Different Strokes

Selective targetingWhile the BSE hurls counter allegations at SEBI, there is a method in its madness. On the advice of a former President...

Selective targeting
While the BSE hurls counter allegations at SEBI, there is a method in its madness. On the advice of a former President of BSE, the charges are leveled exclusively at SEBI8217;s ED incharge of probes, leaving the chairman alone. While this may seem smart to the brokers, it will hardly wash with anybody else. It is known that the BSE top brass was in constant touch with the SEBI CM and the ED, and the latter was only acting under instructions. Curiously, it is the SEBI CM who will decide on the charges in a quasi-judicial capacity, before they go into appeal to the finance ministry. It is probably another example of the BSE brokers8217; inability to fathom regulatory systems, that they actually believe that the SEBI CM will ditch his ED. This will not only demoralise the organisation but could force the cornered ED to squeal against his own organisation. The ministry, at the end of its hearings, may conclude that both need an organisational overhaul.

Not in sympathy
Did themarket drop 75 points because brokers were upset at the action against the BSE President? No. According to a daily, nearly 60 per cent of brokers are not against it. So who panicked and sold the shares? Brokers say that only four firms knew about the sacking and most sales are attributed to them. The consensus is that it was a market sensitive information and we hear that SEBI probers are already at work. Shouldn8217;t this make brokers think twice before hurling allegations?

NBFC problems resurface
Though RBI is now incharge of regulating finance firms, they continue to go belly-up with regularity. Recently, we said that the RBI was struggling to stop a south-based finance company from going bust by installing two officers to monitor its finances. Now Kuber Finance is slowly shutting its offices. RBI officials are in a panic. Sometime back, a seminar in Pune saw harassed investors launch a demonstration against the RBI officer addressing the meet. It was hastily controlled.

Runawaypromoters
One hears that cash-strapped promoters of mega projects have often threatened to abandon projects and let institutions run them if more money is not forthcoming. One promoter has actually put the threat into action. Fed up of lobbying with banks and FIs for funds, the promoters of Rajinder Steel have simply abandoned the project and gone to the US. Apparently, theFIs have offered the project to other companies, rather than risk sure death through the BIFR. But all steel promoters are so starved for funds, that no one is willing to takeover.

Powerful connections
RS 80 crore of overdues, yet power is restored within two days. A couple of phone calls from Delhi to the state government and the MSEB quietly restored power to the Mittals8217; Dolvi unit. Apparently, the Mittals paid up a small amount and agreed to pay the rest over the next year. But what about the fresh dues? That too has been provided for in the new delayed payment deal. Obviously, the Mittals8217; powerful connections thathave led to a national debate are all the connectivity they need.

Tailpiece
The S. H. Khan report on regulating development FIs, which was quietly commissioned by the finance ministry, has now been leaked to the press. Another report commissioned by the ministry is apparently giving jitters to the North Block. This one is on the level of bad debts and NPAs in the banking system. The ministry is now worried about finding a way to deal with the problem or burying the report.

Authors8217; e-mail: suchetadalalyahoo.com