Did Patanjali Get 62,000 Hectares Of Land Nearly For Free?

Did Patanjali Get 62,000 Hectares Of Land Nearly For Free?

Did you know Patanjali acquired Ruchi Soya in December 2019 after which the latter’s stock went berserk? After some time, Ruchi Soya sold some of its subsidiaries to a Lucknow based firm called Sanatan Pvt Ltd. And that deal involved selling off 62,000 hectares of land. But did Sanatan pay the fair price to buy it? Or will someone else pay for it? Or did Patanjali gain from this deal?

Crux of the Matter

Acquisition Through Bankruptcy
In December 2019, Patanjali took over the Soya food brand and one of India’s largest edible oil manufacturers, Ruchi Soya through an insolvency process. The deal worth ₹4,350 crores was considered to be one of the most successful insolvency resolutions in India.

Ruchi Soya’s Share Price

The Controversy Over Land Dealings
In November 2020 filing, Ruchi Soya had announced selling off its 5 subsidiaries to one Single entity – Sanatan Multi Skill Development and Education. Following were the sale considerations of the 5 subsidiaries:

1. RSIL Holdings – ₹ 3.55 Crore
2. Mrig Trading – ₹ 100
3. Ruchi Worldwide – ₹ 100
4. Ruchi Ethiopia Holdings – ₹ 75
5. Ruchi Industries – ₹ 75.4

Only the RSIL Holding figure is in crores, rest are denominations as mentioned.

The Land That Sanatan Got From Ruchi Soya
Collectively, Sanatan got 62,000 hectares of land for ₹150!

Ruchi Ethiopia Holdings:
1. Ruchi Agri Plc. , Ethiopia: Leaseholder of 25,000 hectares.
2. Ruchi Agri Sarlu, Madagascar: Leaseholder of 17,000 hectares.

Ruchi Industries:
1. Ruchi Agri Plantation, Cambodia: Leaseholding of 20,000 hectares.

The Sanatan ‘Shady’?
The Lucknow based company was incorporated by Chandra and Indira Thapa in 2017. They resigned in 2020 in March 2020 and transferred their shareholding to Prakash Pal (40%), Sanjay Singh (30%) and Ved Prakash (30%). Prakash Pal and Yogesh Kumar are the appointed directors of the firm. Sanatan had no business operations and recorded zero revenues until 2018 – 19.

Ruchi Soya’s Filing To NSE
Ruchi Soya, in their filing with NSE disclosed that Sanatan does not belong to the promoter, promoter group or group companies, thus sale of Ruchi Worldwide does not fall under Related Party Transaction (RPT). Technically, it is correct. But although indirectly, the promoters of Ruchi Soya and Sanatan are very closely related. Lets see how!

The Question?
A Ruchi Soya spokesperson said to Economic Times that Sanatan is not a related party to Ruchi Soya and thus the acquisitions made by the former are in complete compliance of the standards. However, the promoters of Ruchi Soya were required to dispose the assets at a ‘fair market value’, which does not seem to be the case.

What do you think? Is it a legit transaction or did Patanjali somehow managed to take control of land worth ₹100 crores at just ₹150? Let us know in the comments below.

Curiopedia
  • Soybeans were a crucial crop in East Asia long before written records began. There is evidence for soybean domestication between 7000 and 6600 BC in China, between 5000 and 3000 BC in Japan and 1000 BC in Korea.
  • By the 1600s, soy sauce spread from southern Japan across the Indian subcontinent region through the Dutch East India Company. 
  • Chinese records dating prior to 2000 BCE mention use of cultivated soybeans to produce edible soy oil. It is one of the most widely consumed cooking oils and the second most consumed vegetable oil.

Curated Coverage

Trivia Thursday: Major Environmental Movements in India

Trivia Thursday: Major Environmental Movements in India

Hi Folks, today on April 22nd, we are celebrating the 51st Earth Day! To mark this event, in this week’s Trivia Thursday, let’s have a look on a few prominent environmental movements that took place in India.

Crux of the Matter

In this week’s Trivia Thursday, let us have a look at some major environmental movements that happened in India:

Chipko Movement
Started in 1973 in Uttarakhand, Chipko movement was a forest conservation movement in India. The word ‘chipko’ means “to cling to” and refers to the rural villagers, mostly women hugging trees as a mark to protect them from loggers.

Silent Valley Movement
Silent Valley is an evergreen tropical forest in the Palakkad district of Kerala. In 1973, a plan to build a hydroelectric project on the Kunthipuzha River would have flooded the rainforest. Kerala Sastra Sahithya Parishad (KSSP) and other NGOs started a social movement called Save Silent Valley. The rainforest was declared as Silent Valley National Park in 1985.

