You need experience and knowledge of the other side to understand retail investor issues and conceive a strategy to cut through bureaucracy to find justice. Meet Vijay Trimbak Gokhale: his emails only tell you that he is an investor living in Mumbai’s distant suburb of Dombivli. But this activist-lawyer’s one-man crusade has notched up more successes than many investor associations. That is probably because he has been an investment banker for a decade and worked with ICICI and ABN Amro Mutual Funds. So, he knows where it hurts.
Gokhale’s journey began when UTI Mutual Fund (UTI MF) denied some money that was due to his friend following a wrong interpretation of the commission structure. The battle ended with 6,000 agents being paid Rs85 lakh. Since then, Gokhale has used email and the Right to Information Act (RTI) to make himself heard by SEBI, UTI MF, Hong Kong Bank and others on causes that he believes are just and fair. His emails are tough but polite and unstinted in their praise whenever it is due. He also believes in following “due protocol” for redressal, but is inevitably frustrated by systems that are callous and unaccountable. He finds that officials often adopt an approach of “confrontation, outsmarting or one upmanship,” and end up complicating matters instead of resolving them.
It is the rare and dogged few that under-take the long and arduous route to challenge the system and get results that benefit the larger investor community. For instance, Gokhale launched a protracted battle with UTI MF when it wrongly charged him an exit load. Finally, his money was refunded but he found the process humiliating. He then wrote to SEBI asking it to drop the entry/exit loads on MF bonus units and units allotted on reinvestment of dividend. After a long delay and after referring the issue to the Association of Mutual Fund of India, SEBI finally implemented the suggestion to the benefit of all investors.
The battle with UTI MF continued. In August 2007, Gokhale used the RTI act to seek information from UTI Asset Management Company (UTI AMC). It was turned down on the grounds that it was not a public authority. Gokhale went through the appeal process to the Chief Information Commissioner where he argued that 51% of UTI AMC was held by four public sector banks. It had also projected itself as a public sector entity in order to qualify for managing pension funds. On 6 August 2008, Gokhale’s logic was upheld. He also fought to get IFCI to pay interest on delay in redemption of Family Bonds.
Recently, he has taken up with SEBI the issue of conflict of interest between sponsors of a mutual fund and asset management company. He has also asked SEBI to bar MFs from “charging different Entry and Exit Load on High value investments” and to regulate MF agents. Media reports suggest that action on this front too is in the offing.
Regulators and officials don’t yet acknowledge his contribution and seldom respond to his unfailingly polite missives. But he remains unfazed and continues to strive for a “constructive dialogue” with the regulator. He wonders why SEBI does not use its powers over companies and market intermediaries to initiate suo moto action when glaring irregularities are brought to its attention. This creates the perception that SEBI is on the side of wrongdoers and not investors. There is an urgent need to change the mindset at all levels of SEBI so that “citizens” can approach it without the trepidation of being treated with “indifference, ridicule or disrespect”, he says, in a letter to the SEBI chairman CB Bhave. Hopefully, Gokhale’s wish will come true, but until then it is heartening to know that the power of one can also make a big difference. Vijay Gokhale can be contacted at [email protected]