SEBI should not become another Kapil Sibal

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SEBI trying to control journalists

SEBI trying to control journalists
SEBI trying to control journalists | Source

SEBI trying to control journalists


SEBI planning to curtail freedom of speech?

SEBI is going to tamper with the freedom of speech. If news reports are any indications, SEBI is all set to control financial analysts. SEBI wants to ensure that analysts are not influenced by their company’s i-banking division. Till now, there is no news about what exactly SEBI will be doing in order to control the analysts. But there are reports that SEBI will attempt to keep i-banking officers from influencing the analysts. But how will SEBI do it? In any financial services firm, there are many divisions. One of the divisions is investment banking division or shortly called i-banking division. Another division is research & analysis division. It seems that SEBI wants research division of a firm not to be influenced by the i-banking division. This is as difficult to achieve as to ensure that husband is not influenced by the wife in a family.

Is it possible to separate husband and wife in the same house?

Of course, you can enact strict rules to prevent husband and wife from interacting in a family. You need to post two or three police constables inside every house to watch the movements of the husband and wife. These police constables should prevent husband and wife from meeting, conversing and sleeping in the same room. Their activity should be monitored twenty four hours a day continuously for all the seven days of a week and all the weeks of a month. If this is done with vigil, you can prevent husband being influenced by the wife even though they belong to the same family and live in the same house.

SEBI has to monitor even their movements in the toilets

In a similar manner, SEBI needs to physically post police constables so that the officers in the i-banking division do not have any contact with the research staff. Their movements have to be watched with eternal vigilance. Even what they do inside the toilets need to be monitored. Apart from their physical movements, their phone conversations and e-mails need to be monitored carefully. Then, these officers, after leaving office, should be followed behind physically to find out where they are going and what they are talking with others. The i-banking officials could pass on communication to their research division counterparts through their friends. Therefore, the friends of the research officers and i-banking officers should also be monitored.

Kapil Sibal is a fool

All these things will involve lot of expenditure. One may consider all these things as foolish. But if you carefully analyse, SEBI would have got this idea from Kapil Sibal who wants to monitor each and everything that is written in the internet. Sibal wants a strict censorship through which unwanted contents could be censored before publication. Millions and even billions of contents are posted in the internet everyday. For monitoring all these contents, you need the entire population of India to become policemen. If this does not sound foolish and impractical, why should SEBI’s proposal to separate i-banking officials and research wing officials sound so?

SEBI will not allow any criticism of Sonia Gandhi

Portfolio managers, fund managers, asset management companies, rating agencies and other services all come under the watchdog SEBI’s powerful scanner. But financial analysts are not covered. Now if SEBI tries to cover their activities also, what will happen? First of all, SEBI will strictly ban any articles criticising its functions and questioning its decisions. All financial analysts should appreciate and applaud SEBI’s actions and decisions. They should appreciate SEBI sky high. They also should not criticise Prime Minister Manmohan Singh, Congress President Sonia Gandhi and the Prince Rahul Gandhi. No analyst should speak about 2G spectrum scam. All analysts should endorse Kapil Sibal’s view that the government has not lost even a single paise in the 2G Spectrum scam. Analysts, while discussing about Indian economy, should refrain from mentioning various scams like the Commonwealth Games scam, Adarsh Housing scam etc. But the analysts can talk freely about the scam in which the former Karnataka BJP Chief Minister B S Yeddiyurappa is involved. SEBI will welcome such a writing and analysis.

SEBI following the footprints of Kapil Sibal

It is reported that SEBI also wants to monitor the analysts’ trading activities to find out whether they are buying or selling shares which they have recommended to buy or sell. But if an analyst buys the shares of a company he has recommended through his friend, what will happen? How will SEBI find it out? It is easy. SEBI is likely to take a list of all the friends and relatives of an analyst. It will post police constables at the residences and offices of all these friends and monitor their activity. Again, SEBI seems to have taken the cue from the intelligent minister Kapil Sibal who has found out a method to monitor the billions of content posted in the web every day.

Muslim cleric is concerned about Muslim women’s shopping habits

Recently a news item came that an Islamic cleric has instructed Muslim women not to see, buy or touch certain types of vegetables and fruits like cucumber, carrot and banana among other things. The reason given by the Muslim cleric was that the Holy Koran banned Muslim women from touching or seeing these fruits and vegetables whose shapes may corrupt the women’s minds and drive their minds towards thinking unwanted things. I do not know whether the Holy Koran has banned these fruits and vegetables for the Muslim women, but it should be so as otherwise the Muslim cleric would not have preached against these fruits and vegetables. I am not questioning the correctness of the cleric’s instruction to Muslim women as it is a sensitive religious matter and a non-Muslim like me cannot offer any comments about it. But my question is how is the cleric going to monitor the Muslim women to find out whether they are seeing, buying or touching these fruits and vegetables?

