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Ounce by ounce, Kerala builds up a gold mountain

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Thiruvananthapuram: The old joke on Keralites was that they had no business acumen and only knew to convert their salaries into some gold sovereigns. Turns out that those humble savings in sovereigns have become a mountain of wealth.

The state may still be an outlier in the manufacturing sector, but when it comes to the yellow metal — whether buying, selling or mortgaging — Kerala brands like Muthoot, Manappuram, Kalyan, Joyalukkas and Chemmannur have turned truly international besides multi-state operations within India.

Local media reports in Kerala have indicated that the total gold reserves, not counting the gold retail outlets, of some of the Kerala-based gold loan companies — Muthoot Finance, Manappuram Finance and Muthoot Fincorp — jointly hold gold jewellery, higher than the gold reserves of Singapore, Sweden or Australia. Between them, the leading gold loan companies in the state are believed to hold 200 tonnes of gold jewellery, though the exact quantity is not publicly known.

Industry players say that the gold mountain build-up has to do with the tradition of buying gold for festive occasions and for marriages and passing them down through generations. “It is also the most liquid of assets after hard cash, and therefore many people prefer to keep a significant portion of their savings in gold,” an industry watcher said.

Kerala’s fancy for gold has been so intense that a private equity company, Warburg Pincus Llc invested $200 million (Dh735 million, Rs12 billion) in Kerala-based Kalyan Jewellers for a minority stake. Kalyan is among the leading retail jewellery brands in Kerala alongside Joyalukkas, Alappatt, Chemmanur, Bhima, Malabar Gold and Atlas, among others.

Interestingly, Kerala’s retail gold jewellery brands also have a strong presence in the Gulf countries, to directly tap the purchasing power of expatriate Keralites there. To have branches in the Gulf and in Kerala is logical, because it helps them get business first hand from the Gulf through outlets there, as well as attract some of the remittances into Kerala through the retail outlets back home. Non-resident Keralites’ remittance into the state is estimated at over Rs750 billion annually.

The gold loan and retail brands from Kerala have become such large national players that the likes of Muthoot Fincorp, Manappuram Finance and Kalyan Jewellers have the leading Bollywood and Malayalam actors as brand ambassadors. Muthoot has also recently associated with the Kerala Blasters team in India’s premier soccer league.

Kerala’s love for gold has to do partly with the general Indian affection for gold. According to the World Gold Council, India’s gold reserves of over 558 tonnes ranks it 11th in the world.

While the state is glued to gold, there is also criticism that the state is facing issues of income inequality. Noted economist M.A. Oommen recently observed that while the government seemed to support the jewellery merchants, the agricultural sector was on the decline and the scheduled castes, scheduled tribes and fisher folk were marginalised.

But even as debate rages, Kerala’s gold mountain keeps growing. And a few years back the state discovered it had another pile of gold and ornaments in underground vaults, too — at the Sree Padmanabhaswamy Temple in the state capital, estimated at over Rs1 trillion worth.

That collection, however, is not for sale, purchase or mortgage.

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SOUTH ASIA

Pakistani Anti-graft body wants travel ban on Nawaz Sharif, kin

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Pakistan’s anti-corruption watchdog has asked authorities to place ousted premier Nawaz Sharif, his daughter and son-in-law on the Exit Control List to prevent them from leaving the country.

The National Accountability Bureau (NAB) sent a formal request to the ministry of interior. The interior ministry officials confirmed that the NAB wrote that names of Sharif, his daughter Maryam Nawaz and son-in-law Capt (retd) Muhammad Safdar should be put on the Exit Control List (ECL), which listed individuals not allowed to leave Pakistan.

The NAB argued that as the trial of the three nears its conclusion, it is feared that they would leave the country.

Earlier, a similar request to place name of finance minister Ishaq Dar on ECL was not accepted, allowing him to go to London and never return.

