Sucheta Dalal :Believe it or not
Sucheta Dalal

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Believe it or not  

Jan 22, 2007

The United States, a capitalist economy, whose systems and procedures we try to emulate (at least in the capital market) has already tried and jailed those involved in the mega scandals of 2001 such as Enron and Worldcom. Our judicial system is slow but our systems are worse. Still, one would expect that 15 years after the Harshad Mehta scam (1992), the Custodian appointed under the Special Courts Act would have traced and notified all the likely beneficiaries. Instead, a fortnight ago, five years after Harshad Mehta passed away, the Custodian’s office has notified his mother Rasila S Mehta and Rina S Mehta, the wife of his brother Sudhir, thereby attaching all their movable and immovable assets and bank accounts.

That these close relatives had (deliberately?) not been notified was commented upon by the media even in 1992, since some financial transactions were routed through their accounts, but nothing happened. What then is the motivation for such drastic action today? And is the Custodian at all accountable to anyone? Fifteen years is long enough for the two women to have rebuilt their lives entirely. Worse, the notification requires banks, mutual funds, financial institutions and other entities to inform the custodian about any properties or assets owned by two women. Since the pertinent assets relate to 1992 and earlier, what is the chance of their availability? Maybe the Custodian must be asked to explain its past inaction, especially since Harshad Mehta had himself made a dramatic attempt to resurrect his career as a market guru in 1998.

Tricky ID

The Finance Ministry finally appears to be stirring to respond to the harassment and confusion unleashed by multiple identity cards by making its own little contribution. Media reports say that the Finance Ministry wants the PAN (permanent Account number) of the Income Tax to be the only identity, but has added a twist by suggesting that it would have a two-letter suffix to denote the purpose it is used. For instance, a PAN for mutual funds would be PAN-MF and the one for demat accounts may be PAN-DP and for bank accounts it may be PAN-BA.

Does that mean that one will have to obtain multiple PAN numbers? Surely the Finance Ministry needs to respond to all those who have yet to receive even one PAN card (although they have a PAN number) and those who have been allotted multiple PAN numbers, before it comes up with ideas geared to cause further chaos. Meanwhile, the Securities and Exchange Board of India (Sebi) is reportedly distancing itself from the Association of Mutual Fund of India’s decision to issue MIN cards. In fact, a little more involvement on Sebi’s part would have saved investors a lot of effort if the data collected by the National Securities Depository Ltd (NSDL) had been accessed and dovetailed with the MIN database set up by the rival Central Depository Services Ltd (CDSL).

Data ownership

Last week, we wrote that NSDL was probably not asked to hand over the data it had collected. NSDL chairman C.B. Bhave, however, tells us that the MAPIN data “very much belongs to Sebi”. He says that Sebi has not only made no request to hand over this data to them for MIN or any other purpose, but the database was in fact offered to the regulator “on two occasions in the past”. This is data that investors have already paid for and includes their fingerprints. Surely it the regulator’s duty to take charge of it and ensure its safe-keeping and security.

Low profile=unseen

When it comes to listing the most powerful women in business, media perception seems based entirely on their accessibility and public profile. Indeed, several truly powerful women are strangely absent from every such list, whether by an Indian publication or a foreign one. At one level, it is because power is only associated with money and not decision making and influence. So you have the usual list of women connected with business—without regard to whether their positions are through inheritance, family connections or personal enterprise. No list is complete without mentioning the top women executives of ICICI or Naina Lal Kidwai whose recognition is certainly well deserved.

But what about the two deputy governors of the Reserve Bank of India (RBI)—Usha Thorat and Shymala Gopinath— who wield considerably more power and are also respected for their abilities? Similarly, Chitra Ramakrishna, the deputy managing director of the National Stock Exchange (NSE) never finds a mention, although many who deal with the bourse say that she calls the shots. Yet another name that is always missing is that of the Central Bank chairperson Homai Daruwalla. It must, however, be admitted that women who broke the glass ceiling—Tarjani Vakil (former chairman of EXIM Bank), Ranjana Kumar (former chairperson of Indian Bank and Nabard) and Kishori Udeshi (first woman deputy governor of RBI) did get their share of credit.

-- Sucheta Dalal