Ring-around an exchange?In the developed world, when profits became scarce, stock exchanges simply merged with each other. We in India do things differently. Fifteen stock exchanges link up to create the Interconnected Stock Exchange of India India's 23rd SEBI-recognised bourse. When turnover of the new entity fails to pick up, exchanges scout around for membership of a major stock exchange, backed by SEBI's assurance that it will allow smaller bourses to set up subsidiaries to do so. Nine regional exchanges and the interconnected stock exchange then rushed to the Calcutta bourse to seek membership. But the CSE too has been bitten by the subsidiary bug; so, like the OTCEI it wants to become a member of the NSE, which in turn already exists in 200 cities. Meanwhile, another hopeful bourse is litigating for SEBI recognition in Kerala, while the Bangalore Stock Exchange wants to strike out on its own and start trading in unlisted securities. If the link up of these bourses is totally confusing thenthe task of their regulation can be nothing short of nightmarish. No one even knows whether arbitrage opportunities, which kept the smaller bourses alive, will finally dry up or find a way to continue. Tiny exchanges do not want to give up their power and SEBI is happy to help them rather than find solutions.Essar's new clothesWhat do you expect from a company which has two international defaults - on a $ 40 million syndicated loan and a $ 250 million floating rate note issue. A cut in the wage bill? Essar Steels' wage bill has risen from Rs 37 crore last year to Rs 49 crore in its latest annual report. And what do you expect when the same beleaguered company hopes to get a part of the hefty Rs 892 crore that FIs plan to lend Stemcor PLC? Here's an example. Essar's glitzy office in central Mumbai is run like a five-star hotel. Each floor has floor managers. So with more money promising to come in, there was a quick meeting of the floor managers to check on their grooming and appearance - thedrape of the saree, the manicure and not to forget the face paint and the coiffure. Any comments?Different tunesFew weeks back, this column reported SEBI chairman D R Mehta's assertion to this paper that SEBI was not in-charge of regulating government securities. In fact, SEBI stated this position in a press release. We said that powers under the Securities Contracts Regulation Act were delegated to SEBI and not to the RBI. We now learn, much to our surprise, that SEBI's public stand is the exact opposite of the position it has taken with the RBI. While SEBI officially denies responsibility for secondary market trading in gilts, it is locked in a major battle to wrest regulatory control over the secondary gills market from the RBI. The strategic thinking behind SEBI's decision to take a public stand which is totally at variance with its official tussle with another, equally important regulator, is completely unclear. But one can say with certainty that it does nothing to enhance SEBI'scredibility in the public eye.Getting the toll rightThe Maharashtra government has a way of doing the right thing the wrong way. First it insisted on collecting a hefty toll at the end of the Mumbai city limits to pay for the 50 odd flyovers under rapid construction. It flatly refused to listen to those who suggested that toll at the city limits taxed only a few, that too those who could ill afford the new burden otherwise they would not have stayed at such a distance. A cess on petrol and diesel, on the other hand, covers everybody who uses the road, from public transport to private cars. But the government wouldn't listen. After a big agitation and protest, it has sensibly decided to levy a 25 paise sales tax on petrol. All that is now needed is some more transparency - as commuters, one would like to know the basis of calculating this levy, how much money is expected to be collected through this measure, and what is the government doing to ensure that the money is used only for constructionof flyovers and nothing else.Author's email: suchetadalal@yahoo.com
