The company, in its official filing with the Bombay Stock Exchange, writes about the promoters’ “creeping acquisition” of its own shares and how its share price has beaten the Sensex
There are a number of companies in the stock market that can go to any extent to increase their share price. But nobody will say this openly.
Now, strangely, there is one company that is doing exactly this. Indore-based Shakti Pumps (India) Ltd has openly advertised its true desires, and that too in a filing to the Bombay Stock Exchange (BSE).
An interesting aspect is that the filing appears more like a news item than a statement by the company. While the company makes a noise about its shares beating the Sensex in the past four weeks, it fails to mention that during this period its shares have in fact fallen to a 52-week low.
On 2nd September, Shakti Pumps filed a statement with the BSE saying, "Please find enclosed herewith the scanned copy of Press Release for Recommended Dividend and started creeping acquisition". A company announcing its 'creeping' acquisition? In addition, the word creeping is usually used to negatively to denote stealing or sneaking into. So, why on earth would Shakti Pumps want to steal its own shares? More about that later.
Let's take a look at the company's share price. According to a statement by Shakti Pumps, the shares of the only five-star Bureau of Energy Efficiency-certified pump manufacturer opened this week (22nd August to 26th August) at Rs38.50 and closed at Rs49.05 because of the creeping acquisition of shares by promoters.
One would like to know why the promoters of Shakti Pumps are increasing their stake in the company. The statement answers this also. It says, "On contacting a company person aware of developments, BP Patidar (who is Director-Finance, Shakti Pumps) said the promoters are wishing to increase their stake by 3%. He further added, the company has started booster pump manufacturing unit of annual capacity of 40,000 pumps will be operational by 31st December 2011, are few factors making promoters to acquire shares through creeping route".
According to the statement, the promoters bought 35,670 shares of Shakti Pumps from the open market between 24th August and 27th August, at an average price of Rs50.08. Owing to the promoters' buyback during the week ended 26th August, Shakti Pumps shares rose by 27.50%, whereas the benchmark BSE Sensex declined 2% to 15,848.80 points. The statement also claimed that during the week to 26th August, its share price outperformed the Sensex for the fourth week.
As of June 2011, promoters hold a 46.92% stake in Shakti Pumps, while the rest 53.08% is held by the public, including corporate bodies. In the past 52 weeks, Shakti Pumps hit a high of Rs115.50 on 7th September 2010 and a low of Rs37 on 19th August 2011.
Normally, promoters of many companies opt for the buyback route to boost, ratify sentiment of market participants towards their company, especially when the share price has been falling. This may be one of the reasons, why promoters of Shakti Pumps are more inclined to buy back the company's shares. However, till date not a single listed company has used a 'news item' format for a regulatory filing that describes a share buyback and compares its performance with the benchmark.
My confidence in the existing parliamentary and judicial process has been shaken badly by the recent events in the campaign against corruption
That the government had to succumb—after innumerable flip-flops-to the common citizenry, led by a small battle-scarred fauzi, who hails from Ralegan Siddhi in rural Maharashtra, speaks volumes about the aam admi's frustration and anger over the corruption and arrogance he suffers. It may be the hard-earned money he is compelled to shell out to obtain a birth or a death certificate, a domicile proof, ration card, electric connection, driving licence or passport. Or in the villages it may be the 7/12 extract of the land record, or a change of land use, sanction for a well. The list is endless. It will not be too long before millions of tired middle-class Indians hit the streets once again, seeking a change for the better, with some concrete solutions to end bribery, stop rising prices and injustice.
The Indian people have tasted success in their first major fight. The young and the old, students and workers, flat owners or shanty dwellers, they came out in thousands. Not just the men, even women and children; announced their struggle at the Marina in Chennai, Bengaluru's Freedom Park, on Mumbai's Azad Maidan, even at schools and on street corners in towns and villages, in response to the call from the Ram Lila.
