life in financial markets: icici prudential mutual fund's opaqueness in disclosures

There are some players in the financial world have a negative record when it comes to transparency in disclosures mandated by regulators. I came across one such instance recently.

Mutual Funds (MFs) in India have to be registered with the stock market regulator, Securities and Exchange Board of India (Sebi). Sebi regulates the MFs through specific regulations for MFs. In these regulations, Sebi requires all MFs, among other things, to disclose once every six months their unaudited half-yearly financial results.

Now, these half-yearly results include giving of notes to accounts of which one relates to disclosing investments made by any scheme of the MF in debt/equity of a company where the company is holding more than 5% of the corpus of any of the MF's scheme. For instance, if company 'A' has invested Rs 5 crore in Scheme 'X' (say, a liquid fund) that has a corpus of Rs 100 crore and if any of the MF's scheme has invested in a debt or equity instrument of company 'A' then the MF has to make two disclosures:
– name of the scheme in which company 'A' has invested (and where it holds more than 5% of the corpus), and
– names of schemes that have invested in company A's debt/equity and exact scheme-wise details like cost of investment during the six month period and the outstanding market value of the investment at the end of the period.

For the six-month period ended September 30, 2007, the MFs made their unaudited financial
statements disclosures towards the end of last month (October). I went through most of them and discovered that ICICI Prudential Mutual Fund was perhaps the only MF that was acting smart with the disclosure I described in the previous paragraph. It was not giving the name of its schemes in which the companies (like 'A' referred to in previous para) were holding more than 5% of corpus. Also, while it gave gave scheme-wise detail of the outstanding market value of the investment as on September 30 it did not give details of the cost of investments made from April 1 to September 30.

ICICI Prudential clearly is trying to hide something by not disclosing the details in their entirety. And, I think, it is the second or third largest mutual fund in India currently. Sebi, as usual, is sleeping, not interested in enforcing their own regulations on the big players in the stock market except against those where its chairman or member would have a vested agenda to do so.

life in journalism: wily PR machine

First of all the official full form of PR should not be Public Relations. They should change it to Press Relations because interaction with the press (media) is the only thing I encounter them doing. They might argue that they are reaching out to the Public through the Press but that's ingenious because they can reach out to the Pubic in a guaranteed manner through advertisements. The only relation the PR industry tries to cunningly build is with the Press and not with the Public.

Anyways, thats not the thrust of this post. What I am sharing now is the sheer frustration a journalist is faced with to handle when dealing with PR people. They bombard you emails with photo/lword file attachments with embedded logos (these emails are generally more than 500kb-1mb in size) without first checking with us whether we want to receive them all or some only. In addition to email, some send faxes to us, again without checking with us whether we are ok or not with this environmentally-unfriendly use of paper. Just today, I received an email as well a fax on half-yearly result of 3i Infotech by Phiroza Choksi of its PR agency, R&PM Edelman. When I called her up to tell her not to send a fax as the email was enough she started making stale excuses of other journalists wanting it. I had to tell her that some journalists wanting to receive an email+fax DOES NOT mean that ALL journalists want it that way and that she should have done her job of calling each one of us to find out our individual preferences. Thats their job. The sooner so-called professionals working for the large PR firms realise the better it will be for their clients. Their clients do not know the cost of irritation and harassment caused by their PR firms to journalists.

Then there were recent examples of PR companies sending me large-sized email attachments that were not sought for by me nor was I asked before-hand. I have a problem with any attachment that is an image file of more than 100 kb in size. Or it could be a word file but with embedded logo images of the companies that jack up the file size by 10-20 times. So if a word file with just text would be just 30 kb in size by adding the tiniest of logo image file inside it would jack up the file size to 300-600 kb in size. Irritating to say the least because why should we journalists (and in particular magazine journalists like me) care what the logo of the companies look if if we are not particularly seeking it for publishing purpose. Also photo files attached will have some official of the client company cutting a ribbon here or lighting a lamp there over an inauguration ceremony, or just the photo of the official. Tell me, what am I to do with these photos?

The most notorious PR company that does this to me again and again is Perfect Relations whose senior image executive, Heena Uttamchandani, keeps sending me large-sizes attachments of their client, Multi-Commodity Exchange of India. Recently, when it happened it was the third time and I had already called her on the earlier two occasions to tell her to stop this practice. Another PR company with whom I had this problem recently was again R&PM Edelman but thankfully after telling them once they have not yet repeated it. My fingers are crossed!

