New Contagious Form Of Cancer Discovered

Contagious cancers may not be as rare as thought, say scientists who have discovered a second transmissible cancer in Tasmanian devils - small dog-sized ferocious carnivores found in the Australian island state of Tasmania.

Transmissible cancers - cancers which can spread between individuals by the transfer of living cancer cells - are believed to arise extremely rarely in nature.

One of the few known transmissible cancers causes facial tumours in Tasmanian devils, and is threatening this species with extinction.

The discovery by researchers from the University of Tasmania in Australia, and the University of Cambridge in UK, calls into question our current understanding of the processes that drive cancers to become transmissible.

Tasmanian devils are iconic marsupial carnivores that are only found in the wild in Tasmania. The size of a small dog, the animals have a reputation for ferocity as they frequently bite each other during mating and feeding interactions.

In 1996, researchers observed Tasmanian devils in the north-east of the island with tumours affecting the face and mouth; soon it was discovered that these tumours were contagious between devils, spread by biting.

The cancer spreads rapidly throughout the animal's body and the disease usually causes the death of affected animals within months of the appearance of symptoms.

The cancer has since spread through most of Tasmania and has triggered widespread devil population declines.

To date, only two other forms of transmissible cancer have been observed in nature - in dogs and in soft-shell clams.

Cancer normally occurs when cells in the body start to proliferate uncontrollably. However, cancers do not usually survive beyond the body of the host from whose cells they originally derived.

"The second cancer causes tumours on the face that are outwardly indistinguishable from the previously-discovered cancer," said first author Ruth Pye, from the University of Tasmania.

"So far it has been detected in eight devils in the south-east of Tasmania," Pye said.

"Until now, we've always thought that transmissible cancers arise extremely rarely in nature, but this new discovery makes us question this belief," said senior author Elizabeth Murchison from the University of Cambridge.

The discovery of the second transmissible cancer began in 2014, when a devil with facial tumours was found in south-east Tasmania.

Although this animal's tumours were outwardly very similar to those caused by the first-described Tasmanian devil transmissible cancer, the scientists found that this devil's cancer carried different chromosomal rearrangements and was genetically distinct.

Since then, eight additional animals have been found with the new cancer in the same area of south-east Tasmania.

The study was published in the journal PNAS.

Article Source: Business Standard

12-year-old Sikh boy arrested in US after classmate accuses him of carrying a bomb

Armaan Singh Sarai, a 12-year-old boy from an American-Sikh family, was arrested by the Dallas police on December 11 and held for three consecutive days after he was accused by a “bully” in his class of carrying a bomb to school, claims his cousin in a Facebook post. Read More

Climate experts say El Nino responsible for heavy Chennai rains

The heavy rains in coastal Tamil Nadu that has left its capital Chennai Floods under water is due to the El Nino impact on the North East monsoon that hits the region between October and December.

            The NE monsoon, which supplies 60% of Tamil Nadu's annual water requirement started with a deficit in October but the impact of the El Nino, the weather phenomenon that triggers atmospheric changes has resulted in historic rainfall. The NE monsoon hits Tamil Nadu, Rayalaseema, coastal Andhra Pradesh, South interior Karnataka and Kerala.

            Meteorologists predict incessant rainfall in and around Chennai till December 6.

            "There have already been 3 to 4 heavy rain events in the last 15 -20 days over Tamil Nadu. We will get more rain in the next four to five days," said B P Yadav, deputy director general, Indian Meteorological Department (IMD).

            The El Nino phenomena, the severest this year, could have potential impact on weather events across the globe. Incidentally, Cyclonic events have not happened in 2015 on the Bay of Bengal coast during the North east monsoon, the first such recorded in more than a decade.

Read More News :Chennai live news | Delhi News | MLAs salary hike | Chennai floods live updates | Chennai news | Chennai rains live updates | Paris Climate Change | Paris Climate Change Conference | 7th pay commission | Aamir Khan

            "As of now, El Nino continues to be strong. In an El Nino year, the South west monsoon will have deficit rains and North East monsoon will see excess rainfall," said G P Sharma, vice president, meteorology at Skymet, the private met agency.

            J Srinivasan, Chairman, Divecha Centre for Climate Change at the Indian Institute of Science attributed the formation of low pressure clouds in the Bay of Bengal that has caused heavy rains as there has been no cyclone.

            "It is a surprise for all of us. We need to look at the data once this phenomenon ends," said Srinivasan.

