Financial Wisdom – By Kalidas

Radical Solution for Credit Crisis from Kalidas

Posts Tagged ‘SEBI

NTT Japan Buys 26% of Tata Tele Services (TTS) for US$ 2.7 Billions (Rs. 12850 crores)

with 8 comments



Date of News or Event: 2008/11/12 – Tata Tele Services – NTT DoCoMo- Japan  purchases

NTT DoCoMo Japan’s and perhaps world’s largest telecom company was rumored to have bought 26% stake in India’s Tata Teleservices Ltd (Unlisted), parent of Tata Teleservices (Maharashtra) Ltd. (TTML) a bleeding child of Tata group for over  3 years. The consideration is US$ 2.7 billions or Rs 12,825 crores or Rs 128,250 Millions at current rate of Rs 47.50/dollar.(It may go higher or lower on the date you read this) Bloomberg News links is Bloomberg- NTT Tata deal Also read in greater detail in India’s  Business Standard


tata-tele-dealphotoIt is also reported today that a press advertisement has been released in which mandatory offer of Rs 24.70 has been posted under SEBI’s takeover rules.


I had posted the article earlier as First Information Analysis based on sketchy details, but withdrawn within hours after realizing that some readers may act impulsively and take large position. Some astute readers did send me 3 comments that forced me to avoid the publication in the interest of potential investors.


This is still a preliminary assessment, because the information released is not enough.  


1.      It is not known whether NTT buys 26% stake from existing shareholders of the Parent TTS or on its expanded equity…

2.      TTML has 190 crores shares outstanding today. Under mandatory offer of 20%, the company may be required to by about 38 crores of shares from the market. The average volume of this counter has been low of late at 3 Million shares (30 Lakhs) of late, and it used to be over 10 millions shares on NSE alone. It will take 10 days of heavy volume or nearly 20 days of moderate volume on NSE to buy 38 crores of shares (380 millions) from the open market. Look at 6m TTML NSE Volume : Yahoo

a.      The premium offered to be paid is only 25% on closing price on 12-Nov-2008

b.      It seems that the company has worked out the Offer Price in terms of SEBI Regulations for Offer Price – See 20(4)(c) under which average of last 26 weeks high and low is taken as basis.

c.      This is not the correct bid. NTT has paid TTS on the basis of Rs 19,334 per subscriber. TTML reportedly has 5 millions subscribers (as per BS report) in Maharashtra and Mumbai. Thus the valuation comes as under:


Total Amt Paid by NTT

US$ 2,700 Bln

Rs 12,850 cr

Stake taken by NTT in TTS



No. of subscribers TTS has

50 Million


Amt offered by NTT/subscriber

Rs 19,334


No. of subscribers TTML has

30 Million


% of subscribers of TTML/TTS



Due share of TTML from NTT


Rs 7,710 cr

No. of shares TTML

190 cr


Amt due per shareholder


Rs 40.58

Current Offer per SEBI


Rs 24.20

Discount on Cost Value/share


Rs 16.38

Loss to TTML shareholders/share


Rs 16.38

.3.      As per BS report, NTT appear to have worked out acquisition price based on per subscriber at Rs 19,334. Obviously, NTT may have worked out the purchase price with reference to industry standard ARPU (Average Rate Per User.

4.      Please note that some reports do suggest that TTML has only 30 Mln subscribers (against BS report of 50 Millions). If that is true, the correct price could be Rs 24.35 or as offered now.


For NTT, this is a bargain. They are paying less because of 20% appreciation of Yen vs. dollar and 20% depreciation of Rs vs. $. Thus, the deal works out 40% cheaper in favour of NTT in Forex alone. 


Other Important Financial Implications:

Depending on the deal,

1.      The TTML will have deep pocket shareholder with latest technology. The past is history

2.      Its debt may disappear sooner or later.  It could be a debt free company in era of monetary crisis

3.      It will have access to latest technology, never seen by any of its competitor, including Vodafone

4.      TTML can now expand at fastest rate. Its rate of growth is over 25% compounded in sales. The growth rate could possibly expand to 50% (CARG) for next 3 years at least

5.      TTML can now bid for major and minor town’s circles and large non-metro cities.

6.      Funding will not be a major problem. While TATA has been under acute pressure, as anticipated by this author 10 months ago, NTT is reportedly having no funding problem. With Yen rising, the funding task become less daunting for NTT

7.      Other operators from Bharati (Airtel), RCom (Anil Ambani’s telecom outfit laden with debt), and Idea (Birla’s outfit laden with heavy debt) will face immense competition. They do not have the level of financing in current difficult credit environments – TTML will outpace them by yards.

