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Monday, January 12, 2009

Byrraju Ramalinga Raju, founder and chairman of Satyam Computer Services, and his brother, B. Rama Raju, the company’s managing director, were arrested late Friday by Andhra Pradesh police. The brothers were placed under judicial custody in a Hyderabad, India jail and will remain there until January 23. Facing charges of criminal breach of trust (Section 406 of IPC), criminal conspiracy (Section 120-B), cheating (Section 420), falsification of records and forgery (Section 468), and fraudulent cancellation of securities (Section 477-a), they face up to ten years imprisonment if convicted.

After 18 hours of interrogation by the Crime Investigation Department (CID) at the state police headquarters, the Raju brothers were sent to the Chanchalguda prison and slept Saturday night on the floor along with 26 other low-risk inmates.

S. Bharat Kumar, the Rajus’s lawyer, asked the magistrate to issue orders for health monitoring. “His blood pressure is fluctuating and he needs medical treatment,” said Bharat Kumar. Mr. Raju appeared before the court Saturday while a team of doctors visited him after he had complained of chest pain.

Raju has Hepatitis-C, and both brothers have high blood pressure, so health precautions are necessary while imprisoned. Prison rules mandate service of jail food thrice a day. The menu includes 650 gm of rice thrice a day with 250 gm of vegetable curry and 125 gm of ‘daal’ plus tea twice a day.

Satyam’s chief financial officer Vadlamani Srinivas, who was also arrested Saturday, had undergone preliminary investigation and appeared Sunday before a special court, according to A. Sivanarayana, Andhra Pradesh additional director general of police. Srinivas was remanded to judicial custody until January 23 by Mr. D. Ramakrishna, Sixth Chief Metropolitan Magistrate, and sent to the Chanchalguda jail with the Raju brothers after interrogation by CID’s Crime Branch (the CB-CID). During his Saturday night arrest and probe by CB-CID, Srinivas made revelations which are contained in his confession letter as submitted to Network 18. “According to me fixed deposits are unreal and fictitious which were managed and was an understanding between the audit section management,” Srinivas stated.

The Hyderabad court on Monday postponed the bail hearings of the Raju brothers and Srinivas to January 16. To be defended by a battalion of 25 lawyers, the three accused will remain in Chanchalguda Central Jail until further court order. The Raju brothers were shifted Sunday to a mid-size Old Hospital Barrack cell shared with a bootlegger.

In 2008, the company struggled to purchase two infrastructure companies founded by family members of company founder and CEO Dr. Raju – Maytas Infrastructure and Maytas Properties – for $1.6 billion, despite concerns raised by independent board directors. Dr. Raju tendered his resignation on January 7 after due notice of falsified accounts to board members and the SEBI.

Since January 7 when two lawsuits were commenced, dozens of other class action law suits were filed against Satyam for hundreds of millions of dollars damages based on fraud in the United States District Court for the Southern District of New York in Manhattan, among others. The securities fraud class-action lawsuits have been filed on behalf of investors who bought Satyam American Depositary Receipts (ADRs) since 2004.

On Wednesday Dr. Raju admitted to falsifying and overstating Satyam’s cash reserves by $1B US dollars (£661m) or 94% of its cash and bank balances on books at the end of September.

The fraud was perpetrated several years ago to bridge “a marginal gap” between actual and accounting books operating profits, and continued for several years. “It was like riding a tiger, not knowing how to get off without being eaten,” B. Raju said.

In a letter to the board, Dr. Raju said that neither he nor the managing director had benefited financially from the inflated revenues. Further claiming that none of the board members had any knowledge of the dire company situation, he noted that Satyam’s balance sheet as of the September 30, 2008, carried inflated figures for cash and bank balances of INR 5,040 crore (as against INR 5,361 crore reflected in the books). He alleged it also carried an accrued interest of INR 376 crore which was non-existent. He confessed that he himself prepared an understated liability of INR 1,230 crore on account of funds amid an overstated debtors’ position of INR 490 crore (as against INR 2,651 crore in the books).

Indian analysts have compared the Satyam-Raju scandal to the infamous American Enron scandal. Immediately following the media expose, PricewaterhouseCoopers, auditor of Satyam’s accounts, was set to be probed for complicity in the controversy. Times Now has reported that the Andhra Pradesh CID arrested PricewaterhouseCoopers (PWC) representative Gopal Krishnan for investigation on Saturday night.

