Saturday, November 27, 2010

US warns India about possible WikiLeaks release

Another embarrasment is about to hit the Indian politicians and government officials.
This might help the 2G scam accused as the disclosures will dominate the news headlines on Sunday and the coming week. Any guesses what US diplomats think about Indian politicians and Babu's.

DNA India reports.

The US has warned India and other key governments across the world about a new potentially embarrassing release of classified documents by the whistle-blowing website WikiLeaks which may harm the American interests and create tension in its ties with its "friends".

"We have reached out to India to warn them about a possible release of documents," state department spokesperson PJ Crowley told Press Trust of India.

"We do not know precisely what WikiLeaks has or what it plans to do. We have made our position clear. These documents should not be released," Crowley said, ahead of the expected release by the website of millions of sensitive diplomatic cables.


Dheila DikShit said...

This is a joke. 100% of Indian administration including judiciary and police are corrupt. Who is going to take action against the corrupt.

If the report happens to be bad, the only action would be organizations like Rss, Shivsena etc start damaging property all over India until someone pays their dues

Anonymous said...

@Dheila DikShit

I couldn't agree more with you, It's all gonna be tamasha..

Now considering the fact that 2G scam/Adarsh and Realty scam are exploding beyond the control of our babus and politicians, this wikileaks is coming as a God send scape goat for these corrupt guys!

shailesh said...

Builders banking on 'close to airport' line

Green signal to Navi Mumbai airport has led builders to boost property rates, and plot owners have joined the bandwagon by postponing land deals in anticipation of the hike

Now that the uncertainty over the airport in Navi Mumbai has been dispelled, real estate prices are set to shoot up in the city.

While builders in the satellite city have taken their cue to pump up property prices, expecting a boost in prices over the coming two months, traders and plot owners have kept plots in Ulve, Donagiri, Panvel and other areas in Navi Mumbai on hold so they can extract the most out of land sales.

Manohar Shroff of Navi Mumbai Chamber of Housing said, "Traders are expecting a rise in prices because they are under the impression that the airport is finally coming to Navi Mumbai now. The real estate market in Navi Mumbai is more attractive now and it will surely help them.

We expect a huge rise in the price of real estate, even farmers, villagers and traders do. They have put all transactions on hold for the coming two or three months so the market gives them the price they want."

The airport is raking in enough buyers to jack up the plot prices in Ulve, Donagiri and Panvel by up to 20 per cent (see box).

shailesh said...

Home loan scam: Companies inflated asset value says Economic Offences Wing

The Economic Offences Wing (EOW) of the Central Bureau of Investigation (CBI) investigating the multi-crore loan scam suspect that the companies that benefited in the syndicate may have inflated their assets value and balance sheets in order to make themselves eligible for more loans than their actual eligibility.

A similar kind of profit ‘inflation’ was observed during the investigation of Satyam scam, in which Ramalinga Raju reportedly told his interrogators that he falsified the assets and profits for years, in order to project his company to be successful and thereby attract more investments.

"We are investigating the case from all angles," said a CBI official. CBI on Wednesday busted a corporate scam in which top executives of at least four public sector banks, and a leading financial services firm, have been involved in swindling of thousands of crores of rupees.

The officials said that Money Matters India Pvt Ltd has been acting as mediators and facilitators for corporate loans. They would allegedly bribe the top officials of the public sector banks and financial institutions for facilitating large scale corporate loans. This was done to get the loans passed even when the corporates seeking such loans were not eligible for it.

A CBI official explained how the corporate companies contacted Money Matters India Pvt Ltd to raise a loan. If the loan requirement was large but did not match with the company’s eligibility, then these companies with the help of Money Matters would allegedly ‘over value’ the company’s assets and balance sheets. CBI officials added that this could not have been possible without help from the property valuers, auditors and the arrested bank executives.

shailesh said...

There are concerns that banks will crack the whip. That, if it happens, could lead to liquidity crunch for players and softening of prevailing property prices, says industry watchers.

In Mumbai, the HDFC Chairman, Mr Deepak Parekh, has gone on record that the scam itself does not point to any systemic risks, but it will make lenders “cautious” and nudge some developers to bring prices down and sell stock. For now, the Finance Minister, Mr Pranab Mukherjee, has asked all public sector banks, financial institutions and insurance firms to carry out an independent evaluation on the asset quality, documentation and compliance of other prudential requirements of the companies mentioned in the CBI application in connection with the bribery scandal. However, the Government has not directed banks and financial institutions to cut down on their exposure to the sector per se.

RBI clampdown

The ‘bribe-for-bank-loan' scam comes at a time when rising prices have slowed down residential sales. Also, in its second quarter review of Monetary Policy earlier this month, the Reserve Bank of India announced a slew of measures aimed at tightening housing loan norms. It came down heavily on the ‘teaser loans' by hiking the standard asset provisioning by banks for all such loans to 2 per cent from 0.4 per cent. The RBI has also increased the risk weight for residential housing loans of above Rs 75 lakh to 125 per cent from 100 per cent — banks have to set aside more capital for giving such loans. Further, the RBI has put a regulatory ceiling of 80 per cent on the Loan to Value ratio in respect of banks' housing loan exposures.