            Dr A Jayaraman, director of the National Atmospheric Research Laboratory (NARL), the weather research arm of Indian Space Research Organisation says cyclonic winds weaken after it hits the coast but the destruction could be enormous. Low pressure winds that carry rain experienced in the Chennai Floods 2015 coast move slow.

            "Cyclone is like an express train. It hits the coast and leaves a trail of destruction. But this fellow (low pressure winds) doesn't move fast like a cyclone. It is like a passenger train, it remains there for three to four days and pours," said Jayaraman, while blaming the current crisis in Chennai as manmade.

            "There is no problem with the rain. Problem is with poor town planning. The canals are blocked and there is no way the excess rain could be drained," he said.

Live Banking Round Table

Technology and new RBI policies are changing the face of banking. In five years’ time, banking might not resemble anything like we know it today. Are banks ready to leverage technology to achive the transformation?

            Will the present business models survive? Leading bankers and technogy players discuss the future of banking.

 Are banks doing enough to leverage technology?

           

            The business model of Live Banking Round Table is getting disrupted because of technology and emergence of new players. While the front-end technology is visible, it is the backend where maximum activity is taking place. What steps are the players taking to gain new customers, improve consumer experience, cross-sell products etc in a world that is rapidly getting digitised? How are they using data analytics to track consumer behaviour and engagement? How is the industry addressing the issues concerning issues of security and privacy, which remain a cause for concern? How are they planning and designing for hyper-scale and hyper-flexibility? Leading bankers and technology players will discuss all this and much more.

  

Will the banking industry survive in its present form in the next five years?

            We are seeing a new wave of competition in Indian banking, disrupting the business model of the existing big boys. Between 1994 and 2014, 12 new banks were born, but not all of them have survived. In the past seven weeks, two more have made an appearance, and in the next 18 months, we will see 21 more—10 payments banks and 11 small finance banks. Added to this is the RBI’s promise of on-tap licensing and the huge focus on technology-led Live Banking Round Table 2015 growth. What does all this mean for the established players? Are the days of incremental innovations over? Will branch banking survive? How do banks deal with the cultural changes that the change will necessitate? Find out the answers from six of the country’s leading bankers.

Sinha spells out four pillars of Budget '16

As the finance ministry begins drafting the 2016-17 Union Budget - to be presented in a mere 12 weeks - Minister of State for Finance Jayant Sinha told Business Standard on Tuesday that "three or four themes" would guide the finance ministry through the lengthy and complex process.

            The first, and major theme, he said, would be the expansion of universal social security, which he hoped would be a historic accomplishment for the National Democratic Alliance government. The roll-out of universal social security would be based on the direct benefits transfer platform, which he said was already working effectively in the employment guarantee programme, for the liquefied petroleum gas subsidy and for pensions and scholarships.

            The second theme in the Budget-2016 would be agriculture, "an area where we can do much more". The minister singled out crop health cards, agricultural credit, funding for state-led irrigation schemes among others.

           

            The third theme, Sinha said, would be job creation and the various associated programmes - 'Make in India', 'Skill India', 'Start-up India', and so on. The Union government's much-anticipated draft start-up policy, he indicated, would be finalised soon but probably not made public till the end of the year or in the New Year.

            The Budget's final theme would be "simplifying the tax structure… Let us see if the committee we have formed has some suggestions by then that we can put in the Finance Bill".

            The Budget News drafting process would take place in the context of a recovery in economic growth that Sinha cautioned was "patchy" - there were as yet "not enough data points" to determine if it was broad-based and could be sustained. "The [recently-released] GDP numbers are good but I want to see a real trend before we can say that the economy is really and seriously on an upswing."

            "You cannot say in an unalloyed way that the economy is moving", he added, adding that the government was facing some significant headwinds: successive below-par monsoons, a commodity meltdown that had hit sectors such as steel and metals, poor export demand and the overhang of stressed assets. Given the headwinds, he said 7.4 per cent growth was "creditable".

            He argued that "every time the Indian economy has done over eight per cent... it has been when exports are strong". When both agriculture and exports were struggling, "to really power beyond 7.5 per cent is a tall task".

            Nevertheless, he pointed to the government having turned around India's macro-economic indicators, including the fiscal deficit, in just over a year as an important component towards making a recovery possible. He added that there were several signs, including an increase in the number of hotel rooms booked for business travel, that domestic demand had begun to revive around Diwali. When asked if the government would meet its disinvestment targets - set at an ambitious Rs 69,500 crore for the ongoing fiscal year - Sinha said simply that "fiscal deficit targets would be met".