8.      On its own, TTML is now on the verge of breaking even. Its current losses are dominated by non cash charge of depreciation. Look at the following numbers

a.      Between 2007 and 08, the sales rose by  Rs 298 crores and losses dropped by Rs 170 crores, That is with incremental sales of Rs 298 crores, the losses were reduced by Rs 170 crores. Current losses are Rs 148 crores, In one more year, the TTML could break even. It could be earlier with this deal.

b.      With increased sales growth next 12 months @40% due to availability of funds with this deal, the increased sale of 680 crores could generate Rs 388 cr of income that could wipe out the deficit of 148 crores and make net gain of about Rs 240 cr. The interest cost (Rs 182 crores) could be reduced to zero If parents remit extra cash to TTML.

c.      It looks like that surplus cash may be retained by the parent TTS and not much cash benefit may accrue to TTML. In fact, the company is entitled to 60% of cash received by parent TTS from NTT. (Rs 9000 crores) being its share of total enterprise value. If it receives Rs 6000 crores (less than 50%), it will wipe out the debt completely and also earn interest income before expansion @ 10% or about Rs 600 crores.

d.      TTML could earn (240 +180 + 600) or Rs 1000 crores given the margin for error. With revised 190 cr shares outstanding, the EPS could be Rs 3.90 or about.

e.      If TTML does not pass on cash benefits to TTML, to which it is entitled to, the EPS may drop by Rs 3 per share or to Rs 0.90 only. In that case, the price target will come down drastically. It all depends how TTS treats TTML – as normal parent or as sucker – to take all gains and pass on all losses.

The stock could therefore see good rise in value in short to longer term. It is also possible that Tata will have to sell larger stake in future, could sell out entire company to NTT, to get out of debt trouble at Tisco and Tata Motor. In any case, even without NTT bid, TTML would have come to profit in 12 months. It would earn about Rs 0.90. If NTT cash is infused proportionately, it could earn Rs 3.90 per share. Its EPS could rise to Rs 10.70 in 3 years based on 40% compounded growth. If credit crisis is settled by then, the stock at could command modest 12x multiples  It can have following target depending on whether the parent pass on cash to TTML to the extent of its contribution to overall business:

If TTS TS treats TTML




Normal EPS of TTML on is own




Price range to trade (Conservative)

Rs 14~28

Rs 18~32

Rs 26 ~42

If TTS remits cash to TTML  (Min 6000 cr)




Price Range if cash received (Liberal)

Rs 20~60

Rs 30~80

Rs 60~160

In the absence of information relating to cash benefits, we have to go by the present position of the TTML. The price target (Conservative) as per second row in that case which is not very attractive to own this stock.

If only TTML receives the proportionate cash from its parent TTS, the price target could be higher. Since Ratan Tata is in serious debt trouble, the possibility of TTS parting with large cash is rather remote. Even Tata could behave like Ruia when in trouble. Crows are black everywhere be they from Jamshedpur or Jamnagar.

The purchasing price of Rupee will go higher (don’t look at $ vs. Rupee) domestically. (If property prices go down by 40%, it means that Rupee’s purchasing power has gone up by 40%)



I have mentioned on MMB that when the parents are in trouble, they sell their children. Ratan Tata made blunder of his life when he bought Corus and then Jaguar just to prove others wrong,. He is in serious trouble now, so he has no choice but to sell his prized companies. TTML was his least priority. He will have to sell VSNL also soon. Even if he wants to sell Corus, he will find no buyers. When I mentioned on MMB 10 months ago that Ratan Tata has made mistake so fatal he will have to sell his Jamshedpur, It was a satirical comment, which was laughed at. And now, I leave it to you.


I have much higher upside for TTML now. Even so, my target is as per above table. It is safe to buy. It will be tomorrow’s blue chip. I take the view that the share of Reliance Communication and Idea will go down relatively more.


I will therefore buy the stock up to Rs 20. There will not be any counterbid I am sure – no one has money now, even Rs 100 crores, forget 12000 crores. Ask Mukesh and Anil Ambani, they will agree. So will be Kumarmangalam Birla of Hindalco and Jindal. They are all hanging over the fire with heads down. They are crying in wilderness. 

