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Journalism of Courage
A Mother8217;s Day feature by a Mumbai daily informs us about how Chief Minister Vilas Rao Deshmukh8217;s son Amit is grooming himself for a political career. 8216;The stepping stone, a sugar mill which he established a year ago, recently had the first successful crushing season. A co-operative bank is underway8217;, says the paper. Young Deshmukh says that since he likes politics, 8220;I guess entering the co-operative movement is the right way to begin8221;. Sugar co-operatives and co-operative banks! Bad timing we would say, for a Chief Minister8217;s son to confess that it is the entry point for a high-profile political career. The nexus between politician controlled co-operative banks and Home Trade is already under a magnifying glass; and thanks to their rampant corruption these badly regulated banks may be in need of a bailout. The statement should provide a further impetus to the process of scrapping the dual regulation of co-operative banks and putting an end to special tax concessions that they enjoy.
Not yet out of the woods
Anti-investor bias?
Investor groups have always complained about how Sebi committees are stacked against them and industry representatives such as lawyers and accountants who are in a majority carry through the most anti-investor decisions. The Takeover Committee was among the most blatant in its anti-investor bias. Representatives of industry associations, stock exchanges and professional bodies on it have been replaced several times since the committee was set up in 1996. In fact the Bombay Stock Exchange had three different representatives, with two changes in the last couple of years. In contrast, when one of the two investor representatives8212;M.D. Limaye, could not attend a single meeting since 1996 for personal reasons, no attempt was made to replace him. Two years ago, when Sebi re-started its interaction with investor groups after a long hiatus, the association that Limaye represented stopped being accredited by Sebi and should have automatically led to his replacement. But the committee preferred just one investor representative who also filed a dissent against its recommendations.
Panel v/s Committee
Investors who are agitated with the Takeover Committee tend to use the word Takeover Panel and Takeover Committee interchangeably8212;a fact that probably does damage to the former. Often, when investors say that Takeover Panel members have been offering consultancy to potential acquirers on how to beat the Takeover code, they mean member of the Takeover Committee. Part of the reason is that they see the Panel as having let off 84 per cent of takeover cases without compelling them to make an open offer to retail investors. Since the Panel8217;s decisions are not published by Sebi except as a brief summary, investors believe that the panel is against them and have demanded investor representation on it. In fact, the panel is probably constrained by the flexibility of the takeover regulations. For the record, the Takeover Panel comprises8212;Justice S.M. Jhunjunwalla chairman, former Judge of the Bombay High Court, S.C. Bafna, former member of the Company Law Board, S.A. Dave, former chairman of Sebi and UTI, A.R. Gandhi of N.M. Raiji 038; Co and Kamath, Banking Ombudsman and former chairman, Bank of Maharashtra. The panel members have now requested that orders regarding their decisions should be published in full so that investors are aware of the basis of granting exemptions.
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