Muslim cleric should have taken an inspiration from Kapil Sibal

Obviously the cleric can deploy two or thee police constables inside every Muslim women’s house for twenty four hours and check their activities. More important is that these constables should follow the Muslim women to the vegetable or fruit market and check up with alertness what they are buying there. Even though the cleric could have got the inspiration from the Holy Koran, he should have equally got inspiration from Kapil Sibal also.

Let the readers decide

Fun apart, there is truth in SEBI’s contention that the financial analysts indulge in exaggerated or even false reporting while writing about an analytical report of a company. Take for example a company approaching a finance company’s i-banking division for managing its IPO. In order to boost market sentiments and people’s confidence in the issue, the financial analysts of the same finance company working in the so called ‘research’ division write exaggerated reports about the worth of the share which gets published in the form of the company’s reports, newsletter etc. These articles are even published in important newspapers under different names. In other words, these articles in the newspapers are ‘planted’ articles. I don’t say that all the newspapers are corrupt and doing like this. There are newspapers that write about truth also. It is up to the readers to differentiate chaff from the grain.

SEBI should not lower itself to the level of Kapil Sibal

SEBI’s thinking that this should be prevented is quite understandable and to be appreciated. But it should not be foolish like Kapil Sibal and lower itself into a derogatory position and a mocking stuff in the eyes of the investors. What SEBI can do is that it can insist that all articles written by financial analysts and published in newspapers and newsletters should carry details about the analyst like his current designation, the company where he is working, his contact email etc. Then the investors can distinguish whether the article carries any vested interest or not. But even this move is bound to fail if the financial analyst writes the article in his friend’s name who may be a freelance journalist. SEBI’s instruction to present the financial analyst’s details along with the article will be akin to printing the statutory warning on the labels of cigarettes and alcohols and will not carry any usefulness.

Questionable decision

In 2006, SEBI banned Mathew Easow, Chairman of Mathew Easow Research Securities from recommending any investment in the public media because of the fact that Mathew Easow himself took an opposite trading position in a few stocks. In other words, Mathew Easow acted as a contrarian to what he himself had recommended. I do not know whether Mathew Easow challenged SEBI’s verdict in a court of law. But in my opinion, banning a person from taking a contrarian stand is not justified and is against freedom of speech and action. Mathew Easow can say that he recommended some companies’ shares for investment, but immediately after recommendation found that some macro or micro economic conditions had changed and hence took a contrarian stand to sell the same shares. There is nothing wrong in this argument.

Newspaper editors’ decisions are partial, but internet is an independent organisation

What about freelance journalists who write about business, company analysis, banking, insurance, government policies etc? Will SEBI try to control them also? If a freelance journalist is writing in any Indian newspaper, SEBI can easily control the activity. In fact the newspaper editor himself will control whatever a journalist writes. But if the journalist writes in the internet, what can SEBI do about it? Billions of contents are posted in the internet everyday. A majority of the sites and blogs do not have any editor to control the contents. Whatever the journalist writes gets published in the website or blog. Sometimes he even gets paid for these articles either directly or in the form of advertising revenues like Google Adsense. Some of the journalists writing about Indian companies may be residing abroad. SEBI cannot enforce its diktat on these journalists as they are working under foreign countries’ rules and regulations. In fact more and more investors are relying on the recommendations of the internet writers as they find that such writings are independent and impartial as compared to what is reported in newspapers which are subject to the likes and dislikes of the Chief Editor. If the Chief Editor’s daughter is married to a company executive’s son, the editor will not allow any damaging information about that company. Internet is a different stuff altogether. That is why the sales of newspapers and magazines are on the decline the world over and internet is gaining prominence.

SEBI cannot control journalists

SEBI should understand that it has limitations while trying to control the activities of journalists. SEBI should realise this bitter truth and try to refrain from trying to do something virtually impossible. Let Kapil Sibal alone do all these foolish activities. SEBI need not become another Kapil Sibal. India and the world need only one Kapil Sibal. Everybody knows that Kapil Sibal is a fool, joker and a comedian when he stated that the government of India has not lost even a single paisa because of the 2G spectrum scam. Even the Prime Minister or the former telecom minister Raja had not said so. Therefore when Kapil Sibal speaks on a subject matter, people expect only foolish utterances. But SEBI enjoys credibility and respect. Let it not lower its prestige to a level to be equated with Kapil Sibal. In a comedy act, one joker performing on the stage will be liked and appreciated. Two jokers may damage the show.

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