By M H Ahssan
Portrays Itself As Charity Group Through Elaborate Website Campaign
As Pakistan struggles to ban the Jamaat-ud-Dawa after the UN Security Council resolution, the Islamic group has mounted its own spirited defence against its ban. Portraying itself as a charity organization and social do-gooder, the JuD has mounted a campaign on its website to convince its followers that the UNSC had proscribed the wrong organization under Indian pressure.
JuD on Tuesday published a detailed list of people who would suffer from the closure. They included thousands of the 2005 and 2008 earthquake victims, especially in Balakot, Mansehra, Muzaffarabad, Bagh and Rawalakot. It also said it is digging wells in Sindh and Balochistan; helping out poor and destitute children, patients who avail of free surgeries and diagnostic services, people who receive dry rations in disaster affected areas, etc.
“Jamaat-ud-Dawa is always the first to reach affected people in any emergency or natural disaster; pulling out people from the rubble of destroyed homes, carrying out on-thespot surgeries of wounded people, setting up tent cities, cooking and distributing free food, digging fresh water wells, and building shelters.”
The JuD website is relishing a BBC story about poor Pakistani Hindus protesting against the ban. Hindus even stepped out in a protest march in Hyderabad (Sindh), describing JuD as a “saviour”. One protester, Biga Ram, told a news agency: “How can an organisation be terrorist if it’s been providing food and water to us despite knowing that we’re not Muslims?”
During the Oct. earthquake in 2005, it was the profusion of JuDhospitals and medical services that drew praise from many international observers, while the Pakistan government floundered in reaching basic services to the quake-affected people.
It helped in that the JuD’s recruiting public came from the PoK region. And ultimately, that’s the secret of the JuD’s survival — because it has taken over a lot of the services that should actually be provided by the state. That’s also the unfortunate truth about the ban. This group which has a charity front will always use the humanitarian excuse to continue working on all fronts, including training and deploying terrorists. Which is why, while JuD’s bank accounts have been frozen, the group has not yet been formally banned by Pakistan.
Thursday, December 18, 2008
JuD Fights Ban with PR Campaign
By M H Ahssan
Portrays Itself As Charity Group Through Elaborate Website Campaign
As Pakistan struggles to ban the Jamaat-ud-Dawa after the UN Security Council resolution, the Islamic group has mounted its own spirited defence against its ban. Portraying itself as a charity organization and social do-gooder, the JuD has mounted a campaign on its website to convince its followers that the UNSC had proscribed the wrong organization under Indian pressure.
JuD on Tuesday published a detailed list of people who would suffer from the closure. They included thousands of the 2005 and 2008 earthquake victims, especially in Balakot, Mansehra, Muzaffarabad, Bagh and Rawalakot. It also said it is digging wells in Sindh and Balochistan; helping out poor and destitute children, patients who avail of free surgeries and diagnostic services, people who receive dry rations in disaster affected areas, etc.
“Jamaat-ud-Dawa is always the first to reach affected people in any emergency or natural disaster; pulling out people from the rubble of destroyed homes, carrying out on-thespot surgeries of wounded people, setting up tent cities, cooking and distributing free food, digging fresh water wells, and building shelters.”
The JuD website is relishing a BBC story about poor Pakistani Hindus protesting against the ban. Hindus even stepped out in a protest march in Hyderabad (Sindh), describing JuD as a “saviour”. One protester, Biga Ram, told a news agency: “How can an organisation be terrorist if it’s been providing food and water to us despite knowing that we’re not Muslims?”
During the Oct. earthquake in 2005, it was the profusion of JuDhospitals and medical services that drew praise from many international observers, while the Pakistan government floundered in reaching basic services to the quake-affected people.
It helped in that the JuD’s recruiting public came from the PoK region. And ultimately, that’s the secret of the JuD’s survival — because it has taken over a lot of the services that should actually be provided by the state. That’s also the unfortunate truth about the ban. This group which has a charity front will always use the humanitarian excuse to continue working on all fronts, including training and deploying terrorists. Which is why, while JuD’s bank accounts have been frozen, the group has not yet been formally banned by Pakistan.
Portrays Itself As Charity Group Through Elaborate Website Campaign
As Pakistan struggles to ban the Jamaat-ud-Dawa after the UN Security Council resolution, the Islamic group has mounted its own spirited defence against its ban. Portraying itself as a charity organization and social do-gooder, the JuD has mounted a campaign on its website to convince its followers that the UNSC had proscribed the wrong organization under Indian pressure.
JuD on Tuesday published a detailed list of people who would suffer from the closure. They included thousands of the 2005 and 2008 earthquake victims, especially in Balakot, Mansehra, Muzaffarabad, Bagh and Rawalakot. It also said it is digging wells in Sindh and Balochistan; helping out poor and destitute children, patients who avail of free surgeries and diagnostic services, people who receive dry rations in disaster affected areas, etc.
“Jamaat-ud-Dawa is always the first to reach affected people in any emergency or natural disaster; pulling out people from the rubble of destroyed homes, carrying out on-thespot surgeries of wounded people, setting up tent cities, cooking and distributing free food, digging fresh water wells, and building shelters.”
The JuD website is relishing a BBC story about poor Pakistani Hindus protesting against the ban. Hindus even stepped out in a protest march in Hyderabad (Sindh), describing JuD as a “saviour”. One protester, Biga Ram, told a news agency: “How can an organisation be terrorist if it’s been providing food and water to us despite knowing that we’re not Muslims?”
During the Oct. earthquake in 2005, it was the profusion of JuDhospitals and medical services that drew praise from many international observers, while the Pakistan government floundered in reaching basic services to the quake-affected people.
It helped in that the JuD’s recruiting public came from the PoK region. And ultimately, that’s the secret of the JuD’s survival — because it has taken over a lot of the services that should actually be provided by the state. That’s also the unfortunate truth about the ban. This group which has a charity front will always use the humanitarian excuse to continue working on all fronts, including training and deploying terrorists. Which is why, while JuD’s bank accounts have been frozen, the group has not yet been formally banned by Pakistan.
Editorial: Terror Laws: Some Questions Remain
By M H Ahssan
The UPA government, which would like to appear to be on the ball in fighting terrorism after the Mumbai outrage, has introduced two bills in Parliament. One aims to establish a National Investigating Agency (NIA) to deal with terrorism and related offences, the other to tighten procedures to aid prosecution and trial by amending the Unlawful Activities Prevention Act. In seeking to create the NIA, the government is in uncharted waters. News reports suggest that the NIA cannot begin investigating a case on its own. It appears that the first step is to be taken by the state government where a terrorist crime may have occurred. The state in question will have to ask the Centre for the NIA to be pressed into service. It is far from clear if states will approach the Centre for the NIA’s help in the first place. State governments are known to guard their turf jealously.
Since law and order is a state subject, they have thwarted efforts in the past, irrespective of their political colour, to create an all-India agency to deal with terrorism. The federalism argument is used to stymie moves in this direction. The Left parties reiterated this view in Parliament on Monday when the bill was introduced. The BJP supported the bill since it has long been asking for so-called "tough laws" against terrorism, but we can only know later if its chief ministers will ask for the Centre’s help in investigating terrorist crimes, especially if the BJP is not running the Union government. In bringing an amendment to the UAPA — in order to tighten procedures to deal with terrorist cases in court and to facilitate investigation — the government has done well to allow for the admission of communications intercepts as evidence.
This is a much-needed reform, although there is a downside to it, theoretically speaking. It has also shown wisdom in not throwing the onus of proving innocence on the accused, for that amounts to an inversion of civilised jurisprudence. It is also good that confession before the police will not count as evidence, as was the case with Pota and Tada, which were widely misused and could not help the police in getting convictions from the courts in more than five per cent of cases. These were, in retrospect, over-hyped laws of little utility. Effective and tighter laws are needed to fight the menace of terrorism, but laws are not everything. A lot depends on the state of repair of the intelligence services and the investigating machinery.
