The Nagarjuna Finance case, after the Satyam saga, has put the role and liability of independent directors on the front burner. But the most alarming aspect of the whole case is that almost nobody wants to go on record to discuss it, discovers Sucheta Dalal
Retail investors are always agitated at stock market scams because they lose money when stock prices crash, but how many bother to find out what happens to those who are accused of unfair trading practices?
If QIBs cannot get their investment timing right and have lost money in the short-term, how do market intermediaries, lobbying for the scrapping of IPO ratings, argue that such ratings are not working? Indeed, the process of generating IPO ratings must be improved and not scrapped only because a lobby of market intermediaries and data aggregators insist that they are not working.
After his first post-Budget meeting with the market regulator, finance minister Pranab Mukherjee said, “SEBI needs to focus on protecting the interest of investors.” If the government is serious, what should it do? Sucheta Dalal explains
If the government can use Nandan Nilekani to create unique identification numbers for all Indians, SEBI can surely use Mr Pai’s expertise to set up a sophisticated system for corporate reporting, consent orders, penalties and the status of investor complaints.
Long after the Satyam scandal, the Securities and Exchange Board of India (SEBI) has put out a set of recommendations made by its Committee on Disclosures and Accounting Standards to tighten disclosures by listed companies
Several independent regulators of the financial sector, acting separately, have thrown a large segment of the industry into a state of suppressed agitation and turmoil over the issue of commissions to distributors
On 28th October, Shankar Sharma, vice chairman, First Global Stockbroking Pvt Ltd, lost an appeal before the Securities Appellate Tribunal (SAT) against an order that barred him from the capital market for a year
SEBI announced a series of plans and actions aimed at pushing capital market reforms to protect investors. What are the implications of extended trading hours, SME platform, FPO auctions for investors?
A few expensively priced IPOs and follow-on issues that opened recently failed to find retail subscribers. Financiers, who help in closing the issue are extracting a hefty discount and also dumping the shares on listing. By Sucheta Dalal
As 2009 draws to a close, here are some random thoughts on government policies, markets and things in general. As we step into a new decade, will anything ever change or will we just have more of the same?
Competition between the BSE, the NSE and the MCX blew up into full-fledged battles in the latter half of the past decade, but we also saw the beginning of turf wars between financial market regulators which seem certain to escalate as we head towards 2010.
India’s investor population has always been concentrated in the states of Gujarat, Maharashtra, Rajasthan and the larger cities in the south. But you would have a completely different notion, if you were to go by the list of 69 NGOs accredited and eligible to receive funds from the Investor Education & Protection Fund (IEPF)
While the IEPF may have done little to further the investors' cause, almost every ministry wants to adopt the same model to grab and collect public funds into a pool that can be distributed to favoured NGOs.
Shouldn't regulators practise what they preach? We asked Jamie Allen, co-author of the The India White Paper released on 19th January in Mumbai. The paper by the Hong Kong-based Asian Corporate Governance Association recommended that corporate websites must be used more efficiently as communication tools and need to be easy to access and search.
Despite economic prosperity and multiplying 24-hour business channels, retail investors are staying out of IPOs, mutual funds and pension funds—gypped by self-serving intermediaries and irritated by cumbersome rules of unaccountable regulators. Sucheta Dalal analyses
It is 10 years since the JPC report on the Ketan Parekh scam first examined and frowned upon synchronised trades. Yet, it remains a rampant market practice. So much so that it is worrying lawyers of international firms.
SEBI has made it mandatory for mutual funds to disclose to investors how they exercise their voting rights as corporate shareholders. But will the new rule force mutual funds to take a stand on management actions and decisions?