Why can't PR companies officials just do some hard work and prepare different emailing and fax lists of different journalists with different preferences? It does not involve rocket science. Just some hard, honest work will do. Will the lazy, inefficient and inept among the PR companies wake up, please?

life in general: noise pollution all around

Drill and shrill! Deafening, nerve-grating sounds! That is the ugly reality of urban India that supposedly has the most educated industrialists, businessmen, affluent citizenry. In Bombay, noise levels are at their highest noise. Be it the daytime-&-nighttime heavy-duty construction machinery of builders or the tile-cutting drill machines used in affluents' homes or society compounds. Or be it is the loud prayer calls emanating from loud speakers in mosques, or the relentless clanging of temple bells. Or be it the annual torture of nerve-grating bombs during Diwali.

But they are fast asleep -- not just the police or municipal authorities but also the high-income citizenry -- oblivious to the serious harm they are causing to everyone's health by their actions (citizens) or lack of it (enforcement of the noise pollution laws by the authorities). Till they wake up, those who don't indulge in these things will have to stay awake on account of the noise pollution. How much more great can high-class urban India get?

life in financial markets: number game

In terms of number of orders disposed off, the appellate authority to the orders passed by the Securities and Exchange Board of India, the Securities Appellate Tribunal (SAT), is catching up after a very sluggish period in the first nine months of this year. In October, SAT, has passed orders in about 42 cases of appeals against Sebi orders, more than the number (40) of orders it passed in the entire nine month period from January to September.

The problem for the market is that it would not know the nature of the 42 October orders. On Sebi's website where SAT orders are posted in addition to Sebi's own orders, only four SAT orders are seen for the month of October and none till 4 November. "Whatever soft copies of orders we receive from SAT we upload it on our website," says a Sebi official. "Maybe there are delays or technical problems causing this," says a SAT office official.

This year has unusually seen the number of SAT orders subdued as compared with previous years (see table below). Therefore, the October surge holds significance. Provided, of course, all of them get uploaded on Sebi's website anytime soon.

SAT orders' history
	No. of orders passed
2007	44a
2006	279
2005	135
2004	112
2003	34
a - till October

The SAT orders are important because they tend to highlight how many Sebi's orders are upheld fully, partly or not at all, and give a rough indication of Sebi's enforcement efficiency levels. Data released by Sebi last month showed that out of 283 Sebi orders that were appealed against and on which SAT ruled in 2006, only 131 were upheld fully, 101 partly, 29 not at all and 22 were remanded back to Sebi for re-working.

life in general: pakistan’s martial law, problems, hypocrisies et al

So, Chief of the Army Staff, General Pervez Musharraf has imposed martial law in Pakistan today. But, in my view, he was already by and large a one-man dictator. But whatever little democratic rights the people of Pakistan had now stands threatened. The judiciary has been suspended. I just hope the best for the common Pakistani citizen who would face the most problem on account of this new development.

The development also exposes the machinations behind US government’s long-standing support to Musharaf. The US government has of late been harping about the lack of democracy in Iran. But in supporting Musharaf it has allowed democracy to be subverted n Pakistan. The US government will not genuinely oppose Musharaf’s imposition of martial law/emergency and instead harp on Musharaf’s endeavour to take on the Taliban in north-west provinces of Pakistan. Surely, Musharaf’s action today wouldn’t have happened without a green signal from US government.

And this is just the latest example of American government’s hypocrisy. The last 30 years has been peppered with many more such examples.

Another aspect of today’s development that raises strong suspicion of fraud in my mind is the news of Benazir Bhutto being in Dubai and coming to know of Pakistan’s emergency when she was boarding a plane to Pakistan. This appears very shady. She came to Dubai 3 days ago knowing very well what was going to happen in Pakistan. One needs to remember that Bhutto is also US government’s favorite.

India, where I live, will as usual hem and haw. It will toe the US line since it has surrendered itself to US interests. India’s record with other dictators in the region is no better – Burma being the most prominent one. India’s right-wing party, the BJP, will criticize Pakistan for its lack of democracy when the most shameless quasi dictatorship is going on in the Indian state of Gujarat where its chief minister Narendra Modi is in power.

India’s left party will also criticize Musharaf easily forgetting that their own Chief Minister in West Bengal state is doing deeds like shooting villagers which would make a Musharaf proud.

The people of the world will, in the meanwhile, pray for sanity to prevail.