Following is my strategy:

1.      Buy and accumulate TTML up to Rs 20 for 2 months and Rs 16 after the completion of offer.

2.      Also Buy stocks like GTL Infrastructure Ltd who makes telephone towers. I was negative on that stock, but the things have changed. I will post my recommendation later in Stock Watch.

3.      Swap from high debt telecom players. I would sell part of every other telecom stock (15%) and swap them into this one. If TTML is receiving more cash from its parent, then I will sell more of other telecom players (50%) and swap them into TTML.

4.      Since the market is uncertain and heading towards complete liquidation ( it will be apocalypse) in a few days, book the gain periodically and buy back in steep correction (over 500 points or more)

5.      For the time being, it is better to swap less than Rs 40 stocks into this one immediately. Ride the rally, book the gain and go back to your counter if still good.

6.      The stock is not going beyond Rs 20 today – the offer is only for 20% and there is no guarantee that your share will be bought by TTML. It may therefore trade at discount of 10% to 20% from Bid Price or Rs 24.20. It is possible that it may go to max Rs 22 before the close of the offer.

7.      Caution: there could be “reverse split” later on the stock.  It could be 5:1 later because company like NTT does not like penny stock. 5:1 will reduce the number of shares by 80% to 38 cr shares (380 Millions against 1,900 Millions now) . With supply side less, and Fund Managers demand more for this potential Blue Chip, the price rise could be sharper than above target.



1.    Buy first some small quantity. Be aggressive if the stock goes to Rs 16 or so
I would buy up to 10,000 shares at current prices (Rs 18 or so)

3.      Swap from other telecom counters which are slow movers or have too much of debt. I would avoid Rcom and Idea only due to high level debt. Both promoters are less liquid.

4.      In 3 years time, this stock could possibly go up 4 to 6 times.

5.      The market overall worsening. It is coming close to total liquidation. So start booking profit if you get opportunity.

Kalidas, Hong Kong


Ref: 0811-014-Tata Tele sells 26% to NTT DoCoMo for US$ 2.6 Billions


© 2008 Anil Selarka (Kalidas)


India’s ON and OFF Policy

with 21 comments

In today’s uncertain world, a few countries stand out on their own, of which India is one. There is everything one can think of finding – higher education, high savings rate, less papers or derivatives, huge population, efficient stock market, several millions of rich middle class wage earners, less debt, huge savings in real wealth like Gold and Silver, classy high tech manpower, world’s best design source, above average entrepreneurs, great creative and entertaining industry, least gambling resources, and a great democracy.

And yet, this giant dinosaur has been unable to find a single genuine pace bowler for its Cricket team, enough players to win the Olympic gold medals, really creative Prime Minister, Finance Minister, and Chief Operating Officers for SEBI (equivalent of SEC), and RBI (equivalent of FED in USA) from its thriving millions of population running across the country in every street and corner, sweating, smothering, bothering and yet smiling amid all odds against its existence.
What is wrong with this country? Its culture, Nay; Collectivism, partly; education, Nay; poverty, Nay; democracy, Nay; Contentment, yeah and lack of Killing Spirit – certainly Yes. Indians are notorious for self egoism, false patriotism and above all “eternal contentment” for whatever it has. Its desire for yearning is least. “Why do we need this? It is enough. We are happy with what we have” And that sets it apart from the rest of the dynamic western world.


India’s Info tech Glory and Visionary Jawaharlal Nehru

Indians have the extremely bad habit of not giving the credit where it is due. Take the example of its InfoTech Industry – now on the lips of every technocrat all around the world. It’s main creator and originator is forgotten as “Cause” and the “Result” is worshipped like a demi-god.

The seeds of high end Info tech were sawn by its first and most charming Prime Minister, Jawaharlal Nehru, a great visionary. With extremely limited sources at his command in early 50s, he maneuvered to obtain the great alliance with prestigious MIT in the United States, to set up 4 finest technical institutes – Indian Institute of Technology. And in remaining 60 years, the successive governments with almost 50 times monetary and ample human resources at their command could set up only 3 such institutes. He made the technical and engineering education so cheap and affordable, that India could produce talents at the cheapest cost.

