[zenren]

Originally Posted by samyakmodi

is it not answerable to it's share holders? how can a company spend without any justification to the share holders?

If that logic is really true and the share holders are interested in such minute level details, we wouldn't see such high levels of bribery across the country. Good book keepers know how to get it into account books as a routine spend without attracting serious attention of the auditors.

[harry10]

Originally Posted by samyakmodi

how is it minor??

apparently a 4.5 crore car totalled and additional 75 odd lacs spent on initial compensation.

interestingly just got to know the MA is not listed as an active director for reliance ports and terminals.

For a person who owns a 4000 crore Rs home this was actually pocket change. Specially when it involves one of his children or a middle age driver

[samyakmodi]

Originally Posted by harry10

For a person who owns a 4000 crore Rs home this was actually pocket change. Specially when it involves one of his children or a middle age driver

True

But honestly I'm apalled at the lack of logic in this case which like Omar Abdullah said " every one knows who crashed it other than the mumbai police"

Though I agree that no one was seriously hurt in the entire episode but this just goes one to show that in our country rules are made buy the people with money for people without money

[shankar.balan]

Originally Posted by samyakmodi

our country rules are made buy the people with money for people without money

Isn't that such a sad situation? All we seem to have achieved in 65 years since Independence is taking bribery, corruption and scams to unprecedented levels.

[canonball]

As someone pointed out in earlier posts, I am faxed with following questions:

A. Why has a publicly listed company - http://investing.businessweek.com/re...vcapId=2529539 bought a car which is not typically used for executive transport?

B. Like someone asked earlier, shareholders of this loss making company seems like morons for not questioning such a purchase.

C the insurer of this car is sure going find ways to not settle the claim on this Aston , I wonder how this loss is going to shown on the books

Truly banana republic and banana people stuff

[StarrySky]

Originally Posted by samyakmodi

in our country rules are made buy the people with money for people without money

You have described democracy as it is practiced in every country in the world. Of course, in our country, corruption is much more visible in our daily lives.

Now we are into completely irrelevant questions like why a loss-making company like Reliance Ports bought an Aston Martin? Unless it is shown that it is illegal for a publicly listed company to buy a Rs.4cr car, it is none of our business.

I'm sure a few non-fatal accidents get settled in our country everyday, maybe in the presence of a crowd or a policeman, with money changing hands, no FIR, no police case. If the other party is willing to pay an amount which will compensate our loss of NCB, we are happy to tell the insurance company we hit a wall ourselves, instead of telling the truth about an accident. We also receive advice, sometimes on this forum, that it is better to settle it this way and forget about it. What then, is so special about this case?

I would also like to understand how many of us will *not* try to help a son or a daughter who gets into trouble. We may not be Ambanis to keep news out of the media, but I'm sure we will try in our own ways - maybe talk to the affected party ourselves, drop a few "important" names, maybe even get help from a local politician or someone higher up in the police force, who is a friend of a friend etc etc.

[zenren]

Originally Posted by canonball

A. Why has a publicly listed company - http://investing.businessweek.com/re...vcapId=2529539 bought a car which is not typically used for executive transport?

B. Like someone asked earlier, shareholders of this loss making company seems like morons for not questioning such a purchase.

Just because the car is registered in the name of a company doesn't mean the company was footing the EMIs or bills for this car. There are a lot of instances where employees opt for the company lease option while purchasing the car which would help save the tax on the EMIs and the monthly cost spent on the car including fuel. If I opt for a car lease with my employer, the car would be registered in the name of my company and would be transferred to my name only after I complete the entire duration of the lease and pay the residual value. The registered owner of my car was my company for the first 36 months.

So I don't think share holders would care one bit if some of their top officials buy cars on company lease as long as the EMI gets deducted from their 'paycheck'. As far as the "car is registered/belongs to XYZ" claim goes, that's probably just someone in the media looking up the RTO data based on registration number.

IMO, we are curious on this specific instance because the car was used by the owners of the company and not just any paid employee. There would be a lot of other cars registered to the same 'owner' if they have a car lease option for senior officials. Technically, it doesn't come under the purview of the shareholders if it doesn't involve company funds. Most members of the family hold some post in the company which would also have a remuneration as per the balance sheet. If the expenditure comes from this header, no shareholder need to be bothered about it as it is a personal choice of that specific person.

[honeybee]

Originally Posted by shankar.balan

Isn't that such a sad situation? All we seem to have achieved in 65 years since Independence is taking bribery, corruption and scams to unprecedented levels.

What, and you are forgetting the fact that luxury cars such as the A6 can now be bought off the shelf, or that car registration can now be done without involving the RTO.

It wouldn't be fair to ignore these changes!

