July 03, 2000

Rumblings at SHCIL
There are some curious rumblings at the Stock Holding Corporation of India (SHCIL) - the quasi public sector company promoted by leading financial institutions. An anonymous letter leveling serious allegations has found its way to most SHCIL directors and has caused a lot of disquiet. Curiously however, the board of directors, which met last Friday and elected Unit Trust of India chief PS Subramaniam as SHCIL chairman, did not discuss the nameless missive. The letter makes several allegations against SHCIL’s managing director B V Goud, which we will leave out of this column, but it also raises pertinent questions.

For instance, it points out that SHCIL’s share of the total custodial business has dropped from its peak level of 70 per cent to 30 per cent in the dematerialised environment, leaving it with “no new sustainable business in sight”. Yet, staff strength has increased 200 per cent “from around 450 to 1350” and, this number does include advisors, consultants and others who are routinely retained by SHCIL. There is clearly enough fodder in the letter to warrant an independent examination of facts by the SHCIL directors.

Travel blues
If the Prime Minister is perturbed by the propensity of our Union Ministers and MPs to go on grand tours during the sizzling hot summer months, he may also want to take a look at the itinerary of some top executives in our financial institutions and regulators. After all, these institutions are bound to come back to the government for a bailout when they go bust due to their high spending ways. Among the notoriously frequent travellers is one Executive Director of the Securities and Exchange Board who has been nicknamed the “Non Resident ED” by SEBI staffers. He barely gets back from one country before he zips off to another. Most other EDs travel almost as much within the country and abroad.

What next at MTNL?
MTNL’s dynamic and high profile chairman S Rajgopalan has stepped down after a hectic tenure, which pumped life into the organisation and kept private operators, with their smooth manipulative ways continually on their toes. His big achievement is probably the tenacity with which he fought to keep MTNL in the race for new business opportunities in telecom. Rajgopalan says that he is leaving a satisfied man, but subscribers cannot help notice that he has had to go without implementing his cherished cellular phone project. The bureaucratic hurdles have been so high that even Rajgopalan’s dynamism did not really sustain investor confidence. During his three-year tenure, the share price and market capitalisation has dipped in line with that of most PSU stocks.

Entertainment wars
Reliance may have been the highest bidder for the big entertainment project at Mumbai’s Bandra-Kurla complex, edging out Zee Telefilms by a hefty 50 per cent margin, but the war is far from over. Though Reliance is the highest bidder, some objections have led to a decision on the award being postponed until next month. It is all part of the entertainment war, say insiders. After all, although Sony, Ad Labs, the Piramals and others had evinced interest in the project, Zee and Reliance were the only one to actually submit bids. In which case, only the loser can raise objections, right?

 

Updated weekly.

The author's e-mail address is: suchetadalal@yahoo.com

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