Robert Vadra - Rent Seeker or Entrepreneur?

Property empire was built on soft loans handed out in unusual circumstances, documents show

In February, as rumours of the ambitions of Congress president Sonia Gandhi’s son-in-law swirled amidst the heat and dust of the election campaign in Uttar Pradesh, her daughter Priyanka moved to scotch speculation about Robert Vadra’s possible political future.

“He’s a successful businessman,” the younger Ms. Gandhi said of her husband, “who is not interested in changing his occupation.”

Even though Mr. Vadra has increasingly emerged in the public eye, there has been little information on just how successful a businessman he is — and how his empire was built.

Last year, The Economic Times first wrote about his “low-key entry into the real estate business” with the help of DLF Ltd, India’s largest commercial property developer. And on Friday, Arvind Kejriwal and Prashant Bhushan of India Against Corruption (IAC) released documents which showed how Mr. Vadra has acquired land assets in and around the National Capital Region worth hundreds of crores of rupees, sometimes at prices below market value — funded by interest-free loans disbursed to him by DLF and other companies for no apparent reason.

Though the documents reveal no illegality or impropriety on the part of Mr. Vadra, they do raise the question of why DLF — which is a publicly traded company — would enter into multiple business transactions with him on terms that appear highly preferential. The company on Saturday issued a lengthypress release setting out its side of the story but questions of corporate governance remain and minority shareholders are likely to ask the company for the rationale behind its arrangement with Ms. Sonia Gandhi’s son-in-law and whether similar soft loans (or “advances” as DLF prefers to call them) and deals have been transacted with companies owned by other prominent individuals. The answer to the second question may help explain why a normally feisty Opposition has been remarkably silent on the DLF-Vadra connection since the story first broke in 2011.

In 1997, the year Mr. Vadra married Priyanka Gandhi, he incorporated his first, modest business — Artex, which dealt with brass handicrafts and fashion accessories. From 2007, there was a surge in his activities. Inside of a year, he founded five other ventures, spanning the real estate, hospitality and trading sectors.

Ms. Gandhi maintained a distance from these companies: in 2008, she dissociated herself from the sole business in which she was involved, aircraft charter firm Blue Breeze Trading.

From balance sheets and directors’ reports released by IAC and additional papers obtained by The Hindu, which relate to six group companies, it is clear that Mr. Vadra’s rise was meteoric. In 2007-2008, his companies started out with promoter funds of just Rs. 50 lakh.

However, the companies succeeded in acquiring 29 high-value properties by 2010, armed with loans and advances of Rs. 80 crore from DLF,… as well as Bedarwals Infra Projects, Nikhil International and VRS Infrastructure. These included a Rs. 31.7 crore acquisition of a 50 per cent share of Saket Courtyard by 2010, armed with loans and advances of Rs. 80 crore from DLF, as well as Bedarwals Infra Projects, Nikhil International and VRS Infrastructure.

These included a Rs. 31.7 crore acquisition of a 50 per cent share of Saket Courtyard Hospitality, which owns the 114-bed Hilton Garden Hotel in New Delhi; a 10,000 square foot penthouse, number B1115, at the DLF Aralias complex for Rs 89.41 lakh; 7 apartments in DLF Magnolia for Rs. 5.2 crore; apartments for Rs. 5.06 crore at DLF Capital Greens; and a DLF-owned plot in Delhi’s ultra-posh Greater Kailash II area for Rs. 1.21 crore. Though DLF’s press release said some of these prices were “completely incorrect,” the investment numbers are all stated in the balance sheets filed by Mr. Vadra’s companies with the Registrar of Companies.

Then, at the end of 2010, Mr. Vadra’s companies also picked up a bouquet of rural properties: 160.62 acres of agricultural land in Bikaner for Rs. 1.02 crore, and Rs. 2.43 crore for an additional 5 parcels of land of unknown acreage; land at Manesar, on Delhi’s fringes, for Rs. 15.38 crore; land at Palwal for Rs. 42 lakh, land at Hayyatpur, in Gurgaon, for roughly Rs. 4 crore; land at Hasanpur for Rs. 76.07 lakh; land at Mewat for Rs. 95.42 lakh; unidentified agricultural land for Rs. 69.09 lakh; and two ‘other real estate bookings’ worth Rs. 9 lakh.