Remember, the Mumbai carnage could take place although Maharashtra has the MCOCA, which is a replica of Pota. So it is not laws alone which deter terrorism. Part of the trouble in India is that even existing laws have not been put to effective use on account of a creaking administrative machinery. Introducing the two bills in Parliament, the home minister said these laws were being proposed because the country was a victim of terrorism sponsored from across the border. Does this mean a state government will ask for use of the NIA only if it determines that a given terrorism incident is inspired from outside the country? We shall know better with time.
The UPA government, which would like to appear to be on the ball in fighting terrorism after the Mumbai outrage, has introduced two bills in Parliament. One aims to establish a National Investigating Agency (NIA) to deal with terrorism and related offences, the other to tighten procedures to aid prosecution and trial by amending the Unlawful Activities Prevention Act. In seeking to create the NIA, the government is in uncharted waters. News reports suggest that the NIA cannot begin investigating a case on its own. It appears that the first step is to be taken by the state government where a terrorist crime may have occurred. The state in question will have to ask the Centre for the NIA to be pressed into service. It is far from clear if states will approach the Centre for the NIA’s help in the first place. State governments are known to guard their turf jealously.
Since law and order is a state subject, they have thwarted efforts in the past, irrespective of their political colour, to create an all-India agency to deal with terrorism. The federalism argument is used to stymie moves in this direction. The Left parties reiterated this view in Parliament on Monday when the bill was introduced. The BJP supported the bill since it has long been asking for so-called "tough laws" against terrorism, but we can only know later if its chief ministers will ask for the Centre’s help in investigating terrorist crimes, especially if the BJP is not running the Union government. In bringing an amendment to the UAPA — in order to tighten procedures to deal with terrorist cases in court and to facilitate investigation — the government has done well to allow for the admission of communications intercepts as evidence.
This is a much-needed reform, although there is a downside to it, theoretically speaking. It has also shown wisdom in not throwing the onus of proving innocence on the accused, for that amounts to an inversion of civilised jurisprudence. It is also good that confession before the police will not count as evidence, as was the case with Pota and Tada, which were widely misused and could not help the police in getting convictions from the courts in more than five per cent of cases. These were, in retrospect, over-hyped laws of little utility. Effective and tighter laws are needed to fight the menace of terrorism, but laws are not everything. A lot depends on the state of repair of the intelligence services and the investigating machinery.
Remember, the Mumbai carnage could take place although Maharashtra has the MCOCA, which is a replica of Pota. So it is not laws alone which deter terrorism. Part of the trouble in India is that even existing laws have not been put to effective use on account of a creaking administrative machinery. Introducing the two bills in Parliament, the home minister said these laws were being proposed because the country was a victim of terrorism sponsored from across the border. Does this mean a state government will ask for use of the NIA only if it determines that a given terrorism incident is inspired from outside the country? We shall know better with time.
It Ain’t Working
By M H Ahssan
US should stop propping up the Pakistani military
US aid to Islamabad is now close to $2 billion a year, putting Pakistan on par with Israel and Egypt as the top recipients of American assistance. And on the eve of the Mumbai terrorist assaults, the US persuaded the IMF to hand a near-bankrupt Pakistan an economic lifeline in the form of a $7.6 billion aid package, with no strings attached. Despite such largesse, Pakistan is host to the world’s most wanted men and the main al-Qaeda sanctuary. Recent polling shows that Osama bin Laden is more popular in Pakistan than ever, even as America’s negative rating there has soared.
Let’s be clear: US policy on Pakistan isn’t working, and unless Washington fundamentally reverses course, it risks losing the war in Afghanistan and making the West an increasing jihadi target, including the scene of Mumbaistyle murderous rampages. After all, as the history of terrorism since the 1980s attests, innovative terrorist strikes carried out against Indian targets have later been replicated in the West. That includes attacks on symbols of state authority, the mid-air bombing of a commercial jetliner and coordinated strikes on a city transportation system.
The jihadis’ logic in employing softstate India as their laboratory has been that if they can bleed the world’s largest democracy through novel and recurrent attacks, they perfect techniques for application against the tougher free societies in the West. If the terrorists can bring the developing world’s most successful democratic experiment under siege, with the intent to unravel its secular and pluralistic character, it is only a matter of time before western societies get similarly besieged. That the tourism ad’s “incredible India” is, in reality, little more than a miserable India — which presents itself as an easy target by merely craving international sympathy as a constant victim — does not detract from the danger that the Mumbai attack masterminds have set up a model for use elsewhere.
Yet the US response, however positive in the diplomatic realm, has failed to recognise that the Mumbai attacks mark a potent new threat to free societies and that unless the masterminds are brought to justice, such cold-blooded rampages are likely to be carried out in the West. The alacrity with which the American media returned to the India-Pakistan hyphenation in covering the Mumbai assaults betrayed superficiality and old mindsets — a failing compounded by media organisations calling the attackers not terrorists but “militants” (like the ‘New York Times’) or “gunmen” (including the ‘Washington Post’). Diplomatically, it has been deja vu — the US exerting pressure and Islamabad staging yet another anti-terrorist charade to deflect that pressure and pre-empt Indian retaliation.
Given the easy manner outlawed terrorist outfits in Pakistan resurface under new names, the US knows well that a ban on any group or temporary detention of a terrorist figure is of little enduring value. More Mumbai-type attacks can be prevented only if the masterminds are identified and put on trial and their sponsors in the Pakistani military-intelligence establishment are, with the help of Europeans, indicted in The Hague for war crimes. Yet, despite a broken Pakistan policy, the US seems reluctant to fix its approach. The reason for that is not hard to seek: US policy remains wedded to the Pakistani institution that reared the forces of jihad — the military.
Indeed, US policy is still governed by a consideration that dates back to the 1950s — treating the Pakistani military as central to the pursuit of American geopolitical objectives. As American scholars Lloyd and Susanne Rudolph have put it, “For roughly 50 years, the US destabilised the South Asia region by acting as an offshore balancer. Its actions allowed Pakistan to realise its goal of ‘parity’ with its much-bigger neighbour and to try to best that neighbour in several wars”. The more recent “de-hyphenation” of India and Pakistan was not a calculated US policy shift but the product of Pakistan’s descent into shambles and India’s notable rise after 1998. Under George Bush, US policy simply went from hyphenation to parallelism. That has involved building strategic partnerships with and selling arms to both. For the first time ever, the US is building parallel intelligence-sharing and defence-cooperation arrangements with both.
The war in Afghanistan and the containment strategy against Iran have only reinforced the US dependence on the Pakistani military, despite mountains of intelligence indicating the latter is playing both sides — bolstering the Taliban and other terror groups while pretending to be a counterterror ally. Instead of helping empower Pakistan’s civilian government to gain full control over the national security system, including the nuclear establishment and the ISI, US policy acts as a stumbling block by continuing to prop up the Pakistani military through generous aid and weapon transfers, including bombers and submarines of relevance only against India. For its own sake, Washington has to stop pampering and building up the military as Pakistan’s pivot.
By fattening the Pakistani military, America has, however inadvertently, allowed that institution to maintain cosy ties with terror groups. A break from this policy approach would be for the Barack Obama administration to embrace the idea currently being discussed in Washington — condition further aid to the reconfiguration of the Pakistani military to effectively fight terror and to concrete actions to end institutional support to extremism. If not, the US is bound to lose two wars — the one in Afghanistan and the other on transnational terror — while staying mired in Iraq.
