1056 Tirumala Tirupati Devasthanams Executive Officer seems to have acted inaptly and imprudently in depositing Temple Funds with Private Banks

Here is a Times of India News Report which indicates that Tirumala Tirupati Devasthanams (TTD), Tirumala, deposited Rs. 1,000 crore (RS. 10 billion or approx. $200 million) with a Private Bank by name IndusInd Bank, tempted by an additional interest of 0.33% p.a. offered by them when compared to Public Sector Banks like Andhra Bank and Vijaya Bank. This act of TTD and its E.O. appears to be an imprudent step. First, I shall provide a link to the Times of India News Report: Click here to go to https://timesofindia.indiatimes.com/city/vijayawada/ttd-dismisses-charges-of-bank-deposit-scam/articleshow/63586776.cms. The Report has also mentioned that the TTD's Executive Officer, Shri Anilkumar Singhal has justified his action. Here are quotes from what Shri Anilkumar Singhal was reported to have said:

TTD executive officer, Anil Kumar Singhal, condemned the allegations. Singhal, addressing a media conference here, on Monday, said that the TTD is following guidelines given by state and Union governments in depositing temple money in banks.

Singhal said that the TTD had called for sealed bid quotations for depositing its money in nationalised public sector, as well as private banks, according to the directions of the investment committee. Officials who opened sealed cover quotations sent by banks on March 24, 2018 had asked the banks to revise quotations with best possible interest rates by March 27, he said.

“We have deposited Rs 4,000 crore acquired through interest in various banks, in which Rs 3,000 crore were deposited in public sector banks and Rs 1,000 crore in IndusInd bank, which accepted to give 7.66% interest per annum,” said Singhal.

The TTD has deposits of Rs 10,589 crore in various banks as of now, and every transaction is done transparently following guidelines, he said.

ybrao a donkey's personal views which are not intended to be imposed on others. No love or hatred towards any individual or institution. Exceptions: Atheism and Marxism.

"That the TTD is following guidelines given by state and Union governments in depositing temple money in banks." cannot be a reasonable explanation, which can be given by I.A.S. Officers. Reason: I.A.S. Officers are supposed to be Cream of the Intelligent brains in India. They are supposed to guide even their Superior Bureaucrats and Politicians, when they go wrong (pramAdO dhImatA api-- English: Even brave and wise persons can accidentally go wrong). And these suggestions of Prudence are to be given by IAS-IPS-IFS-IRS Officers, irrespective of the consequences they may face, in case bosses get annoyed. The IAS-IPS-IFS-IRS Officers are not glorified Clerks. At the same-time, they cannot disobey their bosses continuously. That means, they have to bring facts, possibilities, and consequences to the notice of bosses, and in spite of the subordinates' suggestions if the bosses persist with their wrong Orders, the Subordinates may have to comply with as long as the Orders are reasonable, not against Natural Justice, not against Laws, and not Unconstitutional.

Question: Why depositing Public (Government, quasi-Government, Fiduciary and Trusts etc.) Funds with Private Banks can be dangerous?

Ans: When Banks burst/broke (this has not happened in recent years in India, but still it is possible. Nothing is impossible), the Deposit Insurance Protection available to Depositors is Rs. one lakh (Rupees one hundred thousand only_. This 100,000 Rs. is total amount indemnified for all deposits of the customer with all Banks put together. That means, if two Banks become bankrupt, the Depositor cannot get protection of Rs. 200000/-. His total cover will be limited to Rs. 100,000/-. This protection will be available only when the Bank involved pays the Insurance Premium regularly to the Deposit Insurance Credit Guarantee Corporation. This DICGC seems to have become somewhat inert, as some banks seems to have stopped paying premium and taking cover. This Rs. 100,000/- limit is applicable both to Private Banks and Public Sector Banks.

However, in respect of Public Sector Banks, there seems to be a 'maDi guDDa (Engl: Sacred cloth used in some Indian Homes for Worship purposes, and is not touched or allowed to be touched except during worship.), or 'siggu biLLa' (a peepal-leaf-shaped silver ornament worn by babies, particularly female babies, as a sort of cover for their private parts to hide from the glare of visitors).

What is this sacred cloth or modesty plate? Ans: A hope of some believers, and a promise by Finance Minister in Parliament, that Public Sector Banks in India will not be allowed to go burst. That means, if Public Sector Banks face difficulties, either RBI or the Govt. of India is likely to come to their rescue. Though a Finance Minister's Assurance is not written Law, for the time being it will be like a log of wood for a Depositor floating in a Sea of Hardships.

Will Govt. or RBI come to the rescue of Private Banks, Foreign Banks in India if they fail?