His investment by way of subsidies in education, basic industries and oil refineries returned 100 times return in recent years. What he spent in millions on IIT brought in billions of dollars in Forex through thriving Info Tech industries. Even this author got 4 degrees for just Rs 4000 or $80 in 4 years.

When the British left India in 1947, they built 9 platforms at Bombay VT railway station when India’s population stood at 300 million; whereas in next 60 years, the successive Indian governments could build only 4 platforms at Bombay’s Church gate railway station with over 1 billion population! It is said that India is always on “Auto Pilot”. No one knows how it runs – it just walks in the wilderness.

Nehru dynasty gave leadership in the form of Jawaharlal Nehru itself, then Mrs. Indira Gandhi, Rajeev Gandhi (Son of Indira Gandhi) and now Mrs. Sonia Gandhi, head of ruling Congress party, and wife of Mrs. Gandhi’s elder son Rajeev Gandhi.

Even the Kennedy dynasty nowhere stands near the Nehru dynasty. The greatest contribution that Mrs. Indira Gandhi made was the green revolution and killing of all strength of pre-1947 Pakistan into two separate nations – Pakistan and Bangladesh.

And yet, all credits are given today to the likes of BJP Leader Vajpayee, the charismatic Prime Minister who merely exploded the Nuclear Bomb (It was built only with the vision of Nehru and Mrs. Indira Gandhi), Man Mohan Singh, the Prime Minister and P Chidambaram, the Finance Minister today for doing nothing substantially positive and lots of negative.

India has come a long way since 1950. Knowledge is no longer a power of a few. However, the kind of progress expected has not been achieved by India, and in fact, it is on the verge of losing major advantage if nothing is done now.

India’s disastrous policy measures in past, its effects and how that can be reversed with ease?

India’s de facto Central Bank – Reserve Bank of India – similar to FED in USA or Bank of England in UK, is a most revered institution in India. So also, Security and Exchange Board of India known as SEBI, equivalent of SEC in other countries, and stock exchanges like Bombay Stock Exchange – BSE and National Stock Exchange (NSE). They are given the status of demi-god by the admiring and ignorant semi educated urban class in India. The result is that these institutions, with possible exception of NSE in some cases, have become monolithic and inefficient organizations, with RBI leading the pack.

The officials of these bodies do not have experience in global money market, how certain powers manipulate the word market with ease, and therefore are very dogmatic in their views. They blindly follow the theories and practices of western and eastern world. As result, the economic, monetary and social policies fell far short of desired goals in last 50 years.

They do not realize that if certain standards with reference to which their policies are tailored are not yielding desired result, the standard itself must be wrong. As result, the measures initiated to adjust the imbalance often fail. Let us see the measures that failed India:

Belief, Policy Measures, Expectations and Final Result with Causes

Actuator: Finance Ministry, Reserve Bank of India, SEBI

Policy: Exchange Rate

BELIEF & PARADOX (In Blue prints)

1. Weaker Rupee helps exports and earns FOREX

2. Domestic Industries are protected against excessive and expensive imports

3. Jobs in domestic industries are protected and also promoted

4. Foreign Debt reduces due to FOREX earnings out of exports


Weaken Rupee by all means

1. RBI: Reduce NRE deposit rates – pay them much less than domestic deposit rates (6% less)

Even if NRI came to the country’s rescue in 1992 FOREX crisis, when India had to pledge Gold to Bank of England. NRI were treated like disposable towel

2. RBI: Do not let FII to buy Rupee from the market. Let them come to RBI directly to reward them with much higher rupee rate as enticement not to go to the market.

Even if it costs national exchequer hundreds of crores of rupees

3. FM, RBI: Sterilize any rise in the market by buying back dollar against rupee

Even at the cost of higher money supply leading to inflation

4. FM, RBI: Allow Indian Businessmen to invest overseas so that they buy dollars and sell rupee to cause it weaker and weaker.

While Foreign Investors were keen to invest in India, India was telling its businessmen NOT to invest in India but invest overseas, as though India had become one of the richest countries in the world. Even China after receiving almost $500 billion never thought of stopping the inward money flow and permitted Chinese to invest overseas

5. FM, RBI: Allow Indian citizens to remit overseas US$ 100,000 without RBI approval, so that pressure on rupee is reduced by letting them sell rupee and buy dollars.