The people have come to realize that it is well within their rights to take on the hitherto uncontrolled autocracy of the executive at the Centre and in the states—the netas and babus from parliament, to the state legislatures, municipalities and panchayats, perhaps even sections of the judiciary and the media which can be manipulated.
No, the Lokpal is not a magic wand that will put an end to corruption and corrupt practices overnight. There is a far more effective Bhram Astra or Rambaan that came into existence in 2005, the Right To Information Act (RTI). This useful tool is an effective and potent weapon that has worked wonders in pulling out that skeletons of corruption out of the cupboard-the 2G call, the Common Wealth shame, or Adarsh disgrace.
Today, the common citizen who seeks information, does not have to hire a legal luminary or expert to help him get it. Focused, crisp applications can receive appropriate responses within 30 days. But an applicant choosing to sleep over the information thus secured can make it a wasteful exercise. It is imperative that the information available is utilised to pursue the matter to the source; this is the first step in the fight against corruption.
The citizen's battle against corruption begins from a simple RTI query
Let me explain the reasons for my belief in the simple RTI rather than the Lokpal, as my faith in the existing parliamentary, governmental and judicial process has been shaken considerably recently.
The Lokpal bill has seen eight avatars. It was first introduced in the Lok Sabha by the government of Indira Gandhi on 7 May 1968 and passed on 20 August 1969, but before it could be ratified by the Rajya Sabha, the Congress Party split and this resulted in the dissolution of parliament. Subsequently, the bill was introduced by the Congress four times and the Bharatiya Janata Party twice. All the governments that proposed the bill seemed to have been jinxed and collapsed before completing their terms.
What I cannot understand is why the government and parliament in their wisdom, did not consider bringing the bill before the Rajya Sabha, which is a permanent body that never lapses or expires, as its members change periodically. And now Rahul Gandhi, in an out-of-turn Zero Hour intervention is calling to convert the Lokpal into a constitutional authority, which will be an even more lengthy process that will require the concurrence and two-thirds sanction of a score of state assemblies that is nothing short of shooting the bill down yet again.
Post Anna Hazare's hunger protest, for the first time in parliamentary history, the government was forced to set up a Joint Lokpal Drafting Committee constituted of some high-profile cabinet ministers and down-to-earth members of civil society. There are provisions to fasttrack the process to enact the Lokpal Act, even bypassing the parliamentary standing committee. One of these is to convene a joint session of the Lok Sabha and the Rajya Sabha, to allow members to debate the proposal in threadbare without the enforcement of party whip.
There will be enough time in the Winter Session this year. But it must also be debated in public and objections and suggestions must be sought from the people at large. In September last year, parliament apparently rushed through 17 bills in a few minutes, including an amendment to dilute the Prevention of Corruption Act! Come what may, the Lokpal Bill must be enacted into law this Winter Session and a Lokpal appointed to office by 26th January 2012. No two opinions!
The executive, that is the government, is next. Today, the hitherto respected prime minister is himself under a cloud of distrust for continuing to lead a bunch of ministers, some of whom are not only corrupt, but have even accused him of corruption. And still we read about the declaration of assets by some cabinet members which must be taken with a bucket of salt. Why does a former Maharashtra chief minister and now union minister not figure in the list of people disclosing their wealth? And should not the people know exactly how much, if any, income-tax each minister is actually paying? Some years ago there was the case of a very senior cabinet minister (who aspired to become prime minister) conveniently forgetting to pay taxes for ten long years. Unfortunately there was not RTI Act then to help fish out the information.
The stock replies from the prime minister these days is that a lot of the mess we are witnessing is due to the 'compulsions of coalition dharma', obviously implying that allies like the National Conference, Nationalist Congress Party, Dravida Munnetra Kazhagam and Trinamool Congress are holding him to ransom, or that there is 'no magic wand' to deal with corruption and to bring back black money, both response devoid of logic and lacking in conviction. It is a sad statement of affairs that he has not been able to step in even mildly to bring any debate to an honest and meaningful conclusion. The latest is the collapse of the sports bill criticized by heavyweights with conflicting interests.
