Saving "MySql" is Like saving the Future of Open Source

The open source database MySql would be no longer open source if the acquisition deal of Oracle to buy Sun is approved by EC. Here is an appeal from the creator of MySql.

I, Michael "Monty" Widenius, the creator of MySQL, is asking you urgently to help save MySQL from Oracle's clutches. Without yourimmediate help Oracle might get to own MySQL any day now. Bywriting to the European Commission (EC) you can support this cause and help secure the future development of the product MySQL as an Open Source project.


Oracle is trying to buy Sun, and since Sun bought MySQL last year, Oracle would then own MySQL. With your support, there is a good chance that the EC (from which Oracle needs approval) could prevent this from happening or demand Oracle to change the terms for MySQL or give other guarantees to the users. Without your support, it might not. The EC is our last big hope now because the US government approved the deal while Europe is still worried about the effects.

Instead of just working out this with the EC and agree on appropriate remedies to correct the situation, Oracle has insteadcontacted hundreds of their big customers and asked them to write to the EC and require unconditional acceptance of the deal. According to what I been told, Oracle has promised to the customers, among other things, that "they will put more money into MySQL development than what Sun did" and that "if they would ever abandon MYSQL, a fork will appear and take care of things".

However just putting money into development is not proof that anything useful will ever be delivered or that MySQL will continue to be a competitive force in the market as it's now.

As I already blogged before, a fork is not enough to keep MySQL alive for all future, if Oracle, as the copyright holder of MySQL, would at any point decide that they should kill MySQL or make parts of MySQL closed source.

Corporate Governance and Borrowing Powers of Directors - VI

The question is "How to avoid financial disaster that could have brought by reckless borrowing"? To answer this question, we take a look at the most publicized financial scandals like Enron, Parmalat and Worldcom.


 The Enron scandal, revealed in October 2001, involved the energy company Enron and the accounting, auditing, and consultancy partnershipof Arthur Andersen. The corporate scandal eventually led to Enron's downfall, resulting in the largest bankruptcy in American history at the time. Arthur Andersen, which was one of the five largest accounting firms in the world, was dissolved.

Enron was formed in 1985 by Kenneth Lay after merging Houston Natural Gas and InterNorth. Several years later, when Jeffrey Skilling was hired, he developed a staff of executives that, through the use of accounting loopholes, special purpose entities, and poor financial reporting, were able to hide billions in debt from failed deals and projects. Chief Financial Officer Andrew Fastow and other executives were able to mislead Enron's board of directors and audit committee of high-risk accounting issues as well as pressure Andersen to ignore the issues.

Enron's nontransparent financial statements did not clearly detail its operations and finances with shareholders and analysts. In addition, its complex business model stretched the limits of accounting, requiring that the company use accounting limitations to manage earnings and modify the balance sheet to portray a favorable depiction of its performance. According to McLean and Elkid in their book The Smartest Guys in the Room, "The Enron scandal grew out of a steady accumulation of habits and values and actions that began years before and finally spiraled out of control." From late 1997 until its collapse, the primary motivations for Enron’s accounting and financial transactions seem to have been to keep reported income and reported cash flow up, asset values inflated, and liabilities off the books.

The combination of these issues later led to the bankruptcy of the company, and the majority of them were perpetuated by the indirect knowledge or direct actions of Lay, Jeffrey Skilling,Andrew Fastow, and other executives. Lay served as the chairman of the company in its last few years, and approved of the actions of Skilling and Fastow although he did not always inquire about the details. Skilling, constantly focused on meeting Wall Street expectations, pushed for the use of mark-to-market accounting and pressured Enron executives to find new ways to hide its debt. Fastow and other executives, "...created off-balance-sheet vehicles, complex financing structures, and deals so bewildering that few people can understand them even now."

