Sucheta Dalal :Lowering the bar
Sucheta Dalal

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Lowering the bar  

Dec 13, 2004

A.K. Batra, the only remaining full-time board member at the Securities and Exchange Board of India (Sebi), has resigned. According to sources, Batra, who has been on sick leave for sometime, has now quit on health grounds. However, we learn that there have been serious differences within Sebi over certain aspects of primary market regulation.

Batra’s resignation would probably have left Sebi in a jam. On the one hand, the Securities Appellate Tribunal (SAT) has thrown out an important case on the technical grounds that the regulator has not passed the order in time.

And on the other, it has no full-time members to complete hearings and pass orders quickly.

A third problem has been the quality of investigations and orders; but we are not even discussing that over here. Sebi’s doubtful solution has been to move the decision-making process at least two rungs lower. According to a recent decision, orders that were earlier passed only by the chairman or full time board members are now going to be decided by divisional chiefs.

The decision is causing amusement and consternation among those in the know. They wonder if this is Sebi’s way of isolating the top brass from the embarrassment of losing important and unimportant cases with such regularity.

The question is, will the quality of orders improve or become worse? Also, what is the political pressure that is preventing the appointment of full-time members at Sebi.  

Passing the baton

While full-time directors at Sebi as well as Members of the Securities Appellate Tribunal are lobbying for the age bar to be raised from 62 to 65 (or even 68 for the presiding officer), M. Damodaran has set an interesting new trend while relinquishing the chairman’s job at several institutions. In each case, he proposed the managing director’s name for the executive role of chairman and managing director.

At Infrastructure Leasing & Financial Services, an eight-year old move to make Ravi Parathasarathy the chairman has finally happened.

At the National Securities Depository Ltd, C.B. Bhave’s appointment as chairman and managing director will be ratified at the next Extraordinary General Meeting.

At the National Stock Exchange (NSE) too, Damodaran proposed that Managing Director Ravi Narain should take over as chairman. Sources say Narain has turned down the dual responsibility because he thinks that a separation of the post of chairman and managing director works better in a self-regulatory organisation like a stock exchange.  

A better deal

Last week a prominent newspaper suggested that Anil Ambani was willing to ‘‘start from scratch’’ like his famous father Dhirubhai Ambani.

Immediately afterwards, we learnt that Mukesh Ambani was willing to better the deal that he had offered his younger sibling.

It was suggested that the offer could include a division in the group to give Anil a controlling stake in Reliance Energy and Reliance Capital as well as an investment of Rs 10,000 crore plus a monetary settlement.

Sources in the Anil camp however said there was no question of a deal that does not include a role in the parent company — Reliance Industries Ltd.

Anil, we are told, is willing to accept a 70:30 division of responsibility, but not a complete separation.

On the other hand, many corporate watchers, as well as older brother Mukesh believes that the relationship has soured too much to allow so much of a reconciliation that the brothers can work together again.

So how does one explain the news report full of Anil’s fond reminiscences and claimed willingness to make a fresh start?

The answer we got was: ‘‘The media writes anything it wants’’. In other words, the media is a convenient fall guy after planting false stories.

Twice the claim

The government is stuck with a delicate problem. It has discovered that the head of a regulatory appellate tribunal, who has been staying at a public sector guest house, has been claiming allowances twice over. One the one hand, he has been claiming guest house charges of Rs 200 a day and also claiming a house rent allowance of Rs 10,000 per month. Obviously, the government accounts department wouldn’t clear the claim. That has infuriated the tribunal member and he wants the official to tender an apology and clear the claim. The coming weeks will tell whether the government gives in and apologises or sticks to the rulebook.

Tailpiece: Having to take back tainted ministers is not the only problem that Prime Minister may have to answer for one day. We learn that one of his senior ministers is in the habit of calling up members of quasi-judicial bodies on specific cases. Although it is impossible to say whether these members are in fact influenced by what they are told, the actions clearly smack of impropriety on the part of the minister.

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-- Sucheta Dalal