The article “A newspaper that wanted to fly” (August 7) raises some disturbing questions. First, were funds raised in Deccan Chronicle Holdings Ltd (DCHL) to provide capital to Aviotech? Second, the Securities and Exchange Board of India’s (Sebi’s) rule on disclosing pledged shares was skirted by creating “lien” on shares. In effect, the promoter may have taken loans by providing his shares as security, which may not be invoked as a pledge till the last minute by which time everybody is rushing to get out. Sebi should consider making it mandatory to disclose shares on lien as well.
Finally, I often read reports in which a “fund manager” seems to have more knowledge about the company than what is known publicly, which makes me wonder if certain non-public information is disclosed to select parties. For instance, this article quotes a fund manager saying: “Till June 15, the promoters repaid everyone. He even managed to secure a significant loan from one of the leading private banks. But, things seemed to have gone downhill since.” How is it that the fund manager was privy to such information when nothing was known through public sources like stock exchanges, company press releases, newspapers, credit rating agencies and so on? In fact, it was only in late June that CARE Ratings released a report saying the company had defaulted.
This incident says as much about our regulatory environment as it does about DCHL. Is it any wonder, then, that our people play it safe by investing in gold and land?
Krishnaraj Bangalore
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