Sula charging 3x the MRP of bottled water

Two weeks ago, I paid Rs 150 for 3 bottles of bottled water of MRP 18(total MRP 54, but what I paid 150). On top of this, I paid 12.5% VAT and 10% service charge. 

When I took this up with Sushant Joshi(DGM-Hospitality), his approach was quite arrogant and dismissive, he said that Sula can charge what they want for water. When I told him that law does not allow this and that Sula can be fined for this, he said we can do what we want, but we have to pay this. Finally, we paid the amount overcharged, after he attached his card and wrote what it was charged for.

I did not expect a reputed brand like SULA to commit the illegal act of charging Rs 50 for a bottled water of MRP Rs 18.  I have requested redressal of refund of the overcharged amount, along with an apology compensation for the practice and my time spent on this-say waiver of the bill amount of Rs 3,200 as a goodwill gesture and compensation for the cheating done earlier. Also, the excess amount charged since inception should be refunded or donated to charity. 

Let me see how this works, in the meantime, I will avoid paying extra for bottled water at hotels, after all if one trusts the water used for food, there is no reason to doubt water used for other purposes. 

Never return a missed call from a weird number

This scam has been around for ages, where people give missed calls from 'premium' numbers in Nigeria, UK, Pakistan, China etc, and then when unwary customers politely return those calls, they are charged @ premium rates(for example Rs 10/minute in India where average tariffs do not exceed Rs 1/minute), or worse the scammer uses their own talk time to try hoodwink them into another scam like the infamous lottery one etc. Therefore, before dialing back a number which is unfamiliar, take the effort to Google it once(or call only after you have done so). The results may astound you, since some customer out there would have flagged this number after getting scammed. For example-+923057636540.

Your telecom operator will most likely not do anything, because nothing illegal can be proven and then you DID make the call out of your own free will. So take care

Myntra's unethical advertising of Rs 500/1000 credits

For nearly 2months now, Myntra has been advertising that it gives Rs 250-1000 on signup, to be applied against the first purchase. However, the fineprint is that the coupons are split into two, valid only on a minimum order size AND expire very early. Below is the description reproduced from their site
Register with Myntra to instantly earn Rs 500. This will be added to your Mynt Club account as two credits of Rs 250 each, valid for 2 days, on purchases of Rs 1,000 and above. Alternatively, you could register with Myntra using "Connect with Facebook" option, and instantly earn Rs.500. This will be added to your Mynt Club account as two credits of Rs 250 each, valid for 2 days and on purchases of Rs 1,000 and above. Please note that you would be getting the benefit based on the method you use to sign up on Myntra for the first time. 

I understand that retailers must make a profit, but having such deceptive advertising when they are otherwise so transparent(returns, pricing, shipping) is baffling to me. The Rs 1250 credits on introducing a customer, works in a similar fashion as well.

10 ways how auto/taxi drivers cheat you

While I do have sympathy for those who earn their daily bread through manual sweat and toil(sympathy to the extent that I do not usually bargain), that does not extend to those who exploit/cheat their customers. Having dealt with auto/taxi drivers in 3 metros and 2 other state capitals, below are some ways where the unwary can be fooled. Some ways are well known, while others are not. There is, however, no substitute for asking a friend/other resident of the city about how the system works, so that you are not fleeced.

1. Forged Tariff Cards-fake tariff cards are prepared for those customers who imagine that they will only play by the book!
2. Rigged Meters-this is the most standard practice, sometimes even in Mumbai.
3. Stating the meter reading instead of the fare, in the hope that passenger will pay it-A joke goes as follows, 'A person enters the opticians shop and asks the price of a specs. The optician tells him Rs 200...and then seeing no reaction..says for the 'lens'..and then seeing no reaction..says 'each' and so on! So sometimes, the driver bends the rules a bit and hopes the passenger is price insensitive and will pay the meter reading without converting it to rupees! This is true for cities like Ahmedabad also.
4. Taking longer routes than necessary-sometimes if the driver feels the passenger does not know the route, he may take a longer route to ensure higher meter reading(remember the meter is well over marginal cost!)
5. 'No Change'-Driver pretends that he does not have change, this is usually done for small amounts(say 10% of the fare) so that the customer will not feel like taking so much effort for getting it back.
6. Charging night fare beyond the timings-Some drivers charge fare even for journeys starting before/after the night time window as declared by the Road Transport Office(RTO). Ensure you know the timings before agreeing to pay more.
7. Appeal to sympathy as 'boni'/'first fare of day'(for non metered fares):-Unlike other vendors who give a reasonable rate during boni, these guys use it as an excuse to loot. That is why I am adamant against paying boni, as many drivers are fluent liars.
8. Charging for luggage/waiting:-There are specific tariff rules for those cases, so ensure you know that. Mostly, luggage is NOT charged extra in taxi/auto.
9. Taking 'sharing passengers' after charging entire fare from you-I have nothing against better capacity utilization if it does not make me uncomfortable, but ensure that you reduce the price you offer the driver accordingly. This happens at airports mostly when the supply constraint holds.
10. Not dropping you at doorstep after negotiated fare:-This is especially true for complexes etc where drivers may not want to go inside. But if they decide to halt at the gate(even though the society rules permit them to enter), deduct some amount accordingly for the added inconvenience/distance you are facing, IF the driver has refused to go inside. 