RBI needs to be more transparent in its decision making. Publishing its policy discussions, will ensure that RBI policy-makers are allowed to have different views irrespective of the final policy decision
Chain Roop Bhansali (CRB), whose financial company collapsed like a pack of cards in 1997, along with the savings of numerous people. CRB then vanished from the public scene but has been resurfacing from time to time
After the RBI trimmed the portfolio of one of its deputy governors, another RBI deputy governor Shyamala Gopinath said, the autonomy of monetary policy was not under any threat but didn't suffer the same consequences
India’s industry associations have rarely, if ever, lobbied for good governance, accountability or clarity in regulations. This time too, only the CII has belatedly endorsed the open letter by a group of concerned citizens to the government on ‘governance deficit’ and large-scale corruption
If the new SEBI chairman UK Sinha chooses to clean up the regulatory body, restore legitimacy of rules and processes and recognises the importance of quick and transparent dissemination of information, he would have more than fulfilled ordinary investor’s expectations
SEBI has been quietly letting off a few hundred chosen price manipulators and offenders with a simple ‘administrative warning’ that depends on the whims of investigation officials. Such capriciousness can only breed corruption and brew a scandal that is bound to hit the finance ministry some day
Who regulates the main businesses of the National Securities Depository Limited (NSDL) when it is no longer only a stock depository? The shocking answer is: nobody! Hopefully UK Sinha, the new SEBI chief, will realise that NSDL is far too big and sensitive to be operating under regulatory ambiguity right under his nose
Insider trading was just one of his numerous shady deals, many in India, which have remained under the radar. Among them were Scandent Technologies which no regulator dared ask any question about; he bought a stake in Tamilnad Mercantile Bank bypassing procedure; and an investment in KS Oils
US is cracking down on Indian-Americans with undeclared Indian accounts. But these dubious tax-dodging accounts won’t go away, thanks to rampant corruption in our tax department and the impossibly high deposit targets for bank managers
The recent capricious record of the SEBI top brass has shown that Indian regulators may continue with their whimsical ways if investors/savers don’t assert their rights and demand accountability from politicians
The Securities and Exchange Board of India drags a report against Religare Securities through adjudication over a paltry penalty of Rs3 lakh, but seems unable to investigate case of rampant price manipulation
It was perplexing that a company, listed in London, would spend so much money to broadcast its CSR activities on prime time TV. The truth was evident a few weeks later. Once again, Anil Agarwal’s corporate empire was attempting to push through a self-serving restructuring process
Over the past two years, Moneylife Foundation, our not-for-profit financial literacy organisation, has realised that a big problem with policy-making today is that nobody listens to the ordinary saver.Hence, frustrated savers are pulling money out of the market and mutual funds and putting in bank fixed deposits
In the past 20 years since the securities scam was exposed, radical transformation and development was followed by bumbling insularity, a near monopoly of the NSE, poor leadership and lack of vision at the BSE and an unseemly collusion has kept competition out of the capital market space
The United Stock Exchange is the worst example of SEBI’s dereliction of duty. The fourth forex-derivatives bourse, set up by a bunch of institutions, was permitted to start operations without a revenue model, SEBI and the Reserve Bank of India did not question this
After the landmark verdict by the apex court, Subrata Roy-led Sahara Group has come out with full page ads in various newspapers. This is childishness and only underlines the dangers of allowing this group to keep expanding without regulatory checks and balances
Although Vedanta’s annual report says that it cannot make donations to any political parties in the UK and Europe, it is different when it comes to India. Is foreign money approved and welcomed by all?
It required a parliament question by MP Rajeev Chandrashekar for SEBI to admit the involvement of its manager Jerome K Alexander in the infamous “forged letter” sent to Pyramid Saimira by SEBI. While Pyramid Saimira is being wound up, why is the regulator dragging its feet over the Alexander case and his links with Nirmal Kotecha?
With the Sebi announcing the possibility of launching no-frills accounts to woo investors into the Rajiv Gandhi Equity Scheme, the question is-Will the depository participants even be willing to offer such accounts?
FDI in retail is one issue being dealt with since long. Our government has missed the chance once again. Indian retail giants are as large as foreign hypermarkets, but, do they do as well on the price and quality front?
If you were wondering why most of the recent major cases of corruption have not been exposed by opposition parties, especially the BJP, now you have the answer: they are all in it together. The nexus goes back to Enron’s infamous Dabhol power project, which had been “dumped into the Arabian sea” (by Gopinath Munde of BJP, then deputy CM Maharashtra), but was resurrected at thrice the original size plus benefits for it, based on a report by Dr Kirit Parikh (still a close advisor of Dr Manmohan Singh).
