Gossip & Tales: PMO's Puzzle
A puzzle for PMO
Two recent incidents that inadvertently promoted use of vaccines for cervical cancer have flummoxed the Prime Minister's Office (PMO). Usually a patroness of tons of baloney, model Poonam Pandey came up with a smart plan after watching this year's budget speech of Finance Minister Nirmala Sitharaman on February1. Shortly after the FM concluded her address to the Parliament and most financial experts were on to their siesta, Pandey was busy faking the news of her death on account of cervical cancer. The starving news media lapped up the story, until the next day when Pandey called off her hoax and posted a line on her social media handle from the FM's budget speech, which said, "Our Government will encourage vaccination for girls in the age group of 9 to 14 for prevention of cervical cancer." On February 1, Pandey's fake story had achieved its goal, since it spun a huge narrative around cervical cancer. But her insta post on vaccines the next day gave away the plot of surrogate advertising to promote vaccines.India does not allow advertising for vaccines, which falls in the category of prescription drugs that can't be promoted. Also, the current government has been strict against the use of foreign vaccines due to many conspiracy theories as seen during the COVID pandemic. Yet, foreign companies are among the biggest suppliers of vaccines for cervical cancer in India.
But Pandey's stunt is not the cause for PMO's worry as much as the mention of vaccines in FM's budget speech. Higher-ups are convinced that Pandey's stunt was pre-planned and too much of a coincidence to have been timed with the budget presentation. Some government officials are now worried as to how Pandey and her team could have known what's coming in the budget and pre-planned their stunt to coincide with the FM's presentation and speech. Mention of vaccines in the budget is rumoured to be the brainchild of a member of the committee on use of vaccines. Also, some officials within the government are concerned over words like "use of vaccine for prevention of cervical cancer," making their way into the budget documents since it promotes the idea that vaccines can prevent cancer thereby inducing people to take the shots. Meanwhile, stock market punters are desperately trying to reach the tinsel town bimbo for her ability to know budget details beforehand.
ZEEL: No smoke without fire
India's biggest media sector deal involving Zee Entertainment (ZEEL) and Sony has unleashed unprecedented stock market speculation since both companies entered into a 'good faith' agreement to create a $10 billion entity. ZEEL's market-cap is stuck at less than $2 billion and punters are speculating on various permutations and combinations that can rally the stock to new highs. Even after Sony ruined the dream of starry stock market traders by dashing off a letter to call off the deal on January 18, the latest theory doing the rounds is that billionaire businessman Gautam Adani would be the knight in shining armour, who would lap-up ZEEL. Only this time the rumours are getting fuel from the fact that Cyril Amarchand Mangaldas (CAM) has taken up the legal brief for ZEEL and moved an application on behalf of the company against Sony in the National Company Law Tribunal (NCLT) on January 24, just days after the termination letter came from Sony. CAM is likely to have replaced Trilegal as ZEEL's advisor or is now the lead advisor on legal matters involving the deal, say the sources. It is an open secret that CAM is close to Adani group since Gautam Adani's daughter-in-law Paridhi was born to lawyers Cyril Shroff (Managing Partner at Cyril Amarchand Mangaldas) and Vandana Shroff. Paridhi, a celebrated corporate lawyer, is the wife of Karan Adani, the endest son of Gautam Bhai. When Adani group acquired a majority stake in news media channel NDTV in 2022, CAM acted on the legal side on behalf of the Adani Group. This time, CAM is acting for ZEEL in the NCLT and has sought the court's directions in asking Sony to honour the deal. Recently, the Singapore arbitration tribunal refused to grant a stay to Sony and said the Indian courts had jurisdiction over the matter. It may not necessarily mean that CAM may always act on behalf of Adani Group, but one plus one is eleven for the speculators. Besides CAM, Prompt Legal, which has a strong foothold in NCLT and NCLAT matters, is another law firm that is rumoured to be advising ZEEL.
ZEEL has a total of 96 crore shares, out of which nearly 40 crore equity shares changed hands and were marked for delivery (moved to stronger hands at lower price) during the month of January, mainly when ZEEL's share price crashed following Sony's termination letter and CAMs moved the court. Nearly 10 crore shares have changed hands in February. If Gautam Bhai wants to compete with Mukesh Ambani in the media space, he should have a stake in a big entertainment company besides NDTV or simply remain out of the sector and watch MDA take the cake and eat it too. Any guesses on who is backing ZEEL with massive share purchases amidst the crisis?
