Sunday, November 10, 2013

Sensex X Economic (Sense) < A Debauchery / Fraud on Common investor , of the heinous kind


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Making banks safer

Capital adequacy and tighter regulation are just one step forward

 Sebi to recover Rs 3,000 cr from five Satyam execs.
Looking from an altogether different perspective, as commented elsewhere: This is a report seemingly carrying an unhidden fact of life : In the absence of any foolproof 'mechanism' in place, -which, of course, in the nature of things, will remain as ever before and is bound to remain a pipe-dream, so also a non-starter , - for any such scam to come to light on its own and in due course, everyone concerned would have had to wait , no knowing for how long; but for the 'honest' realization and admittance by the culprit himself, voluntarily, of his misdeed/misadventure of this kind. In individual's perspective, to fit into the context, it is anybody's guess how the drastic changes, being made from to time, in the very form and substance of independent 'statutory audit report', for, besides the rest, the corporate , including the last in line , unwittingly or otherwise so, could even remotely be of any help out; but , instead, may only lead to further complicating and worsening the extant scenario. Over to the eminent experts, if so willing, for a serious but unbiased / impartial deliberation and honest opinion.

"....Sebi has asked Raju and others to disgorge within 45 days the wrongful gains of Rs 1,850 crore, with a simple interest of 12 per cent a year since January 2009." 

 On a loud thinking: Granting that the wrongful gains of ..required to disgorge,have been technically and scientifically worked out, do not, logically and morally, the impacted investors at whose cost the gains are assumed/stated to have been made, if not totally, need to be compensated there out ! This sporadic reaction pivoted on principles of natural justice, though likely to be intriguing, might be worthwhile due consideration as of general relevance and application in all such instances in which the stakeholders' rights and interests happen to have been set at naught/ jeopardized. Legal pundits backed by their eminence will surely have something to say, for or otherwise!

July 4

Government may take the sting out of SEBI | Business Line
7 hours ago - Capital market regulator SEBI may have to settle for reduced authority following protests against it being given search and ... Lessons for SEBI

As has been often criticized in knowledgeable circles, there have been instances in the past, within living memory, in which the SEBI,  has , unwittingly or otherwise, out strtched /over stepped its assigned powers as a mere regulatory authority by choosing to follow patently misconceived ideas of its own, recklessly, thereby exceeding its brief. One of the irritants has been its sporadic resort to rules- /- decision making, without much of a home work as warranted in the wholesome interests of the national economy.

There is no gainsaying that the utmost need, nay opportune time, for  monitoring and regulating the functions of  SEBI, so also of the other like regulatory or semi regulatory authorities, has come to surface in a big way.

Delisting >

Moreover, the skyrocketing costs as well as management attention required ensuring compliance with increasingly onerous securities laws and regulations as well as listing standards compel managements and controlling shareholders to delist the company so as to enable greater focus on the company’s business.[1]
It is in this context that SEBI earlier this month issued a Discussion Paper on Review of Delisting Regulations. The Discussion Paper seeks to review the current state of affairs, identify the deficiencies in the delisting regime and propose some suggestions for overhaul. It observes:

 Regulatory Domain over M&A for NBFCs

 It is noted that, issuance of such notification by way of extending 'regulatory regime', either by RBI or SEBI, has been frighteningly assuming almost the 'force of habit'.

The norms laid down are, of course, claimed to have an ideal aim namely,"...the M&A is not prejudicial to public interest or the interest of depositors." In a manner of viewing, the once- upon- a -time (in the hoary past) vociferously decried and stoutly resisted 'license raj' has, in recent times, staged a forceful come-back. No knowing how far or to what extent all such measures, rightly or wrongly thrust upon, are going to fly in the face of or meekly yield to the near dramatic changes lately announced in further liberalizing the governmental attitude towards FDIs and FIIs.

Further, if one were to bear in mind the common bitter experience even in the recent past, the pastime of churning out more and more such fashionable rules, with no let up, but without a matching effective monitory mechanism, mostly entail adverse consequences to the national economy; but without anywhere meeting or remotely succeeding in the stated aim.

Over to 'experts' for true and fruitful enlightenment.


Shareholder inactivism

You can empower investors to vote out bad decisions, but cannot force them to exercise their rights »

The new Companies Act allows minority shareholders to initiate class-action suits and vote out corporate actions inimical to their interests. But empowering investors is only half the battle. For it to translate into better governance at India Inc, public shareholders and the domestic institutions which represent them should be willing to speak up, when companies infringe their rights. So far, there is precious little happening on this front.

All prima facie hollow or empty rhetoric ; in the ultimate analysis, fail to provide any practical solution, easily adoptable and workable, and also take on effectively, without legal recourse - resort to court. What really is called for is an inhouse remedy - within the corporate set-up, with the least hassle ad waste of time and energy.Certainly, legal battle is no way ?!

