Indian corporate governance seriously flawed

Apr 28, 2017 0

New Delhi–The Indian capital market regulator on Friday voiced serious concern over the standard of corporate governance, saying the country lacked a code of conduct for institutional investors.

“Is the system of corporate governance in the country working satisfactorily…Majority would say no,” Securities and Exchange Board of India (SEBI) Chairman Ajay Tyagi said, while addressing the annual session here of industry chamber, the Confederation of Indian Industry (CII).

Noting that according to company ownership patterns in the Indian context, “Fifty per cent ownership is with the promoters, while institutional investment is increasing, nowadays touching 30 per cent”, Tyagi said there is “no code of conduct” for institutional investors.

Ajay Tyagi

“What are their responsibilities, once they are significant shareholders? Our impression, and this is the saddest part, is that promoters prefer institutional investors who are passive,” he said.

“There is need for a common stewardship code. Just increasing the institutional share, without taking active interest and responsibility, does not serve corporate governance,” he added.

Pointing out that investors’ rights are a SEBI subject, the Chairman said: “If promoters’ plus institutional shareholding crosses 80 per cent, then retail, minority investors really become a minority…who will take care of their interests?”

“Then there is the issue of independent directors, who have not been discharging their functions properly. They have no commitment to any cause, resign without giving any reasons, just say they are sick…giving fake reasons.”

“These are issues of serious concern, to which I have no solutions at the moment,” Tyagi added.

He also said the functioning of independent auditors in India was another matter of concern.

“If the auditors’ committee is not working, independent directors are not independent and there is no code of conduct for institutional investors, then the system is clearly not working,” Tyagi added. (IANS)

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Supreme Court asks Sahara Chief Roy to deposit Rs 1,500 crore

Apr 27, 2017 0

New Delhi–The Supreme Court on Thursday asked Sahara chief Subrata Roy to deposit Rs 1,500 crore, as offered by him, by June 15, failing which he will have to go back to jail even as it sent a proposed buyer of Sahara’s assets to jail for contempt.

Asking Roy, who was present in the court, to pay the money, the bench of Justice Dipak Misra, Justice Ranjan Gogoi and Justice A.K. Sikri recorded his assurance that cheque of Rs 1,500 crore would be honoured on being presented on the due date.

“We are warning you today, if cheques are not realised, amount does not come, we will be compelled to send you to Tihar Jail straight away from here,” the bench told Roy asking him to be present on the next date of hearing on June 19.

Subrata Roy (Photo courtesy: The Hindu Business Online)

Roy was present in the court in pursuance to April 17 direction to be present in the court in person.

Seeking some more time to pay the money, he told the court that he would pay Rs 1,500 crore by June 15, another Rs 552 crore by July 15 and Rs 3,000 crore by October 30.

The court was given two checks of Rs 1,500 crore and Rs 552 crore towards the payment assured in the month of June and July.

Sahara has still to pay balance Rs 11,169 crores of the principal amount of Rs 25,781 crore to the investors from whom two group companies – SIRECL and SHICL – had raised in 2008 and 2009 through OFCDs .

Asking Roy to be present in the court on June 19 when court would hold further hearing in the matter, the bench in the meanwhile asked the official liquidator of Bombay High Court Vinod Sharma to proceed with the preparation of the terms and conditions for the auction of Sahara’s Aamby valley property.

The court said that the reserve price for the auction of Aamby Valley would be Rs 37,392 crore.

The terms and conditions would be placed before the court on June 19 for it consideration and approval.

The official liquidator of Bombay High Court in a report on the worth of the Aamby Valley by an evaluator said that the market value of Aamby Valley is Rs 37, 390 crore and the fair value is Rs 43,000 crore.

Senior counsel Kapil Sibal, appearing for Roy, too quoted a price that was little more than the one quoted by the evaluator but said that the enterprise value of the property was Rs 1 lakh crore.

Meanwhile, the court sent Prakash Swamy — the power of attorney holder for a US-based company MG Capital Holdings LLC, New York that had shown interest in buying Sahara’s New York-located Hotel Plaza — to jail for one month for not depositing Rs 10 crore fine ordered by the court for backing out and misleading the court.

The court had on April 17 ordered Swamy to deposit the fine with its registry by April 27.

