Few know that when Nagpur Cooperative Bank was struggling to recover money from it, Home Trade had just won a long battle with the Bombay Stock Exchange to get listed. Co-incidentally, the listing was hustled through by the same two public representatives, who played a major role in persecuting BSE’s surveillance chief A.A. Tirodkar. In fact, the listing had to be cleared by the governing board after certain members of the listing committee pointed to several mis-statements, omissions and inaccuracies in its documents. But Home Trade’s luck had obviously run out. Before the scrip could actually be admitted for trading, Sebi blocked the move. The NSE too was being pressured to list Home Trade, but in that case, the clearance was nowhere in site. What Sebi needs to check is how and why the scrip was listed by the Pune and Bangalore bourses without proper scrutiny, and after the BSE had already rejected it a year ago.
Understanding CalPERS’ activism
Everytime anyone mentions investor activism, they refer, quite correctly to CalPERS. Sebi chairman G.N. Bajpai recently said ‘that Investor activism, as practiced by organisations like CalPERS in the US, can also perform a regulatory role’. But CalPERS is mammoth public pension fund with a $150 billion portfolio (the largest in the US); it has created corporate governance revolution in the US because when it speaks companies would better listen. In India, only Unit Trust of India (UTI) can play a comparable role, but until recently UTI’s top brass was busy bowing to politicians, colluding with brokers and destroying unit holders’ savings. UTI is now making feeble attempts at activism, but its efforts are much too mild and hesitant. In fact, if UTI does a CalPERS and becomes more aggressive with shady managements’, it could probably rebuild investor confidence much faster than its questionable advertisements, which harp on trust without mentioning performance.
A little hitch
Credit card companies issuing US credit cards may be in for increased paperwork and regulation. The US Treasury Department has begun to implement a little change in the banking laws passed after the September 11 attack. This will, for the first time, require credit-card operators, mutual funds and money-transfer firms to set up programmes to combat money laundering. It means that the regulations ‘encourage’ them to determine whether a foreign bank seeking to issue a US credit card has adequate anti-money-laundering controls, and perhaps even deny credit cards to institutions that pose a risk to the system.
Obviously, credit card companies issuing international cards which can be used the US will now have to put in place new anti-money laundering checks and controls, that may be even tougher than those prescribed under Indian laws.
How much should you trust instant polls? Maybe a media group’s obsession with whether Narendra Modi should remain the Chief Minister of Gujarat or quit, provide fodder for thought. The group first conducted an instant poll through its weekly magazine and found that 76 per cent of the respondents wanted Modi out. Obviously, the results were not to somebody’s satisfaction in the group. So another instant poll was conducted—this time through its television channel, and for good measure on the eve of the big debate in Parliament. Strangely enough, the results this time were the exact opposite. At midnight on the eve of the Lok Sabha debate, only 12 per cent of the respondents wanted Modi to go and an overwhelming 80 per cent plus wanted him to stay. But no, this does not reflect the differing viewership of the Hindi television viewer vis-à-vis the urban English magazine reader. Viewers who tried to participate in the instant poll tell an interesting story. For starters, the TV announcements frequently forget to mention any telephone numbers, email addresses or website at which to cast their vote. Trying to vote through the news channel’s website led to another surprise. Several viewers in Mumbai confirm that the site neither accepted a ‘yes’ or a ‘no’ at their clicks. Instead a window popped-up to announce the outrageously lopsided results and a message saying ‘you have already voted’. Repeated attempts showed that while their votes continued to be rejected; but some others were obviously able to vote at a furious pace because the number of voters seemed to rise rapidly every few seconds. Several angry viewers even called the TV channel to protest. One doesn’t quite know what happened during the night, but when people switched on their television the next morning; the numbers seemed to have evened out. Those who wanted Modi out had risen from 12 per cent at midnight to over 44 per cent the next morning. Was it magic that worked on the numbers through the night or did good sense prevail? -- Sucheta Dalal