US should stop propping up the Pakistani military
US aid to Islamabad is now close to $2 billion a year, putting Pakistan on par with Israel and Egypt as the top recipients of American assistance. And on the eve of the Mumbai terrorist assaults, the US persuaded the IMF to hand a near-bankrupt Pakistan an economic lifeline in the form of a $7.6 billion aid package, with no strings attached. Despite such largesse, Pakistan is host to the world’s most wanted men and the main al-Qaeda sanctuary. Recent polling shows that Osama bin Laden is more popular in Pakistan than ever, even as America’s negative rating there has soared.
Let’s be clear: US policy on Pakistan isn’t working, and unless Washington fundamentally reverses course, it risks losing the war in Afghanistan and making the West an increasing jihadi target, including the scene of Mumbaistyle murderous rampages. After all, as the history of terrorism since the 1980s attests, innovative terrorist strikes carried out against Indian targets have later been replicated in the West. That includes attacks on symbols of state authority, the mid-air bombing of a commercial jetliner and coordinated strikes on a city transportation system.
The jihadis’ logic in employing softstate India as their laboratory has been that if they can bleed the world’s largest democracy through novel and recurrent attacks, they perfect techniques for application against the tougher free societies in the West. If the terrorists can bring the developing world’s most successful democratic experiment under siege, with the intent to unravel its secular and pluralistic character, it is only a matter of time before western societies get similarly besieged. That the tourism ad’s “incredible India” is, in reality, little more than a miserable India — which presents itself as an easy target by merely craving international sympathy as a constant victim — does not detract from the danger that the Mumbai attack masterminds have set up a model for use elsewhere.
Yet the US response, however positive in the diplomatic realm, has failed to recognise that the Mumbai attacks mark a potent new threat to free societies and that unless the masterminds are brought to justice, such cold-blooded rampages are likely to be carried out in the West. The alacrity with which the American media returned to the India-Pakistan hyphenation in covering the Mumbai assaults betrayed superficiality and old mindsets — a failing compounded by media organisations calling the attackers not terrorists but “militants” (like the ‘New York Times’) or “gunmen” (including the ‘Washington Post’). Diplomatically, it has been deja vu — the US exerting pressure and Islamabad staging yet another anti-terrorist charade to deflect that pressure and pre-empt Indian retaliation.
Given the easy manner outlawed terrorist outfits in Pakistan resurface under new names, the US knows well that a ban on any group or temporary detention of a terrorist figure is of little enduring value. More Mumbai-type attacks can be prevented only if the masterminds are identified and put on trial and their sponsors in the Pakistani military-intelligence establishment are, with the help of Europeans, indicted in The Hague for war crimes. Yet, despite a broken Pakistan policy, the US seems reluctant to fix its approach. The reason for that is not hard to seek: US policy remains wedded to the Pakistani institution that reared the forces of jihad — the military.
Indeed, US policy is still governed by a consideration that dates back to the 1950s — treating the Pakistani military as central to the pursuit of American geopolitical objectives. As American scholars Lloyd and Susanne Rudolph have put it, “For roughly 50 years, the US destabilised the South Asia region by acting as an offshore balancer. Its actions allowed Pakistan to realise its goal of ‘parity’ with its much-bigger neighbour and to try to best that neighbour in several wars”. The more recent “de-hyphenation” of India and Pakistan was not a calculated US policy shift but the product of Pakistan’s descent into shambles and India’s notable rise after 1998. Under George Bush, US policy simply went from hyphenation to parallelism. That has involved building strategic partnerships with and selling arms to both. For the first time ever, the US is building parallel intelligence-sharing and defence-cooperation arrangements with both.
The war in Afghanistan and the containment strategy against Iran have only reinforced the US dependence on the Pakistani military, despite mountains of intelligence indicating the latter is playing both sides — bolstering the Taliban and other terror groups while pretending to be a counterterror ally. Instead of helping empower Pakistan’s civilian government to gain full control over the national security system, including the nuclear establishment and the ISI, US policy acts as a stumbling block by continuing to prop up the Pakistani military through generous aid and weapon transfers, including bombers and submarines of relevance only against India. For its own sake, Washington has to stop pampering and building up the military as Pakistan’s pivot.
By fattening the Pakistani military, America has, however inadvertently, allowed that institution to maintain cosy ties with terror groups. A break from this policy approach would be for the Barack Obama administration to embrace the idea currently being discussed in Washington — condition further aid to the reconfiguration of the Pakistani military to effectively fight terror and to concrete actions to end institutional support to extremism. If not, the US is bound to lose two wars — the one in Afghanistan and the other on transnational terror — while staying mired in Iraq.
It Ain’t Working
By M H Ahssan
US should stop propping up the Pakistani military
US aid to Islamabad is now close to $2 billion a year, putting Pakistan on par with Israel and Egypt as the top recipients of American assistance. And on the eve of the Mumbai terrorist assaults, the US persuaded the IMF to hand a near-bankrupt Pakistan an economic lifeline in the form of a $7.6 billion aid package, with no strings attached. Despite such largesse, Pakistan is host to the world’s most wanted men and the main al-Qaeda sanctuary. Recent polling shows that Osama bin Laden is more popular in Pakistan than ever, even as America’s negative rating there has soared.
Let’s be clear: US policy on Pakistan isn’t working, and unless Washington fundamentally reverses course, it risks losing the war in Afghanistan and making the West an increasing jihadi target, including the scene of Mumbaistyle murderous rampages. After all, as the history of terrorism since the 1980s attests, innovative terrorist strikes carried out against Indian targets have later been replicated in the West. That includes attacks on symbols of state authority, the mid-air bombing of a commercial jetliner and coordinated strikes on a city transportation system.
The jihadis’ logic in employing softstate India as their laboratory has been that if they can bleed the world’s largest democracy through novel and recurrent attacks, they perfect techniques for application against the tougher free societies in the West. If the terrorists can bring the developing world’s most successful democratic experiment under siege, with the intent to unravel its secular and pluralistic character, it is only a matter of time before western societies get similarly besieged. That the tourism ad’s “incredible India” is, in reality, little more than a miserable India — which presents itself as an easy target by merely craving international sympathy as a constant victim — does not detract from the danger that the Mumbai attack masterminds have set up a model for use elsewhere.
Yet the US response, however positive in the diplomatic realm, has failed to recognise that the Mumbai attacks mark a potent new threat to free societies and that unless the masterminds are brought to justice, such cold-blooded rampages are likely to be carried out in the West. The alacrity with which the American media returned to the India-Pakistan hyphenation in covering the Mumbai assaults betrayed superficiality and old mindsets — a failing compounded by media organisations calling the attackers not terrorists but “militants” (like the ‘New York Times’) or “gunmen” (including the ‘Washington Post’). Diplomatically, it has been deja vu — the US exerting pressure and Islamabad staging yet another anti-terrorist charade to deflect that pressure and pre-empt Indian retaliation.
Given the easy manner outlawed terrorist outfits in Pakistan resurface under new names, the US knows well that a ban on any group or temporary detention of a terrorist figure is of little enduring value. More Mumbai-type attacks can be prevented only if the masterminds are identified and put on trial and their sponsors in the Pakistani military-intelligence establishment are, with the help of Europeans, indicted in The Hague for war crimes. Yet, despite a broken Pakistan policy, the US seems reluctant to fix its approach. The reason for that is not hard to seek: US policy remains wedded to the Pakistani institution that reared the forces of jihad — the military.
