Impact of Scams on Investors.

Business Standard Smart Business event held on 23rd January, 2013 in Rajkot in association with Rajkot Saher Jilla Grahak Suraksha Mandal.

The consensus is out. Recent spate of scams like Satyam, 2G and coal allocation scam to name a few have robbed retail investors of the confidence to invest continually.

However, at ‘Business Standard Smart Business’ on 'Impact of Scams on Investors' here, organised by Business Standard in association with Rajkot Saher Jilla Grahak Suraksha Mandal, experts had their own reasons to offer behind the impact. Among the panellists were Himanshu Raninga, Resource Person, Securities and Exchange Board of India (SEBI), R. C. Popat, Director, Sandipani Institute, Rajkot, Mahesh Joshi, Head of Economics Department, Saurashtra University, Rajkot, and Vijay Chaturvedi, Head of Business Development, Monarch Projects and Finmarkets Ltd., Ahmedabad.

While some of the experts believed it was the lack of awareness among investors, others cited government's indifference as one of the reasons for impact. Offering his keynote address as the chief guest, Ashok Koyani, CEO, Saurashtra Kutch Stock Exchange Ltd. said that to avoid being impacted by scams and volatility of market, investors should not only align their investments to their financial goals, but also read and do thorough research.

Chaturvedi said, "Investors start losing money right at the IPO listing stage. If retail investors take care of certain things and do proper research, much of their investments could be safeguarded."

According to Popat, capital market, India Inc as well as investors should reduce their dependence on foreign institutional investors (FIIs).

Citing the US example where accountability on scams also lies with government, Samir Shah, president of Rajkot Chamber of Commerce and Industry (RCCI) said that the same should be implemented in India where the Indian government is also partly held accountable for corporate scams.

However, offering a counter-view, Raninga said, "We don't know who is at fault during corporate or other scams but we as investors have to be cautious on our part.”

Meanwhile, other issues that were discussed included IPO premium pricing, corporate governance, and steps to be taken by regulatory bodies and government to curb such irregularities.