Bishnoi Movement 
Bishnoi is a Hindu religious sect found in the Western Thar Desert and northern states of India. They follow a set of 29 principles/commandments given by Guru Jambeshwar. These include a ban on killing animals and felling green trees, and providing protection to all life forms. 

Appiko Movement 
The famous Chipko Andolan of Uttarakhand in the Himalayas inspired the villagers of the Uttara Kannada district of Karnataka Province in southern India to launch a similar movement to save their forests. In September 1983, men, women and children of Salkani “hugged the trees” in Kalase forest. (The local term for “hugging” in Kannada is appiko.) Appiko Andolan gave birth to a new awareness all over southern India.

Narmada Bachao Andolan 
Narmada Bachao Andolan (NBA) is a social movement spearheaded by native tribes (adivasis), farmers, environmentalists and human rights activists against a number of large dam projects across the Narmada River. The NBA, with its leading spokespersons Medha Patkar and Baba Amte, received the Right Livelihood Award in 1991.

Take a look at our last week’s Trivia Thursday here: Trivia Thursday: 7 Wonders Of The World

Covid Wave 2.0: What You Need To Know

Covid Wave 2.0: What You Need To Know

With ~3 lakh new Covid cases coming every day in wave 2 in India, let’s answer some of the questions many of you have regarding the second.

Crux of the Matter

The new strain is escaping the RT-PCR test, which is considered a gold standard test.

Many cases have come to fore, where a patient has symptoms of Covid-19 but get RT-PCR -ve report. So a CT-scan is used to confirm the infection.

Dr Sarman Singh, AIIMS Bhopal director

Covid-19 Wave 2 Symptoms

This time we have witnessed more cases of breathlessness while in the last wave, symptoms like dry cough, joint pain, headaches were more.

Dr Bhargava, ICMR Chief

After Getting The Shot, Can You Be Covid +ve?
Yes. As per CDC, after the first shot, you have  50% immunity. The 2nd shot gives 95% immunity. It then takes 1-2 weeks for maximum protection to kick in.
 
Even then you can contract Covid with less severity, i.e either you will be asymptomatic or have mild symptoms.

Number of people contracting Covid after getting vaccine in India are given below:

What Is The Primary Mode Of Transmission?
As per latest CDC findings, the principal mode by which people are infected with SARS-CoV-2 is through exposure to respiratory droplets carrying infectious virus. The risk of being infected through contact with contaminated surfaces or objects (fomites) is considered low.

Can The Virus Survive On Surfaces?
Researchers suggest a 99% reduction in infectious SARS-CoV-2 and other coronaviruses can be expected under indoor environmental conditions within 3 days on common non-porous surfaces like stainless steel, plastic, and glass.

Misinformation On Twitter
medRxiv did a detailed analysis of COVID19 vaccine disinformation executed by tracing all postings of #AstraZeneca over “blood clot” time frame. The paper said misinformation was spread by powerful individuals, conspiracy websites, state-owned media outlets, as well through co-tweeting bot network. 

Negative News Coverage By US Media
As per a recent study, 87% of Covid coverage in national US media last year was negative. The share was 51% in international media, 53% in US regional media and 64% in scientific journals.

Curiopedia
  • RT-PCR has risen to become the benchmark technology for the detection and/or comparison of RNA levels. Due to its simplicity, specificity and sensitivity, RT-PCR is used in a wide range of applications from experiments as simple as quantification of yeast cells in wine to more complex uses as diagnostic tools for detecting infectious agents. 
  • As of 21 April 2021, more than 143 million cases have been confirmed, with more than 3.04 million deaths attributed to COVID-19, making it one of the deadliest pandemics in history.
  • On 11 February 2020, the World Health Organization (WHO) named the disease “COVID-19”, which is short for coronavirus disease 2019.

Curated Coverage

Why Are Some Products Designed To Fail?

Why Are Some Products Designed To Fail?

Designed to Fail – sounds baffling at first instance, isn’t it? Well, what if we say that it is true! That products and services today are intentionally manufactured to be defective or to get worn out soon. But why would companies do that? Why would they produce an inferior good that could actually hurt their brand image? Let us find out.

Crux of the Matter

The Centennial Light
The Centennial Light is the world’s longest-lasting light bulb, burning since 1901. The handmade bulb has never been switched off and is running for 120 years! If handmade bulbs can survive this long then why don’t our present day bulbs?

Phoebus Cartel
In December 1924, senior executives of world’s top light bulb companies had met in Geneva, Switzerland.

Major firms include : Philips (Netherlands), General Electric (US), Tokyo Electric (Japan), Osram (Germany), Associated Electrical Industries (UK), etc. This group came to be known as Phoebus Cartel.

Purpose Of Cartel
In a move to increase the sale of their products, the cartel decided to cut down the lifespan of their bulbs to 1000 hours, which was then almost half of the existing period. Each member’s sample light bulb was tested at a lab to see if they have confirmed with the 1000 hour limit.

