep up with the Jones's in a rapidly changing economy, certainofficers and gentlemen of the Army are resorting to underhand means.This is at the kernel of the state of disrepair and maybe the SixthPay Commission has partly rectified that. Maybe more needs to be doneas the Army wants to keep economic parity with its competitors incivil society.
Geo strategically and in tactical terms, how does one evaluate theArmy's preparedness against the backdrop of waning discipline andrising corruption? Moreover, what does a SWOT analysis reveal? I foundthis interesting analysis - INDIAN ARMY NEW WAR DOCTRINE ANALYSED byDr. Subhash Kapila.
Here goes:
The Indian Army’s enunciation of a New War doctrine was long overduein the light of India's embattled security environment. The lastIndian war doctrine ‘The COLD START War Doctrine" which was aPakistan-specific war doctrine was formulated nearly five years back.India’s two major adversaries, namely Pakistan and China, have in thelast five years lapsed into stronger adversarial postures. A strategicreview of India’s military postures and plans was certainly called forat this juncture. Pakistan today stands externally and internallybesieged with distinct possibilities of disintegration andTalibanization and its nuclearweapons falling into the hands of Taliban and Al Qaeda. A PakistanArmy so besieged could be tempted to military adventurism againstIndia to divert Pakistani public’s domestic discontent.
China on the Northern peripheries of India has indulged in militarysuppression of discontent in Tibet and Xingjian. In relation to Tibet,China has many India-centric fears, hence the growing adversarialstances on India’s borders with Tibet. On a larger plane, China alongwith its military proxy i.e. Pakistan is intent on keeping Indiaconfined within South Asia confines. Hence, the growing adversarialstances of China towards India. In case of both Pakistan and China,the growing strategic cooperation and military-to-military contacts ofIndia with the United States has generated further strategic disquiet.
Contextually therefore, the Indian Army is well within its rights toformulate plans, doctrines and weapon and equipment acquisition plansto meet the enhanced threat profiles from Pakistan and China.In the last five years, the powers that matter in the global strategiccalculus have viewed India as a regional power and a global power inthe making; consequently, there are expectations that India shouldready itself for a greater strategic reach and out-of area-shoulderingof strategic responsibilities.
Two-Front War Doctrine: This will be the mainstay of India's New WarDoctrine, based on the reality that India should expect and beprepared to effectively meet simultaneous threats from China on theNorthern borders and Pakistan on the Western borders.
India Strategic Reach and Out-of Areas Operations Capabilities: TheNew War Doctrine would incorporate enhancement of India'scapabilities. Both are related to India's aspirations as a regionalpower and a global power.
Tri-Service Operational Synergy: This is a logical top priority focusof India's New War Doctrine. It is analyzed that the New War Doctrineenvisages short and shift military operations. With a nuclear overhangwith both Pakistan and China, the Indian military operations toneutralize the Chinese and Pakistani threats has to be fast pacedfacilitated by a high degree of synergy between the Indian Army,Indian Navy and the Indian Air Force.
Asymmetric Warfare and Sub-Conventional Threats: Focus on OperationalCapabilities to Neutralize Such Threats: Emphasis seems to have beenlaid in the Doctrine because both Pakistan and China can be expectedto use these instruments as force multipliers. India focus on intensefast-paced operations can be slowed down by such threats both inforward areas and rear areas.
Military Technological Dominance Over Adversaries: This encompassesthe entire spectrum of Network-Centric warfare, Information Warfare,Cyber Warfare all integrated to facilitate speedy decision making andexploitation of fleeting tactical opportunities.
Of the five major priority thrusts in the New War Doctrine, the firsttwo are the most significant, the last three thrust areas form anessential part of doctrines of all modern war-fighting.
The New War Doctrine’s enunciation of a “Two-Front War Doctrine” andenhancement of “Strategic Reach and “Out of Area OperationsCapabilities” carry immense political and strategic significance interms of India future strategic directions.
The political significance of the New War Doctrine has to be viewed attwo levels. The first level pertains to India's political relationswith China and Pakistan. The second level pertains to India'sstrategic preparedness and a closer integration between the IndianArmy and the internal security agencies to combat the asymmetricthreats.
Indian Army’s New War Doctrine ordinarily should have not generated somuch interest, as periodic strategic reviews of doctrine are a commonfeature of all major armies. However, in case of India's strategicoutlook and its war doctrine, the global and regional interest is thatmuch more as India moves upthe strategic ladder. Indian Army’s New War Doctrine has appeared inthe public domain in its barest outlines. Yet even within thatrestricted framewor,. Indiahas given ample notice of its strategic directions and doctrinalpriorities.
The message for the China-Pakistan strategic nexus is clear. And thatis, that India is preparing itself adequately to meet theirsimultaneous threats effectively. Defensive timidity is no longergoing to be the Indian hallmark to meet the threats posed. India willpoise itself for offensive-defense which is distinct from militaryadventurism. The message for the international community is that Indiais graduallygearing itself to shoulder regional and extended strategicresponsibilities befitting the stature of an aspiring global power.Such gearing-up is not aimed at military adventurism but to readyitself to shoulder strategic responsibilities as a responsiblestake-holder in regional and global affairs.
Needless to say that Kapila is an international relations and strategic affairsanalyst. He is the Consultant, Strategic Affairs with South AsiaAnalysis Group. Anyway, over to General Singh, for he has his task cutout. The political estbalishment is backing General Singh as he getshis feet wet in waters are very clearly muddied.