Customers can fight back by

1. Using services like G-Auto of Ahmedabad which have minimal service charges and allow booking by phone also
2. Finding out approximate fare, and negotiating it-stay firm despite any emotional pleas etc. 
3. Not succumbing to tactics like 'fare recently changed'etc. 

Why is it so difficult to detect/prevent frauds?

While reading up on information security audit, I noticed some interesting explanations in the ICAI 100hr ITT material on the difficulties in fraud management(http://220.227.161.86/22522ittstm_U9_cp1b.pdf pg 346) and thought I would expand on that

1. Big Data:-Though firms like Opera Solutions and McK Global Research Institute are waking up the the opportunities and challenges in analyzing huge data volumes, companies and Bschools are yet to wake up to that. Frauds can be invisibly concealed in the mass of big data, if analytics is not developed enough to investigate trends, outliers etc.
2. Complexity of Systems:-As butterfly effect/Chaos theory would show, it is difficult to predict the path of complex systems(which most organizations are), and thus predicting all leaks is difficult
3. Changing User behavior:-Be it social mores(breakdown of lifelong employment social contract), use of personal computing devices in workplace, social engineering etc, employee behavior is changing and fraud management must keep up.
4. Continuous evolution of fraud:- Similar to computer viruses, frauds can never be totally removed unless of course you have a closed system like that of Apple's Mac. There is always a cat and mouse game between fraud detection('anti virus') and fraudsters, and indeed auditors can learn a lot from the antivirus industry in terms of updates/learning on frauds etc
5. Risk of false alarms:- Unlike the famed Mongol conqueror Genghis Khan who was rumoured to kill several suspects to avoid the guilty going unpunished, modern judicial systems in most developed countries presume a person innocent unless proven otherwise. And given that fraud accusations are not 'routine', false alarms could lead to the employee quitting or suing the company for defamation. 
6. Privacy/Discrimination:- Since fraud prevention needs extensive data analysis and setting up behavioral profiles, that could be challenged and lead to adverse PR if the news leaks out. For instance, certain PIN codes(zip codes in USA parlance) could be fraud prone as could certain demographic groups in lending default. But fairness in lending/other rules usually demand giving rationale in certain cases, and that would need quantifiable data instead of merely suspicion. 

The above is NOT an excuse, and indeed the new tech savvy generation of auditors, IT Dept and controllers is fighting back. Still, it is important for the public to appreciate the above facts 

Why should students pay for the expensive library spending?

Whether it be my under-grad college or IIM, I noticed that the book requisition/periodicials/knowledge resource acquisition process is largely in the hands of faculty, while it is student fees which pays for that. Even in colleges(like IIM-A) where students can suggest books which are usually approved upto a certain monetary limit, I've noticed expenditure on niche books/novels/out dated resources. Now, one may argue that faculty/research scholars may need these books, and that restricting these purchases would infringe on their academic autonomy. But, I've wandered long enough between the library shelves to note the large number of books which have been issued barely 1-2 times, and then left to rot in the shelves. While I do not state that all books/resources must be used, it does seem a waste to me when resources are underutilized, and still spent for

Even when it comes to online resources, the story is similar. Many of the resources are accessible only from the few library computer terminals, which are barely occupied. The few users of them would rank in single digit. Even counting the students who do research projects etc, the number would not cross 30. And yet, millions are spent in providing access so that MBA rankings, MHRD inspections etc can award bonus points for spending on knowledge resources!

