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Thursday, April 17, 2014

SC: CAG can audit pvt firms in revenue-share deals with govt Telecom Verdict May Affect Other Sectors Like Coal Mining, Gas

New Delhi: In a path-breaking judgment, the Supreme Court on Thursday ruled that the Comptroller and Auditor General (CAG) can audit account books of private companies which are doing business using national wealth or natural resources on a revenue-sharing basis with the Centre. 

    Though the judgment has a direct bearing on telecom service providers doing business using spectrum on a revenue-sharing basis, it will also have a vital impact on private firms engaged in natural gas extraction and coal mining as these sectors too operate on the basis of variants of revenue-sharing models, mostly termed as production-sharing contracts. "When nation's wealth, like spectrum, is being dealt with either by the Union, state or its instrumentalities or even the private parties, like service providers, they are accountable to the people and to Parliament. Parliamentary democracy also envisages the accountability of the council of ministers to the legislature," said a bench of Justices K S Radhakrishnan and Vikramjit Sen. 
    The verdict comes at a time when the SC is dealing with the 2G spectrum scam, coal block allocation irregularities and also hearing arguments on MP Gurudas Dasgupta's petition alleging that Reliance and the Union petroleum ministry were hand-in-glove to give RIL 'windfall profit' causing consequent loss to exchequer.
SC: Govt is sometimes hand in glove with licence providers 
    The bench said such audit by CAG was important when the Executive dealt with natural resources, like spectrum, which actually belonged to the people of India.Writing a judgment that paves the way for CAG to audit private telecom companies, Justice Radhakrishnan said the Supreme Court was of the firm belief that CAG must audit the accounts of private firms because "instances are not rare where even the Executive, at times, acts hand in glove with license providers, who deal with the natural resources, hence, necessity of parliamentary control over the resources." 
    Dismissing petitions by Association of Unified Tele Services Providers and Cellular Operators Association of India, the 
bench said: "CAG's examination of the accounts of service providers in a revenue sharing contract is extremely important to ascertain whether there is an unlawful gain to the service provider and an unlawful loss to the Union of India, because the revenue generated out of that has to be credited to the Consolidated Fund of India." 
    "Parliament should know how the nation's wealth has been dealt with by the Executive and even by the UAS License holders and the quantum of revenue generated out of the use of the spectrum and whether the same has been properly assessed, collected and accounted for by the Union and the license holders," the bench said. 
    The court rejected the telecom service providers' argument that CAG could not be given unhindered access to the account books and could look into only those relating to revenue sharing. "We are of the view that unless the underlying records which are in the exclusive custody of the service pro
viders are examined, it would not be possible to ascertain whether the Union of India, as per the agreement, has received its full and complete share of revenue, by way of licence fee and spectrum charges," the bench said.

‘Forcing Jobs out of Apple was a mistake’ Steve Of 1985 Was Not The Same When He Returned To Tech Giant In 1997: Sculley

New Delhi: John Sculley was hired from PepsiCo by the iconic but temperamental Steve Jobs with a legendary pitch, "Do you want to sell sugared water for the rest of your life? Or, do you want to come with me and change the world?" Sculley went on to join Apple, but ended up becoming part of a corporate legend by firing Jobs from the company he had founded. Jobs came back later and turned around the then-ailing Apple into the world's biggest technology company. 

    As he gears up to start a new venture focused around India for selling low-end mobile phones (not competing with Apple's top-notch devices), Sculley — now 75 — tells TOI that he regrets the decision taken in 1985 by the Apple board of directors to move Jobs out of the company. "I think, in hindsight, for the founder to leave was a mistake and I was a part of that. But, Steve in 1985 was not the same as the Steve in 1997. By the time he came back, he was a much more matured and experienced executive, while back in the eighties, he was still a young learning executive." 
    Sculley, who was one of the stars in the US corporate world after doing wonders for Pepsi-Co, was hired by Apple to get consumer marketing insights into the technology world. However, he developed differences with Jobs over the issue of subsidizing the struggling Macintosh by digging into the resources earned from the profitable Apple 2. Sculley opposed the move. "That was all the profit of the company. I never thought there was merit in lowering the price of the Ma
cintosh. I never regretted that decision." 
    However, he still feels that some way would have been found to have them both work for the company and this could have been facilitated by Apple's board then. "I think there could have been a way, in hindsight, where Steve and I did not need to have a confrontation, and we could have 

worked it out. And, perhaps the board could have played a bigger role in that. But you can't change history." 
    Sculley-founded Inflexionpoint, an IT and telecom supply chain company, will be launching its phones in India under the Obi Mobiles brand. While the devices will be sourced from China, as is being done by most of the phone companies, Sculley feels that the India-experienced team chosen for the venture will help them crack 

the market faster. Ajay Sharma, who was head of smartphone division with homegrown maker Micromax, has been hired as CEO for Obi Mobiles, while some other officials have been poached from domestic companies. 
    Sculley said while the Indian smartphone market remains competitive, the high
paced growth here means that there is space for everyone. "We feel that this is the right time to enter the Indian smartphone market as sales are booming and there is a shift from 2G to 3G and further to 4G. We feel there is an opportunity to build another brand in India that would combine global branding skills that we have learnt around the world with 
companies like Apple and Pepsi and to go into price points that are more like the local brands — in the Rs 5,000 to Rs 8,000 range. That is what we will do." 
    Sculley said he admires Indian companies like Micromax and Karbonn, which have managed to corner a significant market share in India and are also exporting products. "They have done well and will continue to do so. Our goal is not to replace them, but to come and help expand the market even faster." 
    When asked about why an Indian brand has so far not made it big globally like an Apple or a Microsoft, he said they are not very keen to take risks. "Indian culture does not give you permission to fail in a manner the Silicon Valley does. In the West, it is part of a learning curve and there is no penalty. In fact, if you have not failed, you have not taken any risk." 
NEW ENTRANT Backed by ex-Apple CEO, Obi to sell Android phones 
New Delhi: Obi Mobiles, firm backed by ex-Apple CEO John Sculley, said on Thursday that it would start selling Android smartphones in India from May. Headquartered in Gurgaon, Obi Mobiles is backed by InflexionPoint, an IT supply-chain company co-founded by Sculley. The firm will be led by Ajay Sharma, who had earlier worked with HTC and Micromax in leadership roles. 
    "Due to the delay in imple
mentation of 3G services and high smartphone prices, the smartphone share in India is only 20%, leaving larger part of the ground with opportunities yet to be tapped... (It is) a 
favourable and attractive chance for us," said Sculley. 
    Obi Mobiles said that it would invest $20 million this year in the Indian market to set up the supply chain, design centre and after-sales centres in 
key locations. The firm plans to sell affordable smartphones, hoping to woo consumers with lower prices. Sharma said that the firm would specifically focus on youngsters. "Obi Mobiles will be catering to the needs of young Indians who want to own a mobile phone with latest technology, features and are also seeking value for money," he said.According to IDC, in 2013, over 44 million smartphones were sold in India, marking an annual growth of over 200%.

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