While permission was not given to individual foreign investor to invest into Indian stock market as logical step further to widen the Indian markets or for direct investment, domestic Indians were asked to invest overseas, even when India was facing dearth of capital for building power plants, ports, Airports, national artery roads, sewerage, water filtration plants to reach every nook and corner of the country

6. SEBI, RBI: They introduced P-Note measures to scare away the foreign investors from India so that upward pressure on rupee is diminished.

7. SEBI: introduced arbitrary circuit breakers for market and individual stocks in the name of maintaining order which again scared the foreign investors who were faced with illiquidity in the invested counters. Some stocks had 5, 10, 15 or 20% up or down circuits that were fixed arbitrarily.

SEBI forgot main principle of free market that every investor has right to invest or disinvest in any stock at any time without hindrance. Even in market crash such as now, and in January 2008, the foreign and domestic investors were not able to sell the stocks at market because there was no market.

8. FM, RBI, SEBI: prohibited short selling on selected counters to arrest the market fall

If there were no restrictions on Long Buying of any stock, that lead to huge rise in Sensex from 2800 to 21000 (over 700%) in 5 years, why should there be ban on Short Selling of stocks or index?

Dogmas, False Policies and Misplaced Priorities

I have said often that if certain policies do not work with reference to standard for long time, there is something wrong with the standard itself. Such erroneous standard has to be abandoned. However, most of the policy makers and economists have been groomed in high end business schools that rely on outdated textbooks. These guys are not wise men but guys, who never worked on the front line, gained first hand experience, always sat behind the back bench, followed the books in full literary sense, and almost forgot that they too have common sense that was distributed by the God equally regardless of class, religion or nationality.

Why Rupee should be allowed to appreciate?

The weaker rupee policy did not work for 60 years, and yet the Prime Ministers, Finance Ministers, Reserve Bank of India’ Governors, followed the same policy 247365 or 24 hours a day, 7 days a week and 365 days a year for over 60 years. Rupee was devalued from Rs 4/$ to Rs 50/$ today with no tangible result.

Currency is an Ambassador of a Nation – it has to be strong

Currency is the first sign of strength of any country. Currency is a child of the nation by which a nation is recognized, same way the parents are recognized by their own children. Ask your self – Do you want strong children or weak children? You always say my son is this; my son is that, my daughter did well here; my children became engineer, doctor or MBA who will get us decent life from their earnings.

And what the same guys are doing while in charge of the country? They want their currency Rupee weak, so that it earns less, expends more, exports undersells country’s assets, imports overpays for the good, and the external debt soars only because of depreciation of the currency. These smart guys in RBI, SEBI, Finance Ministry and Prime Minister’s office know nothing, absolutely nothing. They are monkeys imitating blindly the western world, who want your national currency weaker so that they can buy cheaper from you and keep their inflation in check.

Weaker Rupee may help Exports, what about Imports?

Oh no, it will hurt exports! Really? What about imports? Are you not overpaying for the gigantic oil bill. Are you not overpaying for debt servicing? If Rupee is at Rs 45 and foreign debt is $100 billion, the national external debt is Rs 450,000 crores. If the rupee goes to Rs 39 as it did, the national debt reduces to Rs 390,000 crores. If rupee was allowed onward journey, it would have gone to Rs 26, and in that case, national debt would have come down to Rs 260,000 crores. You therefore saved Rs 190,000 crores just by letting the Rupee getting stronger.

And I do not say that manipulate rupee to get stronger (the way US does for dollar). What I want to say is that let it find its own level. Do not intervene when there is natural tendency to get stronger. Do not sterilize its rise. The sterilization operation is antibiotic. Continued practice of sterilization will kill its natural power to grow and get stronger. It is more like a person not wanting a child uses condom or birth control pill to sterilize the fertility for over 10 years. finds difficult to have child when he wants to, because the body has become immune to its natural power to produce. Treat economy like a body, and RBI’s sterilization and SEBI’s P-Note measures like birth control pills, and you will understand complex economics in a flash.

A person in a gym uses all equipments and tools to make every part of his muscle beautifully contoured and in shape. He then takes in healthy food, without which entire body will not respond to various form of physical exercise. Consider body as economy, policy measures as various tools for exercise and Rupee as lifeline food. If the food is weak or debilitating, the whole body is destroyed. It is a job of Finance Minister to imitate that practice to make every section of the economy well contoured and strong. The currency policy should be conceived and directed as suitable to the national needs, not international or IMF demand.

