The Hindu Business Line : Superman of finance warns Spidermen of Mum-boy

A powerful broker gets a 20-year sentence for trying to sell to the highest bidder sensitive software used for controlling spy satellites. However, after serving only about a third of the term, the country's outgoing president grants him a pardon. Then? Wait, that's only a teaser of The Broker, the first spy novel of John Grisham, released earlier this year, and hot on the bestseller list.

But the FM was in no mood to pardon the brokers, when he visited Mumbai a few days ago, in his first post-Budget rendezvous with the financial nerve-centre of the country. So much so, headlines read, `Chidambaram warns erring stock brokers', `Noose tightens on errant brokers', and so forth.

The Minister is worked up that debarred market participants are misusing regional stock exchanges and sub-brokers; and so, he warned of stringent action "against these unscrupulous elements.'' He seems to be ready even for "shutting down of some regional exchanges". No question of expecting "misplaced sympathy" or pardon from him, since he doesn't want `bad money' to drive out `good money'.

Chidambaram proclaimed, therefore, "We will do everything possible to professionalise the working of exchanges and see that the brokers follow all laws and live up to the highest standards of ethics.''

To show them who's the boss, he added, "There is no space for any Superman or Spiderman in the capital market.''

News reports don't speak of chuckles or giggles from among the audience, though I'm sure the FM would have misread the same as muffled sneezes.

About a week before Chidambaram went to Mum-boy, as he calls it, a case that the apex court decided was K.C. Sharma vs Delhi Stock Exchange. KC had joined DSE as GM in 1992, and was in-charge of the Market Division, and later of the Investor Grievances Cell. "He is highly qualified academically, holding two first class Masters Degrees in Commerce and Arts, and three core professional Degrees of Chartered Accountant, Company Secretary and Cost Accountant," notes the verdict dated April 1. DSE appreciated KC's work and granted him accelerated increments.

Then, the story turns sour. KC took `strict action' against certain members of the stock exchange. As in thrillers, on June 9, 1995 there was `a murderous assault' on KC. During the period Oct - Dec 1995, when there was no Executive Director in the stock exchange, and so the `affairs were managed by elected member-directors', KC found that "he was subjected to continuous humiliation and victimisation". In March 1996, the Delhi Police, investigating the assault, named one of the brokers "as having engineered the assault on the appellant by paying money to some hooligans".

Interestingly, the text of the judgment notes how KC had put up `periodic notes' stating that "some of the brokers were acting contrary to the rules of the Exchange and of legal provisions," but DSE took no action. On May 22, 1996, KC "issued notices to various brokers including the President Vice-President and senior Directors" of DSE, "in accordance with the guidelines of the Ministry of Finance".

The court observes: "This, perhaps, was the last straw on the camel's back." On May 23, KC was terminated "with immediate effect on payment of three months salary." KC went to court. Justices K.G. Balakrishnan and B.N. Srikrishna heard the case and said: "We are of the view that although the termination of the appellant's service was illegal and unjustified, the totality of the circumstances of the case render it improper and unjust to direct the relief of reinstatement with full back wages." However, compensation of Rs 12 lakh, granted by the high court earlier, was hiked to Rs 15 lakh, as "a slight modification on the issue of compensation."

Thus, it appears that removing KC was wrong; yet, it's not possible to put him back in DSE, for everybody's sake.

Keeping that aside, if we come back to the moral science lessons that the FM administered to the dadas of Dalal Street, what seems comparable is Grisham's `Note' about The Broker, as you can check on www.randomhouse.com: "My background is law, certainly not satellites or espionage... It's all fiction, folks. I know very little about spies, electronic surveillance, satellite phones, smartphones, bugs, wires, mikes, and the people who use them. If something in this novel approaches accuracy, it's probably a mistake."

So, let me draft the FM's note: "My background is law, certainly not... "

E&OE@TheHindu.co.in

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