From just Rs. 7.95 crore in fiscal 2008, Vadra’s fixed assets and investments grew to Rs 17.18 crore in fiscal 2009, jumping a staggering 350 per cent in a single year to Rs 60.53 crore in fiscal 2010, the year in which most of these properties were acquired with promoter funds of just Rs. 50 lakh along with interest of Rs. 255.46 lakh earned on advances and loans and zero group activity or profitability.

Despite the high market value of these listed assets (properties), though, the declared investment portfolio in Mr. Vadra’s balance sheets remained a meagre Rs. 71 crore at the end of fiscal 2010 with accumulated group losses of Rs. 3 crore.

Mr. Vadra’s companies did not respond to e-mails sent by The Hindu seeking clarifications on the details of these transactions. In particular, it remains unclear why DLF and other major corporations would have made him large loans, since this is not in the nature of their business. Nor did Mr. Vadra’s companies have any apparent prior specialisation in real estate business.

Financial wizardry

The financial information available from the balance sheets and directors’ reports of Mr. Vadra’s companies — Sky Light Hospitality, Sky Light Realty, Blue Breeze Trading, Artex, Real Earth Estates and North India IT Parks — raise hard questions about what business it is they actually do, and how this business is conducted.

Each of the companies has 268, Sukhdev Vihar, New Delhi, as its common address, and Mr. Vadra and his mother Maureen Vadra as directors. Mr. Vadra, the documents show, receives remuneration of Rs. 60 lakh per annum from just one company, Sky Light Realty. The payment, the company’s auditor states is “remuneration in excess of the limit prescribed under section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975.”

There are no other employee costs in the books, either to his mother or to others. However, in the documents, both directors “place on record their deep sense of appreciation for the committed services of executives, staff and workers of the company.”

Strangely, while assets balloon in each subsequent balance sheet, there is no account of the corresponding enhancement of visible business activity. For example, the balance sheets raise a current liability of Rs. 50 crore against the Manesar land, though it was registered for just Rs.15.38 crore in the same financial year, defying all commercial and financial prudence and raising doubts about whether this was an income rather than a current liability.

A senior chartered accountant told The Hindu on condition of anonymity, given the individuals involved, that masking incomes as loans/current liabilities in this manner is an unorthodox accounting device. “Using short term funding of this kind to create long-term assets defies financial prudence as it constitutes a high business risk, unless they are not really ‘current liabilities’ and are not payable in the short term, which means they are nothing but incomes which have been disguised,” he said. Vadra’s auditors consistently overlook this in all six firms, while accounting firm Khurana & Khurana in its Auditors Report for Real Earth Estates Pvt. Ltd. for the year 2010, actually opts to gloss over this by stating: “Based on the information and explanation given to and on an overall examination of the balance sheet of the company, in our opinion, there are no funds raised on short term basis which have been used for long term investment.”

The auditor’s accounting rigor comes into further question with its statement that according to the information and explanations given to us, the company has, during the year, not granted any loans, secured or unsecured to companies, firm or other parties covered in the register maintained under section 31 of the Companies Act 1956, excepting the advances under business obligation accordingly paragraphs 4 (iii) (a) (b) (c) and (d) of the order are not applicable. However, the balance sheet shows loans and advances of Rs 2.89 crore for the company in 2010.

Many such loans, which reflect as total current liability of Rs. 72 crore in the accounts, are invested in long-term assets like land. Curiously, no one appears to be pressing for the return of these loans — which are, according to the documents, interest-free.

Additionally, all of Mr. Vadra’s companies show interest income from fixed deposits, claiming tax deducted at source for this interest without accounting for the fixed deposits themselves in the balance sheets. The six companies’ profitability, which grew from zero in 2007-8 to Rs. 20.94 lakh in 2008-9 to Rs. 255.46 lakh in 2009-10, was not from any business activity in these companies but purely from interest on 23 elusive fixed deposits amounting to roughly Rs. 5 crore.

There are other unexplained gaps in the financial information. As of March 31, 2010, the group profit and loss account shows that only Sky Light Realty made a profit, and that too in one single year. Yet, while the others show losses, they continue to make investments. This profit of Rs. 244.98 lakh was despite a complete absence of business activity or liquidation/reduction of fixed assets, investments or other bookings. However, the accumulated losses of Rs. 3 crore from the other 5 firms in the RV Group’s 2010 balance sheet wipe out Vadra’s capital and reserves, raising questions about his ability to buy so many high value properties with zero capital.