            While granting that the quarterly growth numbers were partly driven by front-loaded government spending, he insisted that high public investment could be sustained into the new fiscal year, in spite of the Seventh Pay Commission award and other fiscal stresses: "We have modelled the extra expenditure burden for next year. We can continue to make public investments that are necessary."

            On the prospects for the Goods and Services Tax (GST) Constitution amendment Bill in this session of Parliament, the minister said that the government had earlier managed to build consensus - except for the Congress - in the Select Committee of Parliament, and was "in consultation with colleagues of the Opposition" in order to rebuild that consensus.

            Sinha did indicate that the government viewed the GST as just one in a bouquet of broad structural reforms that it intended to undertake, which would create both hard and soft infrastructure, with the "right balance between regulation and market forces".

            The finance ministry's legislative agenda for the winter session of Parliament extended beyond the GST, he said. The number two priority was the new bankruptcy bill. "Number three on our agenda is the legislative action required to form the Public Debt Management Agency and the Monetary Policy Committee. Apart from that we are working on arbitration and conciliation laws."

            Discussing reform of state-controlled banks, Sinha said that each leadership position would be dealt with on a case-by-case basis, and that they were still open to private sector candidates - if the pipeline of executive directors within the public-sector banking system was not strong enough.

            The bank board bureau to advise public-sector banks was a first step towards a holding company, but there were "several moving parts" to handle before a second step was taken, he indicated. It would require legislative approval, and some banks might need to be changed into corporations, which they at present were not.

            Meanwhile, he stressed the government would continue to look at the non-performing asset situation, which he said was under control in absolute terms and would be settled through transparent processes.

Alkem Laboratories: A new prescription therapy for investors

The company's domestic business will continue growing at the current pace while US business will be fueled by launch approvals in the largest pharma market

            Alkem Laboratories, India's fifth largest pharmaceutical company by market share, is coming out with its initial public offer (IPO). Besides India, Alkem has also spread its sales network in the international arena building a sizeable business in the world’s largest pharmaceutical market, the US. While the company’s impressive growth rates in the domestic market continues, its US business should also grow over time. The company is also making efforts to grow its chronic product portfolio.

            However currently, the product mix is in favour of the 'Acute' segment which is highly competitive compared to the chronic space where margins are better and growth rates higher. On this front, Alkem has been increasing investments on field force and promotional activities, the benefits of which should accrue in the medium-term. In the US, it has built up a large product pipeline through product filings and continues filing for more new products.

            But, since majority of the filings are pending approvals, timely nods from the regulatory authority (USFDA) and consequently product launches will play a crucial role in driving its US growth. While one may have to keep patience till the approval rates pick up and benefits accrue, the IPO is fairly priced vis-a-vis valuations of peers. Given the future prospects of the company, investors can consider the offer.

Leadership position in India

            Having started from East India three decades ago, from where it still derives a third of its revenues, Alkem Laboratories Share Price has expanded to emerge as a pan-India player. In the domestic arena, the company’s strength lies in anti-infectives, gastro-intestinal, pain relief besides vitamins, minerals, nutrients, where it has built a strong product portfolio and enjoys a leadership position.

            Alkem derives majority of its sales from the Acute segment, which is highly competitive and thereby offers comparatively lower margins. It is the volumes that play a crucial role and have been supporting the segment's growth. Alkem, however, is working towards developing its chronic portfolio in the gynecology, diabetic care, dermatology, cardiology streams, etc, which should give returns in the medium term. The company had also acquired Indchemie and Cachet's portfolio that is likely to drive growth further. Supported by the acquisition, consolidated sales of the company during first six month of FY16 have grown by 36.1 per cent year-on-year. During FY11-14, the company’s domestic sales have grown at compounded annual rate (CAGR) of 14.2 per cent versus industry’s 11.5 per cent.

Building International business

            Alkem started strengthening its US presence from 2010, first by acquiring Pharmanetwork LLC for building the marketing platform followed by Norac Pharma‘s API manufacturing assets and recently (in June 2015) Long Pharmaceuticals' formulation manufacturing assets. Ever since, it has also filed 69 ANDAs (abbreviated new drug applications), of which 21 are approved, three have received tentative approvals while 45 are pending approvals. There are about 30 para-IV filings and one may see some launches on exclusivity too. However, these launches are likely to accrue benefits only in the longer run.

