the target book reviews

For long should we bear vindictive orders in the face of public interest?

The NSEL crisis that occurred in mid-2013 has captured quite a bit of news over the past couple of months. It has got even more interesting, after the government ordered the merger of NSEL with its parent, FTIL.

For all those who are still not aware of the case, there is a book out on the market that covers the entire crisis in detail, highlighting the roles of all those who were responsible for it. Titled, The Target Book, the book is written by Shantanu Guha Ray, and brings to light how the then ruling government issued ‘forceful’ and biased orders against the founder of NSELJignesh Shah.

The government took all possible unwarranted measures to demean a national vision, going to the extent of slapping unlawful orders on both his companies, NSEL and FTIL.

Forcing merger on two companies on the pretext of “public or national interest” was quite a stretch. The essential public interest that is the pre-requisite for exercise of power under section 396 is very much absent in the above mentioned case. The government & its authorities are yet to clarify what they really mean by ‘public interest’.

While the book is an excellent medium to reach those who can bring about justice in this case, it raises hopes of a fair trial finally. A must-read.

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the target book reviews

FMC – Commodity Watchdog or Confused Regulator

If you have been assigned a responsibility of protecting the interest of investors, then you should never forget your priority. Unfortunately, Forward Markets Commission, a commodity market regulator did its job very miserably. In fact, it’s shocking that being a regulator it was unaware of its own policies. But, then again, it happens only in India!

I feel terribly sad for NSEL! Reading a book which is an unofficial biography of Jignesh Shah called ‘The Target Book‘ written by ShantanuGuha Ray! Let me tell you what exactly happened before the bomb burst on NSEL.

On July 12, 2013, The Department of Consumer Affairs writes to NSEL asking it to stop further or fresh contracts.

For NSEL, it was something that was out of the blue because as far as they know, they have meticulously followed all the procedures regulated by the FMC. However, as an exchange, it informs all the necessary stakeholders that from July 31, 2013 – NSEL will roll its curtains down. But I can actually feel the shock and uncertainty in Jignesh Shah’s mind like as if it happened yesterday.

Now, what’s the tragedy and what’s FMC’s role in the massive comedy of errors?

– First, the FMC believed that NSEL violated the rules under Section 27 of the Forward Contract Regulation Act. Therefore, it sent its recommendation to the Consumer Affairs Ministry that NSEL should shut shop.

Wait! But, that’s not all!

Exactly a week later, FMC shoots another letter to the Consumer Affairs Ministry claiming that the notification was silent on whether the exemption is applicable to all or specific provisions of FCR Act! Come on!

A regulator’s job is to ensure that investors do not lose money. But, if it are unclear about its own regulation, what could be a bigger bad example for playing with the lives of all those investors who put in their hard earned money into NSEL believing in Jignesh Shah.

Can you imagine the colossal and irreversible damage that NSEL had to suffer! Hats off to Jignesh Shah for trying to keep his empire afloat especially when there are sharks waiting to take out pieces of him.

I am outraged on behalf of Jignesh Shah! I loved the book ‘The Target’ and believe it is a must-read for all those who have followed the NSEL case.

the target book reviews

Need of the hour : Fit & Proper Corporate Affairs

An able and effective Corporate Affairs Ministry can redefine the country’s growth trajectory. Corporate sector forms the backbone of a capitalist economy. Therefore, a dedicated regulatory body, like Ministry of Corporate Affairs (MCA) in India, is a prerequisite to efficient corporate governance.

As a governance epithet, the above fits the bill perfectly. However, when a government goes out of the way to justify corporate decisions overriding its own laws, the dread of executive tyranny gets invoked, as in the NSEL case. What’s absolutely shocking is the merger order of the defunct NSEL with FTIL passed by the MCA on grounds that is in larger public interest. So what would you consider a larger public interest – 63,000 shareholders who are objecting the merger or 13,000 so called investors who have supposedly lost their money?

There is no way the merger works as a solution. One, it’s an unrighteous burden of Rs 5,600 crore on around 63,000 FTIL shareholders who pinned their hopes on the company that gave India its prized commodity exchange MCX, and was the first of its kind to perpetuate commodity software in India.

Two, the merger breaches all known tenets of limited liability which risks India’s hold on its FDI channels as foreign investors, who’ve realised the prospect of growth in India, definitely do not see this positively.

Three, it’s becoming clear with SEBI investigations making head way that colluding brokers at NSEL could pull it off by way of recourses like client code modification, channelizing black money, false assurances and much more, which puts serious questions on our regulatory radar.

