Friday, 30 March 2012

Sack Ramamritham

Ramamritham must be sacked - plain and simple. He is usually just a nuisance and a pain in the posterior, but otherwise a good man. But recently he has crossed the barrier and is now a genuine danger. He must be read the riot act and told to go.

I am referring to his contortions and nonsensical behaviour in the Vodafone case. For those not familiar with this saga - here's a short summary.

Some years ago Vodafone bought a 67% stake in Hutchison Essar. Vodafone's Dutch company bought the shares from Hutchison Telecom which is a Hong Kong company. Neither the buyer, nor the seller was an  Indian company although the shares they bought were of a company whose operations are in India. Under ordinary tax laws in most countries in the world, including India, the place where the selling company is and the buying company is dictates where tax would be paid on the gains from the sale of shares (in this case neither was in India). This should have been a straightforward matter.

But Ramamritham decided to put his grubby fingers in. He levied a demand on Vodafone that capital gains tax was to be paid in India as the underlying asset was in India. Specious argument, but then Ramamritham is not exactly renowned for cold logic. The judicial process being what it is, Vodafone had to cough up a substantial amount (Rs 2500 crores of the total demand of Rs 12,000 crores ), before it could go on appeal.

The case duly went to the Supreme Court which told Ramamritham to *$%& off. That should have been it.

But Ramamritham decided that he would not return the money he had expropriated from Vodafone (you see he had spent it on giving free colour TVs to all and sundry). So he amends the law with retrospective effect in the latest budget to say that Vodafone has to pay. He has excelled himself - he has amended the law with retrospective effect dating back to 1962 !!!!! He can now open every sale or purchase of shares from 1962 and go after everybody. His justification - government will lose a lot of money if it has to refund Vodafone. The mind boggles - next he can simply rob you and me of all our money and then refuse to return it on the grounds that government will lose revenue.

It does not matter to him that the Supreme Court has ruled time and again that the law cannot be amended retrospectively. Ramamritham is trying to get away in this case by claiming that he is not amending the law but the notes to the law !

Have you noted that the blighter is going after Vodafone, which was the buyer and made no capital gain - it was Hutchison Telecom as the seller which made the gain. The simple reason is the Vodafone is in India and unfortunately in Ramamritham's grasp. Ramamritham can always find logic for his tantrums ( in this case the grounds are that Vodafone did not deduct tax at source). Hutchison Telecom does not exist in India; so he cannot go after them. They exist in China which of course has told Ramamritham where he can go and stuff it.

No sensible businessman can do business in India if Ramamritham continues to get away scot free. He must be sacked,  banished to Dhanushkodi and told never to return.

PS - For newbies to my blog, here's an introduction to this frustrating character called Ramamritham.


10 comments:

RS said...

Oh no, why Dhanushkodi??!! Anywhere else please.....

Appu said...

Ah, for a long time, I was wondering what this was all about? Thanks thanks :):)

Sandhya Sriram said...

Even keeping this really sad amendment aside, if P C wants to implement what he wants in reality he wants in the current budget, he needs to first sack all the ramarathinams. it is just frightening to even where the ramarathinams at the lower level can take this budget toBeware, Ramarathinam may even come after you. by blogging about facebook and other billionaires and creating brand value for her delivering a service and they can impose a deemed value of service for your brand equity and levy a service tax on you. so be careful :-)

J said...

If all the Ramamrithams get fired, you will lose some excellent fodder for your blogs... be careful what you wish for :) I haven't closely followed this and your side of the story sounds straightforward. What is the logic in Ramamritham's argument - is he trying to address a bigger issue of tax havens (isn't one of the entities in Cayman or some such place) or is there a gap in the tax laws or is he shamelessly going after deep pockets.

Ramesh said...

@RS - Alright; we'll banish him to Moreh :)

@Zeno - Aaha, there's something that the philosopher did not know ???

@Sandhya - OMG you are right; I have to duck for cover :)

@J - Two of the three reasons you mentioned. Yes; he is going after tax havens, but the reality is that RS 12,000 crores was too tempting. After all M&A like this has been going on for a long time. But when he saw the prospect of robbing Rs 12,000 crores his eyes lit up.

TMM said...

If you can sack Ramamritham and his wonderful boss (PC) it will be the best thing. ONce upon a time about 30 years back when I was a wee little boy we had a new candidate standing for MP elections in our constituency in TN (1980?) Dapper and erudite looking B.Sc, B.L. and an MBA from Harvard, the intelligensia and the masses were charmed by him voted for him enmasse. That was the story of the boss of Ramamrutham who won the first election from Sivagangai. To be reduced to a caricature of what he was (or the promise of what he could have been) is perhaps the irony and the pathos of politics

Ramesh said...

@Kiwi - PC has done quite a bit - remember abolition of that chief Ramamritham called Controller of Imports and Exports - but as he has aged, he has declined into mediocrity. Just goes to show there must be a retirement age for politicians too (China has this).

Btw Ramamritham's boss is now not PC, but Pranabda.

Appu said...

I was not able to understand the issue :(

Vishal said...

I was expecting this post for long Ramesh! Guess your timing is perfect after retrospective amendment to the law. Leave aside, PC! even the bestest of economist, (think of Pranabda's boss), these Ramamrithams do not spare anyone with good intentions. By now, people have big question marks on Mr. Singh's intentions also! He also realizes importance of Ramamrithams now. Who all should be banished to Moreh?

Ramesh said...

@Vishal - If you abolish too many people to Moreh, the place can't accommodate them. So only Ramamritham :):)

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