DLF’s fortunes

Perhaps the key to the relationship could lie in DLF’s troubled fortunes since 2008 — the very time its dealings with Mr. Vadra acquired significant scale. According to a March 1, 2012 report by the respected Veritas Investment Research Corporation, DLF Ltd is an organisation under duress, with its management scrambling to consummate assets sales, rationalize its land bank and divest non-core operations.

Since a May, 2007 Initial Public Offering, which sold at Rs. 525 per share, the stock price declined by 46 per cent in March 2012 compared to a roughly 30 per cent gain in the Sensex over the same period with the stock presently trading at Rs. 241.80, a steep 54.13 per cent dip.

Veritas points to questionable related-party transactions, aggressive and conflicting accounting policies, self-enrichment and inability to deliver on promises, and a balance sheet stretched to the limit, with no free cash flow and no credible plan to de-lever its balance sheet. “If your investment decision incorporates management integrity, then bypassing DLF will be an easy choice,” the Veritas report states.

In addition, Veritas does “not believe the disclosed book equity and asset base of the company,” stating that via its dealings (merger) with DLF Assets Ltd (DAL), from FY 2007 to FY 2011, the company inflated sales by at least Rs. 11,236 crore and its profit before tax by Rs. 7,233 crore.

A slowing real estate market in a high inflation environment and over-exposure to Gurgaon — among India’s most speculative real estate markets — is further expected to create tremendous pressure on the company’s balance sheet. “In the end, we believe DLF will seek assistance from financial institutions to restructure its loans,” the report affirms, urging investors not to buy DLF stock. DLF dismissed the report as “mischievous and presumptive.”

Mr. Vadra himself has attributed his brass-to-gold success story to hard work—and a little help from “family” friends like K.P. Singh, the chairman of the DLF Group. However, Mr. Vadra has strongly denied taking any favours from DLF in the past. “I have a good understanding with DLF. Our children are friends, we are friends. They are seasoned businessmen. They are not daft… They don't need me to enhance them. They’ve existed for years,” he told The Economic Times in March 2011.

Indeed, in January 2002, he made his distaste for favour-seeking capitalism public, dissociating himself from his brother and father, alleging that they were promising jobs and favours using his name and association with the Gandhi family. His father responded by suing him for defamation.

Hard work Mr. Vadra may well have put into building his property empire. But the help he received from friends like DLF suggests at least a part of his success flowed from the willingness of others to bet on the outcome of his enterprise.

£1m buys foreign investors right to live in Britain

Foreign millionaires are flocking to use a little-known immigration scheme that allows wealthy individuals to jump to the top of the queue for permanent residency.

The most recent figures from the Home Office show that more than 400 people applied to use the investor visa scheme in the 12 months to the end of June. This compares with a total of 331 people in 2011 and fewer than 200 in 2009. Photo: PA

By Harry Wilson

9:30PM BST 06 Oct 2012

Rich Russians and Chinese are increasingly using "investor visas" that allow wealthy foreigners to effectively buy the right to live in the UK in return for buying at least £1m of gilts or shares and bonds in British companies.

Top London private bankers have expressed concerns at the number of people using the scheme to gain permanent resident status, arguing that the authorities should consider raising the amount of money needed to gain residency.

"The £1m threshold was put in place more than 20 years ago and is not the obstacle it once was. We have seen a huge increase in demand from Russians, Chinese and people from the Middle East wanting to move to London and it is clear that given the unlimited demand the time may have come to charge more for entry," said on senior London banker.

The most recent figures from the Home Office show that more than 400 people applied to use the investor visa scheme in the 12 months to the end of June. This compares with a total of 331 people in 2011 and fewer than 200 in 2009.

Mark Pihlens, chief executive of Invest UK, which advises wealthy foreigners on investing in Britain, said political instability in the Middle East as well as China and Russia had driven the spike. "People want to take out a second option on where they and their children can live," he said. 2012

Wealthy foreign nationals can speed up the process by investing greater amounts. Investments of more than £5m and £10m mean permanent residency could be gained within as little as two years.