Indeed, US policy is still governed by a consideration that dates back to the 1950s — treating the Pakistani military as central to the pursuit of American geopolitical objectives. As American scholars Lloyd and Susanne Rudolph have put it, “For roughly 50 years, the US destabilised the South Asia region by acting as an offshore balancer. Its actions allowed Pakistan to realise its goal of ‘parity’ with its much-bigger neighbour and to try to best that neighbour in several wars”. The more recent “de-hyphenation” of India and Pakistan was not a calculated US policy shift but the product of Pakistan’s descent into shambles and India’s notable rise after 1998. Under George Bush, US policy simply went from hyphenation to parallelism. That has involved building strategic partnerships with and selling arms to both. For the first time ever, the US is building parallel intelligence-sharing and defence-cooperation arrangements with both.
The war in Afghanistan and the containment strategy against Iran have only reinforced the US dependence on the Pakistani military, despite mountains of intelligence indicating the latter is playing both sides — bolstering the Taliban and other terror groups while pretending to be a counterterror ally. Instead of helping empower Pakistan’s civilian government to gain full control over the national security system, including the nuclear establishment and the ISI, US policy acts as a stumbling block by continuing to prop up the Pakistani military through generous aid and weapon transfers, including bombers and submarines of relevance only against India. For its own sake, Washington has to stop pampering and building up the military as Pakistan’s pivot.
By fattening the Pakistani military, America has, however inadvertently, allowed that institution to maintain cosy ties with terror groups. A break from this policy approach would be for the Barack Obama administration to embrace the idea currently being discussed in Washington — condition further aid to the reconfiguration of the Pakistani military to effectively fight terror and to concrete actions to end institutional support to extremism. If not, the US is bound to lose two wars — the one in Afghanistan and the other on transnational terror — while staying mired in Iraq.
US should stop propping up the Pakistani military
US aid to Islamabad is now close to $2 billion a year, putting Pakistan on par with Israel and Egypt as the top recipients of American assistance. And on the eve of the Mumbai terrorist assaults, the US persuaded the IMF to hand a near-bankrupt Pakistan an economic lifeline in the form of a $7.6 billion aid package, with no strings attached. Despite such largesse, Pakistan is host to the world’s most wanted men and the main al-Qaeda sanctuary. Recent polling shows that Osama bin Laden is more popular in Pakistan than ever, even as America’s negative rating there has soared.
Let’s be clear: US policy on Pakistan isn’t working, and unless Washington fundamentally reverses course, it risks losing the war in Afghanistan and making the West an increasing jihadi target, including the scene of Mumbaistyle murderous rampages. After all, as the history of terrorism since the 1980s attests, innovative terrorist strikes carried out against Indian targets have later been replicated in the West. That includes attacks on symbols of state authority, the mid-air bombing of a commercial jetliner and coordinated strikes on a city transportation system.
The jihadis’ logic in employing softstate India as their laboratory has been that if they can bleed the world’s largest democracy through novel and recurrent attacks, they perfect techniques for application against the tougher free societies in the West. If the terrorists can bring the developing world’s most successful democratic experiment under siege, with the intent to unravel its secular and pluralistic character, it is only a matter of time before western societies get similarly besieged. That the tourism ad’s “incredible India” is, in reality, little more than a miserable India — which presents itself as an easy target by merely craving international sympathy as a constant victim — does not detract from the danger that the Mumbai attack masterminds have set up a model for use elsewhere.
Yet the US response, however positive in the diplomatic realm, has failed to recognise that the Mumbai attacks mark a potent new threat to free societies and that unless the masterminds are brought to justice, such cold-blooded rampages are likely to be carried out in the West. The alacrity with which the American media returned to the India-Pakistan hyphenation in covering the Mumbai assaults betrayed superficiality and old mindsets — a failing compounded by media organisations calling the attackers not terrorists but “militants” (like the ‘New York Times’) or “gunmen” (including the ‘Washington Post’). Diplomatically, it has been deja vu — the US exerting pressure and Islamabad staging yet another anti-terrorist charade to deflect that pressure and pre-empt Indian retaliation.
Given the easy manner outlawed terrorist outfits in Pakistan resurface under new names, the US knows well that a ban on any group or temporary detention of a terrorist figure is of little enduring value. More Mumbai-type attacks can be prevented only if the masterminds are identified and put on trial and their sponsors in the Pakistani military-intelligence establishment are, with the help of Europeans, indicted in The Hague for war crimes. Yet, despite a broken Pakistan policy, the US seems reluctant to fix its approach. The reason for that is not hard to seek: US policy remains wedded to the Pakistani institution that reared the forces of jihad — the military.
Indeed, US policy is still governed by a consideration that dates back to the 1950s — treating the Pakistani military as central to the pursuit of American geopolitical objectives. As American scholars Lloyd and Susanne Rudolph have put it, “For roughly 50 years, the US destabilised the South Asia region by acting as an offshore balancer. Its actions allowed Pakistan to realise its goal of ‘parity’ with its much-bigger neighbour and to try to best that neighbour in several wars”. The more recent “de-hyphenation” of India and Pakistan was not a calculated US policy shift but the product of Pakistan’s descent into shambles and India’s notable rise after 1998. Under George Bush, US policy simply went from hyphenation to parallelism. That has involved building strategic partnerships with and selling arms to both. For the first time ever, the US is building parallel intelligence-sharing and defence-cooperation arrangements with both.
The war in Afghanistan and the containment strategy against Iran have only reinforced the US dependence on the Pakistani military, despite mountains of intelligence indicating the latter is playing both sides — bolstering the Taliban and other terror groups while pretending to be a counterterror ally. Instead of helping empower Pakistan’s civilian government to gain full control over the national security system, including the nuclear establishment and the ISI, US policy acts as a stumbling block by continuing to prop up the Pakistani military through generous aid and weapon transfers, including bombers and submarines of relevance only against India. For its own sake, Washington has to stop pampering and building up the military as Pakistan’s pivot.
By fattening the Pakistani military, America has, however inadvertently, allowed that institution to maintain cosy ties with terror groups. A break from this policy approach would be for the Barack Obama administration to embrace the idea currently being discussed in Washington — condition further aid to the reconfiguration of the Pakistani military to effectively fight terror and to concrete actions to end institutional support to extremism. If not, the US is bound to lose two wars — the one in Afghanistan and the other on transnational terror — while staying mired in Iraq.
It Ain’t Working
By M H Ahssan
US should stop propping up the Pakistani military
US aid to Islamabad is now close to $2 billion a year, putting Pakistan on par with Israel and Egypt as the top recipients of American assistance. And on the eve of the Mumbai terrorist assaults, the US persuaded the IMF to hand a near-bankrupt Pakistan an economic lifeline in the form of a $7.6 billion aid package, with no strings attached. Despite such largesse, Pakistan is host to the world’s most wanted men and the main al-Qaeda sanctuary. Recent polling shows that Osama bin Laden is more popular in Pakistan than ever, even as America’s negative rating there has soared.
Let’s be clear: US policy on Pakistan isn’t working, and unless Washington fundamentally reverses course, it risks losing the war in Afghanistan and making the West an increasing jihadi target, including the scene of Mumbaistyle murderous rampages. After all, as the history of terrorism since the 1980s attests, innovative terrorist strikes carried out against Indian targets have later been replicated in the West. That includes attacks on symbols of state authority, the mid-air bombing of a commercial jetliner and coordinated strikes on a city transportation system.
The jihadis’ logic in employing softstate India as their laboratory has been that if they can bleed the world’s largest democracy through novel and recurrent attacks, they perfect techniques for application against the tougher free societies in the West. If the terrorists can bring the developing world’s most successful democratic experiment under siege, with the intent to unravel its secular and pluralistic character, it is only a matter of time before western societies get similarly besieged. That the tourism ad’s “incredible India” is, in reality, little more than a miserable India — which presents itself as an easy target by merely craving international sympathy as a constant victim — does not detract from the danger that the Mumbai attack masterminds have set up a model for use elsewhere.
