August 07, 2000

Insurance ordeals

It is no news that Indian insurance companies are notorious for denying the claims of policy holders. Finally, Ahmedabad-based Consumer Education and Research Society (CERS) decided to approach the courts with a comprehensive list of demands to force nationalised insurance companies to give consumer a fair deal. In a petition filed against the GIC and its subsidiaries in July, it has demanded— an end to unfair and one sided contracts; a stop to the use of the ‘‘pre-existing disease’’ clause to deprive medical policy holders their rightful dues; that insurance companies should clearly spell out all the benefits of domiciliary hospitalisation to remove ambiguities; that the compensation for natural calamities, should be prompt; that the 12-month limiting period for admission of accidental death liabilities be removed and that claimants need not be asked to produce more than a valid death certificate. Clearly, insurance may have opened up but we still have a long way to go when it comes to policy holders getting a fair deal.

Scams galore

Someone from Goa has gone to the trouble of compiling a State-wise list of financial scams which have looted the country right before our eyes. The numbers add up to an astronomical figure. Here are the details: The Securities scam of 1992 - Rs 5000 crore, the sugar scam - Rs 650 crore, the Bofors scandal - Rs 65 crore, the hawala case— Rs 65 crore, the Housing scam - Rs 18 crore, the MP trading case — Rs 32 crore, the fertiliser scam - Rs 133 crore, the medicine equipment scam Rs 5,000 crore, the telecom scandal - Rs 1,200 crore, the Indian Bank losses - Rs 1,336 crore, the Bihar fodder scam - Rs 1,000 crore, the Bihar land scam - Rs 400 crore, the Bihar bitumen scam - Rs 100 crore, the Bihar medicine scam - Rs 100 crore, the Meghalaya forest case - Rs 300 crore, the Meghalaya forest reserve scam - Rs 75 crore, the UP Ayurveda scam - Rs 32 crore, the Tamil Nadu Dhoti-saree scam - Rs 11 crore, the Wakf scam in West Bengal - Rs 1,600 crore, the Dental College Case of Karnataka - Rs 50 lakh. This too is an incomplete list. The money siphoned away by government official and politicians could easily bridge the budget deficit and finance all the infrastructure we need.

Mystery director

Stock market intermediaries are still trying to figure out what J R Varma, the new member at the SEBI is still all about. He may have headed a couple of SEBI committees, but nobody seems to know too much about his views except maybe on badla trading and excessive regulation of the capital markets. Outsiders only know is that the air-conditioning in his office is turned to near freezing levels and he does not ever offer tea or coffee to visitors. So here is a little trivia which Dr Varma probably wound not mind made public. As far as coffee is concerned, he ‘‘does not like to offer narcotics unless specifically asked.’’ He thinks it is enough of a concession to the tea and coffee drinkers of the world that he ‘‘politely declines the poison when it is offered to him.’’

Vanishing investment banker

What is worse than vanishing companies? It is vanishing intermediaries. DCA secretary, Dr Sanjeeva Reddy had suggested that instead of demanding more powers, SEBI should punish merchant bankers, who are ultimately responsible for what is stated in shady prospectuses. But it appears that this group has been vanishing faster than the companies they helped in gobbling public money. The SEBI Investor survey shows that in the period when the number of listed companies increased from 6000 to 10,000 in the 1990s decade, and the number of bourses went up from 11 to 23, and market capitalisation grew from Rs 908 billion to Rs 6,195 billion - but the number of merchant banker dropped dramatically from 1,000 (1997) to a mere 400 (1999). So who will SEBI punish?

Updated weekly.

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

Other columnists:

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