This is what happened to Parmalat. It was in 1997 that Parmalat jumped into the world financial markets in a big way, financing several international acquisitions, especially in the Western Hemisphere, with debt. But by 2001, many of the new divisions were producing losses, and the company financing shifted largely to the use of derivatives, apparently at least in part with the intention of hiding the extent of its losses and debt.

In February 2003, chief financial officer Fausto Tonna unexpectedly announced a new €500 million bond issue. This came as a surprise both to the markets and to the CEO, Tanzi. Tanzi fired Tonna and replaced him as CFO with Alberto Ferraris.

According to an interview he later gave Time magazine, Ferraris was surprised to discover that, though now CFO, he still didn't have access to some of the corporate books, which were being handled by chief accounting officer Luciano Del Soldato. He began making some inquiries and began to suspect that the company's total debt was more than double that on the balance sheet.

The crisis became public in November when questions were raised about transactions with mutual fund Epicurum, another Cayman-based company linked to Parmalat causing its stock to plummet. Ferraris resigned less than a week later and was replaced by Del Soldato.

In December, Del Soldato resigned, unable to get cash from Epicurum fund, needed to pay debts and make bond payments. Enrico Bondi was called in to help the company. Tanzi himself resigned as chairman and CEO. Parmalat's bank, Bank of America, then released a document showing €3.95 billion in Bonlat's bank account as a forgery. Prime Minister Silvio Berlusconi initiated a fraud investigation and appointed Bondi to administer the company's rescue. Hundreds of thousands of investors lost their money and will never recover it. The company officially went bankrupt, though the Italian government used the legal mean "commissariamento" to save the trademark.

The story of Worldcom: CEO Bernard Ebbers became very wealthy from the rising price of his holdings in WorldCom common stock. However, in the year 2000, the telecommunications industry entered a downturn and WorldCom’s aggressive growth strategy suffered a serious setback when it was forced by the US Justice Department to abandon its proposed merger with Sprint in mid 2000. By that time, WorldCom’s stock was declining and Ebbers came under increasing pressure from banks to cover margin calls on his WorldCom stock that was used to finance his other businesses (timber and yachting, among others). During 2001, Ebbers persuaded WorldCom’s board of directors to provide him corporate loans and guarantees in excess of $400 million to cover his margin calls. The board hoped that the loans would avert the need for Ebbers to sell substantial amounts of his WorldCom stock, as his doing so would put further downward pressure in the stock's price. However, this strategy ultimately failed and Ebbers was ousted as CEO in April 2002 and replaced by John Sidgmore, former CEO of UUNet Technologies, Inc.

Beginning modestly in mid-year 1999 and continuing at an accelerated pace through May 2002, the company (under the direction of Ebbers, Scott Sullivan (CFO), David Myers (Controller) and Buford "Buddy" Yates (Director of General Accounting)) used fraudulent accounting methods to mask its declining earnings by painting a false picture of financial growth and profitability to prop up the price of WorldCom’s stock.

The fraud was accomplished primarily in two ways:

A. Underreporting ‘line costs’ (interconnection expenses with other telecommunication companies) by capitalizing these costs on the balance sheet rather than properly expensing them.

B.Inflating revenues with bogus accounting entries from "corporate unallocated revenue accounts".

In 2002 a small team of internal auditors at WorldCom worked together, often at night and in secret, to investigate and unearth $3.8 billion in fraud. Shortly thereafter, the company’s audit committee and board of directors were notified of the fraud and acted swiftly: Sullivan was fired, Myers resigned, Arthur Andersen withdrew its audit opinion for 2001, and the U.S. Securities and Exchange Commission (SEC) launched an investigation into these matters on June 26, 2002 . By the end of 2003, it was estimated that the company's total assets had been inflated by around $11 billion.

Nobel Peace Prize for Obama

The question is "Why Obama?". Has he done something worthwhile to consider for supposedly such a prestigious award? Has he made great effort to made peace with his enemies - his personal as well as his nation's? Nothing of the sort has happened. Yet "Nobel Peace Prize" for Obama. Why after all?