Yet the US response, however positive in the diplomatic realm, has failed to recognise that the Mumbai attacks mark a potent new threat to free societies and that unless the masterminds are brought to justice, such cold-blooded rampages are likely to be carried out in the West. The alacrity with which the American media returned to the India-Pakistan hyphenation in covering the Mumbai assaults betrayed superficiality and old mindsets — a failing compounded by media organisations calling the attackers not terrorists but “militants” (like the ‘New York Times’) or “gunmen” (including the ‘Washington Post’). Diplomatically, it has been deja vu — the US exerting pressure and Islamabad staging yet another anti-terrorist charade to deflect that pressure and pre-empt Indian retaliation.
Given the easy manner outlawed terrorist outfits in Pakistan resurface under new names, the US knows well that a ban on any group or temporary detention of a terrorist figure is of little enduring value. More Mumbai-type attacks can be prevented only if the masterminds are identified and put on trial and their sponsors in the Pakistani military-intelligence establishment are, with the help of Europeans, indicted in The Hague for war crimes. Yet, despite a broken Pakistan policy, the US seems reluctant to fix its approach. The reason for that is not hard to seek: US policy remains wedded to the Pakistani institution that reared the forces of jihad — the military.
Indeed, US policy is still governed by a consideration that dates back to the 1950s — treating the Pakistani military as central to the pursuit of American geopolitical objectives. As American scholars Lloyd and Susanne Rudolph have put it, “For roughly 50 years, the US destabilised the South Asia region by acting as an offshore balancer. Its actions allowed Pakistan to realise its goal of ‘parity’ with its much-bigger neighbour and to try to best that neighbour in several wars”. The more recent “de-hyphenation” of India and Pakistan was not a calculated US policy shift but the product of Pakistan’s descent into shambles and India’s notable rise after 1998. Under George Bush, US policy simply went from hyphenation to parallelism. That has involved building strategic partnerships with and selling arms to both. For the first time ever, the US is building parallel intelligence-sharing and defence-cooperation arrangements with both.
The war in Afghanistan and the containment strategy against Iran have only reinforced the US dependence on the Pakistani military, despite mountains of intelligence indicating the latter is playing both sides — bolstering the Taliban and other terror groups while pretending to be a counterterror ally. Instead of helping empower Pakistan’s civilian government to gain full control over the national security system, including the nuclear establishment and the ISI, US policy acts as a stumbling block by continuing to prop up the Pakistani military through generous aid and weapon transfers, including bombers and submarines of relevance only against India. For its own sake, Washington has to stop pampering and building up the military as Pakistan’s pivot.
By fattening the Pakistani military, America has, however inadvertently, allowed that institution to maintain cosy ties with terror groups. A break from this policy approach would be for the Barack Obama administration to embrace the idea currently being discussed in Washington — condition further aid to the reconfiguration of the Pakistani military to effectively fight terror and to concrete actions to end institutional support to extremism. If not, the US is bound to lose two wars — the one in Afghanistan and the other on transnational terror — while staying mired in Iraq.
US should stop propping up the Pakistani military
US aid to Islamabad is now close to $2 billion a year, putting Pakistan on par with Israel and Egypt as the top recipients of American assistance. And on the eve of the Mumbai terrorist assaults, the US persuaded the IMF to hand a near-bankrupt Pakistan an economic lifeline in the form of a $7.6 billion aid package, with no strings attached. Despite such largesse, Pakistan is host to the world’s most wanted men and the main al-Qaeda sanctuary. Recent polling shows that Osama bin Laden is more popular in Pakistan than ever, even as America’s negative rating there has soared.
Let’s be clear: US policy on Pakistan isn’t working, and unless Washington fundamentally reverses course, it risks losing the war in Afghanistan and making the West an increasing jihadi target, including the scene of Mumbaistyle murderous rampages. After all, as the history of terrorism since the 1980s attests, innovative terrorist strikes carried out against Indian targets have later been replicated in the West. That includes attacks on symbols of state authority, the mid-air bombing of a commercial jetliner and coordinated strikes on a city transportation system.
The jihadis’ logic in employing softstate India as their laboratory has been that if they can bleed the world’s largest democracy through novel and recurrent attacks, they perfect techniques for application against the tougher free societies in the West. If the terrorists can bring the developing world’s most successful democratic experiment under siege, with the intent to unravel its secular and pluralistic character, it is only a matter of time before western societies get similarly besieged. That the tourism ad’s “incredible India” is, in reality, little more than a miserable India — which presents itself as an easy target by merely craving international sympathy as a constant victim — does not detract from the danger that the Mumbai attack masterminds have set up a model for use elsewhere.
Yet the US response, however positive in the diplomatic realm, has failed to recognise that the Mumbai attacks mark a potent new threat to free societies and that unless the masterminds are brought to justice, such cold-blooded rampages are likely to be carried out in the West. The alacrity with which the American media returned to the India-Pakistan hyphenation in covering the Mumbai assaults betrayed superficiality and old mindsets — a failing compounded by media organisations calling the attackers not terrorists but “militants” (like the ‘New York Times’) or “gunmen” (including the ‘Washington Post’). Diplomatically, it has been deja vu — the US exerting pressure and Islamabad staging yet another anti-terrorist charade to deflect that pressure and pre-empt Indian retaliation.
Given the easy manner outlawed terrorist outfits in Pakistan resurface under new names, the US knows well that a ban on any group or temporary detention of a terrorist figure is of little enduring value. More Mumbai-type attacks can be prevented only if the masterminds are identified and put on trial and their sponsors in the Pakistani military-intelligence establishment are, with the help of Europeans, indicted in The Hague for war crimes. Yet, despite a broken Pakistan policy, the US seems reluctant to fix its approach. The reason for that is not hard to seek: US policy remains wedded to the Pakistani institution that reared the forces of jihad — the military.
Indeed, US policy is still governed by a consideration that dates back to the 1950s — treating the Pakistani military as central to the pursuit of American geopolitical objectives. As American scholars Lloyd and Susanne Rudolph have put it, “For roughly 50 years, the US destabilised the South Asia region by acting as an offshore balancer. Its actions allowed Pakistan to realise its goal of ‘parity’ with its much-bigger neighbour and to try to best that neighbour in several wars”. The more recent “de-hyphenation” of India and Pakistan was not a calculated US policy shift but the product of Pakistan’s descent into shambles and India’s notable rise after 1998. Under George Bush, US policy simply went from hyphenation to parallelism. That has involved building strategic partnerships with and selling arms to both. For the first time ever, the US is building parallel intelligence-sharing and defence-cooperation arrangements with both.
The war in Afghanistan and the containment strategy against Iran have only reinforced the US dependence on the Pakistani military, despite mountains of intelligence indicating the latter is playing both sides — bolstering the Taliban and other terror groups while pretending to be a counterterror ally. Instead of helping empower Pakistan’s civilian government to gain full control over the national security system, including the nuclear establishment and the ISI, US policy acts as a stumbling block by continuing to prop up the Pakistani military through generous aid and weapon transfers, including bombers and submarines of relevance only against India. For its own sake, Washington has to stop pampering and building up the military as Pakistan’s pivot.
By fattening the Pakistani military, America has, however inadvertently, allowed that institution to maintain cosy ties with terror groups. A break from this policy approach would be for the Barack Obama administration to embrace the idea currently being discussed in Washington — condition further aid to the reconfiguration of the Pakistani military to effectively fight terror and to concrete actions to end institutional support to extremism. If not, the US is bound to lose two wars — the one in Afghanistan and the other on transnational terror — while staying mired in Iraq.
ABORTED SATYAM DEAL WAS TO PUT MAYTAS ON TRACK?
