|»The Honest Truth by Ajit Dayal|
FDA bans, India crowns
18 SEPTEMBER 2013
Business Standard carried an article asking whether Indian pharmaceutical companies are being selectively targeted by the FDA who plan to add 7 inspectors to their existing team of 12 inspectors based in India
I hold no brief for Ranbaxy which, the article noted, has new owners (the Japanese company, Dai-ichi Sankyo but "experts say taking shortcuts is in the DNA of the company". A DNA that is common to many of the illustrious business houses in India - but that is another story.
A quote in the article ascribed to Ranjit Shahani, the CEO of Novartis India, describes how the FDA works: "in god we trust, the rest we audit."
Now, being in the greatest of the god-fearing nations that is India, one would expect the RBI and SEBI to apply those same FDA-type principles to the foreign and local financial firms doing business - or wishing to do business - in India.
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But five years after the great Lehman bust of September 2008 which sent the global economy into a tailspin, the financial firms are more powerful than ever. The great Change agent, President Obama, has indeed proven himself to be a deliverer of change: he has overseen a set of policies that have made them stronger and more powerful.
Like bad medication sold by drug companies, the bad advice, bad products, or mis-sold products of many of the global financial firms can cause long term pain and have lasting side effects. Fortunately for the financial firms, this level of pain and damage is not easily measured. Do we know how many people committed suicide because of the financial crisis? Do we know how many families ended up with mental depression or physical challenges due to the aftermath of the global financial crisis? There are no statistics on this. But we know there was pain and dislocation. This fuzziness of data allows the pain to be diffused and forgotten.
But maybe government and regulators should have solid, institutional memories and do the policing.
But it's not the "system" that is solely to blame. Society is willing to forget - the financial firms pay great salaries to win loyalty. Ever heard any Indian parent feel embarrassed that their children still work for these firms - whether in India or abroad? There is no shame in having money - no matter what the source may be.
And before we get all emotional about "foreign" financial firms being bad, recognise that there is a long list of Indian financial firms with products that can wipe out investors. The NSEL is only one recent name in a long list of financial accidents that have kept the savings of Indians sheltered in fixed deposits of banks and in gold.
A US consumer of medicines has the FDA for protection.
Suggested allocation in Quantum Mutual Funds (after keeping safe money aside)