Strong financials

            The company’s consolidated revenues have grown at a CAGR of 22.3 per cent during FY11-14. However, EBITDA and earnings have grown at a CAGR of 17 per cent and 12 per cent, respectively. The company’s profit growth during FY13-15 has remained subdued due to multiple reasons. While the new drug pricing took a toll on domestic operations, Alkem has also expanded its field force and stepped up its marketing and promotional expenditure to grow the chronic segment. The drug filings in the US too have increased and higher investments led to softer profit growth. Analysts feel the company will derive benefits from these investments over time and hence is not a worry. Besides, the company is debt-free and with strong cash flows it can continue scouting for inorganic opportunities.

            IPO valuations too are reasonable with some analysts saying it is at a discount looking at the growth during first six months of current fiscal. Analysts at Reliance Securities say that Alkem is valued at 15.7-16.2x FY18 EPS, which is fairly valued given its operational scale. Analysts at Motilal Oswal Securities say that at the higher-end of the price band, the company would trade at 27x FY15 and 16x 1HFY16/PER (about 15-20 per cent discount to peers).

Bihar's Liquor Ban Is Good Politics, Bad Economics

Several states that imposed prohibition in the past lifted it once revenue loss began to pinch

Nitish Kumar's first decision after taking over as the new chief minister, to impose an all-encompassing ban on alcohol, will take Bihar back by 40 years. In 1977, Karpoori Thakur, Kumar and Lalu Prasad's mentor, too had banned alcohol - but it lasted only a little over a year.

When the ban comes into effect on April 1, Bihar will become the third state under prohibition after Gujarat and Nagaland.

The idea of the Bihar Liquor Ban came to Kumar on July 9 when he was at a function related to women's self-help groups in Patna. After he finished his speech and returned to his seat, the women in the audience complained about the widespread addiction to country liquor in rural areas and demanded a total ban on alcohol. At first, Kumar was taken aback, but returned to the podium with a smile: "You are correct. If I retain power, I will impose a ban on liquor in the state."

Kumar has kept his promise. "I have directed my officers to begin work for the formulation of the new policy which will come into effect from April 1," he said recently. The chief minister blamed increased liquor consumption as one of the causes responsible for domestic violence and said its consumption created "strife in the family".

The decision runs contrary to Kumar's earlier decisions, which were seen - at least by his now ally Lalu Prasad - loaded in favour of alcohol consumption. In fact, Prasad had often accused Kumar of promoting alcohol sale indiscriminately in Bihar.

Legal consumption of alcohol did rise in Bihar during Kumar's tenure. It is estimated that between 2005 and 2015, the number of alcohol shops doubled in Bihar. In 2006, Kumar established the Bihar State Beverages Corporation to provide suppliers remunerative prices, make liquor available at reasonable prices, maintain buffer stock and intervene in the market for price stabilisation.

These steps gave the state's finances a huge leg-up. In 2004-05, a year before Kumar first became the chief minister, the state's earnings from excise on liquor were Rs 272 crore, or 8.15 per cent of total own-tax revenue. In 2013-14, the earnings had shot up to Rs 3,300 crore and their contribution to the state's own-tax revenue increased to 15.60 per cent.

So far, Kumar has not explained how he will make up for this revenue loss, which looks all the more ominous, considering the state's fiscal parameters are not healthy. Bihar's gross fiscal deficit was 6.3 per cent of the state's gross domestic product (GDP) in 2013-14, way above the average of 2.5 per cent for all states.

A bitter taste

Kumar has said his officers will "find ways to make up for the possible loss". But talk to his bureaucrats and you will realise they are clueless - and angry.

"Our expenditure is soon going to be sky-high. We have to implement the recommendations of the Pay Commission and the central government has cut its share in the centrally sponsored schemes," says one officer. He lists other items that require serious investments: the electoral promises of providing road, electricity and water to every household, and unemployment allowances. "And now we have decided to shut our second-largest source of income."

Also bitter are liquor retailers, bars and hotels. Especially worried are the retailers and wholesalers who have placed orders for large consignments - they will have to liquidate them before April 1, even if they have to do so at a loss.

Politics trumps economics

But does Bihar really have an alcohol problem? The data from the National Sample Survey Organisation suggest otherwise.

According to it, people in Bihar spend very little on alcohol. The per capita expenditure on alcohol is around Rs 15.50 a month in the state, which is below undivided Andhra Pradesh (Rs 173), Kerala (Rs 80.85), and Punjab (around Rs 72). The all-India average is around Rs 35 - more than double of Bihar's share.

However, a slightly different picture emerges if the per capita expenditure on alcohol is seen as a proportion of the per capita income. In this, Bihar is placed at the 12th position out of the 29 states and Delhi.