By M H Ahssan & Ayaan Khan
Satyam’s deal to take over Maytas may have been stymied, but has left analysts, stock holders and laymen aghast. Why was Satyam insistent on sharing its goodies with Maytas ? Moreover how were the promoters with merely 8 per cent of Satyam’s equity able to drive the “independent” board of directors? Or is the board not really “independent”? HNN examines.
Even as Satyam's deal to buy Maytas had to be hastily annulled in the wee hours of Wednesday morning as the company lost 52 per cent on its ADR listed on the New York Stock Exchange (NYSE), a credibility crisis has begun to grip India's fourth largest IT company. "How can we trust the management of this company and its board of directors after it tried to enter into a deal that prime facie would benefit only the promoters who just own 8 per cent of Satyam? We have to examine whether the management needs to be changed," cried analysts in a reflection of the deep anguish caused by the now stymied move.
"We have decided not to move ahead with the acquisition in deference to the investment community's views," said Satyam in an SMS sent out at 3.45 am to the media on Wednesday, clearly shaken by the reaction on the US bourse of its move announced barely 10 hours ago.
But this was clearly not enough to save the company: Satyam's stock tanked on the Indian bourses by 30 per cent, even after the company announced its decision to go back on the deal. "The deal was seen as Satyam buying into companies owned by its family members. Cash from a company where the Rajus own 8 per cent was being transferred to a company where they hold more than 35 per cent. This is what investors are resenting. It has become a corporate governance question. Whether the company can be trusted in future to take a proper decision is the moot point," pointed out another analyst. Satyam's scrip closed at Rs 158.05 which is a 52 week low.
"Nearly 58 per cent of Satyam is owned by FIIs and they had no inkling that such a deal was in the offing. There were questions about the future of Satyam after acquiring these companies when it doesn't have any experience in these businesses. It makes more sense to deploy your funds in related businesses or pay your investors," said Sourav Mahajan, analyst with Karvy.
Moreover, what irked investors was as to how Satyam decided to pay Rs 6,500 crore ($1.3 billion), just for Maytas Properties' assets, a land bank of 6,800 acres valued at almost Rs 1 crore per acre. "It is not easy to value real estate in this falling market. So there are questions on the valuation of the acquisition," said Monotosh Sinha, executive director of Centrum Capital.
Later in the day as the company started a firefighting exercise, Satyam's chief financial officer (CFO), Srinivasa Vadlamani told HNN: "We never anticipated this reaction. We underestimated it. We thought we could manage it." He also indicated that the deal had been on the table for the last few months claiming that for starters many other companies were looked at for being acquired. But the choice fell on Maytas Properties because it was zero debt unlike other companies that were in the consideration zone.
"As for Maytas, it had cash on its books. So, it was a judgment call and sometimes some judgments do not turn out to be good," Ram Mynampati, president of Satyam and a board member tried to reason.
Satyam’s move to acquire Maytas has now been stymied thanks to shareholder activism but has put the spotlight on the board of directors of the $2 billion plus company. The board had approved the deal “unanimously” against which the shareholders virtually revolted and Ramalinga Raju had touted this clearance as the basis for going ahead with the acquisition plan.
According to HNN investigations, 7 of the 9 members of Satyam’s board were physically present at the meeting, while two others were on conference call. All the independent directors said yes to the deal and only two family directors abstained because they were “ interested parties.” It is understood that the company’s board had been deliberating on this issue for the last three months. Interestingly members of the company’s audit committee were also present at the latest board meeting.
India’s fourth largest IT company’s board is star studded. Besides Ramalinga Raju, his brother and co founder Rama Raju, the board has the father of Pentium Vinod Dham, former union cabinet secretary T R Prasad, Dean of Indian School of Business (ISB) Rammohan Rao and former director of IIT Delhi U S Raju among others as members. Krishna Palepu who teaches at Harvard Business School and retired professor in many US universities Mangalam Srinivasan along with full time excutive Ram Mynampati also sit on the board.
“Forget experts, even laymen like me realise that there was something not correct with the deal. How is it that the directors did not question the deal? Do they sit on the board just to adorn the company ? “ asked an angry and dismayed corporate executive K Suresh.
“Independent directors cannot wash their hands off. It is their the duty to protect the interest of shareholders and not just that of the promoters. In this case the promoters hold less than 8 per cent of Satyam, so they should have scrutinised the proposed deal to see whether it was in the interest of other shareholders,” said Amitabha Guha, just retired deputy managing director of the State Bank of India.
“Well the case of Satyam demonstrates what corporate governance is all about in India. Company promoters want yes men and this so called independent directors agree to look the other way doing everything at the bidding of the promoters. I fail to understand how Ramalinga Raju with just 8 per cent shares was able to drive the independent board,” asked Monotosh Sinha executive director of Centrum Capital Ltd.
“It is strange that the independent board cleared such a deal. It is more strange that the deal was annulled in the wee -hours of the morning. Did the board meet again. Will Satyam tell us ?” asked Nandu Gupta, managing director of Insec Shre and Stockbroking Company.
Secretary general of Federation of Indian Chambers of Commerce and Industry (FICCI) Amit Mitra refusing to be drawn into a discussion of Satyam’s board, however says independent directors are inducted into company for their specific expertise and not for scrutinising deals. “ Different directors bring in different viewpoints and expertise. For example experts in marketing advise companies on marketing strategies, those are technology specialists bring in their technology expertise. so they can’t be blamed for everything,” Mitra said. But whatever Mitra may say the independent directors of Satyam have egg on their face. No denying that.
Recent dramatic development of Satyam calling off its $ 1.6 billion bailout bid of Maytas has put a doubt in the heads of major industry leaders keenly observing the NYSE-listed firms’ moves. They wonder if this was done to show stronger collaterals to financial institutions to raise funding for the metro rail project, given the dipping real estate valuations that Maytas Infra could have been banking on to raise money from the market to fund the project.
Senior industry persons point out that Satyam with its credentials of a major IT firm can still hope to raise more money as against an infrastructure firm in these times. Given that metro rail’s viability depends largely on real estate returns, banks could be shying away from lending for the project. “As against a land bank (the firm owns land along the three corridors of the project), a Satyam balance sheet is a stronger collateral, much more secure and more valid,’’ says a senior industry source, adding that once acquisition was in place, Maytas Infra would have been able to raise funding from financial institutions, banking heavily on the Satyam name.
“Given the subprime crisis the US faced, no bank would come forward to financially back the project. Satyam is a software company which is considered one of the finest in the country and I do wonder whether Ramalinga Raju was trying to work out something for the infra business with this deal,’’ ponders a senior official of an infrastructure major. He adds that Maytas would have become an ‘indirect’ Satyam company and posed as one during its interactions in the market for funds.
Industry observers say that the move to acquire Maytas does signal that Maytas Infra was not able to do its financial closure.
“There is a theory floating that the acquisition was perhaps aimed at funding the metro project through this route. But then, the bailout of $ 0.3 billion (for Maytas Infra) is only a fraction of the project’s cost of Rs 12,000 crore and, on the face of it, this logic doesn’t really stand,’’ says the head of a real estate firm. He, however, adds that it is only on a closer look one can realise how exactly Maytas infra would benefit from the Satyam name.
“Even without the acquisition, Maytas Infra may not have much of a standing in the market but for the common knowledge that the ‘parent’ firm is Satyam,’’ says a financial expert. Industry heads point out that metro project could well have been the reason to push the IT major into taking this messy decision.
Metro rail, the three corridor and 71 km project, is estimated to cost Rs 12,000 crore and industry experts speculate that the Maytas Infra led consortium would have to raise at least Rs 10,000 crore as debt from the market including loans from banks and financial institutions. Intriguingly, the government is not spending on the project with Maytas Infra not claiming a single penny under the ‘viability gap funding’. In fact, the consortium, which in a move not seen elsewhere in the country, will be paying the government for building the project. In return, it has got 296 acres of prime land from the government for commercial exploitation.