Sharif, 68, and his family this week filed an application with the accountability court seeking a fortnight’s exemption from personal appearance from February 19 onwards to let them go to London to see Sharif’s ailing wife. Three cases were filed against Sharif and his family last year, including Avenfield properties, Azizia & Hill Metal Establishment, and Flagship Investments.

Maryam and Safdar are accused only in Avenfield properties case. The NAB had filed two supplementary references against Sharif, his sons Hasan and Hussain regarding Al-Azizia Steel Mills & Hill Metal Establishment and Flagship Investment cases.

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Pakistan “breaches obligations’ on nuclear arms reduction, UN court told

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The Hague: Pakistan is violating its “obligations” to the international community by failing to reduce its nuclear arsenal, the Marshall Islands told the UN’s highest court on Tuesday.

The small Pacific Island nation is this week launching three unusual cases against India, Pakistan and Britain before the International Court of Justice.

Majuro wants to put a new spotlight on the global nuclear threat, its lawyers said yesterday, by using its own experience with massive US-led nuclear tests in the 1940s and 1950s.

“Pakistan is in breach of its obligations owed to the international community as a whole,” when it comes to reducing its nuclear stockpile, said Nicholas Grief, one of the island nation’s lawyers.

Islamabad and its nuclear-armed neighbour India “continue to engage in a quantitative build-up and a qualitative improvement” of their atomic stockpiles, added Tony deBrum, a Marshallese government minister.

DeBrum warned that even a “limited nuclear war” involving the two countries would “threaten the existence” of his island nation people.

Pakistan and India have fought three wars since independence from Britain in 1947, two of them over the disputed Himalayan territory of Kashmir.

In 1998, the rival neighbours both demonstrated nuclear weapons capability.

The ICJ’s judges are holding hearings for the next week and a half to decide whether it is competent to hear the lawsuits brought against India and Pakistan — neither of which have signed the 1968 nuclear Non-Proliferation Treaty (NPT).

A third hearing against Britain — which has signed the NPT — scheduled to start on Wednesday will be devoted to “preliminary objections” raised by London.

The Marshalls initially sought to bring a case against nine countries it said possessed nuclear arms: Britain, China, France, India, Israel, North Korea, Pakistan, Russia and the United States.
Israel has never admitted to having nuclear weapons.

But the Hague-based ICJ, set up in 1945 to rule in disputes between states, has only admitted three cases against Britain, India and Pakistan, because they have accepted the ICJ’s compulsory jurisdiction.

Pakistan’s lawyers did not attend Tuesday’s hearings.

It did however file a counter-claim against Majuro’s allegations saying “the court has no jurisdiction to deal with the application” and insisting that the case is “not admissible”, said ICJ President Ronny Abraham.

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SOUTH ASIA

Bangladesh to drop Islam as official religion following attacks on Hindus

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Bangladesh to drop Islam as official religion following attacks on Hindus

New Delhi: Bangladesh is likely to drop Islam as its official religion following a series of attacks on people from other faiths in the country. The country’s Supreme Court is hearing a plea challenging the status of the official religion of the country to Islam.

Bangladesh, which was declared a secular country after its formation in 1971, was declared an Islamic country following a constitutional amendment in 1988.

According to a report in the Daily Mail, the plea has challenged the declaration of Islam as the national religion of the country.

The move is being supported by leaders from the minority communities like Hindus, Christians and Muslim minority Shiites.

Bangladesh has 90 per cent of Muslims, 8 per cent Hindus and remaining constitutes Christians and Muslim minority Shiites.

In last month, a Hindu priest was hacked to death following an attack on a temple in Panchgarh district. Two others were seriously injured in the attack. There have been several lethal attacks on writers and bloggers.

According to a report in the Independent, Islamist groups Jumatul Mujahedeen Bangladesh and Ansarullah Bangla Team are believed to have carried out at least seven attacks on foreign and minority people in Bangladesh in the past year.

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