The Liquor Ban In Bihar may be bad economics with uncertain social results, but it is smart politics. Kumar received a lot of votes from women in the recent elections to the Bihar legislative assembly, and he clearly wants to consolidate this vote bank.

"Kumar knows that he is in command despite the fact that we are the junior partners in the collation," says a senior Janata Dal (United) leader. "He knows that it will be tough to manage the aspirations of Lalu Prasad, his family members and his party leaders. Therefore, he wants to be ready beforehand for any eventuality."

Like Lalu Prasad has a solid vote bank of Yadavs and Muslims, Nitish wants one for himself: women. Prohibition appeals to all women, cutting across caste and religious barriers.

Kumar had earlier too struck a chord with women through empowerment schemes such as cycles for girls and 50 per cent reservation for women in the police and local bodies. "Prohibition is our masterstroke, now they will love him," says the JD(U) leader.

What would happen if the prohibition fails? "It doesn't matter. It's a matter of perception," he says. "Women want the government to shut down liquor shops in their neighbourhood and we are doing it."

Lessons from the past

Prohibition in India has met with only partial success. Several states have experimented with prohibition and eventually repealed it. Alcohol was banned in Haryana in 1996 by the Bansi Lal-led Haryana Vikas Party and the Bharatiya Janata Party government. The ban was removed in 1998 after the state government had lost Rs 1,200 crore in revenue.

In Andhra Pradesh, N T Ramarao imposed a ban in 1995. However, the government soon realised it couldn't fulfill its other promises - cheap rice and electricity - without the alcohol revenue. In 1996, after NTR died and his son-in-law, Chandrababu Naidu, took over as the chief minister, the ban was lifted. Naidu had admitted that illicit brewing had increased 20 to 30 times after the ban.

Last year, Mizoram ended its 17-year-old ban. Manipur (only in capital Imphal) and Nagaland are also contemplating doing away with prohibition on alcohol. Earlier this year, Manipur Chief Minister O Ibobi Singh told the state assembly that it was "about time the prohibition [was] withdrawn", while Nagaland Chief Minister T R Zeliand described his state as the "wettest dry state" because of rampant illegal sale.

Gujarat is the only state where prohibition has consistently existed since the 1960s.

The road ahead

Still, Kumar has decided to press ahead. On Friday, he said there will be "complete prohibition" in the state that will extend to all forms of alcohol. He was reacting to reports that the prohibition might just be limited to country liquor.

Besides, there are implementation challenges ahead for Kumar's government. One, he will need the cooperation of the governments of Uttar Pradesh, Jharkhand and West Bengal, where the sale of alcohol is allowed. These governments will have vested interests and might not be as excited by Kumar's idea since the increased sale will add to their revenue. This is reminiscent of 1996 when Punjab did little to help Haryana ensure a ban on alcohol sale in the state.

Usually, as in Gujarat, shops proliferate just across the state border. Moreover, Bihar has a long open international border with Nepal, which is manned by the central government's Sashastra Seema Bal. Tipplers are likely to troop into Nepal, have their fill and come back. The Bihar government's loss will be Nepal's gain.

Two, a correlation can be drawn between an increase in deaths owing to the consumption of toxic liquor and prohibition. Take Gujarat, for instance. The National Crime Records Bureau recorded 29 cases of consumption of toxic liquor in Gujarat in 2013. Neighbouring Rajasthan had zero cases. However, the removal of ban doesn't necessarily ensure an absence of deaths due to toxic liquor, as was evident in over 100 deaths in Mumbai due to consumption of poisonous liquor earlier this year.

One thing is clear: politics, as always, has the final say.

Inside SRK Inc

Weekend Special Shah Rukh Khan turned 50 on November 2. On a television show to mark the occasion, where he took questions from some of his 16 million Twitter followers, Khan minced no words. "It is stupid… it is stupid to be intolerant and this is our biggest issue, not just an issue… religious intolerance and not being secular in this country is the worst kind of crime that you can do as a patriot," he told the host, Rajdeep Sardesai.

            The Bharatiya Janata Party (BJP), which was about to wrap up its shrill campaign for the Bihar elections, launched a scathing attack on the superstar. Cyberspace hardliners went into overdrive. Kailash Vijayvargiya, a party heavyweight from Madhya Pradesh, infamously said that Khan's soul was in Pakistan. The film fraternity fractured into two camps. Top television anchors queued up to interview him, and those who didn't get a slot got busy trashing him on prime time.