It made its first payment of Rs 11 crore in September this year at the time of signing the project agreement. It is now scheduled to pay Rs 50 crore in March 2009. In its fourth year, it is supposed to pay Rs 200 crore followed by Rs 100 crore in the 7th, 8th and 9th year of the project. From the project’s 17th to the 35th year, Rs 1,750 crore would be paid to the government per annum.
Satyam’s deal to take over Maytas may have been stymied, but has left analysts, stock holders and laymen aghast. Why was Satyam insistent on sharing its goodies with Maytas ? Moreover how were the promoters with merely 8 per cent of Satyam’s equity able to drive the “independent” board of directors? Or is the board not really “independent”? HNN examines.
Even as Satyam's deal to buy Maytas had to be hastily annulled in the wee hours of Wednesday morning as the company lost 52 per cent on its ADR listed on the New York Stock Exchange (NYSE), a credibility crisis has begun to grip India's fourth largest IT company. "How can we trust the management of this company and its board of directors after it tried to enter into a deal that prime facie would benefit only the promoters who just own 8 per cent of Satyam? We have to examine whether the management needs to be changed," cried analysts in a reflection of the deep anguish caused by the now stymied move.
"We have decided not to move ahead with the acquisition in deference to the investment community's views," said Satyam in an SMS sent out at 3.45 am to the media on Wednesday, clearly shaken by the reaction on the US bourse of its move announced barely 10 hours ago.
But this was clearly not enough to save the company: Satyam's stock tanked on the Indian bourses by 30 per cent, even after the company announced its decision to go back on the deal. "The deal was seen as Satyam buying into companies owned by its family members. Cash from a company where the Rajus own 8 per cent was being transferred to a company where they hold more than 35 per cent. This is what investors are resenting. It has become a corporate governance question. Whether the company can be trusted in future to take a proper decision is the moot point," pointed out another analyst. Satyam's scrip closed at Rs 158.05 which is a 52 week low.
"Nearly 58 per cent of Satyam is owned by FIIs and they had no inkling that such a deal was in the offing. There were questions about the future of Satyam after acquiring these companies when it doesn't have any experience in these businesses. It makes more sense to deploy your funds in related businesses or pay your investors," said Sourav Mahajan, analyst with Karvy.
Moreover, what irked investors was as to how Satyam decided to pay Rs 6,500 crore ($1.3 billion), just for Maytas Properties' assets, a land bank of 6,800 acres valued at almost Rs 1 crore per acre. "It is not easy to value real estate in this falling market. So there are questions on the valuation of the acquisition," said Monotosh Sinha, executive director of Centrum Capital.
Later in the day as the company started a firefighting exercise, Satyam's chief financial officer (CFO), Srinivasa Vadlamani told HNN: "We never anticipated this reaction. We underestimated it. We thought we could manage it." He also indicated that the deal had been on the table for the last few months claiming that for starters many other companies were looked at for being acquired. But the choice fell on Maytas Properties because it was zero debt unlike other companies that were in the consideration zone.
"As for Maytas, it had cash on its books. So, it was a judgment call and sometimes some judgments do not turn out to be good," Ram Mynampati, president of Satyam and a board member tried to reason.
Satyam’s move to acquire Maytas has now been stymied thanks to shareholder activism but has put the spotlight on the board of directors of the $2 billion plus company. The board had approved the deal “unanimously” against which the shareholders virtually revolted and Ramalinga Raju had touted this clearance as the basis for going ahead with the acquisition plan.
According to HNN investigations, 7 of the 9 members of Satyam’s board were physically present at the meeting, while two others were on conference call. All the independent directors said yes to the deal and only two family directors abstained because they were “ interested parties.” It is understood that the company’s board had been deliberating on this issue for the last three months. Interestingly members of the company’s audit committee were also present at the latest board meeting.
India’s fourth largest IT company’s board is star studded. Besides Ramalinga Raju, his brother and co founder Rama Raju, the board has the father of Pentium Vinod Dham, former union cabinet secretary T R Prasad, Dean of Indian School of Business (ISB) Rammohan Rao and former director of IIT Delhi U S Raju among others as members. Krishna Palepu who teaches at Harvard Business School and retired professor in many US universities Mangalam Srinivasan along with full time excutive Ram Mynampati also sit on the board.
“Forget experts, even laymen like me realise that there was something not correct with the deal. How is it that the directors did not question the deal? Do they sit on the board just to adorn the company ? “ asked an angry and dismayed corporate executive K Suresh.
“Independent directors cannot wash their hands off. It is their the duty to protect the interest of shareholders and not just that of the promoters. In this case the promoters hold less than 8 per cent of Satyam, so they should have scrutinised the proposed deal to see whether it was in the interest of other shareholders,” said Amitabha Guha, just retired deputy managing director of the State Bank of India.
“Well the case of Satyam demonstrates what corporate governance is all about in India. Company promoters want yes men and this so called independent directors agree to look the other way doing everything at the bidding of the promoters. I fail to understand how Ramalinga Raju with just 8 per cent shares was able to drive the independent board,” asked Monotosh Sinha executive director of Centrum Capital Ltd.
“It is strange that the independent board cleared such a deal. It is more strange that the deal was annulled in the wee -hours of the morning. Did the board meet again. Will Satyam tell us ?” asked Nandu Gupta, managing director of Insec Shre and Stockbroking Company.
Secretary general of Federation of Indian Chambers of Commerce and Industry (FICCI) Amit Mitra refusing to be drawn into a discussion of Satyam’s board, however says independent directors are inducted into company for their specific expertise and not for scrutinising deals. “ Different directors bring in different viewpoints and expertise. For example experts in marketing advise companies on marketing strategies, those are technology specialists bring in their technology expertise. so they can’t be blamed for everything,” Mitra said. But whatever Mitra may say the independent directors of Satyam have egg on their face. No denying that.
Recent dramatic development of Satyam calling off its $ 1.6 billion bailout bid of Maytas has put a doubt in the heads of major industry leaders keenly observing the NYSE-listed firms’ moves. They wonder if this was done to show stronger collaterals to financial institutions to raise funding for the metro rail project, given the dipping real estate valuations that Maytas Infra could have been banking on to raise money from the market to fund the project.
Senior industry persons point out that Satyam with its credentials of a major IT firm can still hope to raise more money as against an infrastructure firm in these times. Given that metro rail’s viability depends largely on real estate returns, banks could be shying away from lending for the project. “As against a land bank (the firm owns land along the three corridors of the project), a Satyam balance sheet is a stronger collateral, much more secure and more valid,’’ says a senior industry source, adding that once acquisition was in place, Maytas Infra would have been able to raise funding from financial institutions, banking heavily on the Satyam name.
“Given the subprime crisis the US faced, no bank would come forward to financially back the project. Satyam is a software company which is considered one of the finest in the country and I do wonder whether Ramalinga Raju was trying to work out something for the infra business with this deal,’’ ponders a senior official of an infrastructure major. He adds that Maytas would have become an ‘indirect’ Satyam company and posed as one during its interactions in the market for funds.
Industry observers say that the move to acquire Maytas does signal that Maytas Infra was not able to do its financial closure.
“There is a theory floating that the acquisition was perhaps aimed at funding the metro project through this route. But then, the bailout of $ 0.3 billion (for Maytas Infra) is only a fraction of the project’s cost of Rs 12,000 crore and, on the face of it, this logic doesn’t really stand,’’ says the head of a real estate firm. He, however, adds that it is only on a closer look one can realise how exactly Maytas infra would benefit from the Satyam name.
