The first item thrown up by a Google search for Dharmesh Doshi is an Interpol Red Corner notice issued (A-1025-10-2002) after he vanished from India in 2001. Dharmesh Doshi was a close associate of Ketan Parekh and a director in his firm Triumph International Finance as well as crony companies such as HFCL Infotel Ltd. The sketchy notice issued by the Central Bureau of Investigation (CBI) says that he is wanted in connection with ‘‘Criminal breach of trust, cheating and forgery,’’ but our premier investigation agency has no information on him other than that he is male, an Indian national and speaks English and Gujarati. It does not even have his date and place of birth, which is listed in every passport. Other reports say that Doshi is wanted in connection with bogus transactions worth Rs 83 crore in 2000 and that the Red Corner notice was issued following a complaint filed by European Investment Ltd. The notice is clearly not intended to bring Doshi back to India, because it is common knowledge in capital market circles that he is an active trader operating out of London.
Dharmesh Doshi’s case is an interesting study in how the most reputed regulators make little effort to cross-check information filed by companies. Yet, every regulator expects regulated entities to follow strict ‘‘know your client’’ rules. A couple of readers wrote to say that Dharmesh Doshi works with Jermyn Capital Partners Plc operating out of London and has lead managed many Foreign Currency Convertible Bond (FCCB) issues. I cross-checked the website of the Financial Services Authority (FSA), the powerful securities market regulator of the UK. Sure enough, Dharmesh Doshi’s name and details figure under Jermy Capital Partners, complete with his email address. In case one doubted that it was the same Dharmesh Doshi, the website lists Jermyn as well as Triumph Securities UK Plc with his name. Triumph Securities is listed as shut from June 2002. The FSA website also posts Doshi’s Identity reference number (DXD01161), but not his date of birth. More absurd still is the fact that Doshi is listed as heading the Compliance Oversight and Money Laundering Reporting sections of Jermyn Capital since July 2004. Until then he was a director and Investment Advisor at Jermyn. Jermyn Capital also has another India connection. A company called Jermyn Capital LLC, based in UAE is registered as a Foreign Institutional Investor (FII) in India as a sub-account of Taib Bank and is an active investor in the Indian market. Like Dinesh Dalmia of DSQ Software, who was also involved in the Ketan Parekh led scam, Dharmesh Doshi is another person CBI forgot about after it issued an Interpol Red Notice while these two openly run their businesses in New Jersey and London respectively.
State Bank of India (SBI), often described as a banking behemoth or the Big Daddy of Indian banking or banker to the government is clearly feeling very insecure. Its ‘‘Surprisingly SBI’’ campaign is itself evoking surprise and anger at the suggestion that people are unaware of its size and reach. We learn that the campaign is based on a survey conducted over FM radio and is targeted at yuppies in the 20 to 35 age bracket. But few are willing to buy its findings. It is difficult to believe that India’s educated, upwardly-mobile youth is so ignorant. It is however possible that this target group cares less about numerical supremacy than quality of service. And there, SBI indeed has a long way to go before catching up with its private sector rivals. But SBI investors are not amused at the public admission of ‘‘inferiority and diffidence’’ coming through in its advertisements.
Now that the Finance Minister (FM) is starting his pre-budget exercises, there is a quiet admission that the Fringe Benefit Tax (FBT) needs reworking to remove what the Revenue Secretary reportedly called ‘‘worrisome complexities’’. In fact, the FBT militates against the objective of simplifying the tax structure by granting enormous discretionary power to income tax officials. Worse, it amounts to extorting money even from loss-making companies, by taxing expenditure instead of profits. In doing so, it inflicts the great damage on small companies and budding entrepreneurs. The question is, why is corporate India rather muted in its protests about the FBT? Tax experts say, the biggest reason is excellent corporate performance this year. Most large companies have done so well this financial year that they have chosen to take the additional taxation in their stride. As for the small and loss-making companies, they have never had a voice anyway. The Banking Transaction Tax (BTT), also created last year, was supposed to help track large cash transactions through the banking system to unearth black money. The FM assured us that such transactions were significant enough to warrant action. Tax officials however say that their efforts to trail cash transactions have been stymied after protests by banks and the Reserve Bank of India. Consequently, the BTT has been reduced to a revenue collection mechanism, as anticipated.