oppn parties How To Use Public Money As Your Own

News Snippets

  • Government data placed in Parliament shows a sharp decline in job creation under its flagship employment generation schemes
  • The government is working to amend the Aadhar Act to make it possible for the Aadhar to be linked with the Voter's ID. Election Commission will simultaneously be empowered to link the two
  • Tapas Pal, former TMC MP, dies of cardiac arrest in Mumbai. He was questioned for his alleged involvement in the Rose Valley scam and gained notoriety for his rape remark in 2014.
  • Bypoll to panchayats in J&K, scheduled for March in eight phases, postponed due to security concerns.
  • Supreme Court says that overhead power transmission lines going through the Desert National Park in Jaisalmer in Rajasthan must go underground to save the Great Indian Bustard and the Lesser Florican
  • Pakistan not placed in FAFT blacklist but kept on the grey list with warning
  • The government is expected to announce duty cuts and other measures to combat business disruption due to coronavirus outbreak in China
  • South-East Asia loses its charm as a tourist destination after the coronavirus outbreak in China, airfares dip to new lows
  • DMK leader RS Bharathi says media is running like the red light area in Mumbai
  • A Delhi court issues fresh warrants for the hanging of the Nirbhaya convicts. Fixes the date for March 3
  • Supreme Court appoints a mediation team to ask Shaheen Bagh protestors to avoid blocking the road and shift to another venue
  • Supreme Court says peaceful protests cannot be denied in a democracy but also says that a balance must be struck as protestors cannot be allowed to block roads
  • Telcos pay part of their dues for AGR after the bashing from the Supreme Court
  • Debbie Abrahams, a Labour MP from UK, who was critical of India's action in Kashmir, not allowed to enter India. She was deported to Dubai from the Delhi airport
  • Sidharth Shukla wins Big Boss 13
Former principal secretary to PM Modi, Nripendra Mishra, appointed to head the temple committee of the Ram Janambhoomi Teertha Kshetra Trust
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How To Use Public Money As Your Own

By A Special Correspondent

Whom do you trust with your money nowadays? India is famous for over-regulating all its sectors and having a watchdog for each one of them. Yet scams after scams surface with unfailing regularity to bring down investor confidence to its lowest.

The latest to join the bandwagon of those who treat public money as their own is Karvy Stock Broking Limited. Market regulator Sebi has banned the company from doing fresh business for allegedly illegally using the money and securities belonging to its clients to fund its real estate arm, Karvy Realty India Limited. Karvy Stock Broking has over two lakh clients.

The matter came to light after the National Stock Exchange did a routine inspection of its books. It reported that Karvy Stock Broking had transferred a sum of Rs 1096cr to Karvy Realty by misusing the power of attorney given by its clients to make deals on their behalf.

This is a shocking matter. If the allegations are found to be true, Karvy not only violated provisions of the Companies Act, but it also cheated its clients and misused the trust they placed in it. It will therefore face punitive action under the criminal laws in addition to the other applicable laws.

Earlier, NBFCs came under the scanner when IL&FS went under. In that case, the role of the chartered accountancy firms and rating agencies was also found to be not above board. Then PMC Bank and DHFL went bust. Again, the role of those who are mandated to raise questions in the first instance was found to be suspicious. It seems that the Indian financial sector is under siege and no one knows how to set things right.

This brings us to the main question. Why do the plethora of rules and regulations fail to prevent these frauds? Why are they always discovered when the deed has been done? Why do we not have inbuilt checks to prevent them from taking place in the first case? If chartered accountants do not alert the regulators about divergences in company accounts, who will? If rating agencies do not provide the correct picture of a company's health to the investors, who will? It seems that despite all systems being in place, the Indian investor is being taken for a ride and is more likely to lose money by investing after getting incorrect or cooked-up information.