            In the hysteria that ensued, a Tweet by BJP leader Meenakshi Lekhi went unnoticed: "Khan's intolerance comments came after ED notice." ED is the acronym for the Enforcement Directorate, the finance ministry arm that looks into violation of foreign exchange rules.

            Lekhi's insinuation left nothing to the imagination. As Khan did not respond to that Tweet, it is difficult to tell if the Enforcement Directorate had indeed provoked his outburst. (A few days later, Aamir Khan made a similar point and drew the ire of the lot that had trashed Khan.)

            Lekhi at least got the sequence of events right: late in October, Khan was summoned by the Enforcement Directorate to its south Mumbai office.

            Under its scanner are some overseas financial entities with links to Khan. Specifically, the Enforcement Directorate is examining if there were certain unrecorded transactions done through these entities.

            To unravel Khan's overseas business, one has to rewind to 10 years ago when Londoner Richard James Moore floated a real estate company called Winford Estates in Surrey. In March 2007, he sold it to Raja Sherbaz Khan, a property dealer. Nine months later, Khan acquired control of this company when he bought its solitary share from the property dealer for an undisclosed amount.

            Khan bought the share through Red Chillies International. Though mentioned in some records as a United Kingdom company, Red Chillies International is registered in Guernsey, a sparsely populated island in the English Channel.

            Known for its light taxes and easy regulation, Guernsey is a hub for private equity funds and other investment vehicles, and earns much of its national income from their activities. Its people are still debating between independence and a dominion status under the British crown. Till then, it is a "dependency".

            Filings in the Guernsey company registry show that Red Chillies International's registered office is at New Port House, 15 The Grange, St Peter's Port. It had capital of £50,000, according to the summary of capital and shares, on January 1, 2008. Khan's flagship, Red Chillies Entertainment, based out of Mannat, his sea-facing Mumbai bungalow, owned 49,999 shares in this company and Guernsey-based Island Nominees owned one share.

            While initially Red Chillies International was classified as a non-regulated company, returns filed in December 2012 show it was reclassified as a "financial product" company and its mandate was "creative arts and entertainment activities". Subsequent filings classified it as "financial product company, licensed resident agent".

            When Khan acquired Winford Estates, its net worth was in the negative. Weekend Special News The money it owed to its creditors (£14.9 million) exceeded its assets (£14.5 million). Returns filed with Companies House of the United Kingdom show Winford Estates has since then morphed into a company with a strong net worth: for the year ended March 2015, it had assets of £19.67 million and its bank loans stood at £7.8 million.

            Khan also seems to be sitting on significant gains on account of exchange rate gains as the pound has strengthened from Rs 60 to Rs 100 during the period.

            The Enforcement Directorate suspects that Khan used this structure for some real estate transactions in Dubai in 2008, the surpluses of which were not accounted for.

            Winford Estates' filings show that in 2008, the company extended its accounting year, which till then used to end in September, to March 2009. The notes to its financials for the period ended March 2009 under the head "going concern" remark that the company "is supported by loans given by the parent company Red Chillies Entertainment. We understand that there is no immediate plan to call for the repayment of this loan".

            In response to emails sent last week, the Red Chillies Entertainment spokesperson said Khan goes through all questions and answers them personally, and sought a week's time since the star would be busy all week in his upcoming film Dilwale's promotion. Subsequent reminders did not elicit any response.

            Is this a witch hunt launched by the BJP-led government? Has the Hindutva brigade found a soft target in Khan, who is known to be friends with the Gandhi family? Actually, this is the second time Khan has faced questions from the Enforcement Directorate.

            In 2011, when the Congress-led United Progressive Alliance was in power, it had summoned Khan to explain the share allotments of his company, Knight Riders Sports, which owns Indian Premier League (IPL) franchise Kolkata Knight Riders.

            The Enforcement Directorate had commissioned an audit by Mumbai-based chartered accountant Chokshi & Chokshi to determine whether shares allotted to Khan's business partners, actor Juhi Chawla and her husband, Jay Mehta, were undervalued, which resulted in foreign exchange losses.

            This is what happened. On January 24, 2008, then IPL commissioner Lalit Modi announced that "Khan, joining hands with Chawla and Mehta, won the bid for the Kolkata team for $75.09 million".

            Filings with the Union ministry of corporate affairs show that Knight Riders Sports was incorporated in February 2008 with Red Chillies Entertainment (9,900 shares) and Khan's wife, Gauri, (100 shares) as the promoters.

