How would one react when any Govt. encourages corporate fraud or even oversees such an action – the whole deal turns into a fiasco! This is what happened to the NTPC Follow-on Public Offer (FPO). Whenever an interested investor asked me for an advice I’ve quoted with a lot of sarcasm over this FPO. But, of course as always the retail investor only asks for advice and very rarely heeds to it.
The stock has hovered around 200 for most part of the last six months excepting for a brief period when it the announcement of the Govt over the FPO. If the Govt. plans to investigate the hammering down from 230-240 levels, by an alleged bear cartel then it should also investigate the spiking up to these levels; neither of which seem to happen.
It’s a complete sham the way the divestment program is being handled. Going by the reports more than 50% of the unsubscribed share was bought by biggies like SBI, LIC and other public sector banks & insurers. And now the government pretends as if the offer has been done on a fair process of French Auction and claims it as huge success. But, all through these actions the govt. just breached the line of legality. If a similar action were to be done by any private business group then by now the promoters would be behind the bars.
In contrast, all this transaction achieved is: transferred the assets from the bank and the insurance company to an unrelated activity owned by the promoters. I wonder where all have the corporate ethics gone and moreover it’s a clear case of illegal transaction. Now, it’s interesting to see how SEBI, RBI and IRDA respond and react. Would they act as mute spectators and another entity ruled by the whims & fancies of lawbreakers of the govt.?
"The accomplice to the crime of corruption is frequently our own indifference." ~ Bess Myerson.
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