Curious case of Axis Bank CIO
Right from the stormy exit of Axis's Bank's high profile CEO Sikha Sharma in 2018 due to denial of extension by RBI, to the current controversy surrounding the share purchase deal with the Max Financial Group, where BJP Leader Subramanian Swamy has alleged Rs 5000 crore scandal, functioning of Axis Bank's top management has remained under a cloud for the past several years. Among the few Richie Rich who could drive a Lamborghini in India today, one was a fund manager at Axis Mutual Fund, who attracted a corruption probe. If you still go further back to 2010, Axis Bank's buyout of Enam securities and investment banking arm too had raised eyebrows over the deal structure. But amongst all, the exit of Axis Bank's Chief Information Officer and President Amit Sethi, handpicked by Sikha Sharma, was highly controversial. Sethi's exit from the bank followed a letter from a whistleblower to the management, which detailed several irregularities and inappropriate dealings in the bank allegedly worth Rs 200 crores. Specifically the letter had complained about (mis) functioning of the bank’s technology department, which was then headed by Sethi. No major probe was conducted by the bank as well as any of the investigative agencies or the regulator's like RBI and Sethi got an honorable exit. Shortly after he quit Axis Bank in February 2018, Sethi moved to Singapore and launched a micro services open banking platform tech company, which was purchased by a technology vendor of Axis Bank for a deal worth millions of dollars in October 2018.
CBI's sweet delay?
Nearly a year after registering a preliminary inquiry (PE), the CBI raided the residence of former bureaucrat Ramesh Abhishek. The PE was registered by the CBI on orders from the Lokpal. Many in the know of India's bureaucratic and legal system say that the CBI's delay in conducting the raids on Abhishek was curious and intriguing. Of course, no culprit is going to remain inactive for a year after such grave charges of corruption are levelled against him. Such delay can give abundant opportunities to the suspects to hide or destroy crucial evidence against them. CBI's delay in this case is questionable. Most are already speculating that CBI's final report will have nothing much to say on what they discovered during the raids.
Taking stock of SEBI
The Ministry of Finance engages with legal experts on SEBI-related matters for insights on their experiences. Amidst the ongoing overhaul of securities market regulations, concerns arise about SEBI's accountability and selective interpretation of legal guidelines. At a recent meeting at New Delhi's North Block, critics highlighted instances of SEBI disregarding court orders and cited the need for increased transparency and a potential quarterly review mechanism. Insular meetings were also taken by MOF with brokers and stock exchanges previously. Last year, the Asset management industry had complained about non-uniformity and stifling the industry.
No action on whistleblower complaint
A whistleblower had complained to SEBI that a stock exchange had sold part of its software business to a little known company for Rs 5 crore without any competitive bidding or approval of the board of directors or shareholders. The proof of this lies in the minutes of the board meeting of the exchange's subsidiary tech company, which did not have the sale of software as a key item in the agenda. The whistleblower had told SEBI that even by most conservative Price to Earnings (PE) estimates (considering a PE of 10), the valuation of the software business could likely go up to Rs 200 crore. No listed company can sell a substantial part of its business or that of its subsidiary, without discussion in the board. How can an exchange do it?
No nonsense FM
Recently, a CEO of a stock exchange had gone to meet the FM and kept boasting about the recent success in the derivatives segment. The meeting was over in 30 seconds as the FM advised him to run the organisation as a regulator.
BSE's Occupacition problem
BSE has not renewed the lease agreement of some of the entities ensconced in its iconic building at Dalal Street in Mumbai. The talks are that BSE is expanding its co-location area and putting up more rack space that could eventually help boost its derivatives volumes further. There are other fast paced developments within the exchange premises but the exchange lacks occupation certificate beyond the 13th floors.
Tour de America
Just a month left for his tenure to conclude this year, the MD and CEO of a commodity exchange has gone to the US to attend a conference. There is little expectation about any value addition to the exchange's working post his expensive trip, since he will soon be burdened with exit formalities, unless the regulator decides to reappoint him despite ineligibility due to age factor.
Front runners for MCX top most
Rishi Nathani and Rajesh Saxena have emerged as the front runners for the post of MD and CEO at MCX. Their immediate priority will be to fix tech issues at MCX since after the change of the technology vendor, the exchange has been facing teething issues and to reduce risk brokers are advising clients to move part of their positions to other platforms. Past MD and CEO too are lobbying hard to get their candidates appointed for the top post.
Ayodhya Invitees
Ram Mandir inauguration was a historic event for Bharat and it was a matter of high prestige for those who got personal invites from the PMO to attend the function. Otherwise, the list of invitees for the function was sparing. Apart from PM Narendra Modi, UP CM Yogi Aditya Nath and UP Governor Anandi Ben Patel, most other high ranking politicians and ministers from the ruling dispensation were asked to hold their post and carry on with their routine work. Home Minister Amit Shah himself was on his visit to the North East. Chiefs of LIC, SBI and National Stock Exchange were rare invitees from banking and finance, besides stock brokers and investors like Nirmal Jain. Ramdeo Agarwal. R k Damani also were present too.
Go First bidder's Past Karma
The race of bankrupt airlines Go First has some unusual bidders. One of them has a malicious past that can make them ineligible for buying the airlines. In the airline business, government thrust is on fit and proper persons, who do not have past run-ups with the law enforcement agencies.
But promoters of a Sharjah-based company bidding for Go First were arrested by the Delhi police for allegedly using forged documents to fly cargo planes between Delhi and Dubai. Their company at Masoodpur Village, Vasant Kunj was raided by the Delhi police and the full story of the raids and arrest was carried by Times of India Apr 20, 2002 on its website. Past Karma's can come into play any time.
