Tags:
Journalism of Courage
While many Indians quietly worry about infrastructure bottlenecks, unchecked corruption and rising employee costs, foreigners remain extraordinarily gung-ho about the India story. Private equity continues to be hot and the latest to raise a 2 billion private equity fund is McKinsey8217;s former chief Rajat Gupta along with venture capitalist Parag Saxena of INVESCO Private Capital. We hear that 60 per cent of the fund will be invested in India. This is just one of many private equity funds looking at investment in India, despite the fact that some celebrated entrants are finding it tough to spot truly good investments. Foreign interest also continues to pump the realty industry8217;s money raising machine. Source abroad say that even builders and developers with a flimsy track record are easily able to raise 50 million and multiples of it for realty development. Investors are unconcerned that landbanks are brazenly cooked up and even agricultural land is included on the basis of a meaningless 8220;option letter8221; to purchase from the farmer. Meanwhile petty politicians and government officials are gleefully waiting to line their own pockets by permitting the development of agricultural land.
Feigned exuberance
Slow refunds
While on Parasvnath, investors complain about the delayed refund by Intime Spectrum, its Registrar and Transfer agent R038;T. Dozens of investors have been posting complaints on message boards and writing to complain about the R038;T8217;s tardy behaviour. They allege attempts to contact the registrar via email, fax or the designated phone number are futile. Some narrate experiences where refund orders were sent to wrong addresses and corrected only after demanding photocopies of the application and demat details. Such demands have been made this time too. Through these complaints we learn some investors continue to get their refund by speed post despite the multiple application scandal exposing how scores of refunds were directed to a bank address instead of the investors. If investors now need a PAN to trade, why aren8217;t they asked for a bank account as well that can be electronically credited with dividends and refunds? In Intime8217;s case, investors say electronic credits are also erratic, so their money remained locked up and they lost an opportunity to apply for the Sobha Developers IPO. Two years ago, an allotment goof-up by an over-burdened R038;T agent had caused controversy during ONGC8217;s listing. Sebi had responded by hurriedly setting up the SMILE committee to examine ways of the strengthening primary market infrastructure. It made several sensible recommendations that were unfortunately ignored. Maybe it is time to dig up the report and act on it before creaky market systems break down again.
Still traded
While the Finance Ministry is in favour of permitting delisting of companies by amending the Securities Contracts Regulation Act, message boards of financial websites reveal investors are worried about the fate of their investments. At myiris.com, we found several investors of DSQ Software furious at the money they8217;ve lost. They8217;re even more worried the company is working at getting delisted by refusing to pay listing fees. Both national bourses have suspended the scrip for non-payment of listing fees. But investors are desperate it continues to trade. Interestingly, one Ankit has posted his mobile phone number and offers to mop up shares 8220;at a good price8221;. When we called, he said that he had already completed a buy-order of 50,000 shares for a client. But he is willing to note our number and contact us again. Is the share mop up part of a tax evasion strategy?
