Thursday, March 29, 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.