A convincing study shows that business leaders and serial killers share a mindset

The Wisdom of Psychopaths by Kevin Dutton – review

• 
• • Tim Adams
  • The Observer, Sunday 7 October 2012

Christian Bale as Patrick Bateman in the 2000 film adaptation of Bret Easton Ellis’s novel American Psycho. Photograph: Moviestore Collection/Rex

Do you think like a psychopath? It has been claimed that one quick way of telling is to read the following story and see what answer to its final question first pops into your head:

1. The Wisdom of Psychopaths
2. by Kevin Dutton
3. 
4. Buy it from the Guardian bookshop

Search the Guardian bookshop

1. Tell us what you think: Star-rate and review this book

While attending her mother's funeral, a woman meets a man she's never seen before. She quickly believes him to be her soulmate and falls head over heels. But she forgets to ask for his number, and when the wake is over, try as she might, she can't track him down. A few days later she murders her sister. Why?

If the first answer that springs to your mind is some variation of jealousy and revenge – she discovers her sister has been seeing the man behind her back – then you are in the clear. But if your first response to this puzzle is "because she was hoping the man would turn up to her sister's funeral as well", then by some accounts you have the qualities that might qualify you to be a cold-blooded killer – or a captain of industry, a nerveless surgeon, a recruit for the SAS – or which may well make you a commission-rich salesman, a winning barrister, a charismatic clergyman or a red-top journalist. The little parable purports to reveal those qualities – an absence of emotion in decision making, a cold focus on outcomes, an extremely ruthless and egocentric logic – which tend to show up in disproportionate degrees in all those individuals.

There is a problem though. When Kevin Dutton, the author of this compulsive quest into the psychopathic mind, tried the question on some real psychopaths, not one of them came up with the "second funeral" motive. As one commented: "I might be nuts but I'm not stupid."

The admirable quality of this book is Dutton's refusal to accept easy answers in one of the more sensational fields of popular psychology. He comes at the challenge of deconstructing the advantages and dangers of psychopathic behaviour with two distinct motivations. First, the academic rigour of a research fellow at Magdalen College, Oxford. Second, with the more human need to understand the character of his late father, a market trader in the East End, a man with an "uncanny knack of getting exactly what he wanted", who could sell anything to anybody, because to him "there were no such things as clouds, only silver linings". Psychopaths, we learn, are the ultimate optimists; they always think things will work in their favour.

Dutton's curiosity takes him from boardrooms and law courts to neurological labs. He tries in different ways to get inside the heads of those individuals for whom killing has been a way of life – from Bravo Two Zero's Andy McNab to the video game-obsessed inmates of Broadmoor's secure wards. In his effort to get to their truths he has a tendency to write with the one-tone-fits-all breeziness of the excited enthusiast; at certain points his insistent chattiness jars. Though he demonstrates few of the characteristics of psychopaths himself, none of the limited range of cold fury of Viking "berserkers" or the wilful icy detachment of brain surgeons, he is in thrall to their possibilities. Perhaps, he argues, we all are.

Dutton's book at any rate supports the idea that to thrive a society needs its share of psychopaths – about 10%. It not only shows the value of the emotionally detached mind in bomb disposal but also the uses of the psychopath's ability to intuit anxiety as demonstrated by, for example, customs officials. Along the way his analysis tends to reinforce the idea that the chemistry of megalomania which characterises the psychopathic criminal mind is a close cousin to the set of traits often best rewarded by capitalism. Dutton draws on a 2005 study that compared the profiles of business leaders with those of hospitalised criminals to reveal that a number of psychopathic attributes were arguably more common in the boardroom than the padded cell: notably superficial charm, egocentricity, independence and restricted focus. The key difference was that the MBAs and CEOs were encouraged to exhibit these qualities in social rather than antisocial contexts.

As Dutton details this relationship, part of you is left wondering if the judge who recently praised a housebreaker for his courage and resourcefulness, and expressed the hope that in the future he might use his energies in more constructive directions, might have had Dutton's book by his bedside. Certainly you are left wondering if corporations that really want to find driven leaders might be as well to conduct their recruitment round in the juvenile courts as the universities. In this sense it is hard to know which is more chilling: the scene in which Dutton weighs a serial killer's brain in his hands and reveals it to be in no way tangibly different from yours or mine, or the research that shows the ability of American college students to empathise with others has, in the past 30 years, reduced by 40%…

The sequencing and analysis of the first Malayali personal genome

The new Malayali world of DNA

T. NANDAKUMAR

A Kochi-based laboratory has completed the full sequencing and analysis of the first Malayali personal genome, revealing the genetic diversity of the linguistic group and signalling a revolution in disease diagnosis and treatment.

