Different Strokes

Televised transparency?Some bright spark in government believes that the ultimate in transparency is a televised auction to disinvest Ind...

Televised transparency?

Some bright spark in government believes that the ultimate in transparency is a televised auction to disinvest Indian Petrochemical Corporation shares. To government, relinquishing control over a blue chip firm is apparently the same as selling a painting. Without going into issues like the capabilities of bidders, an open auction has other implications. Unlike sealed bids, which reflect bidders8217; assessment of the company8217;s true value, an auction helps the buyer. Auctions are known to drive up the price, but that possibility has been eliminated. Little tinkering with the sell-off panel8217;s recommendations threw out a clause barring bids which would lead to market monopoly on acquiring IPCL. Therefore, one company, which holds a chunk of IPCL shares and is set to dominate the petrochem business, will be the most aggressive bidder. It also benefits from an open auction. Since the closing sequence has already been pre-written, inviting sealed bids would at least have allowedgovernment to realise a better price.

Inaugurating non-starters

Remember the fanfare with which Yashwant Sinha inaugurated the BSE8217;s Central Depository of Shares CDS and the BSE Online Surveillance System BOSS on July 15? Well, neither is working. The fact that the BOSS stock watch is not operational in a highly volatile market angered even SEBI chief D R Mehta he openly pulled up the BSE last week. As for CDS, it was clear even before the inauguration that it wouldn8217;t take-off. The connectivity problems are now expected to take three months. Meanwhile, it has lost its top two executives 8212; technology head Jajodia said that he didn8217;t want the software boom to pass him by; MD, P V Mayya said he is quitting for health reasons however, insiders claim he had serious differences with the BSE. Add to this the mess over the transfer of cash scrips to the specified section and it amounts to a not so happy Vision 2000.

But Ludhiana does it

Many sticky issues that arose out of the BSE8217;shaphazard transfer of scrips to the specified section are unlikely to go away in a hurry. For instance, the SEBI probe into the basis of shifting these scrips revealed that the BSE has not been impounding 25 per cent of the profits from carry-forward transactions as mandated by the G S Patel panel. The exchange took shelter under the Varma panel report 8212; ignoring the fact that SEBI8217;s October 16, 1995 circular has specifically asked for the impounding of the profits. Further, its October 21, 1997 circular specifically said that barring a few changes, all other conditions of the Patel committee would continue to apply. Now SEBI itself claims the rule is difficult to implement. We learn that Calcutta, Delhi and other exchanges, which have introduced badla also, do not impound profits 8212; but the Ludhiana Stock Exchange does. If the tiny Ludhiana bourse has been scrupulously following the rules, how does the regulator explain its generous concession to the larger exchanges?

Enron and theopposition

Maharashtra seems to get away with the strangest claims with regard to power. It threw out Enron, brought it back with a larger project. The MSEB chief gets away by saying that the Tata Electric Companies are licensed to sell power to Mumbai and not to the MSEB and it goes unchallenged. Why then has TEC8217;s licensed area been systematically encroached over the years? And why was the new power project at Saphale been handed in a hurry to the BSES even after the election code came into operation? It8217;s the same on Enron. With a few days to the polls there are only feeble noises from the opposition about the extortionate cost of power 8212; and none in a manner that the ordinary voter will understand.

Author8217;s email: suchetadalalyahoo.com