Tags:
Journalism of Courage
Conditional Licence
Remember the provisional banking licence8217; that the RBI granted the CRB group. It was to help C R Bhansali raise the Rs 100 crore capital mandated for private banks but ended up conning investors about the group8217;s stability. The provisional/conditional licence8217;, obviously remains a favourite of SEBI Chairman D.R.Mehta he was RBI deputy governor when CRB got its licence, this time he has either granted or is on the verge of granting it to the Central Share Depository Ltd. floated by the Bombay Stock Exchange. The licence is to help CSDL raise its Rs 100 crore capital. The BSE needs more investors because it has realised that giving Rs 65 crore could bankrupt it. There is also this little rule which prevents sponsor organisations from diluting its equity below 51 per cent. So the BSE is looking at more sponsors, and these have so far been more concerned with a piece of paper from SEBI which to them confirms the viability of the project. While the BSE is struggling to raisecapital, the National Share Depository is making things more difficult by yet another reduction in depository charges.
Belt-tightening?
One doesn8217;t know if the FM8217;s advisor Mohan Guruswamy was sacked or whether he resigned, but his arm-twisting of financial institutions FIs to lend Rs 2,500 crore to the Essars was clearly his Waterloo. It is no wonder that the FIs squealed 8212; they are so over-extended to the group that a wag suggests that IDBI be renamed EDBI with Essar8217; substituting Industrial8217;. While the bailout move probably cost Guruswamy his job, Prashant Ruia continues to deny the package was a bail-out. So instead of getting rid of expensive flab like their corporate helicopters, they are now flying these off the top of their office building. After all these are are useful for ferrying the promoters as well as politicians and other VIPs.
Vanishing Regulator
The Department of Company Affairs8217; DCA flip-flop over its responsibility for vanishing companies8217; those who raisedmoney and then vanished is confounding investors. A month ago, it prepared an affidavit disclaiming responsibility 8212; it was to be submitted in court in a case filed by the Midas Touch Investors Association. Last week, cornered by Prithvi Haldea of Prime Database, DCA Secretary T. S. Krishnamurthy however owned up DCA8217;s responsibility for acting against these companies. Wouldn8217;t it be ironic if the Prime Minister8217;s promise of action against vanishing companies remains in limbo because the DCA disclaims responsibility and SEBI doesn8217;t have the powers to act against them?
Painting A Poor Picture
What is happening to ICI? After its aborted bid to acquiring a chunk of Asian Paint8217;s equity, things have been going steadily downhill. First, its parent ICI of UK has its money tied up in the acquisition bid, and now its Indian operations are getting messy. Its brand new marketing and distribution plans have gone awry and its units too are in bad shape too. ICI and Sterlite8217;s takeover attempts suggest thatthe David Vs Goliath story applies to Indian takeovers.
Tailpiece
Chase Manhattan may have only bought itself a strategic collaboration with HDFC Bank as against setting up independent operations, but it has reason to celebrate. It was black-listed from India ever since it refused to honour Indian letters of credit during the Bangladesh war. A livid Indira Gandhi ordered the black-listing and Chase probably regretted the move ever since. Now why does one think that Chase Manhattan would find true sympathisers at HDFC bank?
The author8217;s e-mail address is: suchetadalalyahoo.com
