2nd February, 201929th January, 20191st February, 20193rd ... · Vijay Mallya faces charges of...

29th January, 20191st February, 20192nd February, 20193rd & 4th February, 2019

5th February, 20196th February, 2019

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1. Venezuela crisis: How the political situation escalated (Relevant for GS Prelims, GS Mains Paper II; IOBR) The South American country has been caught in a downward spiral for years with growing political discontent further fuelled by skyrocketing hyperinflation, power cuts and shortages of food and medicine. More than three million Venezuelans have left the country in recent years. But what exactly is behind the crisis rocking Venezuela? Who's the president? This would be an unusual question to ask in most countries, but in Venezuela many want to know exactly that following the dramatic events of 23 January. On that day, the leader of the legislature, Juan Guaidó, declared himself acting president and said he would assume the powers of the executive branch from there onwards. The move was a direct challenge to the power of President Nicolás Maduro, who had been sworn in to a second six-year term in office just two weeks previously. Not surprisingly, President Maduro did not take kindly to his rival's move, which he condemned as a ploy by the US to oust him. He also said that he was the constitutional president and would remain so. Why is the presidency disputed? Nicolás Maduro was first elected in April 2013 after the death of his socialist mentor and predecessor in office, Hugo Chávez. At the time, he won by a thin margin of 1.6 percentage points. During his first term in office, the economy went into freefall and many Venezuelans blame him and his socialist government for the country's decline. Mr Maduro was re-elected to a second six-year term in highly controversial elections in May 2018, which most opposition parties boycotted. Many opposition candidates had been barred from running while others had been jailed or had fled the country for fear of being imprisoned and the opposition parties argued that the poll would be neither free nor fair. Mr Maduro's re-election was not recognised by Venezuela's opposition-controlled National Assembly. Why is it all coming to a head now? After being re-elected to a second term in early elections in May 2018, Mr Maduro announced he would serve out his remaining first term and only then be sworn in for a second term on 10 January.

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It was following his swearing-in ceremony that the opposition to his government was given a fresh boost. The National Assembly argues that because the election was not fair, Mr Maduro is a "usurper" and the presidency is vacant. This is a line that is being pushed in particular by the new president of the National Assembly, 35-year-old Juan Guaidó. Citing articles 233 and 333 of Venezuela's constitution, the legislature says that in such cases, the head of the National Assembly takes over as acting president. That is why Mr Guaidó declared himself acting president on 23 January. What has the reaction been? US President Donald Trump officially recognised Juan Guaidó as the legitimate president of Venezuela just minutes after the latter had said he would take over the executive powers. Predictably, this met with a swift response from Nicolás Maduro, who has long said that the US is behind attempts to drive him from office. Mr Maduro broke off relations with the US and gave US diplomats 72 hours to leave Venezuela. Within Venezuela, those opposed to the government celebrated Mr Guaidó's move, while government officials said they would defend the president from "imperialist threats". What next? Juan Guaidó called on all of those opposed to President Maduro and his government to continue protesting "until Venezuela is liberated". While Mr Guaidó counts with the support of the US, a number of Latin American countries and other international leaders, he does not have much power in practical terms. He is the president of the National Assembly, but this legislative body was largely rendered powerless by the creation of the National Constituent Assembly in 2017, which is exclusively made up of government-loyalists. The opposition-controlled National Assembly has continued to meet, but its decisions have been ignored by President Maduro in favour of those made by the National Constituent Assembly. Who can break the impasse? The security forces are seen as the key player in this crisis. So far, they have been loyal to Mr Maduro, who has rewarded them with frequent pay rises and put high-ranking military men in control of key posts and industries. Following the events of 23 January, top military commanders tweeted their support for Mr Maduro but videos posted on social media showed National Guard members stepping aside at one opposition protest to let those marching through. Mr Guaidó has promised all security forces personnel an amnesty if they break with President Maduro.