The bench sent Swamy to Tihar jail after the court was informed that he has not deposited the money.

Seeking mercy, Swamy said that he was an old journalist who had reported United Nations for ten years.

He said that he filed the affidavit as people in the company concerned knew him and promised him some good gains from the deal. He described himself as “small man”.

Telling Swamy that “small man should not try to be big”, the bench said: “You should not have gone into this. You must understand the gravity of the case.”

“If we forgive you it will send wrong message,” Justice Misra said pointing out that sometimes “tempting situation lead to confinement”.

Swamy had earlier told the court that US-based MG Holding was buying Sahara’s Plaza Hotel, following which the court has asked them to deposit Rs 750 crore in Sahara-SEBI Refund account to prove their bona fides.

However, in the next hearing, the court was informed that the US company had withdrawn the offer after doing due diligence of the property. (IANS)

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One percent of Indians own 53 percent of country’s wealth: UN report

Apr 27, 2017 0

New Delhi–Indicating that inequality in India is increasing, a UN report released here on Thursday said that the richest one percent own 53 percent of the country’s wealth.

It also said that unlike other countries, development in India is not moving across states.

“In terms of wealth inequality, India is second only to Russia, where the richest 1 percent own 53 percent of the country’s wealth,” said the report ‘The Better Business, Better World’ released here in a two day event of the United Nations Global Compact (UNGC) focussing on how through bold innovation, businesses can create solutions and tap new opportunities found within the 17 Sustainable Development Goals (SDGs).

Lise Kingo

According to Lise Kingo, CEO and Executive Director of the UNGC, SDGs can open at least $1 trillion of market opportunity for the private sector in India.

“This is out of a total global value of $12 trillion that could be unlocked by sustainable business models in four key areas, food and agriculture, energy, cities and health,” she said.

Kingo added that over 72 million new jobs could be created in India by 2030 by adapting a sustainable business model.

About addressing the disparity, the report says that to reduce the inequality, India needs a ‘different economic model’ — one that is not only low-carbon but also recognizes poverty, inequality and lack of financial access.

“As the second largest food producer in the world, India needs a more focused approach to developing and managing its agricultural sector and agri-based industrialisation,” it says.

Stating that rising inequality leads to slower progress in reducing poverty, the report added that Oxfam has calculated that if India were to stop inequality from rising further, it could end extreme poverty for 90 million people as early as 2019.

The UNGC also called for better infrastructure to improve access to proper medical care for India’s rural population.

“On its current trajectory, India will continue to face enormous challenges in rural development, urban sustainability, national infrastructure, and improved quality of life of its citizens,” the report says.

Its suggestions included creation of low-income food markets, reducing food waste in supply chains, technological aid in smallholder farms, micro-irrigation programs, resource recovery, remote patient monitoring and preventing catastrophic healthcare costs for the poor. (IANS)

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India intends to make Intellectual Property Rights policy more efficient: Sitharaman

Apr 27, 2017 0

New Delhi–India intends to make its Intellectual Property Rights (IPR) policy more efficient and speedier, Commerce Minister Nirmala Sitharaman said on Thursday.

“The mindset of the government is to make the IPR policy more efficient and speedier,” she said, while addressing the World Intellectual Property Day celebrations here. She also gave away the National Intellectual Property Awards on the occasion

“India’s IPR policy is TRIPS (Trade Related Intellectual Property Rights) Acompliant and forward looking,” she said.

Sitharaman also said creating awareness is very important, and launching an IPR Awareness campaign in schools across the country by Cell for IPR Promotion and Management (CIPAM) is a step in creating a mindset and respect for innovation right from the schools.

Nirmala Sitharaman

On Tuesday, the CIPAM, in collaboration with the International Trademark Association (INT), started an IPR awareness campaign in schools from one such institution in the national capital.

A Union Commerce Ministry release here said that a programme is being worked out to conduct over 3,500 IPR awareness programmes in schools, universities and industries across the country, including in Tier 1, 2, and 3 cities, as well as in rural areas, along with translating content into various regional languages for a wider reach.

Earlier this week, the government extended the Start-Ups Intellectual Property Protection (SIPP) scheme for three years till March 2020 to ensure protection of entrepreneurs’ patents, trademark and designs.