            On March 7, 2009, Knight Riders Sports allotted 10.99 million more shares to Red Chillies Entertainment, 4 million shares to Chawla and 5 million shares to The Sea Island Investment, a Mauritius outfit owned by Mehta through Bermuda-based The Mehta International. All shares were allotted at Rs 10.

            According to the findings of Chokshi & Chokshi, first reported in March, when the shares of Knight Riders Sports were issued to The Sea Island Investment, the fair value of each share should have been between Rs 70 and Rs 86. However, the equity shares were issued at Rs 10 a share. "This simply means that shares sold to The Sea Island Investment were undervalued," the audit report said.

            The matter did not end here. In February 2010, Knight Riders Sports restructured itself when the 11 million shares held by Red Chillies Entertainment and Gauri Khan were transferred to "Shah Rukh Khan jointly with Gauri Khan". A month later, Chawla transferred the 4 million shares she held to The Sea Island Investment. All these transactions were at par.

            The audit report by Chokshi & Chokshi said for the transfer of shares from Chawla to The Sea Island Investment, the fair value should have been between Rs 83 and Rs 99. The difference in valuations of the shares between the date of allocation to Chawla and the date on which she sold these to The Sea Island Investment could lead to capital gains tax implications, according to the Enforcement Directorate.

           

            Emails sent to Chawla and Mehta's offices remained unanswered. Both are learnt to have submitted their response to the Enforcement Directorate earlier this year.

            In its response, Knight Riders Sports contested the method followed by Chokshi & Chokshi for calculating the value of the shares. The company had used the "net asset value" method, also prescribed under the Foreign Exchange Management Act, but the Enforcement Directorate argued the shares should have been valued using the "profit earning capacity" method.

            Knight Riders Sports and Khan said this method could not have been applied to the start-up company that was in its early years and hence its earning capacity was uncertain.

            Four years after the probe started, closure is nowhere in sight.

            Inside SRK Inc Meanwhile, after six years in the business, Knight Riders Sports' revenues have crossed Rs 100 crore, but its profits remain modest and volatile. Still, the Kolkata Knight Riders brand is highly valued. According to a ranking by consulting firm American Appraisal in April, it is the most valuable IPL franchise. Kolkata Knight Riders saw its valuation shoot up 25 per cent to $86 million in 2015, which helped it leapfrog from the third spot to the first.

            Khan has ventured into other businesses as well. After the initial success at IPL, Khan had started a television production business called Idiot Box.

            He had chosen journalist Samar Khan to head this venture. But this folded up after trying its hands in some television serials and talk shows, one of which was hosted by Preity Zinta. When contacted, Samar said he was no longer associated with the venture and would not want to talk about Khan or his ventures since it was "too long ago".

            For Khan, the business partner of choice seems to be Chawla - the two have also done films together.

            In the initial years, Chawla's brother, Sanjiv, was a director of Knight Riders Sports, along with Mehta and Gauri. In April 2010, Sanjiv suffered brain haemorrhage and was hospitalised. The firm relieved him from the board two years later. Knight Riders Sports recorded his death in March 2014 in its last annual report and remembered his contributions.

            Dreamz & Filmz was Khan and Gauri's first venture with Chawla. This company, which distributed films, has been amalgamated into Red Chillies Entertainment. Arclightz & Films, in which Chawla and Khan hold 25 per cent each (with Enzo Pictures owning the remaining 50 per cent), is into film production and made a loss of Rs 3.17 lakh in 2013-14.

            In addition, Khan and Gauri own Tuscany Properties, a realty company with paid-up capital of Rs 1 lakh. This company, which made losses in 2011-12 and 2012-13, had fixed assets (land and building) worth Rs 46 crore, funded largely by unsecured loans from the Khans.

Banking Round Table

Technology and new RBI policies are changing the face of banking. In five years’ time, banking might not resemble anything like we know it today. Are banks ready to leverage technology to achive the transformation?

            Will the present business models survive? Leading bankers and technogy players discuss the future of banking.

 Are banks doing enough to leverage technology?

           

            The business model of Banking Round Table is getting disrupted because of technology and emergence of new players. While the front-end technology is visible, it is the backend where maximum activity is taking place. What steps are the players taking to gain new customers, improve consumer experience, cross-sell products etc in a world that is rapidly getting digitised? How are they using data analytics to track consumer behaviour and engagement? How is the industry addressing the issues concerning issues of security and privacy, which remain a cause for concern? How are they planning and designing for hyper-scale and hyper-flexibility? Leading bankers and technology players will discuss all this and much more.

Will the banking industry survive in its present form in the next five years?