The study by SciGenom Laboratories established that the Malayali is genetically similar to the Caucasians more than any other race on earth.

A detailed report on the analysis has been published after peer review by BMC Genomics, an international medical journal that identifies and pools research contributions in genomics. Investigators at SciGenom Labs had joined hands with Stephan C. Suschter's laboratory at Pennstate, USA, and others to analyse the genome sequencing data.

The report carries elaborate comparison of Malayali genome against other published genomes from other parts of the world. The study revealed that the gene sequence of the Malayali varies from Chinese and African genomes but stands closer to the Caucasian, a term denoting the white race.

Genetic diversity

According to the report, the availability of this genome and the variants identified is a first step in understanding the genetic diversity in the Indian subcontinent, a crucial factor in identifying clinically relevant changes. These changes, along with further studies on additional genomes from this region, should provide a comprehensive assessment of the disease burden in the Indian population, it concluded.

Dr. George Thomas, Director, SciGenom Labs, said this was the first complete sequencing of a South Asian Indian female (SAIF) genome. “The real challenge with regard to the data obtained from genome sequencing is its analysis for arriving at sound conclusions. The analysis enables listing out those genetic deformities and hidden diseases in an individual which would come out in future,” he said.

“So diseases such as cancer, diabetes, liver diseases, and Alzheimer’s would become predictable and there could be preventive treatment and personalised drugs. This is the field occupied by bioinformatics and India needs to develop a good number of experts in this field,” he said.

The sequencing and genotype data has been deposited at the European Genome-Phenome Archive, hosted by the European Bioinformatics Institute (EBI). The SAIF variant information could be viewed at http://gbrowse.scigenom.com. and the full report published by BMC Genomics was available at http://www.biomedcentral.com/1471-2164/13/440, a press note issued by SciGenom Laboratories said.

A rightwing insurrection is usurping our democracy

For 30 years big business, neoliberal thinktanks and the media have colluded to capture our political system. They're winning

• 
• • George Monbiot
  • The Guardian, Monday 1 October 2012 20.30 BST

After contemplating a military coup Sir James Goldsmith went on to form the Referendum party, slogan: Let the People Decide. Photograph: Jacqueline Arzt/AP

To subvert means to turn from below. We need a new word, which means to turn from above. The primary threat to the democratic state and its functions comes not from mob rule or leftwing insurrection, but from the very rich and the corporations they run.

These forces have refined their assault on democratic governance. There is no need – as Sir James Goldsmith, John Aspinall, Lord Lucan and others did in the 1970s – to discuss the possibility of launching a military coup against the British government: the plutocrats have other means of turning it.

Over the last few years I have been trying better to understand how the demands of big business and the very rich are projected into policymaking, and I have come to see the neoliberal thinktanks as central to this process. These are the groups which claim to champion the free market but whose proposals often look like a prescription for corporate power.

David Frum, formerly a fellow of one of these thinktanks – the American Enterprise Institute – argues that they "increasingly function as public relations agencies". But in this case, we don't know who the clients are. As the corporate lobbyist Jeff Judson enthuses, they are "virtually immune to retribution … the identity of donors to thinktanks is protected from involuntary disclosure". A consultant who worked for the billionaire Koch brothers claims that they see the funding of thinktanks "as a way to get things done without getting dirty themselves".

This much I knew, but over recent days I've learned a lot more. In Think Tank: the story of the Adam Smith Institute, the institute's founder, Madsen Pirie, provides an unintentional but invaluable guide to how power in Britain really works.

Soon after it was founded (in 1977), the institute approached "all the top companies". About 20 of them responded by sending cheques. Its most enthusiastic supporter was the coup plotter James Goldsmith, one of the most unscrupulous asset strippers of that time. Before making one of his donations, Pirie writes, "he listened carefully as we outlined the project, his eyes twinkling at the audacity and scale of it. Then he had his secretary hand us a cheque for £12,000 as we left".

From the beginning, senior journalists on the Telegraph, the Times and the Daily Mail volunteered their services. Every Saturday, in a wine bar called the Cork and Bottle, Margaret Thatcher's researchers and leader writers and columnists from the Times and Telegraph met staff from the Adam Smith Institute and the Institute of Economic Affairs. Over lunch, they "planned strategy for the week ahead". These meetings would "co-ordinate our activities to make us more effective collectively". The journalists would then turn the institute's proposals into leader columns while the researchers buttonholed shadow ministers.

