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Catching the culprits

Jul 26, 2002

The recent JPC report on the recent scam specifically names a few individuals and companies for the scam. At the outset I wish to clarify that I have not read the entire draft report but have read articles about it as carried by the press.

I would also like to clarify that, until I read the press articles about this JPC report, I had pretty much forgotten which JPC group was out there and which scam they were trying to investigate. I hope you will forgive me for this but there have been so many acts of blatant robbery in the capital markets in the past decade that there are probably more scamsters and scams than there are honest people in the country! And there are probably more JPC reports written by people who themselves need to get familiar with the intricacies of the market and who take so much time to uncover "facts" that history has a way of forgetting what the crime was in the first place. Justice delayed, they say, is justice denied. And Indians have been denied justice for a long time. But, yet, this particular report of this particular JPC for this particular scam has named a person whom I have had the pleasure of interacting with. And, after each of my meetings with this individual, I have left with a sense of hope. "Hope" because, in all my 18 years of meeting with various officials in the Ministry of Finance, SEBI, UTI, I have rarely met a man from these august institutions who was willing to listen, was quick to understand the issues at hand, and - in my personal view - make an honest decision. According to the JPC report Dr. Nayak, Chairman and MD of UTI Bank, "stood to gain personally from the merger" that was proposed between Global Trust Bank and UTI Bank. Given all that has been written about the political backing of Mr. Gelli of Global Trust and the then UTI Chairman P. S. Subramanyam, I find it hard to see - without any explanations from the JPC - as to how Dr. Nayak "stood to gain personally" from this proposed transaction.

Did Dr. Nayak buy a bunch of shares for his personal account to profit from this transaction? Well, please can the JPC detail those? Did Dr. Nayak receive a guarantee that he would be the Chairman and MD of the larger, combined entity? Those who have observed Mr. Gelli knows that his style is not to share the spotlight with anyone and he prefers to be the shining star of any organization. Here is a Quick Test: name me one senior executive of GTB that you heard about while Mr. Gelli was Chairman. Okay, if you cannot name a senior person then tell me if you ever saw an article on GTB in which anyone other than Mr. Gelli was featured? My personal view is that, if the politically-backed bank merger had been successful, Dr. Nayak would have been out of a job. But that is my view and I am not a JPC - a body that gives judgements based on facts and figures and documentation.

The JPC's role is to identify the culprits, collect proof that they have done something wrong, and then name them to the general public. Dr. Nayak's name may have been tarnished due to a gross error. If the JPC has some proof of his wrong-doing, they should release it. If not, an apology to Dr. Nayak - and that what he stands for - is in order.

The views expressed by the author are his own and not of the website. However, the author is co-founder of this website and would like to disclose that this company has a normal, banking relationship with UTI Bank (and with 3 other banks).

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