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Nikki Haley and Indian Representative to UN discuss India-US cooperation

Apr 27, 2017 0

By Arul Louis

United Nations– The US Ambassador to the UN, Nikki Haley, the first Indian American to hold a cabinet rank, visited India’s UN Mission on Thursday for a wide-ranging discussion with Permanent Representative Syed Akbaruddin.

“We shared perspectives on how India-US can work together at the UN in line with our growing ties,” Akbaruddin told IANS after the meeting.

Haley described their meeting in a tweet as “great”. “We discussed India’s economy, peacekeeping reform and the partnership between India and the US.”

United States Ambassador to the United Nations, Nikki Haley, met India\’s UN Permanent Representative Syed Akbaruddin at the Indian Mission in New York on Wednesday, April 26, 2017. The US Permanent Representative to the UN has a cabinet rank and Haley is the first Indian American to be in the US cabinet. Haley is currently the president of Security Council. (Photo credit: US Mission to UN/via IANS)

A US Mission statement added that they also discussed “India’s economic and anti-corruption reforms that have helped businesses and spurred growth” and “the close ties between the two countries and opportunities to further the partnership between the US and India at the UN.”

Permanent Representative to the UN has a cabinet rank in the US government and Haley has emerged as a powerful and outspoken voice on foreign policy in the US, even as she deviated from some of the early positions of President Donald Trump.

However, the differences have virtually disappeared as Trump moved closer to her stances due to realpolitik and Congressional pressures. For example, Trump has embraced her hardline on Russia after chemical attacks allegedly carried out by Syria.

A critic of how the UN works, Haley has been insistent on reforming it, especially the peacekeeping operations as a cut in US contributions to the world body looms.

“I know for a fact that Nikki feels very, very strongly about taking on problems that really people steered away from,” Trump said on Monday during a White House lunch for Permanent Representatives of members of the Security Council.

Trump thanked Haley for her “outstanding leadership” and said she was doing a “fantastic job.”

It was not known if the Security Council reforms with a permanent seat for India — a priority for New Delhi — came up during the conversation with Akbaruddin.

President Barack Obama has backed India’s quest, but the Trump administration has not publicly endorsed it and Haley has only said that she was open to the idea.

Asked about it at a meeting of the Council on Foreign Relations here in March, she admitted candidly, “First of all, I’m in learning mode. And as I look at that, I know there is conversations of reform of Security Council.”

She then added: “I’m open to hearing anyone on what they have to say and looking at it and going further.”

With the US contributing 28.36 per cent of the peacekeeping budget, Washington is giving priority to reforming the operations.

Historically India has been the largest troop-contributor to the UN peacekeeping operations and 7,678 are serving now.

India has also been advocating reforming the peacekeeping operations, especially how the mandates are set by the Security Council, often without consulting the troop-contributors.

As Governor of South Carolina, Haley showed interest in India’s economy and its potential and led a trade delegation in 2014 to India seeking investments and stronger commercial ties with her state. (IANS)

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US Supreme Court to hear case on citizenship revocation

Apr 26, 2017 0

By Ashok Easwaran

Chicago– The United States Supreme Court is to begin hearing oral arguments on April 26 in a case which could set a precedent in the revocation of American citizenship of naturalized citizens and is of paramount significance to thousands of Indian residents.

In Maslenjak v. United States, the Supreme Court will determine if an “immaterial false statement or omission in an immigration document or status proceeding” can lead to criminal prosecution and revocation of citizenship.

With more rigorous immigration enforcement under President Donald Trump, the case has caused consternation among many immigrant activists. As many as 70 organizations representing immigrants have filed an amicus brief about the case.

The Asian Americans Advancing Justice (AAAJ), which is among the organizations which filed the amicus brief, said in a statement, “The brief explained that many individuals may make minor errors in filling out immigration forms or providing information because of language barriers and lack of counsel and subjecting those individuals to criminal prosecution and loss of citizenship exacts a harsh and unfair penalty.”

“The naturalization process can be long and complicated and requires applicants to make hundreds of factual representations, in response to often ambiguous questions, about events spanning their entire lives.”