Soon, Pirie says, the Mail began running a supportive article on the leader page every time the Adam Smith Institute published something. The paper's then editor, David English, oversaw these articles himself, and helped the institute to refine its arguments.

As Pirie's history progresses, all references to funding cease. Apart from tickets donated by British Airways, no sponsors are named beyond the early 1980s. While the institute claims to campaign on behalf of "the open society", it is secretive and unaccountable. Today it flatly refuses to say who funds it.

Pirie describes how his group devised and refined many of the headline policies implemented by Thatcher and John Major. He claims (and produces plenty of evidence to support it) either full or partial credit for the privatisation of the railways and other industries, for the contracting-out of public services to private companies, for the poll tax, the sale of council houses, the internal markets in education and health, the establishment of private prisons, GP fundholding and commissioning and, later, for George Osborne's tax policies.

Pirie also wrote the manifesto of the neoliberal wing of Thatcher's government, No Turning Back. Officially, the authors of the document – which was published by the party – were MPs such as Michael Forsyth, Peter Lilley and Michael Portillo. "Nowhere was there any mention of, or connection to, myself or the Adam Smith Institute. They paid me my £1,000 and we were all happy." Pirie's report became the central charter of the doctrine we now call Thatcherism, whose praetorian guard called itself the No Turning Back group.

Today's parliamentary equivalent is the Free Enterprise Group. Five of its members have just published a similar manifesto, Britannia Unchained. Echoing the narrative developed by the neoliberal thinktanks, they blame welfare payments and the mindset of the poor for the UK's appalling record on social mobility, suggest the need for much greater cuts and hint that the answer is the comprehensive demolition of the welfare system. It is subtler than No Turning Back. There are fewer of the direct demands and terrifying plans: these movements have learned something in the past 30 years.

It is hard to think how their manifesto could have been better tailored to corporate interests. As if to reinforce the point, the cover carries a quote from Sir Terry Leahy, until recently the chief executive of Tesco: "The path is clear. We have to be brave enough to take it."

Once more the press has taken up the call. In the approach to publication, the Telegraph commissioned a series of articles called Britain Unleashed, promoting the same dreary agenda of less tax for the rich, less help for the poor and less regulation for business. Another article in the same paper, published a fortnight ago by its head of personal finance Ian Cowie, proposes that there be no representation without taxation. People who don't pay enough income tax shouldn't be allowed to vote.

I see these people as rightwing vanguardists, mobilising first to break and then to capture a political system that is meant to belong to all of us. Like Marxist insurrectionaries, they often talk about smashing things, about "creative destruction", about the breaking of chains and the slipping of leashes. But in this case they appear to be trying to free the rich from the constraints of democracy. And at the moment they are winning.

How do you play cricket without becoming a machine?

The challenge for most cricketers- and other sportsmen - is to retain their personality while getting better at the game

Ed Smith

September 26, 2012

Comments: 25 | Text size: A | A

	Afghanistan haven't yet had the joy ironed out of them by the cricket grind © Getty Images  Enlarge
Related Links Series/Tournaments: ICC World Twenty20 Teams: Afghanistan

"The challenge is to play cool without being cold." That was the assessment of the great jazz trumpeter Wynton Marsalis. What he said of playing jazz is also true of playing cricket. A sportsman cannot be at the mercy of his moods and emotions. And yet sport becomes dull and lifeless when it is drained of warmth and spontaneity. Sportsmen must search for the right emotional bandwidth: they want enough coolness to feel in control, and yet sufficient rawness and authenticity to feel excitement.

There is no doubt where the Afghan cricket team lies on that continuum. They are joyful, volatile, emotional, unpredictable and deeply expressive. That is why they are wonderful to watch and have lit up this T20 World Cup, even without winning a game. Their performance against India was deeply moving because you could see how much it mattered to the Afghan players. Every six was joyous, every fielding error was agony.

These were not the learnt, mannered responses of professional sportsmen playing to the gallery. The Afghan cricketers have not yet learned how to hide their feelings. In time, they will become more controlled and clinical. But hopefully not too much. Indeed, we can all learn something from the spirit and the naturalness of the Afghan cricketers. Joy - even vulnerability - has its practical uses, too.

