A few good people, like T.S.Krishnamurthy continue to shine, while scamster Ketan Parekh is set to go abroad
By Sucheta Dalal
Mallika Sarabhai comes from an illustrious family whose contribution to India is unquestioned. Mallika herself has been a cultural ambassador of sorts for decades. Yet, a single charge against her was enough for the Gujarat court to ground her to India and ask that her passport be deposited with the police.
Contrast this with Ketan Parekh. Acknowledged as the chief architect of Scam 2000 by the Joint Parliamentary Committee, he admitted to a liability of Rs 888.25 crore to Madhavpura Mercantile Cooperative Bank (MMCB) alone; he also owes over Rs 100 crore to Bank of India and more to sundry market operators. In the MMCB case, he was granted conditional bail based on staggered repayment commitment.
Although the repayment assurances were unrealistic, they were not questioned. Predictably, he began to default from the time the very first payment was due; yet, there has been no attempt to cancel the bail. The loot of MMCB assets induced by Ketan Parekh had a domino effect on Gujarat’s cooperative banking sector, causing lakhs of investors to lose their entire savings. Yet, last week, Ketan Parekh was granted even more freedom. The High Court in Mumbai generously allowed him to go abroad for a month, after the Central Bureau of Investigation (CBI) raised some weak objections in court. The small matter of over Rs 1,000 crore that he owes to MMCB and others has apparently slipped the mind of the judicial system.
Old Private Banks are the flavour of the capital market these days as potential takeover targets, but some like Dhanalakshmi Bank are being torn apart due to differences between the management and officers. A couple of months ago, the bank removed a proviso permitting officers to get a two-year extension in certain cases. When the officers union protested, they were all transferred to different locations. This led to a lightening strike by bank officers on April 10, protesting the action. On April 12, the bank management used the strike to issue termination notices to the union leaders.
The officers have been doing their share of finer-pointing and now wonder if that has led the management to harden its stand. They had drawn Reserve Bank of India’s attention to the fact that Dr. Rajamohan Rao of United Telecom, who now controls the bank, had been named in a First Information Report filed by the Central Bureau of Investigation in the infamous bribery case involving officials of Motorola, Bharat Sanchar Nigam and Mahanagar Telephone Nigam. Just as in the case of Bank of Rajasthan, the RBI neither reacted nor responded.
Making a difference
If few good people make a difference wherever they go, and Chief Election Commissioner (CEC), T.S.Krishnamurthy is one of them. With elections around the corner, his every utterance makes headline news, but he brought about some radical changes even during his days as Secretary, Department of Company Affairs (DCA).
To him goes the credit of using the Companies Act Amendment exercise to pool investors’ dividends lying unclaimed with companies in the Investor Education and Protection Fund (IEPF). Unfortunately, after his exit, the IEPF hasn’t quite got into its stride.
As DCA Secretary, Krishnamurthy was one of the few senior bureaucrats who remained in touch with people and was often willing to slice through the red tape and formality and force defaulting companies to repay fixed deposits in special cases like those of needy widows or retired armed forces officers. Ironically, Krishnamurthy was reluctant to go to the Election Commission. He felt his background would be more useful in dealing with the corporate world; and didn’t hesitate to say as much to the then Cabinet Secretary. But when he looks back on his career, it is his role and conduct as CEC that will probably be remembered the most.
Fighting for control
The accounting world continues to have its ups and downs. Industry sources say that A.F.Ferguson, a big name in the business, is actively looking at the possibility of merging with one of the Big Four global accountants. So far, it has talked to two out of the four, and my sources say that one of them is already out of the picture. Meanwhile, N.M.Raiji, another big firm that did a lot of business with the Tata Group, is being torn apart due to incessant infighting.
Insiders say that ever since the exit of Arun Gandhi last year, bitter quarrelling between the partners has been worrying investors and employees over the firm’s future. One investor has even written to a top software company to remove the company as external auditor because the fighting would affect its performance.