“If any trivial factual misstatement could violate the statutes at issue in this case, untold numbers of naturalized citizens would be at risk of losing their citizenship and liberty years after they have become full American citizens. Based on this case, someone accused of knowingly providing the wrong street number in an address (203 instead of 205), for example, could be subject to criminal proceedings and having their citizenship revoked – a worrying threat given the current administration’s wide-reaching enforcement and deportation activities,” the AAAJ statement said.

Maslenjak v. United States involves Divna Maslenjak, an ethnic Serbian woman and a native of Bosnia, who came to the United States in 2000 as a refugee in order to flee the civil war in the former Yugoslavia and was found to have made a misstatement during immigration proceedings.

The Supreme Court’s verdict in this case is considered important because it could provide guidance over whether naturalized American citizens can be stripped of their citizenship in a criminal proceeding based on an “immaterial false statement”.

What could have been a case dealing with procedural matters in less turbulent times, has gained importance because of the Trump administration’s enhanced focus on immigration enforcement. The New York Times has reported that officials of two organizations which take a hard line stance on immigration – the Center for Immigration Studies and the Federation for American Immigration Reform — have joined the US Immigration and Customs Enforcement agency, putting them in positions where they can carry out their agenda.

Moreover, with Trump’s appointment of Justice Neil Gorsuch to the US Supreme Court, the court now tilts to conservatism. Gorsuch, like the late Justice Antonin Scalia, whom he succeeded, is a proponent of originalism – a judge given to interpret the words of the US Constitution as they were understood at the time they were written in 1787.

In one of the most famous cases where the United States Supreme Court ordered the revocation of citizenship involved an Indian, in 1923, the court ruled that Bhagat Singh Thind, a founder member of the Ghadar party, was racially ineligible for US citizenship. The court based this decision on the American Nationality Act of 1906 which allowed only “free white men” and “aliens of African nativity” to become naturalized citizens.

In his defence, Thind did not challenge the constitutionality of the racial restrictions, but made an extensive argument that as he was a “high-caste Hindu” and an Aryan, he came under the category of “free white persons” within the meaning of the naturalization act. Indians from North India and most Europeans are Indo-European people, he said. Elaborating on his argument, Thind said that since Aryans were the conquerors of the indigenous people of India, they had greater similarity to ‘white people’.

Thind’s lawyers also argued that as a “high caste Hindu” he even had a revulsion to marrying an Indian woman of a “lower race.” Unfortunately for Thind, the court decided to rely on another case where it was held that “white people” were only those who were members of the Caucasian race. As a result of the court’s decision, the first Indian to become an American citizen, A.K. Mozumdar, also had his American citizenship revoked. (IANS)

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Jackfruit seeds could substitute cocoa beans to make chocolate

Apr 25, 2017 0

By K.S. Jayaraman

Bengaluru–New research has found that the seeds of jackfruit — a large fruit found in many tropical countries — are a potentially low-cost substitute for cocoa beans, the primary ingredient of chocolate.

Considering that the worldwide demand for chocolate is outstripping the production of cocoa beans, the finding reported in the American Chemical Society Journal of Agricultural & Food Chemistry would be welcome news for chocolate lovers.

While in some countries, the sweet-smelling jackfruit seeds are boiled, steamed and roasted before eating, providing a cheap source of fibre, protein and minerals, they are mostly thrown away as waste.

Jackfruit (Photo by Shahnoor Habib Munmun)

Globally, farmers produce about 3.7 million tonnes of cocoa annually, but estimates suggest that demand for these beans will grow to 4.5 million tonnes by 2020.

Researchers at the University of São Paulo who were looking to put the waste jackfruit seeds to better use discovered that compounds found in them produce many of the same aromas as processed cocoa beans and therefore could potentially be a cheap substitute for use in chocolate manufacturing.

The Brazilian researchers made jackfruit seed flours by acidifying or fermenting the seeds prior to drying. They roasted these flours for various times and temperatures using processes similar to those used to enhance the chocolaty flavor of cocoa beans.

Using gas chromatography and mass spectrometry, the team identified several compounds from the jackfruit flours that give chocolate its distinctive aromas — such as caramel, hazelnut or fruity.

While there are several reports on the use of waste jackfruit seeds to produce starch, “for the first time we found that after roasting, jackfruit seeds imparted an aroma similar to that of chocolate”, the researchers say.