Stockguru, a chain-money scheme, openly flouted various SEBI rules. Moneylife pointed this out in December 2010 and again in April 2011 but SEBI, under both former chairman CB Bhave and current chairman UK Sinha, and RBI took no action. Aggrieved investors can possibly file a case of gross regulatory lapse against SEBI and RBI
The outrage over the dastardly Delhi gang-rape has subsided, but at the end of it, women seem to be paying a price for the lack of security it exposed. People don’t trust ham-handed police investigations, more importantly we don’t really trust the justice system to deliver. What lies ahead? Lets hear Justice Sujata Manohar on “The case for delivering better Justice to Women: A view from the Judge's Chair” on this International Women’s Day
Moneylife Impact: The finance ministry’s strange and controversial diktat to public sector banks to emulate HDFC Bank and levy processing charges on payment of credit card dues by cash or cheque was exposed and followed by Moneylife alone. The rest of the media, including the business press is still silent on this issue
Two months after Infosys, India’s most celebrated information technology company took over MCA21—the e-filing portal of the ministry of corporate affairs—it remains unstable. Anguished users want to know why a system that worked well under TCS is causing such pain to companies and users
When a banker comes to your home, exploits your trust and dupes you, he is called a bankster. Why doesn’t such systematic criminal exploitation of hapless depositors move the government and the banking regulator? This 79-year old has resorted to Gandhigiri to get justice
If you work in risky jobs or have a medical condition, you pay a higher premium. Some people are even denied insurance. Shouldn’t insurers refuse to cover serial offenders of sexual-harassment too? This may help women get a fairer treatment in companies
As long as the justice delivery system remains slow and our courts refuse to order crippling monetary penalties, zero-tolerance of sexual harassment at the workplace will be discussed endlessly at HR seminars but never implemented.
The widespread problems of Indian customers will stop only when regulators put in place a formal process to redress investor grievances meaningfully by forcing companies indulging in mis-selling or fraudulent practices to compensate investors for their losses and impose exemplary damages for needless harassment.
From the very beginning, Infosys set standards and created benchmarks in transparency, good governance and accountability. But when circumstances changed, this pretty picture began to get dented bit by bit, starting with TV Mohandas Pai’s stormy exit around the time that NRN hung up his boots
Mr Murthy and his protégé Nandan Nilekani have always been clever about managing their image. Consider this anecdote of 2005, just two years after the Narayana Murthy Committee had submitted its report to the Securities & Exchange Board of India
HDFC Bank is targeting non-resident Indians (NRIs) with a fixed income product, exposing them to foreign currency fluctuations. If a customer loses money, he has to be blamed, of course, for falling for this hard-sell from his 'trusted' banker
Time, economic conditions, pressure of high expectations and the tax department may have taken a toll on his image, but there was a time when NR Narayana Murthy not only walked the talk on good governance but showed how committees can function differently
Sanjay Dutt, director of Quantum Securities and a long-term shareholder of NDTV has alleged that chairman Prannoy Roy received irregular promoter funding of Rs375 crore by pledging NDTV shares which, according to him, is against the RBI rules
In probably the first such action in India, NDTV, through its law firm Amarchand Mangaldas has sent a legal notice to Sanjay Dutt, who holds a 1% stake in the broadcasting company for raising questions about its corporate policies and practices
The NSEL fiasco is part of a wider problem: poor financial market regulations across capital market, insurance and banking. The government is apparently considering a new regulation for commodity markets. Why wasn’t this a given higher priority than arming a corrupt and inefficient SEBI bureaucracy with draconian powers?
Those of us who watched with fascination how Subrata Roy seemed to get away with full-page advertisements and interviews attacking the capital market regulator are relieved that the word ‘contempt’ is even being discussed in the apex court.
The Financial Technologies group has always managed to get generic words as company names, with Registrars violating their own guidelines. Use of words like ‘National’ for National Spot Commodities Exchange are illegal too
Indian Bullion Markets Association was one the biggest borrowers from the borrowing/lending racket of National Spot Exchange Ltd, amounting to Rs1,159 crores. With a name like that, was this group of company of Financial Technologies, the promoter of NSEL, masquerading as a trade body, lobbying on behalf of the group?
Indications are that the government may soon drop the kid gloves treatment to NSEL and its management and allow the CBI to take over. If that happens, most investors will not get anything back from their investment
Reacting to a barrage of complaints against the Bharat Nirman ads on Bills that have not yet been cleared by the Parliament, the Advertising Standards Council of India-ASCI, an industry watchdog, decided that it cannot rule on government and political advertisements
RBI has done more for customers than Sebi and IRDA but it has also often argued that it will not interfere when it comes to products that already have an independent regulator. This is unfair to customers who repose enormous trust in banks
The NSEL scam has opened a big can of worms about the integrity of the entire regulation and supervision infrastructure, including the efficacy of the slew of independent regulators set up over the past 25 years.
The collective voices of senior citizen through Moneylife Foundation and many others has finally been heard. The government has announced that reverse mortgage annuity would be tax-free. However, there is lot more that needs to be done, including regulation, to make senior citizens live a dignified life