Here's a look at the excuses Musharaf used in his statement of Emergency:

from
http://www.app.com.pk/en/index.php?option=com_content&task=view&id=20109&Itemid=1

Text of ‘Proclamation of emergency’

ISLAMABAD, Nov 3 (APP): Following is the text of the Proclamation of Emergency declared by Chief of the Army Staff General Pervez Musharraf on Saturday:
“WHEREAS there is visible ascendancy in the activities of extremists and incidents of terrorist attacks, including suicide bombings, IED explosions, rocket firing and bomb explosions and the banding together of some militant groups have taken such activities to an unprecedented level of violent intensity posing a grave threat to the life and property of the citizens of Pakistan;
WHEREAS there has also been a spate of attacks on State infrastructure and on law enforcement agencies;
WHEREAS some members of the judiciary are working at cross purposes with the executive nd legislature in the fight against terrorism and extremism thereby weakening the Government and the nation’s resolve and diluting the efficacy of its actions to control this menace;
WHEREAS there has been increasing interference by some members of the judiciary in government policy, adversely affecting economic growth, in particular;
WHEREAS constant interference in executive functions, including but not limited to the control of terrorist activity, economic policy, price controls, downsizing of corporations and urban planning, has weakened the writ of the government; the police force has been completely demoralized and is fast losing its efficacy to fight terrorism and Intelligence Agencies have been thwarted in their activities and prevented from pursuing terrorists;
WHEREAS some hard core militants, extremists, terrorists and suicide bombers, who were arrested and being investigated were ordered to be released. The persons so released have subsequently been involved in heinous terrorist activities, resulting in loss of human life and property. Militants across the country have, thus, been encouraged while law enforcement agencies subdued;
WHEREAS some judges by overstepping the limits of judicial authority have taken over the executive and legislative functions;
WHEREAS the Government is committed to the independence of the judiciary and the rule of law and holds the superior judiciary in high esteem, it is nonetheless of paramount importance that the Honourable Judges confine the scope of their activity to the judicial function and not assume charge of administration;
WHEREAS an important Constitutional institution, the Supreme Judicial Council, has been made entirely irrelevant and non est by a recent order and judges have, thus, made themselves immune from inquiry into their conduct and put themselves beyond accountability;
WHEREAS the humiliating treatment meted to government officials by some members of the judiciary on a routine basis during court proceedings has demoralized the civil bureaucracy and senior government functionaries, to avoid being harassed, prefer inaction;
WHEREAS the law and order situation in the country as well as the economy have been adversely affected and trichotomy of powers eroded;
WHEREAS a situation has thus arisen where the Government of the country cannot be carried on in accordance with the Constitution and as the Constitution provides no solution for this situation, there is no way out except through emergent and extraordinary measures;
AND WHEREAS the situation has been reviewed in meetings with the Prime Minister, Governors of all four Provinces, and with Chairman Joint Chiefs of Staff Committee, Chiefs of the Armed Forces, Vice-Chief of Army Staff and Corps Commanders of the Pakistan Army;
NOW, THEREFORE, in pursuance of the deliberations and decisions of the said meetings, I General Pervez Musharraf, Chief of the Army Staff, proclaim Emergency throughout Pakistan.
2. I hereby order and proclaim that the Constitution of the Islamic Republic of Pakistan shall remain in abeyance.
3. This Proclamation shall come into force at once.”

life in general: abysmal service standards in india of telecom & broadband companies

I do not know about the levels in other countries but, here, in India, the service standard levels of telecom and broadband companies are very low. This, I say, based on my experiences as a mobile phone customer of Vodafone (earlier called Hutch), and a broadband subscriber of Tata Indicom and Sify.

The most jarring note is the very low competency of the first-level customer service staff -- whether on phone or at their physical service centres. If your problem is even a tad beyond a basic problem (like bill not received or opting for charged-for new features) then you will encounter sheer incompetencies and disregard for your time.

Then there is the issue of inflated bills. Recently, Vodafone charged me for 35 Mb interent usage(around Rs 200) in a month when I was already a subscriber to that internet tariff of theirs (fixed Rs 500 per month) that provided for 500 Mb free usage .

I don't blame the front staff really. It is really the vice-presidents and other senior managers in the customer service divisions of these companies who are oblivious to their responsibility of ensuring adequate training to the front staff and then actively monitoring them on a daily basis. They are the ones who need to be taken to task. But who can do that? Their bosses? That is, the CEO or MD? Problem is, more often than not, these CEOs or MDs are also not interested in monitoring their vice-presidents or other senior managers.

The above description might even hold good for most of the rest of the corporate world.

life in general: two videos of my july visit to village on narmada river shoreline

This is a follow-up to my 28 July 2007 post on my visit to a village in Madhya Pradesh on the shoreline of Narmada river with regard to the issues surrounding the huge Sardar Sarovar Dam on the river and consequent displacement of villagers, submersion of villages in water and diversion of dam water to corporates and industries at cheap rates.

In that post, among other stuff, I had given a link to a video I had taken during my visit. In this post, I am giving link to two other videos taken during my visit that I have been able to upload to YouTube. One is a conversation I had with an elderly lady (Maushi) of Eklara village near the Narmada shoreline and the other is a general video of a flock of goats and three children.