The White House acknowledged that this "Nobel Peace Prize" is unjustified and not deserved by "President Obama accepted the Nobel Peace Prize today in Oslo, Norway, less than two weeks after he ordered 30,000 more troops to Afghanistan. In a possible attempt to avoid questions about the Afghan war, the White House has canceled the traditional press conference held by Nobel Peace Prize winners. "


Obama himself acknowledged the tragedy of "Nobel Peace Prize" by saying that   


"Somewhere today, in the here and now, in the world as it is, a soldier sees he’s outgunned, but stands firm to keep the peace. Somewhere today, in this world, a young protestor awaits the brutality of her government, but has the courage to march on. Somewhere today, a mother facing punishing poverty still takes the time to teach her child, scrapes together what few coins she has to send that child to school, because she believes that a cruel world still has a place for that child’s dreams. "


That "soldier" may be fighting for "independence" but may be labeled as "Terrorist". That "young protestor" may be wrong in her protest but may be seen by many people 'fighting for just cause". That "mother" may need a tiny fraction of the defense budget of USA to live happily forever. Who in this world has the right to decide what is wrong and what is right? Barak Obama or Nobel Peace Prize Committee.

According to Nobel's will, the Peace Prize should be awarded to the person who:

“	during the preceding year [...] shall have done the most or the best work for fraternity between nations, for the abolition or reduction of standing armies and for the holding and promotion of peace congresses.

Boom & Bust

Tarek El-Diwany so convincingly demonstrated that boom & bust is an outcome of interest based money - banking. But people are being led to believe that the cause is something different e.g. Financial Times Blog "The Future of Capitalism" is full of such stories. Why people don't understand which is so obvious? May be because of ignorance or because of deceit by who are the beneficiaries - bankers, brokers, investors. 


Here is an excerpt from "The Debt Economy" that throws some light on the current financial crisis "John Kenneth Galbraith wrote that all financial crises are the result of “debt that, in one fashion or another, has become dangerously out of scale.” The recent financial crisis was no exception, with everyone—homeowners, private-equity investors, our biggest banks—taking on enormous amounts of debt. If it’s frustrating that the government is footing the bill to clean up the mess, it’s even worse that the government helped pay for the debt binge that created the mess in the first place, thanks to a tax system that actually subsidizes borrowing. Debt didn’t get dangerously out of scale because the system was broken. It got out of scale, in part, because the system worked."


Here is another link that searched for the cause of current financial disaster "Genesis of the debt disaster - In the 1990s, a young team at Wall Street investment bank JP Morgan pioneered a new way of making money – credit derivatives. Within a decade, the market for these exotic securities had exploded to more than $12,000bn – and some people later blamed them for fuelling the global financial fiasco. In the first of two extracts from her book, Fool’s Gold, the FT’s Gillian Tett reveals how the innovation genie was first let out of the bottle – and eventually devoured the system, to the horror of its creators."

Corporate Governance and Borrowing Powers of Directors - V

Company is an artificial juridical person. The company operates through directors who are its brain, eyes, ears etc.. They are entrusted with the job of managing the affairs of the company by its owners - shareholders. Thus the relationship between shareholders and directors are of principal and agent respectively, hence , the agency problem, agent may not perform his duties to the advantage of his principal. What should be done to eliminate such an eventuality? Here is an excerpt from "The Combined Code on Corporate Governance 2008".

A. DIRECTORS

A.1 The Board

Main Principle

Every company should be headed by an effective board, which is collectively responsible for the success of the company.

Supporting Principles

The board’s role is to provide entrepreneurial leadership of the company within a framework of prudent and effective controls which enables risk to be assessed and managed. The board should set the company’s strategic aims, ensure that the necessary financial and human resources are in place for the company to meet its objectives and review management performance. The board should set the company’s values and standards and ensure that its obligations to its shareholders and others are understood and met.

All directors must take decisions objectively in the interests of the company.

