Hush-hush tales from the world of stock markets, banking, corporate world and corridors of power
Last Updated: August 30, 2021 / 10:09 AM IST
The jailed Ranbaxy promoters' wives claim they were duped by conmen. One allegedly paid Rs 200 crore to secure bail for her husband. The police have arrested the fixers. But it is a common thing in New Delhi. Whenever a big shot goes to jail, criminals promising bail or some other help in fixing the case approach them or their family members. The desperate people agree to pay sums in crores and end up losing everything. Most of them don’t make it public fearing more cases against them for trying to bribe the court. A few years ago, a controversial business tycoon had offered Rs 1,000 crore for his bail and allegedly paid Rs 100 crore as commission to the PA of a powerful MP. It never came out. In another incident, the wife of a real estate tycoon was duped. She was running from pillar to post. Some fixers took a huge sum promising bail and disappeared. Again no complaints.
CLOSE AND FAR
Two former BJP leaders were hopeful of landing a Rajya Sabha seat from an eastern state. Unexpectedly—let’s put it shockingly, from their vantage—that post went to a retired bureaucrat. What happened next? We hear that the chief minister consoled them saying the seat’s tenure is not long because it was a bypoll. They would be nominated next year for the full six-year term. One of them is a party member while the other is very close to the CM. Incidentally, both of them were once close to the late AB Vajpayee and LK Advani but have turned bitter critics of the current administration at the centre. Seat or not, the prominence they are getting in the new party has not gone down well with the original cheerleaders in that party.
INFY’S UNHAPPIEST CLIENT
It's rare to see a client publicly taking its vendor to the task. More so when the client happens to be the Finance Ministry and the vendor—one of India's most storied software services firms—Infosys. Things came to a head once again last week over glitches in the new Income Tax filing portal. While Finance Minister Nirmala Sitharaman had taken Infosys and its co-founder Nandan Nilekani to task on Twitter a couple of months ago, last week, the company's top executives were "summoned" by the Ministry yet again. Insiders familiar with the meeting described the meeting as a 'bloodbath', where Sitharaman gave Infosys CEO Salil Parekh and its India business head Raghupathi Cavale a harsh dressing down. The mood was so sombre that the company executives exited without speaking to the media and haven't issued a statement since then. Even as Infosys tries to salvage the project, there are questions looming on whether a public spectacle was warranted.
More on the Infosys meeting at the finance ministry. The meeting started at 2 PM and was followed by further parleys between the Infosys executives and Revenue Secretary Tarun Bajaj and other tax officials. FM Nirmala Sitharaman exited the building at 5 pm but did not speak to the gathered reporters and camera persons. Bajaj stepped out half an hour later and refused to comment as well. Salil Parekh slipped out but avoided the main gate used to enter and exit the finance ministry. Turns out that they were aware that a scrum of reporters were waiting for them, and chose to exit from the home ministry side. The scrum of mediapersons waited for hours for nothing. There is precedence to such exits. The famously media-shy former RBI governor Urjit Patel used to enter the building from the main gate to meet the then Finance Minister Arun Jaitley, and used to often exit from the back gate in order to avoid TV cameras.
A recently ousted chief minister is getting restless. After sitting at home and even spending a week in the Maldives, he is back in action. He is touring his home district inspecting development work. He has also declared that after that Ganesh Chaturthi, he would tour the state to build the party. This bit of news has enthused his followers. But the party high command is not too keen to allow him to run the party. They fear knowing his nature, he can do anything. According to the grapevine, party bosses are seriously thinking to make him a governor of a northern state, far away from home. The problem is he is not keen to take up the offer.
FIRECRACKER OR FIZZLED IPO?
This IPO is one of the biggest that Indian markets will see and was set to create a dhamaka of sorts with its debut. Well, that dhamaka is showing signs of fizzling, going by the chatter among bankers. They are now guiding to a valuation that is at least $10 billion lesser than what was pegged, making it more or less a flat round for the company. A number of concerns are swirling around this IPO -- big issue size, existing investors selling big, tepid growth and no clear business model or leadership in any segment. It remains to be seen if the founder can bring the famed selling and marketing skills to rescue the IPO.
DON'T ASK, DON'T TELL!
The recent tug-of-war between the founders and the management of this company and the subsequent back-to-back exits at senior and mid-levels have made quite a few big news headlines. Following the 'bad press', the top management, we hear, has asked the senior and mid-level staff to strictly keep mum to the media on the latest developments. The Mumbai-based public relations agency that handles the firm's communications has been asked to switch over to the crisis management mode and keep a tab on the outgoing communications from company officials. Logical moves indeed! But the problems seem to run deep and have multiple dimensions. How long can the company avoid media scrutiny?
In two recent cases that market regulator SEBI found mutual funds (MFs) guilty of mismanaging their debt schemes, it has levied three kinds of penalties. One, it imposed a monetary penalty (Rs 50 lakh to Rs 5 crore on fund managers of—and the AMC—Franklin Templeton India and Rs 50 lakh on Kotak AMC last week). Second, it banned both fund houses from launch new schemes for a stipulated period. The third leg of the punishment is by far the harshest and may run into rough weather with the Securities Appellate Tribunal (SAT). SEBI has asked both fund houses to return management fees back to investors. SEBI asked Templeton to return Rs 512 crore by way of management fees it earned during the period of which it found the MF to be in violation of rules. It asked Kotak AMC to return the management fees of the six FMPs. Many legal experts term the disgorgement of fees unfair. Usually, firms are asked to return fees if there is fraud. That is not the case with either of the fund houses, per SEBI’s own findings. Legal experts also say management fees collected is a pool of money from where all of the AMC’s expenses—including salaries to its entire employee force and not just the fund managers in question—are paid. At worst, the fund houses made terrible fund management calls, which many legal experts say is possible in a market-driven product, whose monthly portfolios were in the public domain. It’s unclear whether Kotak AMC will approach SAT to get the disgorgement order reversed (some legal experts believe it should), but given that the size of the penalty and the six-month ban to be small, it may not feel worth its while to take on SEBI. But Templeton filed an appeal at SAT in July. SAT asked it to deposit Rs 250 crore pending its final decision. SEBI went to Supreme Court (SC), which passed on the baton back to SAT and said it would rather wait for SAT to finish its hearing. How SAT and SC view disgorgement will have far-reaching implications on future cases.
This fintech which got funded recently is facing a lawsuit from a competitor. The accusations are not trifle. The rival has alleged that this company stole confidential data by poaching important employees and even hacking into some servers. Well, well. The affected fintech is planning to take action soon, and is working with the police. We’ll keep you updated. Everything flies in the era of hot money, we say!
WHO'S KNOCKING NEXT?
This bank has a tumultuous past. Not many executives have managed to hang on to the top post beyond the initial few years and most of those who have done so have complained of promoters' intervention in daily operations as a major reason for their premature exits. Now, things seem to have settled a bit with promoters getting a consensus candidate for the corner office. But the picture isn't over yet. Now we hear the promoters are getting feelers from a few prominent investors to pick up a significant stake in the bank. Nothing is formal yet. The promoters had said no to a few suitors earlier. There are strong local sentiments surrounding this bank. Will there be a change in the promoters' approach this time? If yes, who will be the next in the line of suitors? Let's wait and see what happens.
Bangalore and Delhi NCR have always been startup land, except for a brief phase in 2015 when Mumbai had the hottest startup in town—a housing company that blew up spectacularly. Now Mumbai's profile is once again rising, with a slew of hot startups getting funded in recent months and one even becoming a unicorn. It is good news for the city's startup employees but they hope they can avoid the controversial companies this time!
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