They conclude that the cheap and abundant jackfruit seeds are thus “a potential replacement” for cocoa beans for the manufacture of chocolate. (IANS)

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As Mallya’s custody sought, India’s extradition success rate is 36 percent

Apr 25, 2017 0

By Rakesh Dubbudu

Vijay Mallya

The government has sought custody of liquor baron Vijay Mallya from the UK, but Indias success rate at extradition has been no more than 36 per cent over 15 years, according to a report by, a data journalism portal. This means India managed one extradition of every three sought.

While 62 fugitives have been extradited to India from a foreign country between 2002 and 2016, 110 fugitives are yet to be extradited though a formal request has been made by India, according to an answer to the Lok Sabha on December 6, 2016, Factly reported.

Mallya was arrested by the Scotland Yard — and released on bail — on April 18, 2017, in connection with an extradition request filed by India on February 8, 2017. The UK government has sent the request to the concerned court, and the arrest marks the beginning of the extradition process.

Mallya is wanted in several cases related to economic offences in India. The now-defunct Kingfisher Airlines that he set up owes over Rs 9,000 crore ($1.5 billion) to state-owned and private banks, it has been widely reported.

There were 16 extradition requests pending with UK as of July 2016, according to an answer to the Lok Sabha. Only one fugitive has been extradited from the UK — Samirbhai Vinubhai Patel, an Indian citizen, for murder; the extradition came in October 2016, 23 years after India’s extradition treaty with the UK came into force in 1993.

The highest extraditions happened from the UAE (18), followed by the US (9). While four each were extradited from Canada and Thailand, three have been extradited from Germany and South Africa.

India has extradition treaties with 47 countries, among them Afghanistan, Australia, Bahrain, Bangladesh, Belgium, Bhutan, Brazil, Bulgaria, Canada, Chile, Egypt, France, Germany, Hong Kong, Indonesia, Iran, Israel, Kazakhstan, Kuwait, Malaysia, Mauritius, Mexico, Nepal, the Netherlands, Oman, the Philippines, Poland, Portugal, Republic of Korea, Russia, Saudi Arabia, South Africa, Spain, Switzerland, Tajikistan, Thailand, Tunisia, Turkey, the Ukraine, Uzbekistan and Vietnam.

India also has extradition arrangements with nine countries — Croatia, Fiji, Italy, Papua New Guinea, Peru, Sri Lanka, Singapore, Sweden and Tanzania.

What is the process of extradition?

A request for extradition can be initiated against a fugitive criminal who is formally accused of, charged with or convicted of an extradition offence. The Ministry of External Affairs (MEA) takes up extradition requests with the concerned foreign countries when a request for extradition is received from the relevant law enforcement agencies in India.

All extradition requests should be supported by documents and information as prescribed by the MEA guidelines. It has to be noted that each extradition request is different and the request is dependent on the specific treaty/agreement signed with a country. The offence should also be defined in the list of the extradition offences.

What are the offences defined in the extradition treaty with UK?

The extradition treaty signed in 1993 with the UK defines the scope of the extradition offence as one which is punishable by law for a term of imprisonment of at least one year. The treaty does not classify political offences as extradition offences but it provides an exhaustive list of offences that will not be treated as a political offence.

Most fugitives extradited in 2005

The most (8) fugitives were extradited in 2005 followed by seven each in 2003 and 2004. Six fugitives were extradited in 2015 during the rule of the current government.

Most people extradited for murder & terrorism-related offences

Out of the 62 fugitives extradited since 2002, 14 were for murder-related offences and 10 for offences related to criminal conspiracy.

As many as nine fugitives were extradited for terrorism-related offences, including three from the UAE, in relation to the 1993 Mumbai bomb blasts. (IANS)

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Reliance Industries overtakes TCS as most valuable company

Apr 24, 2017 0

Mumbai– Industrialist Mukesh Ambani-led Reliance Industries (RIL) on Monday regained its position as the most valued company of the country in terms of market capitalisation (m-cap) after a gap of four years.

The company’s shares on the BSE closed higher by 1.19 per cent or Rs 16.65 to Rs 1,416.40 from its previous close at Rs 1,399.75. This lifted RIL’s m-cap to Rs 4,60,518.80 crore.