These videos give a visual idea of what kind of villages, villagers, village life, animal life will get uprooted when they come under submersion due to the ever-increasing height of the Dam.

life in financial markets: hectic!

Its been two weeks since my last post. Things have been pretty hectic at my workplace. As a journalist writing on the financial markets there has been little breathing space with the volatile action in recent days and weeks.

Will endeavour to update here my thoughts, & contributions to Business World (the magazine for which I write) on the financial markets.

life in journalism: cowering before a police state?

From whatever limited I hear, see and sense around me in Indian journalism I have no choice but to say that a vast majority of editors (editor-in-chiefs, executive editors, deputy editors, chiefs of bureau etc) of mainstream newspapers, magazines and television news channels have, in the last 10 years, become almost completely silent on the various dangerous operational biases (anti-minorities, anti-poor, anti-labourer, anti-farmer etc) of the police of most states in India. There is a eerie silence every day in the media on the police’s machinations.

Some (or many) journalists who write on issues related to police, crime, civil, environmental and social issues do not mind this and go along, binding themselves completely to sources in police who provide them with selective information on various cases.

But there are journalists who do not want to be puppets of the police administration. They keep trying their best in their work despite being actively discouraged by their editors and ugly pressures from the police force. Hats off to them. For instance, Tehelka weekly newsmagazine does regular stories on the police (although I find Tehelka goes soft stories on business and stock markets). To take as an example, in their latest issue (13 October 2007, that would have hit the stands on 6 October), there are two stories exposing police machinations. One is on the Delhi police's Special Cell yet-again dubious role in an important investigation and the second and the other is on police-criminal nexus in Tamil Nadu.

life in general: excerpts (part 1) from a citizen panel's report on bombay's communal violence of 1992-93

I have been born and brought up in Bombay. In 1992, at 22 years of age, I was working as an executive in a financial services company in Bombay. At the end of that year, in the aftermath of planned demolition of a mosque in Ayodhya (in Uttar Pradesh state in north India) by Hindutva parties (BJP, VHP, Shiv Sena, Bajrang Dal & RSS), my city was rocked by crimes against humanity in the name of religion. I clearly recollect how utterly shocked and deeply hurt I was by what I saw and read at that time. Similar violence also took place in some other parts of the country like Surat in Gujarat.

Sometime soon after the communal violence against minorities subsided a citizens' group headed by former high court judges S.M.Daud and H.Suresh came out with a report titled 'The People's Verdict: An enquiry into the Dec '92 & Jan '93 riots in Bombay' and commissioned by the Indian People's Human Rights Tribunal. I present below excerpts from this report:

............
THE FINDINGS

Having taken an overall view of the two bouts of rioting in different areas of Bombay, we have to now address ourselves to various questions listed in the terms of reference.

CAUSES

A Century Old Precedent

The December 1992 and the January 1993 riots came almost a century after the Bombay riots of 1893, An account of the last century's riots is found in the "Economic and Political Weekly" dated January 1993, pp. 182-187. On that occasion also, rumours and incendiary writings had excited passions on both sides. This followed from a pamphlet entitled "The Dreadful Bombay Riots" ("Mumbai ma thaelum bhayankar hoolad") published for the "Cow-Protection Society", which could well compare with the outpourings of the 'Saamna' (the Shiv Sena mouthpiece), the 'Navakal' (a Marathi daily), not to speak of the 'Organiser' (the mouthpiece of the RSS). Published on August 24 1893, only 13 days after the first outbreak of the riots, the Gujarati pamphlet contained verses "praising the actions of rioters for what they had done; the rioters were not riots but brave fights undertaken by Shivaji's warriors; the participants not rioters but soldiers who had fought like men.”

Incidents had taken place all over the city then, as they had in our present limes. As in those days, there were numerous instances when members of one religion protected members of the other...

Historical Background : A Survey

Even prior to the departure of the British from India, communal polarisation had been used by individuals and groups as a means to attain a following amongst the masses… and through such a route, attempt to gain power. The British policy of divide and rule enabled such groups to legitimise their aspirations and actions. In course of time, there arose political formations brazenly parading their parochial platforms. The Hindu Mahasabha, the Muslim League, the Akalis – all these and many more splinters made no secret of their striving for the advancement of a section of the people to the exclusion of others. Thus the Hindu communalists advocated the supremacy of the Hindu faith, traditions and aspirations. The Muslim was seen as a polluting element in the polity and his subjugation if not elimination was openly advocated. In the same way the Muslim communalist spoke of a mythical past when Islam and its adherents had brought glory to various lands including India.

...Thus began a contest between the communalists of different faiths and even within the same faith. ...
........