“Banks had any way clamped down on funding , and the last one-to-one-and-a-half years have seen strict controls being put in place. The bribery scam will trigger more such scrutiny…any chance of revival of loans to developers now appears even more difficult,” says Mr Samir Jasuja, Founder and CEO of PropEquity, but categorically rules out a crash in the property market.

More private equity

Mr Anuj Puri, Chairman & Country Head, Jones Lang LaSalle India, feels that borrowing could become more expensive and the process involved in getting it lengthier as banks increase their vigilance. “This means that we may see a marginal increase in the dependence on private equity,” he opines.

“So far funding was available from the banks. If that cycle is now broken, it will be natural for developers to turn to private equity,” feels the CEO of Fire Capital Fund CEO, Mr Om Chaudhary.

Anonymous said...

'WikiLeaks' increasingly looks like a clandestine operation by CIA with the full knowledge of American Administration. The ulterior motive is anybody's guess. Now, as far as our country is concerned, the leaks may include huge kickbacks to various ministers/govt to secure defense deals and may lprovide information on kickbacks involved in other import/export.

As DikShit said, the opposition may try their best to unseat the government. Other than that, this leaks will have no impact on Indians. Unlike the olden days when USSR was a superpower, there is no one else to turn to for technology, trade etc , so the question of worsening the relations between countries doesn't arise. Just like the middle east, India will remain a virtual slave to USA for some time to come. All the talk about India becoming a super power is all bullshit as long as India remains corrupt

Anonymous said...

@Anon above, I wouldn't be surprised if the US has taped the wires and communications of politicians from around the world where they have put their self interests above that of their nations and for any country that does not tow the line that the US dictates, they will keep releasing these documents via wikileaks thus as a form of blackmail....

Desi Batman said...

Since when did ethics came into play for businesses. Scams add no value or devalue the RE and nor do Indians care.

Think about this, people are ready to pay crores for the place which has shitty basic infrastructure such as water, sewer and electricity. They are not going to put scams on priority list above instructure on deciding to buy RE.

More over RE in India, most part of price is in Black, they are NOT dependent on loans from Bank.

shailesh said...

Housing loan scam: How will bankers respond?

two-three things, one is that the real issue started with the stimulus programme. What seems to have happened is that the stimulus programme was actually targeted to go back to the economic revival, to go back to the economic performance of all the sectors, we started realising that a couple of sectors received perhaps more benefits out of that stimulus programme, out of that asset reconstruction program that the banking companies created. So, the whole issue started with that. And then ofcourse somewhere along we started realising. All the quarterly statements, which we received from the regulators office, did hint at the asset valuation bubble and did point out that the bank should really be very careful with their exposure in those areas where the asset valuation is subject to huge volatility. So that was one part of it.

The second part of it was that the pricing of both commercial and residential properties across most urban areas was kept at a certain artificial level. And somewhere you get an impression that the stimulus programme funds were actually utilised in keeping that price line at an artificial level. So, somewhere that correction had to happen. I am very glad to say that regulator has been very careful, he has through the risk weightages really tried to look at the exposure of the banking companies in this particular sector. Somehow in this particular case now we are getting an impression that it’s not just the exposure, but it’s also something to do with the security and the collateral valuation. And that’s something that is a little worrying because do the banks really know the value of security and collateral they are sitting on. If there was certain amount of value adjustment upwards ofcourse, which the borrowers may have carried out in order to show that they are complying with the security requirements then the banking companies will have to take a stock of that and start examining that.

shailesh said...

Let’s look at the underlying reality. There’s no doubt real estate prices have been soaring. It is easy to say this was demand driven, given the huge gap between supply and demand for middle-class housing in the country. However, instead of catering to the differentiated needs of a vast segment of the middle class, developers have been focusing at the high end of the market, keeping prices well beyond the reach of potential clients. In the last two years, due to the impact of recession, banks had reduced interest rates and offered teaser loans to encourage people to buy property. But while such loans played a part in reviving the property market, the suspicion remains that prices in many metros are being rigged up by builders.

As property prices continued to soar beyond the reach of the middle class, purchases dwindled and builders needed cash from banks to improve liquidity. For lenders who saw a slowdown in retail loans, giving out bulk loans to builders was an easier option to grow business. This is where the bribery scandal may have played a facilitating role in bringing big lenders and builders together.One hopes that most of these loans are recoverable and not siphoned off by rapacious builders. But either way the government should ensure a thorough investigation and send the crooks to jail.

Anonymous said...

I think somewhere there has been collusion with the government too. I remember in 2008 when the recession had started baring its fangs, K P Singh of DLF led a group of builders to MMS to plead for their liquidity needs. The case made out at that time was that realty industry employs the second highest number of laborers after the agriculture sector and therefore needs to be supported. Thereafter most of these builders managed to get "stimulus" and therefore the boom continued..

I think this bubble is looking for a pin and the loan scam might not be the pin, but the pin is around which is going to puncture this bubble...

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