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In a country where the concept of financial activism is still, well, only a concept, the opposition by shareholders to a salary increase proposal at the Tata Motors AGM came as such a surprise that financial editors immediately put this development on the front pages of their papers across the country.
Which is kind of an irony because this country otherwise celebrates the daring of a celebrated Indian picking up salt to defy the might of the British empire, but when it comes to evoking even a watered-down version of that courage in the face of financial misdemeanors, you won't find even five from millions of this country's investors who will dare to say 'Let me see how they get away with this!'
What makes us cowards in the financial domain?
A defaulting company reportedly deployed bouncers at its AGM to dissuade belligerent shareholders from raising uncomfortable questions. A steel company reported the theft (thus so!) of its complete plant and machinery and not one shareholder took the company to court. A firm suddenly selected to delist just when a sharp profit increase became imminent. An analyst criticised a steel major for understating its debt but was 'arm-twisted' to recant on television.
What does this tell us about ourselves?
That when it comes to fighting for what we think is right, we are 'cynically academic' - we are cynics about the managements, the system, the regulatory agency, the country, the legal system; our angst is largely academic because the maximum to which we will carry our disgust is the cocktail circuit or the Letters to the Editor space after which it is back to blaming our karma, finding another five-bagger that can recoup our loss and move on.
So again, for people who will compete ferociously for the last paisa in the marketplace, why will we treat people who eat into our savings with timidity and tolerance?
There are various reasons: We believe that this is just another form of systemic dadagari where the big eats the small and better to discount this into our system than agitate; in this country financial thievery is still considered among the more benign injustices; it is almost a norm for promoters to siphon money off the books so the trustable are really those who do so in moderation; the more 'trusted' are not the ones who do not siphon but ones who do and yet meet their earnings guidance which makes things so much more predictable for all of us; we have no moral perch from which to argue because most of us cheat on the system in various ways anyway; if analysts even ask managements probing questions, they will have cut their information umbilical cords cut to the extent that these analysts may be branded as 'difficult' and kept at bay.
So, what can turn the mood? Probably the instance of a large institution taking an unusual activist position, setting a standard, emerging as a role model, inspiring a community of fund managers and retail investors to think alike, creating a body of public opinion and driving fear into managements.
Woh subah kabhi toh aayegi…
The author is a stock market writer, tracking corporate earnings and investor psychology to gauge where markets are not headed