There is a counter argument to my view, of course. Some argue that sport is not about self-expression or enjoyment at all, but rather resilience and reliability under pressure. I've never seen this view better expressed than by Chad Harbach in his excellent novel about baseball, The Art of Fielding. (I make no apology for quoting it at length):

The making of a ballplayer: the production of brute efficiency out of natural genius […] This formed the paradox at the heart of baseball, or football, or any other sport […] Baseball was an art, but to excel at it you had to become a machine. It didn't matter how beautifully you performed sometimes, what you did on your best day, how many spectacular plays you made. You weren't a painter or a writer - you didn't work in private and discard your mistakes, and it wasn't just your masterpieces that counted. What mattered, as for any machine, was repeatability. Moments of inspiration were nothing compared to elimination of error […] Can you perform on demand, like a car, a furnace, a gun? Can you make that throw one hundred times out of a hundred? If it can't be a hundred, it had better be ninety-nine.

It is a wonderful passage, full of insight. But while I agree with many of the steps, I cannot follow all the way to Harbach's final conclusion. Sport is not quite about the elimination of human individuality, or the progress - if that is the right word - towards machine-like efficiency. True, a good player cannot be too vulnerable, he cannot allow his human weaknesses to surface so often that they undermine his performance.

But nor do the best sportsmen, I believe, allow themselves to lose touch completely with their human dimension. We must think carefully before trying to turn ourselves into machines: we may find we lose more than we gain. There is a balance to be struck: between naturalness and pragmatism, between voice and efficiency, between joy and control. Crucially, that balance is different for every player (and every team).

Inevitably there are outliers on that continuum - some players are exceptionally self-denying where others are extraordinarily natural. Rafael Nadal's game is based on the fearless elimination of error, the repeatability of relentlessness. In contrast, Roger Federer's is freer and more intuitive. Federer has said how he cannot bear to "play the same point twice". He needs to be trying something new, at least to some extent, in order to fully engage his talents.

	There is a balance to be struck: between naturalness and pragmatism, between voice and efficiency, between joy and control

It is a myth that sportsmen can simply choose to adopt the best strands from the personalities of other players. Instead, they must search for the right balance that suits them. The natural, laconic David Gower would not have benefited from trying to become more like the dedicated professional Graham Gooch - nor vice versa. The quest for self-improvement must be tempered by the retention of authenticity.

The same balance applies to teams as well as individuals. Every team has an instinctive personality, a natural temperament. The challenge is to develop and strengthen that collective personality without losing what makes it unique. Over decades as a rugby fan, I have noticed that France play best when they keep their innate flair but harness it within collective discipline. They are much less successful when they rely too much on flair or when they travel too far in the direction of self-denial. To win, France must be France - they cannot pretend to be England.

This logic has consequences for the way we think about getting better at sport. Development - for both the individual and the team - is only partly about honing skills and perfecting techniques. Perhaps the bigger part of the story is learning how to be yourself. This can become harder, not easier, with experience, which explains why many players do not improve with age, but regress. The more they try to become machines, the worse they become. That is why the art of coaching - yes, the art, not the science - is at least as much about understanding people as it is about imparting technical knowledge. What kind of player might he become, what kind of person?

Where does all this leave Afghan cricket? Yes, they need to become more consistent. Yes, they will need to become better at controlling their emotions. Yes, their techniques will have to become more polished and reliable.

But all those things must be developed within a context of remaining true to themselves. They should not lose sight of the spirit and innocence that makes them such a compelling team to watch, and such a dangerous team to play against. In the lovely phrase of ESPNcricinfo writer Sharda Ugra, they "bring to a somewhat tired global community the fresh, bracing air of the mountains".

Afghanistan's cricketers are so refreshing because they aren't like everyone else. It would be a shame if they merely become part of the crowd.

We need a revolution in how our companies are owned and run

The second of this series on a new capitalism calls for a culture dedicated to long-term, ethical goals

• 
• • Will Hutton
  • The Observer, Sunday 30 September 2012

Rolls Royce: almost our last remaining great industrial company. Photograph: Simon Stuart-Miller/guardian.co.uk

Twenty years ago, Britain's greatest industrial companies were ICI and GEC. A third, Rolls-Royce, secured from hostile takeover by a government golden share, had a board that was boringly committed to research and development and to investing in its business. ICI and GEC, under colossal pressure from footloose shareholders to deliver high short-term profits, tried to wheel and deal their way to success. Neither now exists. Rolls Royce, free from concerns about hourly movements in its share price, has gone on to be almost our last remaining great industrial company.