Who is Sunanda Pushkar?

BEHIND THE NEWS

New Delhi: All eyes may well be on minister of state for externalaffairs - Shashi Tharoor - for his complicity in the Rendezvousaffair. An affair which threatens to snowball into something that caneven derail the team's very bid and future existence. Tharoor hasvehemently denied that he has any economic interest in the franchiseand clarified repeatedly that he only played mentor in architectingthe consortium. But what of the consortium itself? Who is RendezvousSports World? Modi is clear when he says that a central ministerexerted pressure on him not to reveal the name of the key beneficiaryof the free equity. The name in question - Sunanda Pushkar. A lady whois in the process of marrying Shashi Tharoor as media has let us knowon Monday. Ergo, the central minister can only be Tharoor himself.
Who then is Sunanda Pushkar? She is sales manager with TecomInvestments in Dubai. What is Tecom Investments? After all free equityamounting to anything between 18 and 20 per cent is serious businessgiven that the size of the bid was a staggering $333.33 million (Rs1533 crore). Twenty per cent amounts to a sizeable Rs 306 crore.Nobody gives away stake amounting to $66 million to an individual.Unless the individual is holding these shares in proxy for someoneelse. One can only presume that Sunanda Pushkar who is marryingTharoor and is his companion these days in Delhi's social circuit iseither holding these shares for Tharoor or Dubai Holdings which ownsTecom Investments. The fact that free equity totalling 25 per cent wasgiven to disparate individuals whose very antecedents were not knownthrows into stark relief the issue of transparency in IPL. Thatanything between 18 to 20 per cent of that 25 per cent was given toSunanda Pushkar compounds RSW's problems. Modi has called it, but thisis certainly not the end of this unsavoury matter. Rendezvous claimsthat Modi is favouring Ahmedabad and Gautam Adani over Kochi. If oneexamines the shareholding pattern of Kochi, then there is no clarityon who has actually put in this humunguous amount of money. Does theamount forked out commensurate with the shareholding pattern revealedby Modi? Logic says only 75 per cent of the shareholders would havecoughed up $333.33 million, after all 25 per cent was given 'free.'Whew, someone needs to tell us who is behind this venture?
Tecom Investments, based in Dubai, is a subsidiary of Dubai Holding, aglobal company dedicated to knowledge and life-improving industries. Acreator of vibrant knowledge industry clusters, TECOM Investments iscurrently active in buoyant cutting-edge sectors like ICT, Media,Education, Life Sciences and Clean Technology. A recognized leader inthe global knowledge industry, TECOM Investments manages entities likeDubai Internet City, Dubai Media City, Dubai Knowledge Village, DubaiInternational Academic City, eHosting DataFort, International MediaProduction Zone, Dubai Outsource Zone, Dubai Studio City, DuBiotechand Enpark. TECOM Investments’ phenomenal growth also encompasseslocal and international joint venture interests like Empower, adistrict cooling service provider established as a joint venture withDubai Electricity and Water Authority, Emirates InternationalTelecommunications Limited, a joint venture with Dubai InvestmentGroup and SmartCity, a joint venture formed with SAMA Dubai to developand manage knowledge industry townships worldwide.Emirates International Telecommunications Limited holds stakes inTunisie Telecom and GO, telecommunication carriers in Tunisia andMalta respectively. SmartCity has already laid the foundations of aglobal network of knowledge driven clusters through agreements todevelop SmartCity Malta and SmartCity Kochi.
Pushkar's Linkedin profile states clearly that she is working withTecom since 2005 as sales manager. Rendezvous Sports World is nowgunning for Modi for breaching the confidentiality agreement.

