oppn parties How To Use Public Money As Your Own

News Snippets

  • T20 WC: USA enter Super Eights as their last match against Ireland gets washed out. They were ahead of Pakistan in the points tally. Pakistan were eliminated
  • T20 WC: USA enter Super Eights as their last match against Ireland gets washed out. They were ahead of Pakistan in the points tally. Pakistan were eliminated
  • BJD leader and former Odisha CM Naveen Patnaik said that the criticism of his aide V K Pandian is "regrettable"
  • As more than 20 BJP ministers lost in the recent elections, the new Union cabinet will have many new faces from the party
  • Congress Working committee asks Rahul Gandhi to take up the position of Leader of Opposition in Lok Sabha. Gandhi says he will consider the request
  • RBI governor Shaktikanta Das said that gold was shifted to India as the quantum of RBI gold abroad had increased due to recent purchases
  • Delhi HC rules that submitting photographic evidence of adultery will not be enough, they will have to be proved as authentic in the age of deepfakes
  • A four-member panel will review NEET-UG results of 1563 candidates to check if they were given extra marks for exam time loss
  • Mamata Banerjee says her party will not join Modi's oath-taking ceremony. Also says INDIA bloc might stake claim to form government later
  • K C Tyagi of the JD(U) dropped a bombshell when he said that Nitish Kumar was offered the post of prime minister for switching sides. Opposition leaders rubbished the claim
  • This May was India's hottest month in 36 years says IMD
  • T20 WC: India take on Pakistan today. Telecast to begin at 8pm IST
  • T20 WC: Afghanistan stun New Zealand and Bangladesh win against Sri Lanka
  • T20 World Cup: Australia beat England by 36 runs. This spoils England's chances of making the playoffs as they have lost both their matches till now
  • Heat wave continues in the country as monsoon moves slow
G7 commits to promote India-Europe corridor
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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.