In today's India, a very successful industry mogul can be a crony capitalist without raising an eyebrow. He can also behave like a con artist without raising an eyebrow.
1.While blaming coaching classes for the decline in the scholarly quality of IIT entrants at PanIIT summit, N.R. Narayana Murthy (of Infosys) omitted to tell his audience that he himself has substantial private investment in the lucrative IIT test preparation business.
Catamaran, Narayana Murthy's private equity firm, has invested Rs 25 million in ACE, a Bangalore–based test preparation firm that offers training for the IITJEE, AIEEE, PMPD, CBSE-11 & 12, CET, Foundation IIT and NTSE.
2. Catamaran, Narayana Murthy's private equity firm, has pumped a couple of billion of rupees into Manipal Universal Learning without the media telling the public (and some court of law taking suo motu notice) that all PE investments in education are illegal.
They amount to a backdoor entry into educational institutions that by law can only be run by non-profit trusts and societies.
The 'two tier' system that PE investors' employ by setting up a private company, which extracts private profits from the trust/society running an educational institution, is nothing but a fraud.
It invariably results in breaking of laws governing non-profit trusts/societies, income tax, and regulations governing educational institutions, which is what Narayana Murthy has been doing with impunity.
3. Catamaran has invested in Wellspring, a private healthcare provider, and yet Narayana Murthy has assumed the chairmanship of Public Health Foundation of India (PHFI), a fraud organization that influences, deeply and unabashedly, the government policy on healthcare and medical education.
Narayana Murthy's only claim to competence in public health is his wealth and supposedly 'clean image'. Describing itself as a public-private partnership (PPP), which itself is a fraud, PHFI has been receiving billions of rupees of taxpayers' money in the form of grants and parcels of free land for its public health schools from central and state governments with zero accountability. This fraud organization has remained non-compliant with the Right to Information Act 2005 for most of its existence and has been kept outside the scrutiny of Parliament and the Comptroller and Auditor General.
PHFI's public health schools are unrecognised and unaccredited by any statutory regulator. Government employees are being made to study PHFI's unrecognised and unaccredited courses for which PHFI charges the government a cool Rs 250,000 per candidate.
K. Srinath Reddy, PHFI's chief executive, who has long acted as a sidekick of Rajat Gupta, a convicted fraudster, has been engaged in fraud and forgery, as two articles posted elsewhere on this blog-site explain.
'PHFI' must indeed stand for 'Public Health Fraud of India'.
4. Clearly, Narayana Murthy has been using the carefully crafted image of "an ordinary middle class man turned successful and principled IT entrepreneur" to advance his illegal private investments in education and other dubious interests.
5. In the matter of PHFI, Narayana Murthy does not look very different from his predecessor, Rajat Gupta, a convicted fraudster who had to resign his chairmanship in March 2011 after being charged by US prosecutors with being involved in the Galleon insider trading ring.
(On October 27, 2011, Rajat Gupta, the former managing director of McKinsey, was arrested by the FBI, produced in a New York court, and charged by federal prosecutors with five counts of securities fraud and one count of conspiracy to commit securities fraud.
The 62-year-old Gupta faces over 100 years in prison and a $25 million fine if found guilty. He is accused of leaking information to Raj Rajaratnam, his Sri Lankan-born old friend, who managed Galleon hedge fund and turned a massive profit on the news. Gupta has since been convicted and sentenced to two years in prison.
Rajaratnam has been serving an 11-year jail term for the massive fraud.)
Rajat Gupta helped corner public resources in starting PHFI’s unregulated educational enterprises while also looking for lucrative opportunities in education for his private equity businesses.
Narayana Murthy has been doing the same.
Both Gupta and Narayana Murthy have no scruples about making PE investments in education in India, which are prohibited by the law of the land.
Notably, the law is circumvented by getting the non-profit managements of the educational institutions to outsource most of their work to the profit-making companies owned by PE investors.
Such a ‘two-tier arrangement’ results invariably in violations of laws governing public trusts/societies and the Income Tax Act, which mostly go unpunished due to the connivance of the regulatory authorities.
Will a person engaging in such shenanigans on a scale of millions of dollars know where to draw the line in commercializing education?
Poor quality of students entering IITs: Narayana Murthy
PTI | Oct 3, 2011
NEW YORK: Voicing his displeasure over the quality of engineers that pass out of the IITs, Infosys chairman emeritus N R Narayana Murthy has said there is a need to overhaul the selection criteria for students seeking admission to the prestigious technology institutions.
Addressing a gathering of hundreds of former IITians at a 'Pan IIT' summit here, Murthy said the quality of students entering Indian Institutes of Technology (IITs) has deteriorated over the years due to the coaching classes that prepare engineering aspirants.
He said the majority of the students fare poorly at jobs and global institutions of higher education.
"Thanks to the coaching classes today, the quality of students entering IITs has gone lower and lower," Murthy said, receiving a thundering applause from his audience.
He said apart from the top 20% of students who crack the tough IIT entrance examination and can "stand among the best anywhere in the world," quality of the remaining 80 per cent of students leave much to be desired.
Coaching classes teach aspirants limited sets of problems, out of which a few are asked in the examinations.
"They somehow get through the joint entrance examination. But their performance in IITs, at jobs or when they come for higher education in institutes in the US is not as good as it used to be.
"This has to be corrected. A new method of selection of students to IITs has to be arrived at."
Catamaran, Accel Investing Rs 5Cr In Test Prep Firm Ace Learning
16 November, 2010
N R Narayana Murthy's Catamaran Ventures, which struck its investing debut with SKS Microfinance (India's first microfinance firm to go public), is making its second investment in Bangalore-based Ace Creative Learning Pvt Ltd, which provides educational support services to schools and colleges.
Accel Partners is the co-investor in the early stage investment round which will see both venture firms contributing Rs 2.5 crore each in Ace. This will be Accel's fourth investment in 2010.
When contacted, Accel India’s partner, Prashant Prakash confirmed the deal, but declined to divulge the transaction details. “We have decided to invest Rs 2.5 crore in Ace,” Prakash told VCCircle, adding that he can’t comment on the stake holding and other details.
Catamaran’s Managing Director Arjun Narayan also confirmed the investment in an email to VCCircle.
Banglore–based, Academic Center for Excellence or Ace, founded in 1998 by Dr. Ganapathy Sridhar, offers comprehensive training for the IITJEE, AIEEE, PMPD, CBSE-11 & 12, CET, Foundation IIT and NTSE, according to its website.
Here is a lovely article by Anand Ranganathan (who also works for News Laundry that I recently criticised in one of my blog-posts) on the cr...
By Kapil Bajaj Arvind Kejriwal wanted people to govern themselves not long before he decided to give them a ‘political alternative’. He put...
Sandeep Pauranik is a Bhopal-based journalist. He wrote the following article in Hindi recollecting his personal experience of Emergency whi...
Islamic State produces a glossy magazine called 'Dabiq'. One can read all the issues on the web-link below. http://www.clarionproje...