Opacity name of the game in IPL

SUNDAY MIDDAY

INDIAN OWNERSHIP LEAGUE
The IPL whirligig has attracted a clutch of disparate, but moniedindividuals to either bag city based franchises individually or asmembers of a consortium. Many of them are billionaires and ranked inthe prestigious Forbes list. Remember, two years ago in 2008, it wasan untried and untested formula in India. While many reckon that theBCCI and Lalit Modi cloned the idea from Subhash Chandra's IndianCricket League, the reality is that Modi actually invested time,effort and energy into building a spitting image of Major LeagueBaseball (MLB), English Premier League, NBA and NFL; which are some ofthe best known city based sporting franchise models. Modi has takenIPL to a level which the ICL could only hope for. By roping in a headycocktail of bulge bracket industrialists, glamour quotient film stars,wannabe and newbie investors who want to make a statement, Modi hasdone what nobody has managed to achieve in the country. An amalgam ofcricket and entertainment resulting in what appears to be a gangbustercommercial operation.
While opacity dominates the ownership structure of the ten differentfranchises (two more having been added recently), some of themanagements are clear as daylight. But others which have multipleowners coming together as a consortium have less clarity onshareholding. But wherever individuals or companies are owners, thenthe owning entity is for most part a fully owned subsidiary. DeccanChargers for instance owned by the listed company Deccan ChronicleHoldings, Delhi Daredevils which is owned by GMR Sports P Ltd in turnpart of the listed GMR Ltd. In the beauty parade that took place onJanuary 24, 2008, Mukesh Ambani's Reliance Industries emerged as thebuyer of the Mumbai franchise for $111.9 million (Rs 441 crore). Theownership structure works like this - RIL group firm India Sportswinowns 95 per cent while Deutsche Bank's Anshu Jain owns 5 per cent.With one of the richest men in the world and certainly the wealthiestin India buying a team, Modi had effectively managed a mini coup.Mukesh Ambani's wife Nita is now running the franchise personally.Similarly, the high profile liquor baron Vijay Mallya stepped up tothe plate and bought the Bangalore team - christening it RoyalChallengers. The team owned by UB Sports under Mallya's flagship firmUB Group now has his son Siddharth Mallya managing the team. Mallyapaid $111.6 million for the team.
If Mukesh Ambani and Vijay Mallya represented two pillars of bigbusiness in IPL, then on the other end of the vector was the EmergingMedia consortium that bought Rajasthan Royals for a bargain basementprice of $67 million. Last year when rumours of Manoj Badale promotedEmerging Media picking up a direct stake of 50.3 per cent in IPLfranchise Rajasthan Royals swirled about, Emerging Media was quick toclarify that there was no change whatsoever in the franchise'sshareholding pattern. The franchise spokesperson had then said, "Therehave been reports in a cross section of the media on Emerging Mediapicking up majority stake in the IPL franchise, Rajasthan Royals. Wewish to clarify that all these reports are completely unfounded andbaseless. There has been no change whatsoever in the shareholdingpattern of Rajasthan Royals." Rajasthan Royals, the franchise is ownedby Jaipur IPL Cricket, wholly owned by Mauritius based EM SportingHoldings. It was largely believed that Manoj Badale was the majorityowner of the franchise, but as it turned out, the Nigeria NRIChellaram family (Suresh and Aditya) owned 44.1 per cent in theMauritius holding company. Badale is a minority partner in the holdingcompany with 32.4 per cent while the balance 23.5 per cent is dividedbetween Blue Water Estate owned by Lachlan Murdoch and KukiInvestments owned by UK based Kundra (Raj) family and Shilpa Shetty.Rajasthan Royals were the cheapest franchise bought for $67 million in10 equal payments of $6.7 million per year for 10 years. When RajKundra picked up stake in the franchise, it was valued at $140million. Kundra bought 11.7 per cent stake for $15.4 million.Incidentally, Nigeria based NRI Suresh Chellaram is Lalit Modi'sbrother in law which led to charges of IPL being Indian PariwarLeague.