Britain, as the Kay review on the equity markets reported, has far too few Rolls-Royces. Instead the report identified a lengthening list of companies – Marks and Spencer, Royal Bank of Scotland, BP, GlaxoSmithKline, Lloyds and now BAE – which have made grave strategic errors, taken ethical short cuts or launched ill-judged takeovers, hoping to benefit their uncommitted tourist shareholders. Their competitors in other countries, with different ownership structures and incentives, have survived and prospered.

It is an unreported crisis of ownership that goes to the heart of our current ills. Over the last decade, a fifth of quoted companies have evaporated from the London Stock Exchange, the largest cull in our history. Virtually no new risk capital is sought from the stock market or being offered across the spectrum of companies. A share is now held for an average of seven months. Britain has no indigenous quoted company in the fields of car, chemical or building materials. They are all owned overseas, with design and research and development travelling abroad as well.

The stock market has descended into a casino, served by a vast industry of intermediaries – agents, trustees, investment managers, registrars and advisers of all sorts – who have grown fat from opaque fees. It has become a transmission mechanism for highly short-term expectations of profit driven into the boardroom. Directors' pay has been linked to share price performance, offering them the prospect of stunning fortunes. As a result, R&D is consistently undervalued.

British companies are now hoarding some £800bn in cash, cash they would rather use buying back their own shares than committing to investment. We have allowed a madhouse to develop. An important reason why Britain is at the bottom of the league table for investment and innovation is the way our companies are owned or, rather, notowned.

It is a crisis of commitment. Too few shareholders are committed to the companies they allegedly "own". They consider their shares either casino chips to be traded in the immediate future or as no more than a contract offering the opportunity of dividends in certain industries and countries; this requires no engagement in how those profits and dividends are generated. British law and corporate governance rules demand the narrowest interpretation of investors' and directors' duties: to maximise short-term profits while having minimal associated responsibilities.

The company is conceived as nothing more than a network of short-term contracts. Any shareholder – from a transient day trader to a long-term investor – has the same standing in law. American directors' ability to defend their company from hostile takeover or German directors having to live – horrors – with trade union representatives on their supervisory boards are seen as obstacles to enterprise that Britain must not go near. But companies and wealth generation, as Professor Colin Mayer argues in his important forthcoming book Firm Commitment, are about co-creation, sharing risk and long-term trust relationships: Britain's refusal to embrace these core truths is toxic. Companies were originally invented as legal structures to enable groups of investors to come together, committing to share risk around a shared goal and so make profit for themselves, but delivering wider economic and social benefits in the process. Incorporation was understood to be associated with obligations: a company had to declare its purpose before earning a licence to trade. There existed a mutual deal between society and company.

No game-changing improvement in British investment and innovation is possible without a return to engagement, stewardship and commitment. Limited liability should not be a charter to do what you like. It must be conditional on a core business purpose, along with the creation of trustees to guard it. Directors' obligations should be legally redefined to deliver on this purpose. What's more, every shareholder should be required to vote, with voting strength, as Mayer argues, increasing for the number of years the share is held.

To solve the problem that individual shareholders – even savings institutions – do not have sufficient muscle nor sufficient incentive to engage with managements, voting rights could be aggregated and given to new mutuals. These would support directors in delivering their corporate purpose, a proposal made by the Ownership Commission I chaired. Companies would become trust companies, with a stewardship code. The priority in takeovers would be the best future for the business, not the ambition to please the last hedge fund to take a short-term position.

Stakeholders should also have a voice in how the company is run. In Germany, a company's bankers and its employee representatives have seats on the supervisory board. Why not copy success rather than continue with our failed system? The Kay review's proposals to stop quarterly profit reporting, while a useful first step, do not address the core of the problem. The company has become a dysfunctional organisational construct that needs root-and-branch reform.

As part of the reform, Britain also needs more co-operatives, more employee-owned companies and more family-owned firms. It needs to be more attentive to which foreign companies own our assets and for what purpose. It is an ownership revolution to match the revolution in finance proposed last week. Together with an innovation revolution – see next week – the British economy could at last begin to deliver its promise.