New York-listed Satyam Computer Services Ltd., India’s fourth-biggest software firm, is a consulting and information technology services company based in Hyderabad, India. Founded in 1987 by Dr. Byrraju Ramalinga Raju, Satyam’s network spans 67 countries on six continents. It employs 53,000 professionals in India, the United States, the United Kingdom, the United Arab Emirates, Canada, Hungary, Singapore, Malaysia, China, Japan, Egypt and Australia. Its monthly salary outflow is estimated at six billion rupees ($125 million). Deriving more than half of its revenues from the United States, it serves 700 global companies, 185 of which are Fortune 500 corporations.

Satyam’s clients include Nestle, Ford, General Electric Co., General Motors Corp., Nissan Motor Co., Applied Materials Inc., Caterpillar Inc., Cisco Systems Inc. and Sony Corp., and brought in about $40bn last year.

In December 2008, a failed acquisition attempt involving the company Maytas led to a plunge in Satyam’s share price. After Wednesday’s confession, Satyam stocks fell further by more than 70%, while the BSE SENSEX dropped to 7.3% Wednesday, causing the removal of Satyam Computer Services from its indices on Thursday. The shares free fell to 11.50 rupees on Friday, their lowest level since March 1998, compared with around last year’s high of 544 rupees.

The New York Stock Exchange has terminated trading in Satyam stock as of January 7, while the National Stock Exchange of India said it will remove Satyam from its S&P CNX Nifty 50-share index from January 12.

India’s biggest-ever corporate fraud has seriously tainted India Inc.‘s strong corporate governance image. “The admission of fraud in financial affairs has created an adverse impression in the minds of trade, business and industry across the world,” the Indian government admitted. The government intervened on Friday night, dismissing Satyam’s board of directors, announcing it will appoint representatives to manage the affairs of the insolvent outsourcing giant. The board would meet within seven days. Dr Yeduguri Samuel Rajasekhara Reddy, chief Minister of State of Andhra Pradesh, India, on Sunday said that the main agenda is to protect the jobs of the software professionals. “We are taking all needful steps in coordination with the government of India to ensure that the jobs of 53,000 engineers are protected and the shareholders’ money is salvaged,” Reddy said.

“We are working on the names. The Satyam case is an aberration. The credibility of the Indian corporate sector in general, and IT sector in particular, should not be allowed to suffer because of this.” Prem Chand Gupta, the Corporate Affairs Minister said. The Federal Government of India appointed a three-member independent board with full authority for Satyam on Sunday and was set to convene within 24 hours. “We have appointed Deepak Parekh, chairman of Housing Development Finance Corporation, Kiran Karnik, former president of IT industry body NASSCOM and C. Achutan, former member of Securities and Exchange Board (SEBI) of India,” Mr. Gupta said.

In early Monday trading (0535 GMT) after the creation of the three-member board, Satyam shares rocketed upwards 60% to 38.15 rupees, even though the main Mumbai market was down more than 2%. BBC reported that Satyam shares have jumped 51% to 36.05 rupees on Monday after the stock lost 87% last week. “The constitution of the new board is seen as a positive step by the market. It’s a confidence boosting measure,” K.K. Mital, Globe Capital, New Delhi head of portfolio management services said. “But the rally will depend largely on the financial situation at the company and the kind of measures that are taken to improve liquidity,” he added.

The Company Law Board, however, has requested Satyam’s interim board not to implement its decisions. “We are asked by the Company Law Board not to implement the decisions of the board. But we are allowed to continue our activity. The team which was constituted recently is continuing its work,” Satyam head global marketing and communications, Mr. Hari Thalapalli, said.

Lazard Ltd., who has a 7.4% stake in Satyam, sought representation on the new board and wrote as much to The Indian Ministry of Corporate Affairs. “As the largest shareholder in the company, we want to be consulted in whatever decisions are being taken by the Indian government. We have written to the Ministry of Corporate Affairs and are awaiting a reply from them,” Hitesh Jain, a partner at ALMT Legal, who claimed to represent Lazard, said. “It is a fair proposal and we will take a decision as and when we clear other issues. No decision on this has been taken yet,” P.C. Gupta replied.

Meanwhile, the Securities and Exchange Board of India (SEBI) also announced it will try to control the damage and take steps to boost investor confidence. “This exercise will be undertaken after the third quarter results and is expected to be completed by end of February this year,” a SEBI official statement said. A SEBI team is also investigating acting-CEO Ram Mynampati whose salary was greater than that of founder Dr. Raju and all the directors combined. Dr. Raju had just one fifth of Mynampati’s total package of over Rs 3.5 crore as of March 2008. All the directors comparably received only a total of Rs 2.6 crore as salary, commissions, sitting fees, professional fees and other receivables.

