All eyes of the industrialists, the Bombay Club and the western world are now on the BJP government. Every Indian investor is keenly awaiting the exact shape of policies governing foreign investment, treatment of multinationals, the stance on import tariffs etc. For the fortunes of the millions in this country, who have put their money in the stock markets would depend upon the new policy directions. Fabulous gains or serious losses can be made depending upon the stance one takes in the market, in anticipation of these policy measures.But governments which exhort the public to support the stock market continue to give a shabby treatment to the Indian investor. According to reports in a section of the press, the finance ministry officials have gone out of their way in briefing gatherings of 50-60 global fund managers and foreign investors, on the eve of the new government taking charge. To put it bluntly global fund managers have been privy to the finance ministry thinking, while the Indian investorhas been kept in the dark. In stock market parlance this is an unpardonable crime. Readers would easily recall how Harshad Mehta, a few years back, managed to meet the finance ministry officials, prior to the budget presentation. The meeting was purportedly to have an inter action with Mehta on the subject of government policies regarding the investment scene. Many investors felt outraged at this.
Because a meeting with finance ministry officials is tantamount to receiving private information on the line of thinking at the ministry. The person who is privy to such information can easily cash in on it by acting on the stock markets. Such meetings with only a section of investors is patently improper, to say the least. Norms and regulations already in vogue make it compulsory for information on companies to be revealed to all investors at the same time. If that is so, how can information about government's likely stance on capital market related matters be different.
By meeting the fund manager of foreigninvestors, the finance ministry officials have committed a serious impropriety. The right thing would have been to let the fund managers wait for the developments as they unfold in the formal manner in parliament or otherwise. Alternately they ought to be content with the public statements made by politician or the government officials, in the meanwhile.
That the ministers themselves have not participated in these meetings makes only a mockery of the issue involved. For the officials would not haveattended these meetings without the express permission from the ministerconcerned. The issue is one of treating all investors on level playingground. More concretely the issue is to ensure that the local investor isnot made to lose because some information is passed on to foreign investors, while he is kept in the dark. No one really knows all the details that transpired in these meetings, or the impression one could gather from such meetings. Nor does one know, for that matter, what follow up action theseinvestors took after the meetings. I can only recall a parallel.
A few years back fund managers visited Infosys Technologies. The meeting helped to gather the right picture. That helped investors to make a killing by investing in the scrip, which at that time was quoting at Rs 800.
Gathering of impressions about the government's likely stance is an important input in devising one's investment strategy. For example, prices of several MNC stocks have risen sharply in the last few days. Did the revelations in these meetings help the FIIs to invest in these stocks with knowledge, which was only privy to them. Certainly those who attended the meeting would have gathered much more than the public statements that were being made. And in any case, if nothing other than what was said in the public was all that transpired in the meeting, where was the need for it. Or alternately, why did not the finance ministry invite all the Indian investors and Indian brokers. The tragedy is that the domestic investor is beinggiven a step-motherly treatment by his own government, which proclaims to be swadeshi? If the government wanted to clarify its position in a hurry, why did it not do so through a press release, so that all investors had access to the same information at the same time.
It is meaningless to say that the government owes an explanation to the Indian investor. Because government officials are only too facile with explanations after the crime. For what matters is that crime has been committed on the Indian investor, for sure.
May be it is time that this matter is raised by the opposition in the parliament. For, the BJP must be told in no uncertain terms that there are others to defend the swadeshi stance as well. Swadeshi is no exclusive brand equity for BJP.
More importantly it is only on such occasions that the opposition can show the public at large that it acts in the public interest, whenever there is an opportunity to do so.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
