Barely had Sebi chairman G.N. Bajpai told a television channel that anybody (officials from union ministries) who dealt with price-sensitive information, would have to ‘obey the rules’, and there was another violation.
The chairman of National Fertilisers Ltd (NFL), a company whose shares are soon to be divested by government, was seen busy talking down the price of his scrip by telling CNBC (on the same day) that the government’s 51 per cent stake was not worth more than a Rs 1,000 crore, implying that the market price was unjustified.
The scrip immediately tumbled 16 per cent from its trading level of Rs 68 and caused a reader to say: “Even if he is right about the pricing, is he really supposed to influence it by commenting on it especially at this crucial juncture?” The NFL chairman went on to talk about problems at many of its plants and poor offtake of its fertiliser. Maybe Sebi should start by training government officials on what constitutes price sensitive information.
Rupert Murdoch’s Star TV has quickly cobbled together an India company called Media Content and Communication Services Ltd (MCCS) to meet government regulations that require 74 per cent of its ownership to be Indian.
But when it comes to staffing the fledgling organisation, the broadcasting MNC is facing some star troubles. Apparently, top executives and journalists, including the channel chief Ravina Kohli are unhappy about having to quit Star and become employees of MCCS.
They are worried that being employees of the Indian outfit rather than the media multinational may gradually lead to a change in salaries, perks and other benefits. Media watchers are waiting to see how this internal battle pans out.
Reliance Infocomm may have finally hit bulls-eye with its Monsoon Hungama offer. The scheme, which allows people to walk away with a mobile phone and connection for just Rs 501, has created a storm and the grapevine says that it has already sold 6.5 lakh phones.
The company however is acting coy and refuses to disclose numbers. It has also checkmated the Telecom Regulatory Authority of India (Trai), which was at pains to keep the competitors viable by blocking what it called ‘predatory pricing’ by Reliance, and depriving consumers of lower phone tariffs.
The drastic reduction in the cost of going mobile has seen a host of small businessmen, traders, carpenters, salespersons and even vegetable vendors snapping up the phone.
Reliance’s hungama has put the competition in a tizzy. Rivals are busy drawing up comparison tables to show that the offer is either not so hot, or could be axed by the regulator for violating rules.
The Trai went into a huddle on Friday to examine if charges of violation of rules were true, but didn’t come up with anything substantial. Reliance has followed Trai’s tariff regulations, but has lowered the entry barrier by virtually giving away the phones for free and with a Rs 200 charge per month covering insurance and privileges, that may also cover the hand-set cost over time.
The crux of the offer is that a company with deep pockets is taking the risk by giving away expensive handsets. Corporate circles say that Reliance was already committed to buy the handsets at hugely discounted prices, and by holding on to them for much longer, it risks obsolescence. However, the company is silent about this too.
Conflict of interest?
The Institute of Chartered Accountants of India (ICAI) imposes several restrictions on the conduct of Chartered Accountants and bars them from advertising, soliciting business and under-cutting rivals.
Naturally, the standards demanded of ICAI’s president are those expected from Caesar’s wife, especially since the ICAI conducts the examination for CAs. It so happens that the current president of ICAI (or his wife) also runs Prime Academy, a well-recognised coaching institution for CA students at Chennai. Does this pose a huge conflict of interest? Well, scores of CAs certainly seem to think so. They have written several letters to top bureaucrats at the DCA to draw attention to their concerns. So far, the regulator has not reacted. At the same time, sympathisers of the president say that there is no violation of rules and no misuse of authority. Is that correct? Only an inquiry by the DCA can decide the issue.
TAILPIECE: By definition, a lottery is clearly a game of chance, but when on-line lottery’s masquerade as a news bulletin and invite people to ‘invest’ in them, who regulates its advertising? The Advertising Standards Council will take note of the problem only if someone complains. And if it doesn’t bother, who regulates such advertisements? -- Sucheta Dalal