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Journalism of Courage
Indias regulators have taken two decisions that deserve to be applauded. In the first,the Securities and Exchange Board of India,or Sebi,cracked down on two companies of the Sahara group. The two housing-sector companies had raised Rs 4,800 crore through the markets; Sebi directed the companies to repay that money,and disbarred its directors,including group chairman Subrata Roy,from associating themselves with any public company that would raise money from the markets till the repayments were made. Then the Competition Commission of India fined the National Stock Exchange,or NSE,Rs 55.5 crore 5 per cent of its average turnover for three years for abusing its dominant market position,in particular to squeeze out rival exchange MCX.
These are exemplary orders,in that they have both taken on powerful insiders. The Sahara group has considerable political clout; and yet,faced with toughness from Sebi,there has been little dissent; the ministry of corporate affairs,in fact,went so far as to issue a statement that it did not intend to intervene. The NSE,too,represents those with considerable clout,being an often-quoted example of the gains of liberalisation; and,even so,it has been shown that it is subject to regulatory control. The courts are now examining both disputes. Clearly,competent,independent,emboldened regulators are at work to monitor 21st century capitalism. Creating a restrictive framework of laws stifles innovation and growth. Nor can faith in the abilities of ex-ceptional individuals be the foundation of a long-term solution. Indias growth requires it to construct and empower a stable framework of credible regulatory agencies.