Further, the Andhra Pradesh Police CID and teams assigned by the Economic Offences Wing of the CB-CID conducted searches Sunday of homes of the accused including the ex-CFO’s office to gather documentary evidence about the financial fraud.

Saturday, June 4, 2005

Overnight Friday a Southerly storm brought snow to both the Southern Alps and the central North Island mountains of New Zealand for the first time this year, closing major roads and stranding travellers at the start of the Queens Birthday holiday weekend. Police and the AA urged motorists to drive with extra care and to the conditions this weekend.

In the North Island, State Highway 1 between Waiouru and Rangipo, the Desert Road was closed by deep snow at 3 PM on Friday afternoon. Other roads in the area, including other parts of State Highway 1 between Bulls and Turangi, State Highway 4, via National Park, and 49, via Ohakune, were closed at 8 PM.

These road closures stopped all traffic through the centre of the North Island. About 200 travellers were reported to have spent the night at the Waiouru Army Camp, being accommodated in the Marae and the Barracks. Grit trucks and snow ploughs worked overnight to clear the snow and reopen roads, with the Desert Road finally being reopened about 12:30 PM Saturday.

Together with a slip threatening to close State Highway 3 in the Manawatu Gorge and damage to State Highway 2 after floods in the Bay of Plenty a couple of weeks ago, the only reliable alternative route for travellers around the North Island was via Wanganui and Taranaki.

In the South Island, Police and the AA advised that chains were essential when travelling over the mountain passes.

Yesterday, Mount Hutt skifield announced it would be opening Saturday morning. Early Saturday morning, skiers were reported to be queuing at the gates of Mount Hutt skifield, eager to get the first opportunity to hit the slopes in 2005. Other South Island ski fields were also indicating June opening dates.

The weather outlook is for cold southerly winds and rain over the Queens Birthday holiday weekend, with snow down to 400m in the South Island.

Monday, June 22, 2009

Following the resignation of Speaker Michael Martin, which took effect yesterday, members of the House of Commons, the lower house of the British Houses of Parliament, today elected John Bercow as the new Speaker of the House.

The three rounds of voting were held as a secret ballot of all Members of the Commons. Each round eliminated from subsequent rounds any candidates with less than 5% support, with the winner to be the candidate who, in any round, achieved a simple majority of the vote. This was a new system for electing the Speaker, and the first time that the Speaker has been elected by secret ballot.

In the first round of voting, there were 10 candidates: Margaret Beckett, Sir George Young, Ann Widdecombe, Sir Alan Beith, John Bercow, Richard Shepherd, Sir Michael Lord, Sir Patrick Cormack, Sir Alan Haselhurst, and Parmjit Dhanda. All candidates made brief speeches in the chamber at 13:30 UTC (14:30 BST) immediately before the vote.

Four candidates were eliminated by this round — Cormack, Dhanda, Lord, and Shepherd — leaving six candidates to go forward to the second round of voting.

In the second round, Widdecombe was eliminated, leaving five candidates to go forward to the third. All candidates apart from Bercow and Young lost ground. Young gained more votes than Bercow, but Bercow remained in the lead.

In the third round, all remaining candidates except two, Bercow and Young, withdrew from the contest, after an appeal to do so from the Father of the House, Alan Williams. This appeal was motivated by the length of each round of voting, which required 600 ballot papers to be printed, marked, and counted.

In both the first and second rounds of voting, one ballot was spoiled. Although the ballot was secret and the identity of the person whose ballot it was could thus not be confirmed, John Mann, MP for Bassetlaw, claimed it was him. “None of them have got a strong reforming agenda,” said Mann. “Some of the speeches were shocking, after what we have been through recently.”

After confirmation by a unanimous acclamation, with no “noes” voiced, John Bercow became the Speaker-elect for the 157th Speaker of the House of Commons. In accordance with tradition, he was physically dragged to the chair. At 19:31 UTC (20:31 BST) he delivered a 5 minute speech, paying tribute to the other candidates, before sitting in the chair itself. In that speech he paid tribute to his mother, pointing out that she had taken a keen interest in proceedings.

He also said: “I want just to say this about the responsibility of the office. The Speaker has the responsibility to immediately and permanently cast aside all his or her previous political views. I said it —”. Here he was interrupted by members anticipating the end of his sentence, and calls to “come and join the Labour Party”. He resumed “I said it and I meant it. My promise to this house is to be completely impartial, that is what it’s about. I will do my best faithfully, honourably and respectfully to do my best in the months ahead.”