The company overtook Tata Group’s multinational IT company Tata Consultancy Services (TCS) in terms of m-cap.

Mukesh Ambani

The Tata Group’s multinational IT company’s shares on BSE gained by 0.77 per cent or Rs 17.90 to Rs 2,329.10 from its previous close at Rs 2,311.20. The company’s m-cap stood at Rs 4,58,932.37 crore.

On April 21 also, RIL had overtaken TCS in terms of m-cap during intra-day trade. The company’s shares had closed higher by 2.22 per cent to Rs 1,399.75 per share on last Friday with an m-cap at Rs 4,55,105.33 crore.

In comparative terms, the share price of RIL has risen by 31.2 per cent from January 1 to April 24, whereas TCS’ scrip price has fallen by 1.1 per cent.

During the period under review the NSE Nifty only surged by 12.6 per cent and BSE Sensex gained by 11.4 per cent.

“Factors like healthy growth of RIL’s traditional business such as petro-chemical and the fact that its telecom venture has transitioned from a capex-to-customer acquisition phase has worked for the company,” Deepak Jasani, Head – Retail Research, HDFC Securities, told IANS.

“However, structural changes in the IT industry and digital disruption have hurt TCS. The company’s margins are expected to face headwinds as a result of US immigration policies and an appreciating currency.”

TCS had overtaken RIL’s m-cap during February 2013. RIL’s stock had made a record high of Rs 1,626.05 on January 15, 2008. (IANS)

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Snapchat struggles in ‘rich people gate’

Apr 23, 2017 0

New York–Southern California-based social media company Snap Inc., which highly publicised IPO in March with value at $24 billion, faced backfire as CEO Evan Spiegel was accused of claiming that Snapchat was an app “only for rich people”.

Snapchat, which was labeled by business analysts as the strongest rival to Facebook, had to start damage control urgently, saying Spiegel never made such remarks and “these words were written by a disgruntled former employee”, Xinhua n ews agency reported on Sunday.

The quote, which Snapchat called “ridiculous”, came from a recently unredacted court complaint by Anthony Pompliano, who was hired away by Snapchat from Facebook then served as the company’s growth lead for a few weeks in 2015.

Pompliano’s lawsuit filed in redacted form in Los Angeles Superior Court in January. Snap Inc. dropped its efforts to keep the unredacted complaint under seal and released it in a public filing last week.

Evan Spiegel (Photo courtesy: Adweek)

In the complaint, Pompliano recounted an exchange he said he had with Spiegel in a September 2015 meeting about the app’s international growth plans. He said he presented methods to address the issue, but Spiegel abruptly cut him off.

“This app is only for rich people,” Spiegel said, according to Pompliano. “I don’t want to expand into poor countries like India and Spain.”

These words sparked outrages from all around world, especially in India.

Hundreds of thousands users voiced their disapproval via social-media posts and one-star reviews in Google and Apple’s app stores.

“Mr. CEO of Snapchat, we may be poor but we have bigger hearts than you,” a user named K.P. Naik said in a recent one-star review in Play store.

Another tweet posted by Shreyas Singh on April 15 said: “I am very poor so uninstalled #snapchat but thanks for entertaining for this many days. @evanspiegel @Snapchat don’t mess with India.”

“This is ridiculous,” as statement released by Snap argued, saying those words were written by “a disgruntled former employee”.

“We are grateful for our Snapchat community in India and around the world,” the statement said.

However, Snapchat would face huge challenge in this lawsuit more than PR works as Pompliano also claimed that he learned the company had exaggerated its user data and that top executives were “completely misinformed” about key metrics.

According to report of Variety, in the lawsuit, Pompliano said that on his second day of the job he met with two data analysts, who confided to him that Snapchat had “an institutional aversion to looking at user data”, and its efforts in that area were marked by “utter incompetence.”

Pompliano said he found Snapchat’s daily active users (DAUs) was much less than the company’s boasted number, 100 million DAUs at the time, moreover, the user base increased only one to four per cent per quarter, far less than the double-digit month-over-month growth the company was claiming.

Pompliano also claimed that he was fired because Spiegel determined that he “presented a risk to Snapchat’s IPO”. (IANS)

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