Fakes and Flying

The latest scandal to hit is that of fake pilots.

Well the issue of fake pilots has to be understood from the point of :

1. Can he pilot a plane or not - nothing more nothing less.

Rest all degrees are nonsense anyways!! Most people who are termed as fake are those who have given fake marksheets - but they have undergone the training and passed and most are amongst the best pilots in the business anyways.

NOW the larger issue is - HOW did they pass ?

Nobody wants to ask this uncomfortable question as most are in a job because of some "fake" certificate anyways. If one were to take a proper audit of all lawyers, engineers, doctors - I am sure a far greater percentage of fakes would be found here.

The bigger question is and SHALL ALWAYS BE is - Are these so called fakes doing their job or not AND Oh! - This question applies to those who arent fakes but are incompetent too!!

This brings us back to the central simple Question all over again - How did they pass the exam to become a fake or incompetent whatever!!

Cairn, Vedanta, ONGC and the crude politics of OIL

The latest skeleton making its way into the governments cupboards is the mess they have been making with the ONGC-CAIRN-VEDANTA royalty issue. It has become painfully clear that Vedanta hadnt done a proper due diligence as the issue of royalty recovery was not spotted by them and Cairn was betting on the same not being spotted so that they could get a higher price for their shares!!

What interests me is that even after it has become painfully aware that the royalty is to be recovered from all the stakeholders Why is the government now suddenly saying that let us give the green signal for the takeover of Cairn AND that the issue of royalty can be settled later?

The cost of arbitration for such an issue can manage the mid day meal scheme of a whole district for a year!! Quite obviously this issue has to be resolved BEFORE any merger or takeover is sanctioned and more importantly the same cannot be done without the express consent of ONGC.

Of course one should also not lose sight of the fact that the price that Vedanta pays for Cairn will be different depending on the royalty issue. So why is the government in a tearing hurry to bless this deal when Vedanta can get a significantly lower price once the royalty issue is settled in ONGC's favour? (as expected)

SEBI is as usual snoring away in one corner while the shareholders of Sesa Goa, Sterlite and Vedanta fend for themselves.

HONDA - not the HERO of its shareholders

Going by the convoluted way in which the shareholding is being transferred by Honda to the Hero group with total disregard or total detriment of the other shareholders speaks volumes of the chicanery that exists in the system.

The most transparent way would have been for HONDA to have given these shares as a rights to all existing shareholders (would have been 1 share for every 3 shares held) at the price of 740/-.

The other issues that are interesting to watch out for here are the action that the IT department will take for the implied gift being given by HONDA to HERO - almost 1100 per share when the agreement was initially drafted to a more sedate 800 per share now. that works out to 240/- per share as a gift tax that the hero group will have to pay to the govt for the gift received by it!!

also the immediate sale of these shares to PE players at a price above 1540 would also call into play short term capital gains tax. keep watchig this space to see what the IT department does in this deal.

SEBI has snored through the entire episode - lets see what what the tax collector does ...