Nothing wrong in spending money, but should it be so woefully under utilized? One cannot blame the students for this because they hardly have the time/inclination to read/use those resources. Perhaps, if digital resources were accessible from student personal computing devices AND in user friendly format, the use of the periodicals/resources would improve. When the rest of the world has shifted from input based budgeting to outcome based metrics, it is time for libraries to do the same. Useful metrics would be

• Average number of books issued per student(split as per year/program)
• Books turnover(my hunch is this will be a long tail not a normal distribution) stats
• Hours spent accessing online resources under IIMA login
• Number of research projects done/year

My main point is that academic libraries do seem broke and should be fixed ASAP.

GTL group corporate governance sham-the reason for the price crash?

In June-11, the two listed companies of the GTL group crashed nearly 75%-80% in a day(since then they crashed even more and there seems no respite). The rumored reasons for the crash(promoter pledged holdings being sold) turned out to be false. And the company took corrective action by clarifying to the stock exchanges in detail, appointing SBI Caps as their merchant banker for restructuring etc. Such actions were necessary to regain a modicum of investor trust(given that the group companies were manipulated stocks in the Ketan Parekh scam in 1990s). As a value investor, I spent 2 hrs poring through the filings/presentations of the companies from 2009 till date. It took time and effort, but finally this is what I could gather.

1. Artfully structuring shareholdings within the promoter group to avoid consolidating certain balance sheets:- Debt covenants signed by GTL, for GTL Infra and CNIL make it guarantee a major portion of its associates debt, and retain management control. GTL owns 36% in GTL Infra, which(till Mar-11) owned 51% of the Aircel towers acquisition SPV CNIL. Now, GTL owned nearly 33% of CNIL, with the promoter Manoj Tirodkar owning 16%.  Though GTL controlled CNIL indirectly by virtue of controlling GTL Infra, bright line rules were read so that CNIL came only on GTL Infras balance sheet, without being consolidated on GTL. Why should you bother? CNIL represented Rs 5000Cr+ debt.
   
2. Avoiding consolidating 'associate companies' where it has equity, guarantees debt and contractually exercises management control:- The main entity GTL(52% promoter owned) is made to co-invest a minority stake along with group companies/promoter itself. And this co-investing is often accompanied by corporate guarantee of the total debt of the associate. For example(before CNIL was amalgamated into its parent GTL Infra), GTL invested Rs 1067crores( with promoter investing 650 Crores individually) for a 49% stake, with GTLs fellow subsidiary investing 51%. Despite this, accounting was done as an 'associate'
3. Independent directors receiving hefty ESOPs:-'Independent Directors' own 1% or so of both GTL and GTL Infra. This does seem unreasonable. Will they ever have the incentive to speak up? Though other companies DO allow such ESOPs, none to my knowledge have been so generous
4. Shareholder Quality:- Both companies have low holdings from Banks/FIs/MFs, and even retail shareholders. The major holdings are from hot money(FIIs) and promoters. Considering that India's only independent tower company must have undergone investment analysis atleast once, the omission from the portfolios does seem odd. 
5. Extension of financial year:- In its 4Q'11 earnings release, GTL decided to extend its financial year from Mar-11 to Jun-11. This reeks of wanting to delay the inevitable viz default. 
6. Doubtful selection of auditors:- The joint auditors of the firms do not have any international presence, and do not audit a single subsidiary. Though the subsidiary auditors listed in the annual report are all reputable firms, one wonders why did GTL avoid a single firm auditor, which could have done the audit much more effectively? I'm not a Big4 fan, but large complex audits do need it, given that international revenues for GTL(not GTL Infra) are quite large.

 Ironically, GTL has received the ICAIs Golden Peacock award for corporate governance-you all know what happened to another illustrious recipient of that award-Satyam Computers. The company does seem sincere on 'green engineering'(investing 2400crores), financial disclosures(like Enron, all it needed was someone to patiently pore through the disclosures) and corporate philanthropy. And the promoter's rags to riches story is commendable(aka Satyam's Raju). His judgement calls have worked right before, and he MAY have a magic solution to this morass. 

But all that does not compensate for dodgy structuring practices. Even the market seems to realize this, with the severe penalty to even whispers of doubt about the company's stability.