Tuesday, November 29, 2011

India’s Business Most Foul | GroundReport

India’s Business Most Foul | GroundReport:

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All those who are taking keen interest in anti corruption campaign in India must watch out the two high profile cases relating to Maran brothers; Kalanithi Maran and Dayanidhi Maran, sons for late Murosoli Maran, leader of the DMK party and nephew of DMK patriarch M. Karunanidhi.


While Kalanithi Maran runs the Sun TV, one of the largest media outlets in south India, his younger brother Daynanidhi Maran is into politics. He stepped into politics following the death of his father and was Union minister in the successive UPA government.


Daynanidhi Maran who held the telecom portfolio had to resign for his involvement in 2 G spectrum scam in which his successor A. Raja, is now behind bars for a considerable period of time.


Raja, who had succeeded Maran as the Union minister, is said to have favored Swan Telecom and the latter’s promoters had in turn given Rs 200 crore to DMK-controlled Kalaignar TV.


The same case has led to the arrest of Ms Kanimozhi, daughter of DMK patriarch, M Karunandhi, as headed the Kalaignar TV. The case is sub judice and trial is going on in the court of law.


Coming back to Maran brothers who have amassed huge fortune in just twenty years, their crime and corruption cases are a potboiler. The first case pertains to acquiring investments in the family business using political clout as a telecom minister 2005-06.


Mr. Dayanidhi Maran during his tenure as a minister ‘deliberately delayed' to provide letter of intent to telecom operator Aircel. In turn, he favored the takeover of the Aircel Company by the Maxis Communication, a Malaysian firm by clearing seven license and spectrum deals with the Maxis Communication.


It’s alleged that as a part of the deal, the Maxis Communication through its sister concern, Astro Network, made an investments of 550 core into Sun TV, owned by the Maran family. A FIR is registered by the CBI in this case and the matter is sub-judice.


Now its tussle between a business house having political clout and law enforcement agencies. The arguments and the counter arguments are being made in the court of law and one has to keep a watch on this story how it will play itself out.


The second case is much more interesting, where political clout was used to dupe the government’s exchequer to the tune of crore of rupees. Lo and behold Mr. Dayanidhi Maran after becoming the telecom minister, created a ‘virtual’ telephone exchange at his residence installing 323 residential lines at his home.


These telephone lines were taken in the name of BSNL General Manager and were connected from the minister’s residence to the office of Sun TV, owned by his brother Mr. Kalanithi Maran.


The connection was made through a dedicated underground cable for facilitating SUN TV’s special needs such as video conferencing and transfer of huge volume of digital data to other ports outside the country.


In the normal course, such services may have come for a heavy price, that has to be paid by the consumer to the government owned service provider, but it was almost free for Sun TV, because the lines were operated from the residence of the telecom minister.


Again, an FIR is registered in this case and the matter is sub judice. One has to keep a watch which on this story as arguments and the counter arguments is being made in the court. The two cases are well laid out, and it remains to be seen will it result into conviction of the accused.


There is much to dig into the business deal of the high profile political business house of South India. One of the most noticeable development was the acquisition of the Spice Jet, public carrier by the SUN TV. This happened so after Mr. Dayanidhi Maran became the telecom minister of India.


The allegation is that the huge money that was made to promote the idea of the license permit raj, was ploughed into the purchase of the aviation company and diversifying the business of the media outlet.


It’s obvious that the ledger books will tell the story of clean business operation, but those watching the developments from the close quarters do not rule out a possible scam.


Then the SUN network off late has also entered into the business of production and distribution of Tamil films. The business was run with the help of political clout and it was made a case of survival of the mightiest and all those into this business before had to vacate the scene because of such dirty business practices.


After the change of the government in Tamil Nadu, things are now looking up for better. The new regime has taken cognizance of the high handedness of the SUN TV, and cases are slapped on operational head running this business.


This business model of the Sun TV extended to having monopoly over cable business in Chennai. In order to have the monopoly, the cable business of the SUN TV used its political clout to subdue all the competitors.


Previously, the Rahija group controlled a part of the cable business in Chennai, but it had to give up, because SUN TV used all foul means, literally fighting a turf war to control this business.


After having the monopoly the SUN TV cable operator charged very exorbitant amount of money for airing new TV channels, discouraging them from doing from doing business.


After the new government has come to power, the situation is now changing on the cable scene. A It state run cable operation system is brought in to break the monopolist situation, but its having a tough time because Sun TV refuses to be part of this cable network.


This story may remain incomplete without the mention of Kalagnar TV, that was launched in the wake o of tussle between Maran family and M. Karunanidhi family.


The tussle broke out on the issue of the prices of the shares of Sun TV to the Karunanidhi family. The Maran bothers offered a very low price for the shares to Karunanidhi family who had substantial stakes in the Sun TV.


This led to the antagonism and a complete breakup between the two families. This led to the formation of Kalagnar TV, which is owned by Karunanidhi.


Even this was not tolerated by the SUN TV. Mr. Sharat Kumar who owned Gemini TV, a Tlegue channel, in partnership with SUN TV, was hired to head the Kalagnar TV, was physically assaulted allegedly by the Sun TV goons.


A case is registered and is pending the courts and it’s another story that instead of Maran bothers, Mr. Sharat Kumar is behind the bars in the 2 G spectrum case.


The other side light into Maran’s tale is the DTH service operation in India. The TATA sky had already git the license to do DTH business, but the telecom minister, Mr. Dyanidhi Maran opposed becoming a TATA’s a player in the DTH business.


A war of words broke out between them and it was reported in the media. Since, TATA’s had bigger financial clout and all India operation to run, the ambition of the regional player had to eat a humble pie.


Even though the acrimony faded into oblivion, it did led to the formation of another business the SUN DTH.


There is much to dig into the business operations of Maran brothers as they have many other hidden businesses not known to the public but it would suffice to say that this is not an isolated business model in India.


There are many business conglomerates who have charted out similar course of action to become and become rich, richer and richest.


For the theoreticians of business practices in India, there are two business models operational in this country.


One is to acquire business interest by fair and foul means and then acquire political power to protect the business and make it grow. The other model is first gain political clout and then become a corporate entity and flourishes under the political umbrella.


The two models are simultaneously at work in India. This is reflected in the ever growing number of Crorepatis MPs in the Indian Parliament. A cursory look at their profiles suggests that either they have taken the political route or the business route to amass such huge wealth.


Geared by Marxian ideology, to travel the distance in phases to achieve the goal of a utilitarian state, the politician after crossing the stage of acquiring political power get into the domain of building huge economic wealth. Similarly, businessmen after accumulating substantial wealth, get into the domain of accruing political clout. In this way they can get away with all their gory deeds and keep their business operation afloat.


However, the rule of the game is quite different. The businessmen normally take the protection of the political bosses by funding them and flourish in their businesses.


The political bosses on the other hand keep away from business activity because they have easy flow of cash. This arrangement seems to be working fine but is now becoming a slightly outdated for business practices in this country.


With change in business practices, the changing character of the Indian democracy is quite glaring. This development stare us on our face as we see the other side of India that lives on less than a dollar a day.


The conclusion drawn out of this discussion is the gap between rich and poor is becoming unbridgeable in this country.


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Syed Ali Mujtaba is a journalist based in Chennai. He can be contacted at syedalimujtaba@yahoo.com