How did Venezuela get this bad? Some of the problems go back a long time. However, it is President Maduro and his predecessor, the late President Hugo Chávez, who find themselves the target of much of the current anger. Their socialist governments have been in power since 1999, taking over the country at a time when Venezuela had huge inequality. But the socialist polices brought in which aimed to help the poor backfired. Take price controls, for example. They were introduced by President Chávez to make basic goods more affordable to the poor by capping the price of flour, cooking oil and toiletries. But this meant that the few Venezuelan businesses producing these items no longer found it profitable to make them. Critics also blame the foreign currency controls brought in by President Chávez in 2003 for a flourishing black market in dollars. Since then, Venezuelans wanting to exchange bolivars for dollars have had to apply to a government-run currency agency. Only those deemed to have valid reasons to buy dollars, for example to import goods, have been allowed to change their bolivars at a fixed rate set by the government. With many Venezuelans unable to freely buy dollars, they turned to the black market. What are the biggest challenges? Arguably the biggest problem facing Venezuelans in their day-to-day lives is hyperinflation. The annual inflation rate reached 1,300,000% in the 12 months to November 2018, according to a study by the opposition-controlled National Assembly. By the end of 2018, prices were doubling every 19 days on average. This has left many Venezuelans struggling to afford basic items such as food and toiletries. The price of a cup of coffee in the capital Caracas doubled to 400 bolivars ($0.62; £0.50) in the space of just a week last December, according to Bloomberg. What's the government doing about it? Back in August, the government lopped five zeros off the old "strong bolivar" currency and gave it a new name - the "sovereign bolivar". This meant people no longer had to carry such huge amounts of cash. It also began circulating eight new banknotes worth 2, 5, 10, 20, 50, 100, 200 and 500 sovereign bolivars and two new coins. The new currency is part of an "economic package" of measures which the government says is the "magic formula" to help Venezuela's battered economy recover.







Among the measures were: Raising the minimum wage to 34 times its previous level from 1 September Anchoring the sovereign bolivar to the petro, a virtual currency the government says is linked to Venezuela's oil reserves Raising VAT by 4% to 16% However, the currency has continued to fall since its introduction, and a further minimum wage increase has had to be introduced, leading to questions over how effective the move was. How have Venezuelans reacted? Many people have been voting with their feet and leaving Venezuela. According to United Nations figures, three million Venezuelans have left the country since 2014 when the economic crisis started to bite. However, Vice-President Delcy Rodríguez has disputed the figures, saying they are inflated by "enemy countries" trying to justify a military intervention.







The majority of those leaving have crossed into neighbouring Colombia, from where some move on to Ecuador, Peru and Chile. Others have gone south to Brazil. The mass migration is one of the largest forced displacements in the western hemisphere. (Adapted from bbc.com) 2. What is 'pay-to-stay US visa' and why it led to Indian students' arrest (Relevant for GS Prelims, GS Mains Paper II; IOBR) What are the charges against students? The arrest of 129 Indians in the US for enrolling themselves at a fake university, allegedly to stay in the country has brought the "Pay-to-stay scheme" into the spotlight. The immigration attorneys have claimed that the youths were not aware of the university's illegitimate operation. However, the fate of the students remains unclear. Under the "scheme", the students who enter the country will not attend any actual classes, earn credits, or make academic progress toward an actual degree. The sole intention behind enrolling in a fake university is to fraudulently maintain their student visa status and to obtain work authorization under the Curricular Practical Training (CPT). What is CPT? CPT is temporary employment authorization for F-1 visa non-immigrant foreign students in the United States while enrolled in a college-level degree program. In order to study in the US, students must secure F-1, M-1 or J-1 visas after getting approval from universities authorized by the Department of Homeland Security. After obtaining an F-1 visa, the student must attend the accredited programs. What are the rules after programme? If a student manages to find a job within 60 days after the programme, he/she can remain in the country by obtaining a work visa. If they fail to get a job, they will have to leave the country within two months after the course ends. (Adapted from Indian Express) 3. U.K. Home Secretary orders Vijay Mallya’s extradition to India (Relevant for GS Prelims, GS Mains Paper III; Economics) 14 days for appeal British Home Secretary Sajid Javid has signed the order for the extradition of liquor baron Vijay Mallya to India. The businessman — whose legal team had previously indicated their intention to appeal the extradition — will now have two weeks to lodge an appeal. Vijay Mallya faces charges of money laundering and fraud in India. What are the rules in Britain? Under Britain’s extradition rules, Mr. Javid had two months from the date of the judgement to determine whether to order the extradition. The signing of the order on February 3 came