Ans: There does not appear to be any legal obligation either for the Government or for the RBI. Private Banks and Branches of Foreign Banks operating in India, come under the category of Scheduled Banks. As per the Banking Regulation Act, they maintain some Deposits in Current Accounts with RBI, called 'CRR'. RBI may allow the Banks to withdraw these moneys intended for CRR. Similarly, Scheduled Banks have to maintain some Term Deposits/Approved Securities / Government Bonds with Approved Institutions, total of these being called 'SLR' "Statutory Liquidity Ratio". When Banks face difficulties, RBI may allow loans against the SLR Securities / or allow Repurchase-Resale (popularly called Reverse REPO and , REPO). Under ordinary circumstances, these may be sufficient for Banks to tide over funds crunches / crises. Suppose the Liabilities (Deposits from customers are also liabilities) of Banks become an unwieldy and too-much-of-a-burden, will RBI support, beyond what are permitted under-against CRR and SLR. This has not been adequately tested. We have to wait and have a taste of it.

Question:Will High Courts and Supreme Court direct respective State Governments or the Union Government to come to the rescue of Depositors?

Ans: Though inspecting and supervising all Scheduled Banks in India (all-- private banks, Public Sector Banks, Foreign Banks operating in India, some Co-operative Banks), is the right and the responsibility of RBI, to ensure their health, it is not clear how far RBI can be made accountable or liable or responsible for lapses of its Officials. This has not been sufficiently tested in Courts.

Though Sahara is not a Bank, SEBI and Supreme Court seem to be doing an impeccable job in protecting the Indian Public. Similarly, in case of Agri Gold Scam, Andhra Pradesh Government is selling some assets and making some payments to depositors under directions of AP High Court. A similar instance is yet to arise in respect of Private Banks in India.

Question: In various State Level Bankers' Meetings, the Hon. Chief Minister of Andhra Pradesh threatens Public Sector Banks that AP Government will direct its Departments/Corporations to withdraw their deposits from Banks which do not lend as per the Government's Expectations. Though, strictly, TTD is not a Government Organ, did the Chief Minister exert his Policies on TTD, so as to make its Executive Officer to divert some funds to the Private Bank i.e. IndusInd Bank.

Ans: It appears to be so. But Mr. Naidu appears to be busy with his travails on Special Status and Special Packages, Utilisation Certificates issues with the Centre, and the Parliament. He may not have that much of time. But, somebody from CMO (Chief Miniser's Office at Amaravati) might have used his sly hand.

Incomplete. To be completed and corrected soon.

905 Not only the Corporate Governance issues pointed out by Mr. N.R. Narayana Murthy are to be addressed, but also at macro level Government has to conduct indepth studies of at least half of Corporates in India

There are some similarities and some variances between what is happening in the Board Rooms of Infosys and the Tata Group. We need not lay undue emphasis on differences among Board Members about matters relating to the Managements of their respective Companies. Reason: Differences are natural, and are bound to be there. Like the Meetings of India's Union Cabinet, or the Cabinets of States like Andhra Pradesh, Telangana State, Tamil Nadu, if every thing is conducted without arguments, dissent, some emotional outbursts, with bent heads, knelt knees, UNANIMOUSLY, then there must be something wrong. Whether it is in political democracies, or in Corporate Democracies, such blind-fold meetings can lead to incalculable damage and harm. Such blind-fold, dumb-fold meetings, when conducted in Corporate Bodies, can lead even to financial collapse of Companies. Such blind-fold, dumb-fold meetings, when conducted in Executive Bodies such as Cabinets, Legislatures, Advisory Councils of countries can lead to dictatorships and tyrannies, and finally lead to disintegration of countries.

Here is a link to HIndusthan Times, dated 14th Feb. 2017, which contains some observations made by Shri R. Seshasayee, the Chairman of Infosys, about 'differences' among Board Members, which he terms as "not conflict", but as "convergence". Click to go to Hindusthan Times, http://www.hindustantimes.com/business-news/infosys-management-vs-narayana-murthy-is-the-conflict-really-over/story-2czSEEwLX45xLapMixs4gO.html. Some of the observations:--

“...Something like this doesn’t happen again.”

"...I shall not quit unless asked by the board and the shareholders to do so. ..."

"...the Bansal episode has taught the board to insert severance details in contracts and not be subjective about them. Bansal, was eventually paid Rs. 5 crore as severance pay, not the previously agreed-upon Rs. 17 crore. It was not “hush” money to get Bansal to keep the peace. ..."

"...Sikka's salary has been approved by shareholders. ...".

"... The Board continues to address issues all stakeholders, including ones that the founders have, within the overall framework of the fiduciary responsibility it has to all shareholders. ...".

"...Board will treat the promoters just as it does 'any other shareholders' ...".

Here is a report which contains the observations of the Shri N.R. Narayana Murthy, one of the top five Founders of Infosys: Click to go to EconomicTimes.IndiaTimes,com to study what Mr. Narayana Murthy is reported to have said.