Prominent southern based industrialist and owner of India Cements - NSrinivasan - who is also the BCCI secretary and slated to become itspresident this September is the owner of Chennai Super Kings. ChennaiSuper Kings is a fully owned subsidiary of India Cements and in alllikelihood, CSK will be first off the blocks to list on the stockexchanges next year. At a recent analyst meet, Srinivasan indicatedthis. Srinivasan was treasurer of the BCCI in 2008. With valuations ofthe two new teams at astronomical levels of $333.33 million and $370million, the existing eight franchise owners are now in a position todemand more for stakes in their clubs. In any case, there was a threeyear lock in period for the eight original franchises which ends atthe conclusion of season 3. They could not sell more than 49 per centin their clubs. But now talk is is gaining currency that Kings XIPunjab owners Mohit Burman (Dabur), Karan Paul (Apeejay Surendra),Ness Wadia (Bombay Dyeing) and actress Preity Zinta are ready to exit.Mohit Burman confirmed to this writer that the going price is $300million, four times the price that the foursome paid in 2008 for thefranchise - $76 million. Burman saying that he was bound by aconfidentiality agreement added that neither Venugopal Dhoot ofVideocon or Pawan Munjal of Hero Honda were the suitors. Tracing theetymology of the franchise ownership, Burman had said that Ness, Karanand himself had grown up together and remained friends for a long timeand when the IPL came about decided to come together to bid. Mohit'sUK based brother Gaurav is Modi's step son in law.
Just as Mukesh Ambani and Vijay Mallya were a catch for Lalit Modi,the presence of superstar Shahrukh Khan was a vindication of themystical and magical X factor. SRK or King Khan is the majority ownerof Kolkata Knight Riders along with actress Juhi Chawla and herhusband Jai Mehta. KKR is vested in SRK's production company RedChillies Entertainment. That brings us to the two lesser establishedplayers - Delhi Daredevils and Deccan Chargers - who used this mix ofglamour and sport to further their own brand salience and credo. TVenkat Ram Reddy, owner of newspaper group Deccan Chronicle Holdingsbought the Hyderabad franchise for $107 million. Sometime last year, avaluation exercise was conducted which discovered a price of Rs 1240crore for the Chargers. This is when top rated media investmentmanagement firm Group M came on board by picking up 20 per cent in theteam. Infrastructure player GMR owned by G Mallikarjun Rao bought theDelhi franchise - Delhi Daredevils. Naresh Ganaparthi of GMR was thebidder officially. It made eminent sense for GMR was building outDelhi's multi million dollar airport project. GMR Sports is theholding entity of DD.
When the 2008 team auctions concluded, Reliance ADAG and Subroto RoySahara were seen as number nine and ten in the queue. When the bidsopened for the two additional franchises earlier this year, SubrotoRoy's Sahara Adventure Sports outbid favourites Gautam Adani andVenugopal Dhoot's Videocon in conjunction with Saif Ali Khan andKareena Kapoor with $370 million. Suborto Roy's association withIndian cricket is well documented, while the Rendezvous World Sportsconsortium was a big surprise. Vivek Venugopal (Elite Group), AnchorSwitches, Rosy Blue Diamond, Mukesh Patel and Ravi and Sanjay Gaikwad(who between them own 25 per cent and are also involved with UFOMoviez which has the theatrical rights to the IPL) are the officialowners, but secret ownership given to a politician, a former Indiancaptain and a present Indian player created a flutter in the dovecotesrecently till all notions were dispelled when they signed a freshagreement with IPL.
Once these entities list on the stock exchanges and become publiclimited companies, the levels of transparency will automaticallyincrease and clearer accounts of ownership will become known.