For instance, the Regulatory Bill pending take-off suffers from the same malady, rather serious drawback; in that , the ultimate resolution of grievances provided for only through a battle in the arena of court.

On shortcomings in invariably suggested recourse to court litigation, what has been said / underlined by legal legends must be taken to be enough or more than adequate; for anyone to be convinced that that is no 'solution' at all; but on the contrary is no different from - blind and deaf  leading a blind, if not deaf !

"You can empower investors to vote out bad decisions, but cannot force them to exercise their rights"
The editorial has tended to play the same old song but not even in a significantly different tune anyway soothing to the once -for -all set socalled incorrigible and inscrutable ‘mindset’.
Strikingly reminds one of the undeniable or incontrovertible truth in the saying, - any creation on earth, not alone  ‘animal’, can only  be taken to water or fodder  but can never be forced or persuaded, against its wish and will, to drink or bite, - certainly never to gulp down or chew, much less to assimilate / absorb into the system - CAN ONE, except the invisible CREATOR, EVER  DO?????!!!!!!
Coming down to earth, - does not the whole fallacy or mischief  traceable to that remedy of  'recourse to class action' - which is worse than the very ailment/ evil itself  sought to be remedied ?!


ICAI Launches E-Book “Guidance Note on Audit of Books (2014 Edition)

Bankers - In The US !
'Mindboggling': Federal Judge Slams DOJ Refusal to Jail Bankers

The Commodity Futures Modernization Act was also a big factor:

venkat swami

This latest news from the US, it is noted, goes to sadly belie and rudely shake the impression generally obtaining in, besides the US, every other country across the globe – amongst the customers and the rest of the stakeholders. The reference is to the seemingly ingrained belief that,- the judiciary can , in any event, be relied on as the last refuge for successfully seeking redressal of all genuine grievances, - not only against the individual bank management, but also against the concerned duly empowered governmental authorities (the Finance Ministry and the apex bank)

     RBI : Banks to ensure Timely Issue of TDS Certificate to Customers on TaxGuru

    C (updated) >

    This latest report from across the border, it is noted,goes to sadly belie the impression generally obtaining in, besides elsewhere, in our country – amongst the customers and the rest of the stakeholders. The reference is to the seemingly ingrained belief that,- the judiciary can , in any event, be relied on as the last refuge for successfully seeking redressal of all genuine grievances, not only against the individual bank management, but also the concerned duly empowered governmental authorities (e.g. in India, the Finance Ministry and the RBI)

    < May be contd.


    Industry, inflation data point to economy's bottlenecks

    FinMin mulls measures to attract FIIs to stabilise rupee, boost stock markets

    Chidambaram interacted with FIIs who expressed their concerns on taxation issues, high fiscal deficit and current account deficit

    Six of the country's leading bankers say while green shoots are visible, the pace of recovery will be slow because of a whole lot of unresolved ...

    Bank has got the board's nod for preferential allotment of equity shares

    Any dilution in govt's stance on equity injection due to fiscal pressures could have an immediate impact on the ratings of weak banks





    The senseless, irrelevant Sensex

    Jubilation by a few, for a few. — A.M. Faruqui Only 0.5 per cent of all companies are listed on BSE. How then can Sensex reflect fundamentals? »

    BL (2005)

    The Hindu Business Line : Stock market: Barometer of economy?

    The Finance Ministry mandarins too seem to be caught up in this web of confusion. That is the primary reason for this distorted obsession about the market, and there are several factually incorrect assumptions about the market's role.

    1.     Is The Stock Market A Barometer Of The Nation's Economic Health ... › Discuss

    Stock market: Whom does it represent?

             < "...The answer lies in understanding the structure of both market and household savings. ..."

    THE answer is, in one’s forth right view, faulty to the core; and even by adoption of a liberal valuation norms or standard  deserves to be given a big Zero   mark, if not a minus mark. 'Senseless'  is not the "Sensex"; but it is the collective driving forces, motivations, so on , behind the scenario/smoke screen , all rooted in the basic human trait of - GREED, in all its ramifications. One honestly thinks that though an attempt has continued to be made perilously in recent times, as ever before, against all odds , - in sum, to keep the myth surrounding the unrelenting Stock Market kicking and alive somehow , the fact remains staring in the face that, should reliance be placed on the  unbiased and truthful expert view given publicity, the stock exchange has never been, and  in any case long ago ceased to satisfy or anywhere meet , the once-upon-a- time- commonly-ingrained belief ; that is, that the stock market represents the state of the economy or economy’s health. Looking back, any number of expert articles are lined up.

    A couple of them to readily illustrate:

    The Hindu Business Line : Stock market: Barometer of economy?

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