How External Debt gets reduced by Stronger Rupee?

If you want to earn Rs 190,000 crores by way of FOREX earnings out of exports, and if the export margin is 10%, the exports have to be additional 1,900,000 crores, provided none of the debt going bad. Further, if rupee had gone higher, Government could have reduced the external debt by simply selling rupee, buying dollars and liquidating the debt say, $ 15 billions.

False Praise leads to Wholesale Destruction

Often the names of financial officials in the country were mentioned on the top covers of magazines like Forbes, Fortune, International Banker, IFR, IMF Review etc. Whenever their names appear on such magazines, take for granted that they are least qualified for that post. Those who do not get proper jobs in their own country lend up at world Bank and IMF, where decisions were never taken and such posts were official retirement with full pay every month. It is a warehouse of inefficient. That resume however works in India.

India is a country that believes in enormous adulation. Gods, Goddesses, Gurus, Cricketers, Hollywood actors, high court judges, politicians and officials in RBI, SEBI, NSE and BSE are all elevated to the extreme status. Gods and Goddesses never listen, Gurus always need bhakta jan to wash their feet and drink that holy water, Cricketers and Actors are easy pass time, and inefficient judges in various courts who have been caging justice for over 20 years, take 3 times vacation, larger than your own children, never deliver justice in time prompting citizens to approach for alternative judiciary of Mafias or Bhais to give them “Supari”, politicians like Advani go on blurting about building Ram Temple, instead of building mass housing for the poor Indians, and officials in RBI go on having “condom sex” with economy by sterilizing operation, and officials in SEBI go on inventing rules like P-Notes how to drive out the Foreign Investors. When they were coming, they were asking why you are coming, and when they are going, they are asking why they are leaving. What the hell do you want, you fickle minded babus?

Indians never saw Lower Oil Prices at Rs 10/ltr when Oil fell all time low to $10/brl

Due to consistent weaker rupee, the petrol prices always rose like mercury in thermometer. When the oil fell all time low to $10 per barrel or Rs 400 per 159 liters or Rs 2.33 per liter, Indian never saw petrol or diesel prices falling to Rs 10 per liter. This is what the misguided Rupee policy did for Indian consumers

Currency (Rupee) Never Remain at Same Level – like Water, it finds its own level

The currency movement is always dynamic. The sum total of entire economy is represented by currency. If it does not go down, it goes up; and if it does not go up, it goes down.

During BJP administration, Rupee was allowed to appreciate to Rs 43 from Rs 48. It continued to Rs 39 when the officials in RBI and Finance Ministry were alarmed. SEBI started talking about Rupee when it was none of its business. These are fiscal and monetary matters, not stock market that is the domain of RBI and Finance Ministry. They invented P-Note related measures that were the harbinger of downward movement of Rupee. It just dropped from Rs 39 to Rs 50 yesterday, when Indian economy was supposed to be having highest growth in the world, Forex reserve at over $300 billions, and every sector of the economy was on four cylinders.

These wise guys applied screeching brake with the result that money simply evaporated, stock markets crashed, rupee crashed, interest rates rose, inflation rose to over 13%, oil subsidies went through the roof, and many other countless collateral damage such as recession, lower home prices, higher food prices, and what not.

If Islamic punishment of stoning to death was allowed in India, the officials in finance Ministry, Reserve Bank of India and SEBI fully deserved that capital punishment. They destroyed vibrant economy; they dealt death blow to the aspirations of Indian people, they sank India into deeper external debt (by additional at least Rs 60,000 crores), they caused Oil bill to rise by Rs 16000 crores due to depreciation effect of the Rupee, they caused first time home owners life miserable by increasing their EMI by over 6% per year or Rs 3000 per month per Rs 100,000 of mortgage loan, they raised the borrowing cost of almost all business enterprises by minimum 3% , cost of energy rose by 20%, and only the life of human (Made in India) became cheaper.

Due to single most reason – Weaker Rupee

(To be continued further that will be appended here. Full article will then be converted into PDF file for download)

Kalidas, Hong Kong

Ref: 08-010 – India’s ON and OFF policy

Note: Due to problem with the WordPress software, the article can not be properly formatted earlier. It has been withdrawn and substituted with this one. The comments associated with the previous one may not be available here, but I will try to put them if possible.