Different Strokes

Watch the watchdogThe finance ministry is curiously complacent about the charges levelled by R.C.Mathur, the BSE Executive director again...

Watch the watchdog

The finance ministry is curiously complacent about the charges levelled by R.C.Mathur, the BSE Executive director against SEBI. Mathur has said that SEBI was kept informed at all stages about its decision to tamper with the trading system by opening it three times to insert trades late in the night. Strangely, SEBI will sit in judgement over the BSE’s counter allegations, and is naturally in no hurry. Investigations into the June payment crises have dragged for 10 months already, and reports are being released in driblets so they have no deterrent impact on the BSE working. The BSE has now been given even more time for its office bearers to appear for a personal hearing. Informed sources say that SEBI is buying time so that some brokers can convince Mathur to resign. He will then go back to the State Bank of India and the entire messy business will be quietly buried. But the finance ministry which is gleeful about the soaring sensitive index will have dealt another blow to thealready low credibility of the regulatory process.

The missing details

While on SEBI, several details are missing from the papers sent by it to the finance ministry on the June payment crises. These include a signed confession by Shripal Morakia of SSKI that the BSE President and vice president coerced him into bailing out brokers allegedly operating for Harshad Mehta. SEBI now has all the details about firms which funded the bailout — and these link directly to the promoters of those four companies whose shares were rigged up. So why is SEBI not releasing that report or issuing show cause notices to these companies? Is it under pressure to hush up price manipulation by promoters?

A JPC for Guruswamy?

The opposition’s demand for a joint parliamentary committee (JPC) to probe Mohan Guruswamy’s charges will open the door for every sacked official who exceeds his brief to fling around wild charges without proof. Will the MPs also demand a JPC to probe the more serious charges levelled bysacked Navy Chief Vishnu Bhagwat? Will there be a third one if the Disinvestment Commission quits on Tuesday? All these Joint committees will ensure that a mixed bag of politicians meddle with precisely the issues which the sacked advisor to the finance minister ought to have stayed away from. Banks and institutions will spend time rushing to Delhi with explanations or permissions for all their decisions. It should not be long then before the finance ministry sets up more committees of the Deepak Parekh kind to work on bailout packages for all of them.

Guruswamy’s charges

If you find nothing major to knock in the budget, choose another subject — that’s the strategy of opposition parties. Ironically, while finance minister Yashwant Sinha’s offering himself as a target, though H.D. Deve Gowda is clearly aiming elsewhere. In various articles and interviews the FM’s former advisor Mohan Guruswamy has confessed to meddling with the functioning of financial institutions. He was working on the bailoutof Essar and also wanted money given to them “for expanding their refinery to the size of Reliance”; he openly acknowledges interfering with UTI’s decision to sell ITC shares by trying fixing an absurdly fanciful price to kill the sale. He was also more than willing to work on a bailout for the Mittals and others — he was only looking for a green signal from the PMO. Finally, VSNL officials say that his presence at the GDR roadshows embarrassed the company, forcing it to explain his presence since news about his sacking/resignation had been leaked to the press. His only allegation that really needs some investigation is that regarding the fixing of the import price of HR coils at a high $ 302 per tonne. But does that not have to be explained by the commerce ministry headed by Gowda’s political rival in Karnataka and not the finance ministry.

The author’s e-mail is: suchetadalalyahoo.com