When the Securities and Exchange Board of India (Sebi) moves to a swank new office at Mumbai’s Bandra-Kurla complex, it will start with a clean slate and little institutional memory. Pratip Kar, the last senior executive who has been with the organisation since its inception, has resigned. Dharmishta Raval, another ED who was there from the start, quit a couple of years ago to practice law. Interestingly, neither of them has left for fat salary in an MNC or private sector company. Kar is leaving for ‘personal reasons’ and emphatically denies he is joining Reliance (as speculated by a leading newspaper). What does this say about the government’s ‘selection’ process which remain unconcerned about the growing unattractiveness of low-paid government jobs that now provide neither challenge nor growth? Consider Kar’s example. After 12 years as a competent Executive Director who reported directly to the Chairman and helped frame and draft regulation in Sebi’s development phase, he now reports to three whole-time Members at a time when basic regulation is in place and the main job is market supervision and tracking new developments. Each of the three Members knows far less about the capital market and the nuances of its regulation than Kar does. They were appointed to Sebi on retirement from Income Tax, central bank and a government bank respectively. No organisation with a decent HR policy would allow such a situation to develop in connection with competent officials, or allow them to be hounded by a specious vigilance inquiry (in which he was exonerated) as Pratip Kar was. However, government remains blind to the massive shortage of talent and experience that corporate India is grappling with. Its appointment committees are superficial, easily influenced and focussed on creating post-retirement sinecures. The hush-hush extension in the retirement of Sebi Members to 65 years is an example.
The recent campaign against the government’s attempt to amend the Right to Information (RTI) Act and remove ‘some’ file notings from the purview of public information has an interesting sidelight. The most aggressive protesters were leading NGOs, but this time some of the RTI spotlight has turned on them too. Activist Veeresh Malik says that the RTI Act is very clear that information seekers must adhere to its provisions themselves. So far, most NGOs would not meet the disclosure standards that they demand from government, nor would many of their financiers and backers. Specifically, Malik charges a few aggressive NGOs, substantially funded by foreign donor foundations, multi-lateral agencies and even foreign governments seeking defence-related information, when in fact the RTI statute applies only to Indian citizens? So far, only one organisation has responded to this demand, that too only with an assurance about adherence.
Last week a newspaper reported that ICICI Bank, lender to the always controversial Pramod-Vinod half of the Mittal steel empire, was trying to force a merger between the group and Jindal Steel. Within hours, senior Mittal group officials were on TV denying the move and alleging ulterior motives. More importantly, they said that the company will return to the black in six months. Sources say the facts are exactly the opposite. The Mittals are the only steel major that squandered an opportunity to ride the commodity boom and turn profitable. Secondly, they are facing a serious investigation under the Foreign Exchange Management Act for transfer of funds abroad and are grappling with excise inquiries. A couple of years ago, an investigation by the Serious Frauds Office was stayed by the courts. All told, the company is hardly on the recovery path as claimed by management. Interestingly, Sebi officials have already swung into the act of verifying Ispat’s claims and the implications of their statements under Clause 49 of the listing agreement.
An ‘international’ network-marketing or chain marketing scheme called GoldQuest is busy ensnaring people across India; especially those who can shell out Rs 30,000 to purchase numismatic coins procured from international mints. Unlike previous local chain schemes, GoldQuest claims an ISO 9001:2000 certification, ‘government registration’ (Goldquest International India Pvt Ltd) and its communications person, Ms. Preetha says that ‘‘Mrs Nalini Chidambaram was engaged by the company on the legal side’’. What lures people to this company is not the ostensible value of limited edition coins but the usual lure of introducing two new people to the scheme, who in turn introduce two others to set off a chain that earns ‘lakhs’ of rupees for the original introducer. The company has a detailed website which is silent on the ‘Ponzi’ element of the chain, as well as some tall claims made at ‘marketing seminars’ including tales of riches quoted to potential members. Unlike similar schemes of the past, which vanished over time after duping people, this one claims an international standing. ‘‘It is a part of the Qi Group with its head office at Hong Kong. The Multi Million Qi Group has offices in 22 countries, and employee strength of 400 worldwide’’. Whatever its claims to legitimacy, people must know that GoldQuest operates outside any formal regulation or supervision.