Different Strokes

Another committee?SEBIs hastily convened meeting to discuss the tightening of primary marketrules last week raises some interesting questi...

Another committee?
SEBIs hastily convened meeting to discuss the tightening of primary marketrules last week raises some interesting questions. For instance, why arestock exchange representatives discussing IPO rules instead of beingconcerned with listing requirements or secondary market issues such asmargins and price manipulation? Why was SEBIs Primary market AdvisoryCommittee PAC not called in for the discussion? Could it have somethingto do with the fact that at least three members of the PAC had previouslyobjected to IT companies being allowed to go public with a mere 10 per centequity offer? SEBI says that it plans to tighten the three-year trackrecord for companies, but it is pertinent to ask how and why it was relaxedin the first place? Had the PAC discussed the tightening of IPO norms,these questions would probably have been raised and embarrassed SEBI. So aset of market intermediaries who have little to do with the Primary Marketdiscussed the issue and helped make news for a day.

Carries no conviction
Finally the party seems over. The ICE is running out and nobody is takingeven the Finance Ministers assurances of no investigation seriously. TheICE scrips which are leading the race to break stock indices mainly theK-10 scrips 8212; Himachal Futuristic and Satyam dropped in value two days ina row, Global Telesystems was down below Rs 1000 on Friday, Zee continuedto crash and is now below Rs 500, forcing analysts to predict that it willhave little option but to scale down its ambitious proposals, and PadminiPolymers a scrip which had shot up from Rs four to Rs 257 its 52 weekhigh has dropped to Rs 51 8211;it was over Rs 100 when the FM said thatpossible price ramping would not be investigated. Interstingly,Fridays 144point fall in the BSE sensitive index also saw ICICI crash Rs 14. A bearmarket, it seems asks too many questions about profits and NPAs which abull market simply ignores.

Not dead yet
Iridium one of the most expensive international projects to go belly-up,made world headlines when it was switched off, but the story is not yetover. We picked up some interesting little tidbits. Apparently, Iridium hasnot entirely been shutdown but remains alive over the African continentwhere an expedition deep in the jungles is completely dependent on thesystem to stay in touch with civilisation. Various charitable foundationsand multilateral agencies are apparently paying a lot of money to keep thecontact going. Also, lenders to Iridium, including our very own financialinstitutions that were gung-ho about the project are slowly realising thatit was one thing to write off equity, but they should probably have securedthe debentures with something more concrete from Motorola such asperformance guarantees. Angry lenders and partners are even beginning toquestion the price at which Motorola has sold some equipment to Iridium.The lenders hope that the sale and dismantling of Iridiums costlyequipment including a possible recycling and use of the 66 odd satellitesmay help them get back some money. A group of them are planning litigationto make Motorola cough up some money. But the best story yet is this onefrom Mumbai. Three people who claim to have subscribed to the Iridiumapiece have lodged a complaint with the Andheri police. Their charge: theservice has stopped, the company has shut shop, and the person who soldthem the phones has vanished. We are more curious about who thesesubscribers are. Given the constant rumors Iridium was found convenient byterrorists and the underworld, it may be worth checking on those who comeforward with such complaints.

Name-game continues
Did the newspapers not report that ICICI and ILamp;FSs subsidiaryInvestsmartindia had settled their unseemly dispute over the domain nameInvestsmart? News reports said that ICICI had agreed to hand over the siteto Investsmart after the two had filed consent terms nearly a month ago.The site however tells a different story. We clicked on to Investmart.comthe ICICI registered domain for a lark and guess what, it led straight toICICI.com. Surprised, we tried again with the same result. Obviously,consent terms are not necessarily followed by compliance, which may requiremore court directions. Incidentally we also looked up Investsmartindia.comand found that it is still an ILamp;FS venture no reverse deal has happenedeither. For good measure we also checked investmart.com without the Indiasuffix 8212; it was a site under construction, while Investsmart with ans8211; links to a site called individualinvestor.com. Maybe ICICI decide toride out the controversy and simply hold on to the domain name or maybe itwill go to court again.

Author8217;s email: suchetadalalyahoo.com