just a few less than two-month window from the date of judgement — December 10, 2018 — within which a decision had to be made. What were the considerations? In making extradition decisions, the Minister has to consider issues including whether the death penalty would be involved or the person be extradited to a third country (neither of which would apply in this case).

What are the options with Mr. Mallya? Should the appeal to the High Court fail, Mr. Mallya would still have further opportunities to attempt to overturn the extradition order, by seeking permission to appeal to the Supreme Court, though that could only take place if the High Court certified that the appeal involved a “point of law of general public importance, and either the High Court or the Supreme Court gives leave for the appeal to be made.” (Adapted from The Hindu) 4. What is the Saradha scam? How is Trinamool linked? (Relevant for GS Prelims, GS Mains Paper III; Economics)







What is the alleged scam that has led to the current unprecedented political standoff between the Centre and Mamata Banerjee? How are the TMC and the Kolkata Police Commissioner linked to the allegations? The Ponzi scheme In the early 2000s, businessman Sudipto Sen set up the Saradha Group, and launched what the securities market regulator Securities and Exchange Board of India (SEBI) later categorised as a collective investment scheme. The Saradha Group used a consortium of companies to tap small investors, promising them very high returns. Like in a classic Ponzi scheme, money was collected through a wide network of agents, who were paid commissions of over 25%. In a few years, Saradha’s raised about Rs 2,500 crore. It built its brand through filmstar endorsements, investments in popular football clubs, ownership of multiple media outlets, and sponsorship of cultural events such as Durga Pujas. The scheme expanded to Odisha, Assam, and Tripura, and the number of investors reached close to 17 lakh. How Saradha operated Saradha began by issuing secured debentures and redeemable preferential bonds to the public in violation of SEBI rules that bar companies from raising capital from more than 50 people without issuing a proper prospectus and balance sheet. Companies must also have SEBI permission to operate, and must get their accounts audited. After SEBI raised a flag in 2009, the Group diversified, opening 239 companies, and building a complex corporate structure. Through schemes involving tourism packages, forward travel and hotel booking, timeshare credit transfer, real estate, infrastructure finance, and motorcycle manufacturing, the Saradha Group continued to raise capital from ordinary people. The bulk of the investors put in around Rs 50,000 each. Many others invested through chit funds under the Chit Fund Act, 1982. Chit funds are regulated by the state government. When the Saradha scam broke By 2009, politicians in West Bengal had begun to discuss Saradha’s alleged fraudulent ways. In 2012, SEBI, which was already watching the Group, asked it to stop accepting money from investors until it got the regulator’s permission. Alarm bells started to ring in January 2013, when for the first time, the Group’s cash inflow was lower than its outflow — another classic event in a Ponzi scheme. By April 2013, the scheme had collapsed, and investors and agents lodged hundreds of complaints with the Bidhannagar Police. Sudipto Sen fled West Bengal after writing an 18-page letter, in which he accused several politicians of arm-twisting him into making poor investments that led the company to collapse. An FIR was registered, and Sen was arrested along with his associate Debjani Mukherjee in Sonmarg on April 20, 2013.