Companies were heavily fined if bulbs surpassed the limits. For instance, for a bulb lasting 3,000+ hours, a fine of 200 Swiss Francs for every 1,000 bulbs sold was charged.

Life of Bulbs over the years
While Phoebus Cartel died in 1939, the practise of planned obsolescence continued.

What Is Planned Obsolescence?
It is a strategy of making a product with an artificially limited useful life or a purposely frail design, so that it becomes obsolete after a predetermined period of time. It also means not creating an efficient product even if the manufacturer can easily provide its customers with a better product.

The Case Of Inkjet Printers
Inkjet printer manufacturers employ smart chips in their ink cartridges to prevent them from being used after a certain threshold, even though the cartridge may still contain usable ink or could be refilled. The poor durability and high cost of repair turn printers into nothing but disposable commodities. As a result, consumers find it easier to buy a new printer instead of repairing the old one.

The Case Of Apple
In 2017-18, Apple confirmed that it did slow down some iPhones, but said it only did so to “prolong the life” of the devices. iPhone owners “were not informed that installing iOS updates (10.2.1 and 11.2) could slow down their devices”.

As a result, Apple was fined 25 million euros by the French authority DGCCRF that was probing Apple for “planned obsolescence” in Apple’s iPhone. Later, Apple also agreed to pay $113 million to 34 states in the US to settle an investigation into its practice of slowing down iPhones.

Curiopedia
  • Osram apparently means “to poop” in Polish. As a result, many believe that this company failed badly in Poland.
  • In 1924, American automobile market began reaching saturation point. To maintain unit sales, General Motors executive Alfred P. Sloan Jr. suggested annual model-year design changes to convince car owners to buy new replacements each year, with refreshed appearances headed by Harley Earl and the Art and Color Section.
  • The origins of the phrase planned obsolescence go back at least as far as 1932 with Bernard London’s pamphlet Ending the Depression Through Planned Obsolescence. The essence of London’s plan would have the government impose a legal obsolescence on personal-use items, to stimulate and perpetuate purchasing. 

Curated Coverage

How Is Digital Yuan Different?

How is Digital Yuan Different?

In our last story on Digital Yuan, we saw the composition of Digital Yuan and some of its disruptive features. In this story we dive deep into some strategic areas of the currency and try to understand how it is positioned to impact the global economy in long run. And of course, this story answers many of the questions surrounding the new digital currency.

Crux of the Matter

How Is Digital Yuan Different From Bitcoin?

  • Bitcoin is a decentralized currency which means that it has no controlling authority like a government or a central bank. Digital Yuan on the other hand is the legal tender issued by China’s central bank.
  • In bitcoin, the identity of its users is not known. While Digital Yuan with its innate traceability feature overcomes the user anonymity issue.

Currency Stability
China will not increase its money supply by introducing new form of currency. With every Yuan introduced digitally in the market, an equivalent worth of physical cash will be drawn out from the circulation thus ensuring the stability of economy.

Will Digital Yuan Disrupt The Global Financial System?
The US Dollar holds 88% share in international foreign-exchange trades. Moreover, at present most of the international settlements happen over the SWIFT technology which is a messaging network used to securely transmit information through a standardized system of codes. The US administration has a significant authority over both the mechanisms.

The Chinese Renminbi holds mere 4% of share in international foreign-exchange trades. Hence, simply with its own digital currency, China cannot replace US Dollar in international transactions. But it will definitely open up new options for people to transfer money and maybe at better margins.

Dollar Weaponization
With US being the prime source of dollar, it has the ability to freeze institutions and nations by laying various sanctions on them. Sanctioned nations are kicked out of the global financial system as banks and financial institutions are prohibited from doing transactions with them. This entire phenomena is known as Dollar Weaponization.

Examples Include:

  • Crippling Economies of Iran and North Korea owing to US laid sanctions.
  • Blocking the movement of top military officials financial assets in Myanmar amidst the coup.
  • The unending US – China conflict followed by multitude of economic and financial sanctions laid on China.

Aim Of China
One of the prominent aims of Beijing for introducing Yuan is to limit the power of US dollar in international settlements.
Thus, nations that are penalized by US can transact and transfer their money through Digital Yuan – without the knowledge of US.

This takes away sanction leveraging power of the US.

Nicholas Burns, American diplomat

Final thoughts?
It is maybe farfetched to say that Digital Yuan will take over US Dollar. Nevertheless, the building blocks are too important to be ignored.

Curiopedia
  • The official currency of China is Renminbi. Yuan is the basic unit of the renminbi, but internationally the word is also used to refer to the Chinese currency.
  • One yuan is divided into 10 jiao and one jiao is divided into 10 fen.
  • The United States dollar is called Meiyuan in Chinese, and the euro is called Ouyuan.

Curated Coverage