[Hayek]

Originally Posted by canonball

A. Why has a publicly listed company -http://investing.businessweek.com/re...vcapId=2529539 bought a car which is not typically used for executive transport? B. Like someone asked earlier, shareholders of this loss making company seems like morons for not questioning such a purchase. C the insurer of this car is sure going find ways to not settle the claim on this Aston , I wonder how this loss is going to shown on the books

As the article you have linked to shows, the company that owns the car is a subsidiary of a listed company with a Rs. 280,000 cr. market cap, and PAT of almost Rs. 25,000 cr. Shareholders are not going to miss Rs. 4.5 cr. even if the insurance company fails to pay (and I don't see how they can not pay as long as the car was driven by a person with a license).

As someone else has pointed out, it is completely normal for corporate executives to be permitted to buy a car of their choice within their cost to company limits. You can also use such a car for personal purposes (including by giving it to a family member or paid driver) as long as you declare the perquisite value (Rs. 1800 per month, if I am not mistaken) in your tax return. I have bought a Vento under such a scheme, colleagues of mine have bought 7 series and A8s, and our company would have no problem with someone buying a Z4 or M5 instead.

Similar company car laws exist in other parts of the world such as the UK. So let's not get completely off topic and call ourselves a banana republic because of something that is perfectly above board.

[saket77]

Now there is a twist in case!

The published news reads as :

MUMBAI: Phorum Ruparel, a 25-year-old student who complained to the police after a speeding Aston Martin hit her Audi on Pedder Road early this month, has said she does not wish to pursue the case. But it is not in her hands anymore to withdraw the FIR.

"It can be done only by the government or the complainant will have to go to court stating she has done a compromise with the accused," said a senior police official, making it clear that the court would decide.

Link:http://timesofindia.indiatimes.com/c...w/28024272.cms

[StarScream]

Originally Posted by canonball

As someone pointed out in earlier posts, I am faxed with following questions:

A. Why has a publicly listed company - http://investing.businessweek.com/re...vcapId=2529539 bought a car which is not typically used for executive transport?

B. Like someone asked earlier, shareholders of this loss making company seems like morons for not questioning such a purchase.

C the insurer of this car is sure going find ways to not settle the claim on this Aston , I wonder how this loss is going to shown on the books

Truly banana republic and banana people stuff

Reliance Ports is not a publicly-listed company. It has no public shareholders. It has issued debt and hence has bondholders but I haven't checked who. As Hayek said it is a unit of a publicly-listed company.

There is a separate issue here of how owner managers in India treat their public companies as their turf to do as they please. Case in point, Vijay Mallya. His Goa retreat is shown on United Spirits' books as a company guest house.

[canonball]

Originally Posted by StarScream

Reliance Ports is not a publicly-listed company. It has no public shareholders. It has issued debt and hence has bondholders but I haven't checked who. As Hayek said it is a unit of a publicly-listed company.

There is a separate issue here of how owner managers in India treat their public companies as their turf to do as they please. Case in point, Vijay Mallya. His Goa retreat is shown on United spirits books as a company guest house.

My overall point is there certainly is a privilege abuse happening, which is not acceptable under global standards where the same is more often kept in check than India can ever aspire to.

I understand private companies in which a public ltd company have interests or is the chief promoter of automatically falls under deemed public.

I suppose the guys who responded to my post in quotes may have the answer. Cars bought for employees as tax saving retention tool is not applicable to promoter in management category, so comparison is irrelevant. Anyway i don't want to bother with this argument in an environment which seems not ready to tackle the obvious impropriety which is overlooked wholesale in our country cheerio

[StarScream]

Originally Posted by canonball

My overall point is there certainly is a privilege abuse happening, which is not acceptable under global standards where the same is more often kept in check than India can ever aspire to.

I agree, although I believe the super rich enjoy such privileges all over the world - the difference is only in the degree of the getaway factor.

About your original point about shareholders - shareholder activism is a concept that doesn't exist in India and that is one reason why promoters can get away with all sorts of transgressions.

[canonball]

Originally Posted by StarScream

I agree, although I believe the super rich enjoy such privileges all over the world - the difference is only in the degree of the getaway factor.

About your original point about shareholders - shareholder activism is a concept that doesn't exist in India and that is one reason why promoters can get away with all sorts of transgressions.

Have you noticed everything wrong in india is defended, argued and intellectualised tooth and nail. I suppose it is the lack and ability of applying ones mind to have the same prejudice against the wrong and for the right. Which is why the MAJORITY of us find the easy way out in everything. These are not way nations can grow in today's context.

This sums it up -

https://www.youtube.com/watch?v=KcrUs8FAt40

[Chetan_Rao]

The facts of this case (whatever precious little are available) simply don't add up.

Insurance claims paid out within a couple of weeks (now denied by the insurer), expensive cars bought off the shelf (adding some pocket change to the non-existent insurance settlement), sporting a number plate which isn't officially allotted yet, and all this for a driver who has already 'confessed' to the crime.

I don't want to make allegations I can't substantiate, but I wasn't born yesterday.