As a lot of months have already been consumed by investigations headed nowhere and executive mishandling; now is the time for MCA to redeem itself as India’s corporate regulatory body with the ability to invoke rational decisions that actually stem from ‘public interest’ and not the other way round. Will the Government able to take a decision which is in actual interest of the public (in this case, the 63,000 shareholders) or will it bend to the unwarranted pressure to make an example out of a company that has not been accountable by the law?

For more information check The Target Book Reviews.

the target book reviews

Was it the Brokers Who Destroyed NSEL?

Who was responsible for the NSEL crisis — The exchange, its members, brokers or investors?

A book I’ve been currently reading probes this and points out how some powerful politicians, along with bureaucrats, brokers, and defaulters, orchestrated a crisis that damaged a true ‘Made in India’ MNC and the untiring efforts of its architect.

The Target Book, written by ShantanuGuha Ray, is an intensely chilling read for all those who have been waiting for justice towards Jignesh Shah & his abruptly shut venture – NSEL. The government and its various agencies are hell-bent on forcing the merger of two of his companies – FTIL & NSEL.

The only positive development in the case has been done by SEBI and the probe committee set up by the HC to scrutinize the brokers’ role in the case. Major discrepancies on the brokers’ part have been discovered and it has been discovered that they were mis-sold products, made false promises to traders, modified client codes, routed black money and so on.

As the case against brokers becomes stronger, hopefully, this absurd merger idea will vanish into thin air, for us to develop as a nation.

NSEL Case : Role of Brokers exposed

Every system of life has an underbelly. Be it politics, corporate or any industry, you can’t move without their blessings in the long run.

the target book reviews

In the exchange industry – it goes without saying that the brokers rule the markets. In the NSEL case, the brokers were the perpetrators of the payment default. For all the assurances they spread to repay the investors’ money, they did nothing about it. Reading ShantanuGuha Ray’s book ‘The Target Book’ opened my eyes about these brokers trusting whom I invest in the stock market. It is shocking I can’t help feeling that it could happen to me tomorrow. What if a broker is using my KYC details for his or her personal wealth creation, I wonder what will happen if I am slapped with a sudden notice by the exchange authorities?

What remarkably stands out is Jignesh Shah in the book ‘The Target’. I think this man has made absolutely proud. I am shocked he has not been given a Bharat Ratna for his contributions for the development of the country. It is just tragic that the underbelly of the financial markets have set their targets on this successful man! He would have changed the entire landscape of the Indian financials markets had he been allowed to do his job – technological innovation!

the target book reviews

Who gains with NSEL-FTIL forced merger?

When NSEL crisis occurred in 2013, nobody imagines that the Government will end up taking back to back irresponsible decisions which would affect a lot of people and cause irreversible loss to its parent company FTIL.

Currently, the order has been passed but not implemented as it is sub-judice, the case of a NSELFTIL merger, forced in my perception, has left me with questions for which only the Government can have the right answers. I read Shantanu Guha Ray’sThe Target Book’, and I feel that it is not acceptable that Government which has not taken any stern action against the real swindlers such as Vijay Mallya and Sahara Boss Subrata Roy but has declared a man who built his empire without any Government help, not fit and proper. I think this is a criminal abuse of power.

What is really baffling is the government deciding to merge NSEL with FTIL unilaterally! My question to everyone is plain and simple, what exactly about this decision is laudable? Does it in any way aim to salvage shareholders sentiments or make a case for Make in India or simply even make sense?

How do we justify the use of section 396 of The Companies Act in the manner that it might jolt the life out from the concept of limited liability corporations? Are we ready to let go of something so fundamental to the idea of promoting entrepreneurship in today’s India that looks to pioneer ‘Make in India’? To begin with—that can’t even be an argument!

I am also perplexed by the government citing other forced mergers, apparently, to put forth the idea of how healthy it can be. Here, what about the fact that those were mergers with parties that were state-owned and that had agreed to the merger.

It beats me when the government claims to be acting in the interest of the public because it is not very clear as to who that ‘public’ is and what those ‘interests’ are? All things kept aside, the merger burdens FTIL shareholders with a Rs 5600 Cr liability—how is it then in larger public interest.  With the Vodafone issue still un-remedied, the perception we might just be creating with such acts of executive overreach is that of being an economic destination that has lots to sort out on the economic front—certainly not in public interest anyway!

And, I conclude by saying that for a reputed company like FTIL, merging defunct company, NSEL in this case, with it can only dent its perception in the market. Besides, what everybody talking about this fiasco forgets that NSEL has no liabilities as all the transactions are under the privacy of contract between the brokers and their respective trading clients! I can’t wait to see who has the last laugh!

For more information check The Target Book Reviews.

