Beware TV pundits,says govt investment guide

Dont get carried away by corporate governance awards; beware of the media,especially the stock-specific advice in the electronic media...

Dont get carried away by corporate governance awards; beware of the media,especially the stock-specific advice in the electronic media; dont over depend on comfort factors like independent directors… All this and much more has found its way to the A beginners guide to the capital market,courtesy the Ministry of Corporate Affairs (MCA).

Despite regulating the financial sector and capital market,the government has not been able to do much about stock market scams and corporate failure. So finally,it has decided to educate the segment most affected by such scams the investors,more so the people just beginning to invest in the capital market.

It is to be noted that scam-hit Satyam Computer Services received the coveted Golden Peacock Global Award for Excellence in Corporate Governance for 2008. The organisation was named the winner by The World Council for Corporate Governance (WCFCG),with Ola Ullsten,the former Prime Minister of Sweden,serving as lead judge.

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In a week-long investor awareness event,the MCA has come out with a guide for such investors to educate them so that they are not swayed by feel-good advertisements and sectoral frenzy and are able to make the right investment decisions.

The guide,edited by managing director of PRIME database Prithvi Haldea,goes on to say that investors should not take decisions blindly based on accounts just because they are audited. There are too many saints (read electronic media) in the capital market offering free advice… in reality many of these advisors have vested interests, the guide candidly adds.

Also,the government has asked investors not to get carried away by attractive headlines,catchy messages and appealing visuals. Further,the sectoral hysteria created by companies should not persuade investors to invest in a particular IPO because not all companies in a sector are good and many companies change their names to reflect the current sectoral fancy.

Above all,the ministry has advised all investors not to fall prey to greed as there are many scamsters moving around to exploit it.