Hai, yeh Commonwealth Games ne mar dala

CAPITAL VIEW

A wilting citizenry

The citizenry of Delhi is wilting under the intensity of not just anunusually warm spring sun, but an inordinately high price spike. Withthe ogre of food inflation refusing to go away, the month of March hasbeen cruel for Delhites. An early summer notwithstanding, it is thezero tolerance against rising prices due to the inefficiencies of theCommonwealth Games Organising team that havethe hoi polloi in a tailspin. Monthly budgets have gone for a toss asa double whammy of the Union Budget followed in quick succession bythe Delhi budget have dealt body blow after body blow to the alreadyshrinking pockets of the middle class. While the Union Budget tooksome harsh decisions like raising Cenvat rates and restoring duty cutsand cess on petroleum products, the Delhi Budget has very nearly beena death blow. A combination of a large hike in diesel prices, partremoval of subsidy on LPG, even a hike in CNG and of course the large hikein VAT rates has made the cost of living in the capital go upsubstantively.
Why? Because all of us in the capital have to pay for the time andcost overruns of the much vaunted Commonwealth Games. It is now moreexpensive to eat out and make ordinary purchases of householdconsumable items, as also pay more for a LPG cylinder or using dieseland CNG fuels. With India being a diesel economy since all goods areferried on diesel transportation, it would have a cascading effectacross the board on all items. The diesel hike with VAT being redrawnfrom 12.5 to 20 percent has meant a Rs 2.37 rise. And soon after theDelhi budget came the Bharat Stage 4 norms and another 50 paise hikein diesel and petrol prices. The hike in value added tax stems fromthe fact that revenue collections are down and someone has to pay tofinance the Commonwealth Games. After the Union and Delhi Governmentshave pumped in thousands of crores, why should the common man man paymore for tea, coffee, cutlery, school bags costing more Rs 300,compressed natural gas for transport, wood and timber, dry fruits anddesi ghee, all of which have become more expensive? To financethe Commonwealth Games which were awarded to India as far back asNovember, 2003 in Montego Bay. For seven years, we have been deeplyensconced in the arms of Morpheus as multiplicity of agencies and highprofile satraps has meant a tardy pace of work.
What the Delhi Government does not realise is that business willactually begin to fly out of the city as Delhites cross seamlessborders and make purchases of consumables from Noida, Gurgaon,Faridabad and Ghaziabad, all now part of a homogenous National CapitalRegion. While the Commonwealth Games are undoubtedly a prestigiousevent to host, people have had it up to their ears with thecomplications due to it. Budgets have escalated as goal posts haveconstantly been changed. With less than six months to go, Delhiresembles a gigantic war zone, its innards lying open as the race tocomplete the projects seems never ending. Already touted as the mostCommonwealth Games, costs have shot through he roof.
There is empirical evidence to support the argument this. All told,the Games are going to cost the exchequer as much as a stiff $13.5billion. I am including all Games infrastructure and city developmentcosts in this figure. Which means the new Metro lines, new airport andessentially all civil works to make the rajdhani an internationalmegalopolis. With practically no financial oversight existing for mostpart of this journey, costs have gone haywire without anyaccountability whatsoever.A combination of greed and mismanagement responsible for this sadstate of affairs. Meanwhile all we have is assurances. Take theCommonwealth Games Village which was genuinely delayed because of aSupreme Court stay, from a budget of Rs 465 crore in 2004, it hasjumped into the stratosphere at Rs 1400 crore. NDTV reported the otherday that traffic and communication infrastructure budget also saw ahuge leap upwards - Rs 40 crore to Rs 80 crore in 2010. The budget for11 stadia was Rs 1200 crore in 2004, it has risen to Rs5000 crore and construction is way behind schedule.
NDTV also reported that, "Work on flyovers was altered mid-way severaltimes and now, new unplanned additions have been made. The budget: Rs1,650 crore.Streetscaping is another unplanned expenditure with a budget of Rs 1,000 crore.Security too has been an added expenditure with a budget of Rs 370crore, but that’s because of the terror scare that has pitched inrecent times. Naturally, in the light of delays, events planning isalso suffering.What was to cost Rs 920 crore in 2004, now has a budget of Rs 2307crore." And so the litany of woes goes on. In the end, it is thecitizenry which pays through its nose.
From a thanksgiving budget last year where no new taxes and levieswere imposed as Sheila Dikshit thanked the city's electorate forreturning her as CM for the third time, 2010 will go down as the yearwhen the common man pays for the sins of Suresh Kalmadi and Co.