As part of their role as members of a unitary board, non-executive directors should constructively challenge and help develop proposals on strategy. Non-executive directors should scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance. They should satisfy themselves on the integrity of financial information and that financial controls and systems of risk management are robust and defensible. They are responsible for determining appropriate levels of remuneration of executive directors and have a prime role in appointing, and where necessary removing, executive directors, and in succession planning.

A.3 Board balance and independence

Main Principle

The board should include a balance of executive and non-executive directors (and in particular independent non-executive directors) such that no individual or small group of individuals can dominate the board’s decision taking.

Supporting Principles

The board should not be so large as to be unwieldy. The board should be of sufficient size that the balance of skills and experience is appropriate for the requirements of the business and that changes to the board’s composition can be managed without undue disruption.

To ensure that power and information are not concentrated in one or two individuals, there should be a strong presence on the board of both executive and non-executive directors.

The value of ensuring that committee membership is refreshed and that undue reliance is not placed on particular individuals should be taken into account in deciding chairmanship and membership of committees.

No one other than the committee chairman and members is entitled to be present at a meeting of the nomination, audit or remuneration committee, but others may attend at the invitation of the committee.

A.4 Appointments to the Board

Main Principle

There should be a formal, rigorous and transparent procedure for the appointment of new directors to the board.

Supporting Principles

Appointments to the board should be made on merit and against objective criteria. Care should be taken to ensure that appointees have enough time available to devote to the job. This is particularly important in the case of chairmanships.

The board should satisfy itself that plans are in place for orderly succession for appointments to the board and to senior management, so as to maintain an appropriate balance of skills and experience within the company and on the board.

C.1 Financial Reporting

Main Principle

The board should present a balanced and understandable assessment of the company’s position and prospects.

Supporting Principle

The board’s responsibility to present a balanced and understandable assessment extends to interim and other price-sensitive public reports and reports to regulators as well as to information required to be presented by statutory requirements.

C.2 Internal Control

Main Principle

The board should maintain a sound system of internal control to safeguard shareholders’ investment and the company’s assets.

C.3 Audit Committee and Auditors

Main Principle

The board should establish formal and transparent arrangements for considering how they should apply the financial reporting and internal control principles and for maintaining an appropriate relationship with the company’s auditors.

D.1 Dialogue with Institutional Shareholders

Main Principle

There should be a dialogue with shareholders based on the mutual understanding of objectives. The board as a whole has responsibility for ensuring that a satisfactory dialogue with shareholders takes place.

Supporting Principles

Whilst recognising that most shareholder contact is with the chief executive and finance director, the chairman (and the senior independent director and other directors as appropriate) should maintain sufficient contact with major shareholders to understand their issues and concerns.

The board should keep in touch with shareholder opinion in whatever ways are most practical and efficient.

D.2 Constructive Use of the AGM

Main Principle

The board should use the AGM to communicate with investors and to encourage their participation.

E.2 Evaluation of Governance Disclosures

Main Principle

When evaluating companies’ governance arrangements, particularly those relating to board structure and composition, institutional shareholders should give due weight to all relevant factors drawn to their attention.

Supporting Principle

Institutional shareholders should consider carefully explanations given for departure from this Code and make reasoned judgements in each case. They should give an explanation to the company, in writing where appropriate, and be prepared to enter a dialogue if they do not accept the company’s position. They should avoid a box-ticking approach to assessing a company’s corporate governance. They should bear in mind in particular the size and complexity of the company and the nature of the risks and challenges it faces.

E.3 Shareholder Voting

Main Principle

Institutional shareholders have a responsibility to make considered use of their votes.

Supporting Principles

Institutional shareholders should take steps to ensure their voting intentions are being translated into practice.

Institutional shareholders should, on request, make available to their clients information on the proportion of resolutions on which votes were cast and non-discretionary proxies lodged.

Major shareholders should attend AGMs where appropriate and practicable. Companies and registrars should facilitate this.