Shantanu’s New Book nails the lies about NSEL crisis

I am a huge fan of Shantanu Guha Ray. His earlier books such as ‘Fixed!: Cash and Corruption in Cricket’ was really deep and went through every corner of the scandal that rocked the world of cricket in 2013. It was the same year that NSEL crisis broke and shocked the financial markets. Just that Shantanu has chosen to write the story behind that crisis, three years later. I must say that his book has once again done the unthinkable – revealed a side that was hidden purposely. I read ‘The Target’ because of Shantanu Guha Ray. I can guarantee you, that now I have enhanced my knowledge about the exchange industry. I also read up about Jignesh Shah. The book is written to show the parallel Government that is run by bureaucrats in the Centre and the State. And, the NSEL crisis is culmination of corporate jealousy, vested interests and the showcase of power by certain Government officials who were aware that they can get away with anything as long as they know how to pull the right chains.

I am just glad that Shantanu had the courage to expose a side that was masked in such a way that it would look like only one man is to blame for the entire Rs 5,600 cr crisis and that too in the financial markets that is practically run by influential brokers.

NSEL Case : Broker-Investor Nexus Exposed

Jignesh ShahIf you are an investor in the exchange market, you will enjoy reading ‘The Target’, written by Shantanu Guha Ray. It enlightens you about the ways you can manipulate your money so that you can refrain from paying tax. Well, now I understand the lust for the stock market that many people have, especially, if it is also termed as a ‘legal gambling’ in many circles.

the target book reviews

So here is how these so called investors who are quoting a big figure of Rs 5600 crore, actually played hand in glove with the brokers so that they can earn more and pay less taxes. Now, if I am a client who wants to indulge in market manipulation, then based on the PAN numbers of my wife and me, my broker will generate two unique client codes. So, then I start buying and selling from my UCC account and earn massive profits. Now, as be the RBI norms, any profit I make in exchanges, be it commodity or stock, I have to pay tax on it – for this is a profit or to simplify it further, it is an income for me. Now, how do the brokers help you in off setting these profits? Well, your wife’s account comes in handy then. Your broker will transfer your profits or losses to an account by changing the client code 30 minutes after the market closes for the day. As a result, if the information is changed and your account on paper now shows that you have lost all your money but that’s exactly opposite. So, you do not have to pay taxes. It is just brilliant how brokers-investors played this game, but when the NSEL crisis erupted they blame Jignesh Shah and FTIL for the discrepancies made by their broker, in some cases, with their consent. These brokers must be punished immediately!

The Target bares powerful vendetta against Jignesh Shah

It is a known fact that Jignesh Shah owned 99.9% of NSEL. But of all the exchanges that he created, only NSEL incurred a crisis. At the outset, it looks fishy as none of the other exchanges which he has been heading saw any such problems. In fact, NSEL ran successfully for five years since its inception in 2008. But, if there was a market watchdog, was it sleeping for five years. I am an ardent investor in the commodities market and I was one of the happiest when MCX came about in 2003. Jignesh Shah rose to stardom, and his direct competitor was the monopolistic NSE.

The NSEL which ran successfully for five years was under the supervision of FMC from 2011. So in the two years that FMC was the designated authority to lead the exchanges and protecting the investor interests, it was definitely sleeping. If it takes so much time to actually connect the dots or even notice a violation, two years after it was designated by the Govt to do so, then it is an issue as it clearly shows the FMC was ineffective as an authorised watchdog. In addition, if it was so incompetent, why did the Government approve of its recommendations of NSEL-FTIL merger, when they themselves merged FMC with SEBI. It does sound strange that it was a premeditated move to bring down Jignesh Shah. Have the vested interests succeeded in killing his spirit of innovation. Guess, only time will tell!

the target book reviews

Make in India and Executive Overreach can’t go hand-in-hand

It is easy for the Government to take actions against companies because they can defend it as an issue of larger public interest. However, the Government always forgets that any company is built by the hard work of the employee and the vision of its creators. When I read about the NSEL-FTIL merger, I knew without even reading the law books, that it was unconstitutional. And, after I read Shantanu Guha Ray’sThe Target Book’, I knew I was right!

Jignesh Shah’s innovations are touted as true ‘Made-in-India’ exchanges and now, this very indigenous idea is being trashed because the Government believes that a defunct NSEL will add value to a thriving FTIL. I can’t imagine from when the Government went wrong with its ideas of right and wrong.

It looks like the mistakes by the earlier Government are being carried forward by the current Government. What is the end result of this merger? It will not benefit the over 63,000 shareholders and the employees of FTIL. It would also hinder FTIL’s growth and kill the spirit of innovation which has been the genesis of the FTIL group. To cut a company of its livelihood in such a brutal manner is unacceptable.

For more information check The Target Book Reviews.