“Even without the acquisition, Maytas Infra may not have much of a standing in the market but for the common knowledge that the ‘parent’ firm is Satyam,’’ says a financial expert. Industry heads point out that metro project could well have been the reason to push the IT major into taking this messy decision.
Metro rail, the three corridor and 71 km project, is estimated to cost Rs 12,000 crore and industry experts speculate that the Maytas Infra led consortium would have to raise at least Rs 10,000 crore as debt from the market including loans from banks and financial institutions. Intriguingly, the government is not spending on the project with Maytas Infra not claiming a single penny under the ‘viability gap funding’. In fact, the consortium, which in a move not seen elsewhere in the country, will be paying the government for building the project. In return, it has got 296 acres of prime land from the government for commercial exploitation.
It made its first payment of Rs 11 crore in September this year at the time of signing the project agreement. It is now scheduled to pay Rs 50 crore in March 2009. In its fourth year, it is supposed to pay Rs 200 crore followed by Rs 100 crore in the 7th, 8th and 9th year of the project. From the project’s 17th to the 35th year, Rs 1,750 crore would be paid to the government per annum.
Indian Netway ‘Jammed’
By M H Ahssan
If there's one speedway where traffic's zipping, it's on the Indian information highway. For one, India has seen a 23% growth in new internet connections for the quarter ended October. But, what is more heartening is the fact that increasingly more consumers are now using high speed connections to plug into the global network, instead of the painfully slow, and somewhat anachronistic, dial-up system.
This last bit of news will surely gladden the hearts of content suppliers, gaming companies and, of course, those who are jostling for a piece of the lucrative ecommerce cake.
Internet connectivity has been growing apace in India for some time now. In the quarter ended October, the trend continued with research agencies observing 2.6 million new IP addresses connecting to the global network, compared to 2.1 million in the quarter ended June. This is a growth of 23%. IP address, or internet protocol address, is the unique number given to each computer when it plugs into the global internet family.
According to some estimates, India has more than 41 million internet users, making it the eighth largest internet population in the world. What's encouraging is that this number is growing every quarter. With only 4% of the country's population plugged into the net family, the headroom for growth is also enormous. But the one indicator that's blowing every one's minds is the gradual migration to high speed connectivity from the earlier dial-up situation. Currently, 74% of all internet connections in India have speeds of over 256 kbps. In fact, the number of connections with speeds of 2mbps and above is also growing fast-- from 4.6% of all connections in the second quarter to 5% in the third quarter.
China, incidentally, has only 4.3% of all connections with speeds above 2mbps. This, when combined with the growing internet penetration, is a significant indicator since it shows how high speed networks have become affordable over the
India ranks a lowly 153 in IP addresses
The growing number of consumers using highspeed internet connection also shows how eager the Indian internet audience is to engage in e-commerce and all the other amenities that high-speed connections offer.
The high-speed connections have also been made possible by the increasingly complex, and growing, grid of submarine, fibre-optic networks that now connect India with the rest of the world. For example, a consortium of 16 telecom companies is planning to build a 15,000-km submarine cable system that will link India with Europe through the Middle East. The project is expected to cost upwards of $700 million and add 3.84 tbps of capacity. Interestingly, stateowned Bharat Sanchar Nigam Ltd has plans to offer high speed internet access to 25,000 villages by the end of March 2009.
According to Sanjay Singh, managing director at Akamai Technologies, which provides a quarterly state-of-the-internet report: “In Q3, we saw a 23% growth in terms of new IPs from India. This increase may be attributed to more people turning to the world wide web for news and video content related to the Beijing Olympic Games, which took place in August. We also noted a gradual improvement in terms of IP per capita which increased to 2.3 unique IPs per 1,000 people, and believe India is poised for significant growth in internet adoption.’’
However, India ranks a low 153 in terms of number of IP addresses per capita, with 2.3 unique IPs per thousand people. In comparison, China had 30 unique IPs per thousand people and United States had 360 unique IPs per thousand people, while being ranked at No 94 and No 6 respectively
Verisign—which manages .com, .net and .tv domain names—has also come out with a domain name report that mentions a 26% increase in domain registrations in Q1 2008 over the same quarter of 2007. Domain registrations have grown by 46% in Q1 of 2008. “At the end of Q1 2008, there were 1.2 million domain name registrations in India,’’ said Verisign’s Shantha K. “This represents a 46% growth over the previous year and a 12% growth over the previous quarter. Of these registrations, approximately 6.85 lakh are .com and .net domain name registrations and 4.10 are .in domain name registrations,’’ he added.
If there's one speedway where traffic's zipping, it's on the Indian information highway. For one, India has seen a 23% growth in new internet connections for the quarter ended October. But, what is more heartening is the fact that increasingly more consumers are now using high speed connections to plug into the global network, instead of the painfully slow, and somewhat anachronistic, dial-up system.
This last bit of news will surely gladden the hearts of content suppliers, gaming companies and, of course, those who are jostling for a piece of the lucrative ecommerce cake.
Internet connectivity has been growing apace in India for some time now. In the quarter ended October, the trend continued with research agencies observing 2.6 million new IP addresses connecting to the global network, compared to 2.1 million in the quarter ended June. This is a growth of 23%. IP address, or internet protocol address, is the unique number given to each computer when it plugs into the global internet family.
According to some estimates, India has more than 41 million internet users, making it the eighth largest internet population in the world. What's encouraging is that this number is growing every quarter. With only 4% of the country's population plugged into the net family, the headroom for growth is also enormous. But the one indicator that's blowing every one's minds is the gradual migration to high speed connectivity from the earlier dial-up situation. Currently, 74% of all internet connections in India have speeds of over 256 kbps. In fact, the number of connections with speeds of 2mbps and above is also growing fast-- from 4.6% of all connections in the second quarter to 5% in the third quarter.
China, incidentally, has only 4.3% of all connections with speeds above 2mbps. This, when combined with the growing internet penetration, is a significant indicator since it shows how high speed networks have become affordable over the
India ranks a lowly 153 in IP addresses
The growing number of consumers using highspeed internet connection also shows how eager the Indian internet audience is to engage in e-commerce and all the other amenities that high-speed connections offer.
The high-speed connections have also been made possible by the increasingly complex, and growing, grid of submarine, fibre-optic networks that now connect India with the rest of the world. For example, a consortium of 16 telecom companies is planning to build a 15,000-km submarine cable system that will link India with Europe through the Middle East. The project is expected to cost upwards of $700 million and add 3.84 tbps of capacity. Interestingly, stateowned Bharat Sanchar Nigam Ltd has plans to offer high speed internet access to 25,000 villages by the end of March 2009.
According to Sanjay Singh, managing director at Akamai Technologies, which provides a quarterly state-of-the-internet report: “In Q3, we saw a 23% growth in terms of new IPs from India. This increase may be attributed to more people turning to the world wide web for news and video content related to the Beijing Olympic Games, which took place in August. We also noted a gradual improvement in terms of IP per capita which increased to 2.3 unique IPs per 1,000 people, and believe India is poised for significant growth in internet adoption.’’
However, India ranks a low 153 in terms of number of IP addresses per capita, with 2.3 unique IPs per thousand people. In comparison, China had 30 unique IPs per thousand people and United States had 360 unique IPs per thousand people, while being ranked at No 94 and No 6 respectively
Verisign—which manages .com, .net and .tv domain names—has also come out with a domain name report that mentions a 26% increase in domain registrations in Q1 2008 over the same quarter of 2007. Domain registrations have grown by 46% in Q1 of 2008. “At the end of Q1 2008, there were 1.2 million domain name registrations in India,’’ said Verisign’s Shantha K. “This represents a 46% growth over the previous year and a 12% growth over the previous quarter. Of these registrations, approximately 6.85 lakh are .com and .net domain name registrations and 4.10 are .in domain name registrations,’’ he added.
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