Investigations found the company had laundered investments in locations such as Dubai, South Africa and Singapore. Mamata Banerjee’s government set up a Special Investigation Team (SIT) to probe the case after clubbing all the FIRs. Around the same time, the CBI began investigations in Assam after the state government handed over the probe to it. Based on state police FIRs, the Enforcement Directorate registered cases of alleged money laundering, and arrested several people. In May 2014, the Supreme Court transferred all cases to the CBI, given the inter-state nature of the alleged scam. The SIT, which had by now conducted a year-long probe, had to hand over to the CBI all case papers, evidence, and the accused it had arrested. The Trinamool connection Along with his brand, Sen had worked on building political relations. He had acquired media organisations and invested in the Bengali film industry. Actor and TMC MP Satabdi Roy and former Bollywood hero and Rajya Sabha member Mithun Chakraborty were Saradha’s brand ambassadors. Then TMC MP Kunal Ghosh was appointed CEO of the media group in which Saradha invested Rs 988 crore and hired close to 1,500 journalists. By 2013 it was running eight newspapers in five languages. Ghosh was said to be drawing a salary of Rs 16 lakh per month. Another then TMC MP, Srinjoy Bose, was involved in the Group’s media operations. Then West Bengal Transport Minister Madan Mitra headed the Group’s employees’ union. Saradha gifted patrol motorcycles to Kolkata Police. The government deployed and distributed ambulances and motorcycles sponsored by Saradha in Naxalism-hit areas of the state. The Group allegedly also had connections with Congress leader and former union minister Matang Sinh, and the Assam BJP leader Himanta Biswa Sarma, who was then in the Congress. The ED questioned Sarma’s wife Rinki in February 2015 for accepting money from the Saradha Group to run advertisements on her TV channel in Assam. The agency also questioned TMC MP Arpita Ghosh in the case. The CBI questioned over a dozen TMC MLAs and MPs, and arrested Srinjoy Bose, Madan Mitra and Kunal Ghosh. Among those questioned were then TMC vice president and former West Bengal DGP Rajat Majumdar, Trinamool Youth Congress chief Shankudeb Panda, and MPs Satabdi Roy and Tapas Paul. Mukul Roy, who was once among Mamata’s closest confidants and is now with the BJP, was also questioned, as were the Assamese singer and filmmaker Sadananda Gogoi and former Odisha advocate general Ashok Mohanty. Former Assam DGP Shankar Barua committed suicide after CBI questioned him and searched his house. Where top cop comes in Kolkata Police Commissioner Rajeev Kumar headed the SIT constituted by the Mamata government, which investigated the Saradha case for a year. CBI has claimed that it has been







trying to question the members of the SIT, including Kumar, for one and a half years to get information on some missing evidence, but Kumar and his colleagues have been avoiding the agency. CBI sources claim communication, notices, and summons to members of the SIT and the West Bengal Police asking for cooperation in the investigation have been sent on 18 occasions since September 2017, but no one has turned up for questioning. The sources say that the Kolkata Police and SIT officials have given ill health or personal engagements as reasons to stay away, and then asked for a mutually agreeable venue to sit and discuss the case. According to CBI Joint Director Pankaj Srivastav, who is in charge of the Kolkata zone, Rajeev Kumar alone has been sent five notices and summons to appear before CBI since October 2017. The first of these summons was sent on October 18, 2017, and the latest one on December 8, 2018. To the last summons, the West Bengal DGP replied that queries could be sent in writing which would be replied to and, in case the need arose, a meeting could be arranged between the CBI and SIT at a “mutually convenient place”, CBI sources said. According to CBI, the SIT had not handed over a diary of Sudipta Sen that has details of payments made to prominent people, apart from other evidence. “Our multiple requests to hand over all documents seized by the SIT have fallen on deaf ears. They have the diary, interrogation reports of several accused — some of them recorded on video — some pen drives, and material recovered from a bank locker owned by Sen. Several of these things were not brought on record by the SIT. We learnt of them during interrogation of the accused,” Srivastav told The Indian Express. (Adapted from The Indian Express)






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2nd February, 201929th January, 20191st February, 20193rd ... · Vijay Mallya faces charges of...

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