The market is wrongFinance Minister Yashwant Sinha is so confident that his quick-fix disinvestment last year which forced public sector oil companies to buy each others' shares was correct that he told the economic editors' meet that the market didn't understand him. The stock market had reacted to the cross-holding by hammering down the prices until they lost a whopping Rs 24,000 crore in market cap. Sinha doesn't plan to try cross-holdings again not because it's wrong. Because the market doesn't understand how wonderful it is.Double speak and confusionTHE BJP can't be held responsible for the delay in implementing reforms since the Opposition forced mid-term polls and derailed things. But is it too much to expect the government to talk in one voice about future policies? For instance, at the economic editors' meet, the FM defended cross-holding, but Power Minister R Kumaramangalam thought it was an embarrassment. Similarly Kumaramangalam charged that the NTPC takeover of NHPCwas being attacked only because it was seen as a way of bailing out the government on its disinvestment target. He was at pains to say that only Rs 2,500 crore would go to the consolidated fund this year and he would extract special benefits for the power sector from the FM. Sinha, however, decided to be aggressive about bridging the fiscal deficit.The fiscal deficit, he said, was a problem for the whole country and not the FM alone. The Minister of Chemicals Suresh Prabhu was so cagey that when asked for a specific reply on whether IOC would be allowed to bid for IPCL shares, he said everything was under review. What really took the cake was Commerce Secretary Prabhu. He was so bent on avoiding issues that in answer to a question about whether the government was talking to China about cross-border trade through the North-East, he said that ``talks may be going on or they may not.'' All this has a context. Kumaramangalam, under attack on the NTPC issue, said that the media shouldn't see itself at odds withthe government. Even if the Press wants to be neutral and constructive, the confusion caused by his government, the refusal to provide correct information and constant double-speak makes it difficult to be anything but skeptical and cynical.No charges from GeogitIT is difficult to let go the issue of deposits that are being collected from investors by Depository Participants (DPs) when they open accounts for demat of shares. While the NSD seems inclined to buy their argument that deposits are being collected because investors run away and refuse to pay fees, here is something that contradicts the claim. Geogit Securities, a Kerala-based brokerage firm, and DP have made waves in the South by single-handedly spreading the reach of DPs to tiny towns and offering efficient service. This week Geogit opens its Mumbai branch, the first outside Kerala. The account maintenance charges, custody charges or transaction charges, but ``we will be charging Rs 3 per certificate as demat charges.''Theinformation is in response to our report on DPs collecting deposits from investors, so it is safe to assume that it will not be collecting deposits either. In fact, it assures that ``Geogit will follow only fair practices in our business.'' Does NSDL need further convincing that collection of deposits is unnecessary?Bad news, good newsNOTICE how Jindal Vijayanagar Steel juxtaposes good new with bad. Despite constant help from FIs, the project cost has once again gone up by just under Rs 1,000 crore. Yet FIs continue to bail it out. The announcement of the cost increase came quick on the heels of a report which said that the institutions are converting interest overdue into equity and raise their stake in the company from 8 per cent to a hefty 30 per cent plus (over Rs 300 crore). Now the Jindals claim that they plan to place 10 per cent of the equity with a foreign investor. Why'd any foreign investor want a stake in a company whose project cost is not capitalised and whose future depends on thegenerosity of FIs? Also what happened to plans of finding a buyer for the Tractabel equity in Jindal Tractabel?Author's email: suchetadalal@yahoo.com