"...There is no let-up in my demand that the board of India’s second-largest software company satisfactorily address the issues of poor corporate governance pinpointed by me last week, striking a firm stance in what looks set to be a fractious corporate battle. ..."
“No, I have not withdrawn my concern,”

"...They (issues and concerns) have to be addressed properly by the board, and full transparency should be given and people responsible should become accountable...".

"...They are all good-intentioned people of high integrity, but obviously being human even good people sometimes make mistakes, this is one such case, ..."

"...But good leadership demands that they listen to all concerned shareholders, re-evaluate their decision and take corrective action. I hope they take corrective action soon and improve governance for a better future for the company..."

"...Such payments raise doubts whether the company is using such payments as hush money to hide something...".

Shri Balakrishnan: "... If investigations have proved there was nothing wrong, then why stop? Someone has to own this up. The chairman should take responsibility. ..."

"...Infosys board be recast with “some good people” like Marti Subrahmanyam. It should also induct unnamed former Infoscions, schooled in the Infosys values ...”.

ybrao-a-donkey's perceptions, which are not intended to be imposed on others

Out of the top four Info Giants in India of those days (TCS, Infosys, Wipro, Satyam Computers), the last i.e. Satyam Computers made an ignominous exit, as fudging of accounts by the then Satyam Management led by Shri Ramalinga Raju blew up, sending him to Jail. The remaining three IT Giants maintain a public profile which claim "honesty and truthfulness". While nobody knows what happens in those remaining Top Three Companies, and people go by revealed Financial Statements and Data, as certified by their Company Auditors.

One thing is definite. Since the 2008 Sub-Prime Lending Crisis which engulfed U.S.A. and the Wall Street, the Business Environment for Indian IT Companies has also undergone some unfavourable changes. In tune with those unfavourable changes, the three IT Companies ought to have made substantial provisions for unforeseen losses, but it is not clear to what extent they have made provisions.

The five top promoters of the Infosys (Sarvashri N.R. Narayana Murthy, Nandan Nilekani, SD Shibulal, Kris Gopalakrishnan and K Dinesh, seem to have withdrawn a major part of their investments from Infosys. They are said to hold, all of them together, about 12.75% stake in the Company. It can also be observed that , when the going is good, when the Business Environment is favorable, everybody will come forward to work as Chairman, CEO, CFO, so that they can take credit for the good results. But, when there is a dwindling trend of fortunes, nobody will come forward; Those who are at the helm, may try to step down, and chose either to retire, or go in search of greener pastures.

Promoters , having tasted power all-the-days when they were at the steering, after leaving the Company, because of past attachments (Sanskrit and Telugu: "vAsanAs"), may want to drive their Companies from back seat. This type of approach, reflects a type of urge "to eat the cake and have it too", exercise some authority, without match responsibility.

REPORTED SHARE-HOLDING MIX

(Approx.) Shareholding Mix of Infosys
Top Promoters: 12.75%
Foreign Institutional Investors: 39%
Insurance Companies: 11%
Mutual Funds: 7%
Foreign Non-Institutions: 17%
Public: 10%

ybdonkey always believed

In India, Private Sector Companies are NOT REALLY PRIVATE SECTOR COMPANIES. In most Companies, Promoters hold very little share-holdings, often less than 20%. But, Promoters, and their benAmIes pull the strings in the Boards, hold most Executive positions, and draw huge amounts as perquisites/remuneration/salaries. Besides, they also ensure that their kith and kin, and the Companies promoted by them, get all the supply Contracts, Distributorships, sine cure jobs in the Company.

Independent Directors, Directors representing Financial Institutions such as Mutual Funds, Insurance Companies, Foreign Institutional Investors, do not take active interest in the Management of the Company. Even when they attend BOard Meetings, they just sign the Attendance, raise one or two unimportant questions and queries for formality and ritual sake, have the dinners/lunches/refreshments, collect the gifts, receive Sitting Fees, collect Flight Tickets, and leave. In Telugu language, there is a proverb: "SingaDu addanki pOnU pOyADu, rAnU vachchADu." Approx. English: A person named "SingaDu" went to a place called "Addanki" in Prakasham Dt., of Andhra Pradesh, and came back, with no outcome. Attending Board Meetings remains just a symbolic appearance.

"... The Board continues to address issues all stakeholders, including ones that the founders have, within the overall framework of the fiduciary responsibility it has to all shareholders. ...".

"...Board will treat the promoters just as it does 'any other shareholders' ...".

These words of the Chairman, seems to suggest that promoters will be shown their place, in proportion to their 12.75% shareholdings. If the (former) Promoters try to exercise their will on the Current Management, the Chairman may try to take shelter in the Foreign Institutional Investors who have 39% shareholding, apart from trying to get support from Mutual Funds and Insurance Companies.

Though SEBI seems to have started making some inquiries into the goings on, such enquiries seem to be too little, when a lot needs to be done.

To continue adding / deleting / editing. सशेष. ఇంకా ఉంది.