His first three acts as Speaker-elect were to call upon the Prime Minister Gordon Brown, the Leader of the Opposition David Cameron, and the leader of the Liberal Democrats Nick Clegg to speak. Brown and Cameron both commented upon Bercow’s hobby of playing tennis, with Brown observing that Bercow had now permanently taken the position of umpire. The Prime Minister said that on the matter of Bercow’s casting aside of his past political views, “some of us thought you had done that some time ago”. Cameron also pointed out that Bercow was the first Jewish Speaker to be elected by the House in its history.

Cameron and Clegg both reminded Bercow of the comments made by Parmjit Dhanda, who had said in his candidacy speech earlier that afternoon: “All of the 10 (candidates) is capable of doing the job but … do we all really get it? Do we understand the level of crisis out there. Do we understand the level of public’s anger.”

Bercow’s election as Speaker elect remained subject to Royal Approbation. This was not given in person by the Queen.

At 20:51 UTC (21:51 BST), the Lords Commissioners assembled on the Woolsack in the House of Lords, and summoned the House of Commons via Black Rod, who in turn summoned the Commons at 20:54 UTC (21:54 BST). The clerk of the House of Lords read the Royal Commission, authorizing the Lords Commissioners to speak in the name of the Queen. At 21:01 UTC (22:01 BST) the Lord Chancellor Jack Straw, spoke for the Lords Commissioners and declared Bercow to be the Speaker of the House of Commons.

Bercow’s first act as Speaker, after returning to the Commons and formally notifying it of events in the Lords, at 21:06 UTC (22:06 BST) was to call upon the Leader of the House, Harriet Harman. She proposed a motion, carried by acclamation without dissent, for the Commons to call upon the Queen to elevate the previous Speaker, Michael Martin, to the House of Lords. Bercow’s second act was again to call upon Harman, who proposed a motion to adjourn, again carried by acclamation without dissent.

Sunday, September 21, 2008

An email accidentally sent to Jeff Crouse of the Anti-Advertising Agency recently brought the controversial techniques of the advertising firm Kluger Agency under fire.

“I’m writing because we feel you may be a good company to participate in a brand integration campaign within the actual lyrics of one of the worlds most famous recording artists upcoming song/album,” the email read, offering to place Jeff Crouse‘s fake brand, Double Happiness Jeans, into the songs of popular artists. It was posted on his blog along with a reply that mocked Kluger and brought ridicule and criticism against Adam Kugler and his agency. According to Crouse, Kluger emailed him once again to claim it had been an automated email, and later requested that Crouse remove the post and comments criticizing himself and his agency, threatening a $150,000 lawsuit against Crouse for defamation.

Kluger Agency is known for advertising brands like Abercrombie & Fitch, Mercedes-Benz, and Nike by inserting the brand names in the songs of popular artists like Mariah Carey, Black Eyed Peas, Fall Out Boy, Pink, Lady GaGa and Ludacris. Kluger, founded in 2006, represents over 170 corporations and focuses on well-known record labels.

Kluger and his PR team have come forward defending the advertising techniques, stating that they do not have songs made just for the products in question and do not infringe on artistic integrity. “Now, we don’t want an artist to write a song specifically to promote a brand, we just feel that if it’s a product that’s admired by the artist and fits his/her image, we now have the capability of leveling out the playing field and making things financially beneficial for all parties involved,” he was quoted saying to Wired.

However, the agency’s website shows video examples of its product placement, with brand images and names often being repeated, pointed at, praised, or being the basis of the song. The website also advertises that “a successful ‘brand-dropping’ campaign will imprint [the] brand name and product into your market’s subconscious”.

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Tuesday, April 10, 2018

On Saturday, the Trump Tower, in Midtown, New York City, caught fire shortly before 18:00 EST (2200 UTC) on the 50th floor, claiming the life of a 67-year-old resident, Todd Brassner, who lived in apartment 50C. All other residents were evacuated without incident. During the fire, six firefighters received non-life-threatening burns and other minor injuries. Neither US President Donald Trump nor the First Family were in the building at the time of the fire.

The high-end Fifth Avenue address is the personal residence of President Donald Trump, whose family occupies the top three stories of the 58-story building. The US Secret Service maintains a constant security presence inside the building with the New York City Police Department guarding a hard perimeter, intended to stop vehicular attacks, and a soft perimeter, intended for on-foot attacks.