First Annual List of the 100 Top Global Thinkers | Foreign Policy

Foreign Policy's First Annual List of the 100 Top Global Thinkers | Foreign Policy

7. Cass Sunstein and Richard Thaler

Sunstein and Thaler describe themselves as "libertarian paternalists," but you probably know them more simply as the behavioralism gurus. Their big idea -- to use small policy tweaks to overcome human capriciousness -- has turned the field of economics upside down and, most recently, won them an ear at the Obama White House. Humans, the two men argue in their book, Nudge: Improving Decisions About Health, Wealth, and Happiness, tend to be emotional, rash, and uninformed, and value the present more than the future. They're far from the rational creatures upon which so much economic policy is based.

So what's a responsible government to do? Use free market policies that "nudge" citizens toward the smart options they wouldn't otherwise select, such as setting "opting in" as the default choice for retirement funds and organ donation. It's a quietly revolutionary idea from two brainy guys: Thaler is a University of Chicago-trained economist whose name has been mentioned along with "Nobel" more than a few times; Sunstein is a Harvard-trained lawyer who clerked for Thurgood Marshall and "seems to write a book about as often as most people run the dishwasher," as one 2008 profile put it. Clearly, people in power are reading: Thaler is reportedly advising the British Conservative Party on economic policy, and Sunstein, as the new head of the White House's Office of Information and Regulatory Affairs, is nudging Obama administration rules on everything from avian flu to student loans.

Corporate Governance and Borrowing Powers of Directors - IV

The Combined Code on Corporate Governance 2008 has something to say about directors role. Here is an excerpt:

Good corporate governance should contribute to better company performance by helping a board discharge its duties in the best interests of shareholders; if it is ignored, the consequence may well be vulnerability or poor performance. Good governance should facilitate efficient, effective and entrepreneurial management that can deliver shareholder value over the longer term.

The Code is not a rigid set of rules. Rather, it is a guide to the components of good board practice distilled from consultation and widespread experience over many years. While it is expected that companies will comply wholly or substantially with its provisions, it is recognised that noncompliance may be justified in particular circumstances if good governance can be achieved by other means. A condition of noncompliance is that the reasons for it should be explained to shareholders, who may wish to discuss the position with the company and whose voting intentions may be influenced as a result.

In relation to the requirement to state how it has applied the Code’s main principles, where a company has done so by complying with the associated provisions it should be sufficient simply to report that this is the case; copying out the principles in the annual report adds to its length

without adding to its value. But where a company has taken additional actions to apply the principles or otherwise improve its governance, it would be helpful to shareholders to describe these in the annual report.

If a company chooses not to comply with one or more provisions of the Code, it must give shareholders a careful and clear explanation which shareholders should evaluate on its merits. In providing an explanation, the company should aim to illustrate how its actual practices are consistent with the principle to which the particular provision relates and contribute to good governance.

In their turn, shareholders should pay due regard to companies’ individual circumstances and bear in mind in particular the size and complexity of the company and the nature of the risks and challenges it faces. Whilst shareholders have every right to challenge companies’ explanations if they are unconvincing, they should not be evaluated in a mechanistic way and departures from the Code should not be automatically treated as breaches. Institutional shareholders should be careful to respond to the statements from companies in a manner that supports the ‘comply or

explain’ principle and bearing in mind the purpose of good corporate governance. They should put their views to the company and be prepared to enter a dialogue if they do not accept the company’s position. Institutional shareholders should be prepared to put such views in writing

where appropriate.

Companies and shareholders have a shared responsibility for ensuring that ‘comply or explain’ remains an effective alternative to a rules-based system.

Companies can make a major contribution by spreading governance discussion with shareholders outside the two peak annual reporting periods around 31st December and 31st March and by raising further the general standard of their explanations justifying non- compliance. Shareholders for their part can still do more to satisfy companies that they devote adequate resources and scrutiny to engagement.