            We are seeing a new wave of competition in Indian banking, disrupting the business model of the existing big boys. Between 1994 and 2014, 12 new banks were born, but not all of them have survived. In the past seven weeks, two more have made an appearance, and in the next 18 months, we will see 21 more—10 payments banks and 11 small finance banks. Added to this is the RBI’s promise of on-tap licensing and the huge focus on technology-led Banking Round Table 2015  growth. What does all this mean for the established players? Are the days of incremental innovations over? Will branch banking survive? How do banks deal with the cultural changes that the change will necessitate? Find out the answers from six of the country’s leading bankers.

Sinha spells out four pillars of Budget '16

As the finance ministry begins drafting the 2016-17 Union Budget - to be presented in a mere 12 weeks - Minister of State for Finance Jayant Sinha told Business Standard on Tuesday that "three or four themes" would guide the finance ministry through the lengthy and complex process.

The first, and major theme, he said, would be the expansion of universal social security, which he hoped would be a historic accomplishment for the National Democratic Alliance government. The roll-out of universal social security would be based on the direct benefits transfer platform, which he said was already working effectively in the employment guarantee programme, for the liquefied petroleum gas subsidy and for pensions and scholarships.

The second theme in the Budget'16 would be agriculture, "an area where we can do much more". The minister singled out crop health cards, agricultural credit, funding for state-led irrigation schemes among others.

The third theme, Sinha said, would be job creation and the various associated programmes - 'Make in India', 'Skill India', 'Start-up India', and so on. The Union government's much-anticipated draft start-up policy, he indicated, would be finalised soon but probably not made public till the end of the year or in the New Year.

The Budget's final theme would be "simplifying the tax structure… Let us see if the committee we have formed has some suggestions by then that we can put in the Finance Bill".

The Budget drafting process would take place in the context of a recovery in economic growth that Sinha cautioned was "patchy" - there were as yet "not enough data points" to determine if it was broad-based and could be sustained. "The [recently-released] GDP numbers are good but I want to see a real trend before we can say that the economy is really and seriously on an upswing."

"You cannot say in an unalloyed way that the economy is moving", he added, adding that the government was facing some significant headwinds: successive below-par monsoons, a commodity meltdown that had hit sectors such as steel and metals, poor export demand and the overhang of stressed assets. Given the headwinds, he said 7.4 per cent growth was "creditable".

He argued that "every time the Indian economy has done over eight per cent... it has been when exports are strong". When both agriculture and exports were struggling, "to really power beyond 7.5 per cent is a tall task".

Nevertheless, he pointed to the government having turned around India's macro-economic indicators, including the fiscal deficit, in just over a year as an important component towards making a recovery possible. He added that there were several signs, including an increase in the number of hotel rooms booked for business travel, that domestic demand had begun to revive around Diwali. When asked if the government would meet its disinvestment targets - set at an ambitious Rs 69,500 crore for the ongoing fiscal year - Sinha said simply that "fiscal deficit targets would be met".

While granting that the quarterly growth numbers were partly driven by front-loaded government spending, he insisted that high public investment could be sustained into the new fiscal year, in spite of the Seventh Pay Commission award and other fiscal stresses: "We have modelled the extra expenditure burden for next year. We can continue to make public investments that are necessary."

On the prospects for the Goods and Services Tax (GST) Constitution amendment Bill in this session of Parliament, the minister said that the government had earlier managed to build consensus - except for the Congress - in the Select Committee of Parliament, and was "in consultation with colleagues of the Opposition" in order to rebuild that consensus.

Sinha did indicate that the government viewed the GST as just one in a bouquet of broad structural reforms that it intended to undertake, which would create both hard and soft infrastructure, with the "right balance between regulation and market forces".

The finance ministry's legislative agenda for the winter session of Parliament extended beyond the GST, he said. The number two priority was the new bankruptcy bill. "Number three on our agenda is the legislative action required to form the Public Debt Management Agency and the Monetary Policy Committee. Apart from that we are working on arbitration and conciliation laws."

Discussing reform of state-controlled banks, Sinha said that each leadership position would be dealt with on a case-by-case basis, and that they were still open to private sector candidates - if the pipeline of executive directors within the public-sector banking system was not strong enough.

The bank board bureau to advise public-sector banks was a first step towards a holding company, but there were "several moving parts" to handle before a second step was taken, he indicated. It would require legislative approval, and some banks might need to be changed into corporations, which they at present were not.

Meanwhile, he stressed the government would continue to look at the non-performing asset situation, which he said was under control in absolute terms and would be settled through transparent processes.