The four-alarm fire required 200 firemen, extra police, and paramedics. At 20:00 EST (0000 UTC Sunday), the New York City Fire Department (FDNY) declared the fire was under control. Trump tweeted, “Firemen (and women) did a great job. THANK YOU!” This is the second fire at Trump Tower since the election; previously on January 8, a fire was caused by an electrical malfunction in a cooling tower on the roof. Three FDNY firefighters received minor injuries, and all residents and office workers evacuated without incident on that occasion.

Trump Tower provides a number of unique problems never before encountered by the Secret Service. Never has a US President’s personal residence been inside a skyscraper or in a densely populated area like Midtown. The security measures have disrupted vehicular and pedestrian traffic requiring time consuming detours and delaying emergency response.

The New York Fire Code did not mandate sprinkler systems at the time Trump Tower was built in 1983, which might have reduced the size and severity of the fire had they been present. The 50th-floor apartment was, according to FDNY Fire Commissioner Daniel Nigro, “[T]he apartment was virtually, entirely on fire.” The Secret Service monitors all the fire alarms in the building but it took time to find the source of the thick black smoke emanating from the fire. Secret Service Agents escorted the firefighters throughout the building, including the Trump residence.

Brassner, the sole casualty, was unconscious when firefighters pulled him out of apartment 50C. He was transported to Mount Sinai Roosevelt Hospital. Originally listed as critical, he was pronounced dead sometime during the night. Brassner, guitar collector, was acquainted with artist Andy Warhol and was acknowledged in Warhol’s 1989 autobiography, The Andy Warhol Diaries. The cause of the fire is unknown, with investigations into Brassner’s death and the emergency response ongoing. Currently, the Secret Service leads the investigation.

Sunday, January 25, 2009

International steel conglomerate Corus Group is to axe 3,500 jobs worldwide.

Up to 2,000 jobs are to be lost in the former British Steel plants in the United Kingdom. Owner Tata Steel employs 42,000 people worldwide, with 24,000 being in the UK. Corus did not comment on the report so far, but a union official told BBC News that the company would be making an announcement at 0930 UTC on Monday. The cuts would be part of long term restructuring plans made by soon to depart CEO Philippe Varin, which have been accelerated by the worldwide downturn.

Tata Steel’s sister company Tata Motors is said by The Sunday Times to be considering 1,500 job losses at the UK’s Jaguar Land Rover car manufacturer. It is not thought that any Corus plants in the UK will close outright.

Corus was formed from the merger of British Steel and the Dutch steelmaker Hoogovens, creating the ninth largest steel company in the world and the second largest in the European Union. The merger was uncomfortable and the company suffered severe financial problems in 2003. It later recovered and was bought by India’s Tata two years ago.

Sunday, April 1, 2007

In Estonia, a mouse made its nest in a cash machine and spent the weekend eating tens of thousands of kroons in bank notes. The critter was discovered after a customer making a withdrawal got half-eaten bills from the machine.

Experts are now investigating how the rodent was able to get into the ATM.

Thursday, April 7, 2005

At an information technology conference in Addis Ababa, Prime Minister Meles Zenawi of Ethiopia vowed to offer universal Internet connectivity in the country within three years. The government is working with a United States technology company Cisco Systems to fulfill this promise.

The government will invest US$40 million in the venture, which will lay nearly 10,000 km of fibre optic cable. Ethiopia currently ranks low in Internet penetration, with just 30,000 connections available for its 71 million inhabitants. Part of the program is the installation of Internet access at 450 secondary schools throughout the country.

Zenawi explained the change of heart that led to the decision to invest in this infrastructure project. “Not long ago many of us felt that we were too poor to seriously invest in information and communication technology,” he said at the conference. “We were convinced that we should invest every penny we have on securing the next meal for our people. We did not believe serious investment in ICT had anything to do with facing the challenges of poverty that kills. Now I think we know better,” he explained to the delegates.

Not everyone thinks that the government knows better. Giovani Peri, Assistant Professor of Economics at University of California, Davis, specializes in macroeconomics and growth theory. Peri believes that the Ethiopian government may be misguided in its direct investment in the build-up of information technology, and should instead create incentives for the private sector to build such infrastructure.

Professor Peri likened the Internet access project to previous failed attempts by African governments to stimulate growth via large-scale projects. “[African governments] in the past tried to build airports … in the middle of desolation.” — but people need to know that the environment is right for business, he said, not just a good airport. He said that the investment in Internet access might be too early for that country, and that before it is built, the country needs a good educational system to get the scientific community involved in the process of building technology infrastructure.

Ethiopia’s population is mostly rural, and over half of the population is illiterate. The country’s GDP per capita is US$560.