oppn parties How To Use Public Money As Your Own

News Snippets

  • Kapil Sibal leaves Congress, fills nomination for Rajya Sabha with SPs backing
  • RBI bans 5 NBFCs as it cracks down on e-lending platforms
  • Hindustan Motors to tie-up with Peugeot to bring out a redesigned version of the iconic Ambassador
  • GST Council to defer rate rejig due to inflation
  • Centre to sell 29.5% in Hindustan Zinc at an expected price of Rs 38000cr
  • Stocks remain negative on Wednesday: Sensex loses 303 points to 53749 and Nifty 99 to 16025
  • IPL: RCB beat LSG by 14 runs and end their dream run. Rajat Patidar scores a brilliant 112. RCB will take on RR to decide who goes through to the finals
  • Delhi Additional district judge Nikhil Chopra says there is no legal right for people seeking to worship deity inside Qutab Minar, says it survived 800 years without worship so "let it survive like that"
  • Punjab chief minister Bhagwant Mann sacks state health minister Vijay Singla over corruption charges. Singla was later arrested by the ACB
  • Protestors burn the house of Andhra minister P Viswaroop and MLA Satish Kumar over renaming of Konaseema district as B R Amberdkar Konaseema
  • Gyanvapi: Varanasi district judge decides to first hear the 'maintainability' plea filed by mosque management
  • Delhivery and Venus Pipes shares list at premium of 10% and 8.7% respectively even when market sentiment was down
  • In a bid to cool edible oil prices, Centre allows duty-free imports of 20 lakh tonnes each of crude sunflower oil and crude palm oil per annum this year and next
  • Centre caps sugar exports to ensure availability of stocks in the domestic markets to cool prices
  • Stock markets get the jitters as RBI signals rate hike and government moves in to control inflation: Sensex tumbles by 236 points to 54052 and Nifty goes down by 89 points to 16125
Yasin Malik of JKLF gets two life terms in terror funding case /////// Kashmir TV artist killed and her nephew injured in a terror attack in Hushroo in Budgam district
oppn parties
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.