Duality of office and position in BCCI

BEHIND THE NEWS

Cosy private club gets cosier

The chairman of the Indian cricket selection committeeKrish Srikkanth is also the brand ambassador for IPL team ChennaiSuper Kings. The owner of Chennai Super Kings similarly is thesecretary of the BCCI. He will be taking over as president of thecricket board this September as it is south's turn by rotation to getthe job. This duality of office and position is not helping Indiancricket, is it? If office for profit could trip Mrs Sonia Gandhiwhere she needed to resign from her parliamentary seat, then by thesame yardstick, this duality of office and position should not beallowed in the cricket board. Yes, Caesar's wife was above suspicion,but the board is an autonomous body which has been registered as acharitable organisation in Chennai itself, so it reckons that it isabove the law. Registered as a society under the aegis of the TamilNadu Societies Act, it operates like a private club. Should the board,even if it is a private consortium, be allowed to have administratorswho double up as beneficiaries and financial dependents? Ever sinceIPL came on to the scene, it has queered the pitch within the board,fissures have deepened and the might is right principle remainsdominant. Intra board politics is nothing knew, remember JagmohanDalmiya's bitter feud with Sharad Pawar and the latter's embarrassingdefeat. The board works on a simple rule - votes. There are 27associations and each vote is worth its weight in gold. A headycocktail of industrialists, politicians and administrators havedominated board presidentships over the last 50 years. Transparencyhave never been its greatest virtue. But in the recent past, thisconfluence of business and commercial interests and cricket boardadministration is getting murkier and messier.
Recently a curious turn of events took place in the Madras High Court.PTI reported that the Madras High Court declined to interfere with anamendment ofits regulations by Indian Cricket Board, excluding IPL and T-20tournaments conducted by it, from the purview of its rules allegedlyto 'favour' its secretary and India Cements managing director NSrinivasan who is the franchisee of Chennai Super Kings T-20 squad.
While this case was filed by former BCCI president A C Mutiah andcould well be mirroring the internecine sniping in Tamil Nadu CricketAssociation, it threw into stark relief the way our cricket boardfunctions and acts. The High Court dismissed appeals filed byindustrialist and former BCCI president A C Muthiah challenging theamendment to clause 6.2.4 of the Board'sregulations, a Division Bench comprising Justices D Murugesan and MSathyanarayanan held that they found "absolutely no merit tointerfere" with a single judge's order turning down Muthiah's plea toset aside the amendment.Contending that the amendment excluding IPLand T-20 tournaments from the purview of the Board''s regulation was"illegal and opposed to public policy", Muthiah said that under theunamended clause no administrator of BCCI could have, directly orindirectly, any commercial interest in the matches or events conductedby the Board.
The PTI story unfortunately was not picked up by national media.During the course of arguments, Muthiah''s counsel, senior advocateNalini Chidambaram, had submitted "the new regulation was brought inonly to favour N Srinivasan". The Bench said a careful reading of theplaint indicated that all the averments were aimed at only Srinivasanand Muthiah had sent two complaints to BCCI President on September 5,2008, and Septmber 19, 2008. In the complaints, Muthiah had notmentioned that he was making the complaints in the capacity of theBoard''s past president. Mutiah was BCCI boss between 1999 and 2001.The concerns that he has raised are significant because the duality ofbeing an administrator in the board and as a corollary a beneficiaryof the BCCI's largesse every once in a while is an issue that some oneneeds to deal with.Readers may well remember that the BCCI chose to compensate just twoteams for the cancellation of the inaugural Champions League Twenty20of 2008. Rajasthan Royals, who were winners of season 1and the ChennaiSuper Kings, who finished as finalists in the same edition werecompensated $5 million, approximately Rs 22 crore, for thecancellation of the Champions League T20 last year due to the 26/11terror attacks in Mumbai.However, none of the other foreign participating teams - Victoria andWestern Australia (Australia), and Titans and Dolphins (South Africa),Middlesex (England), and Sialkot Stallions (Pakistan) - are eligibleto any form of compensation from the BCCI or the IPL. This againshowed Srinivasan and Modi's (whose brother in law Suresh Chellaram islead owner of RR) clout and influence within the board. Modi has sincefallen out with Srinivasan and despite repeated denials that all iswell between the two, finds himself in a corner with BCCI presidentManohar and Srinivasan using every opportunity to cut him to size.
Anyway, these events once again point out to the fact that the BCCI isa cosy club. The Srinivasan-Srikkanth combine have also been accusedof being partial to state players like Murali Vijay and S Badrinath,but I don't want to go there because Indian cricket has been litteredwith instances of regional parochialism and bias. Somehow the riddledwith controversies zonal selection system is responsible for thismalaise. The sports ministry and International Olympic Committee arebattling the Indian cricket board on different issues, yet the BCCIseems to be trumping both repeatedly due to its naked money power. Theway the BCCI has managed to subjugate cricket's apex body - ICC - isalso worth noting. With the spectators and commerce available inabundance in India, the BCCI can get away with blue murder at themoment. The question is for how long? People like Muthiah are not thetype to let sleeping dogs lie, he will make more attempts todestabilise Srinivasan, just as Srinivasan will do the same to Modi.This game of dominoes should get more interesting when Srinivasanascends the throne of the BCCI. Will Pawar who by then will become ICCboss be able to circumvent Srinivasan's designs against Modi is whatwe are waiting to see.