It may be relevant to point out that Dr Manmohan Singh is perhaps the only unelected prime minister (he is a nominated member of the Rajya Sabha from Assam) and that he chose not to cast his vote in a general election and instead set off on a visit to China on the day of the Assam assembly elections. So much for respect for the democratic process from the head of the government.
The prime minister is increasingly seen to be presiding over a motley group of ambitious, arrogant, unscrupulous ministers in his union cabinet. He chose to ignore the warning by the then sports minister on the Commonwealth Games, and is today posturing about applications to Swiss bankers to retrieve black money stashed there. The United States has managed to get the Swiss to disclose the names of 4,550 individuals and foundations; the United Kingdom, France and Germany have also struck deals with the Swiss authorities to tax their citizens who might park money there, while our government is still dilly-dallying on the extradition of a 26/11 accused from the US.
Now, by allowing his ministers to defend the indefensible, through verbal gymnastics or the use of dirty tricks like the threat of a CBI inquiry or parliamentary privileges, the prime minister has forfeited the confidence of the nation, and is largely seen as a weak leader who is not capable of dealing with some equally serious situations like the rise in food prices; a far cry from the earlier image of an outstanding economist, a man of integrity, not given to verbosity, amiable and free of arrogance.
It is time to shout the warning by Oliver Cromwell, from 20th April 1653 at the Rump Parliament: "You have sat too long for any good you have been doing lately. Depart and let us have done with you. In the name of God, go." It is time for UPA2 to seek the peoples' vote of confidence through a mid-term election, at the earliest.
(The writer is a Mumbai-based chartered accountant and activist.)
Shailesh Gandhi, central information commissioner, says that with more and more public projects handled by PPPs, people have a right to know what is happening to these assets. He was speaking at a Moneylife seminar at the weekend
Public-private partnerships (PPPs) must come under the purview of the Right to Information (RTI) Act because they concern public assets and resources, says Shailesh Gandhi, central information commissioner.
"PPPs must be brought under the RTI. A lot of public assets, I think, are going to be shifted to these entities in the coming years. So, people have a right to know what is happening to those assets," Mr Gandhi says. "If information is denied, it is like a fraud, where public assets are privatised without consent."
He was speaking at a seminar on using the RTI effectively, hosted by Moneylife Foundation on Saturday.
Mr Gandhi says it is unfortunate that in many cases, public information officers (PIOs) reply that PPP documents do not exist, or that they are not traceable.
The central information commissioner mentioned that he had come across cases where documents were declared 'missing' within three years of signing of the contract. "How can they just go missing within three years? Even surprisingly, how does the contract itself disappear?" he wondered.
According to some activists, such 'missing' documents cases make way for new, or 'altered' documents, which differ substantially from the original ones. In many cases, facts and figures about the quantum of resources allotted to PPP projects are changed, they say. Therefore, they suggest that all contracts and related documents should be put up on the company website, or in some other public domain, as soon as they are signed, so that there is no chance of them getting lost.
Narrating from his personal experience, Mr Gandhi said that the truth can be revealed, even when documents are declared missing. "In a similar case the PIO said that the documents were not traceable. I asked him to report that the documents have been stolen. He was aghast and he refused. So I asked him to give me the evidence that the documents were not stolen. In the end he had to produce either the file or the backup," Mr Gandhi said.
According to Mr Gandhi, PPPs are 'substantially funded' by the government and hence should be subject to the RTI, even if the government may not hold a majority stake, or control in the project. Many government infrastructure and urban development projects are now handled by PPPs.
In a letter to Montek Singh Ahluwalia, deputy chairman of the Planning Commission, Satyananda Mishra, chief information commissioner has said, "In all such projects which are handed over to a PPP entity … the land, if not any other resource, given by the government forms a vital component of the project … and can be deemed to be substantial funding. Thus, a PPP entity should be deemed to be a public authority for the purpose of the RTI Act."
"The problem is that the moment information is sought about such an entity, public information officers deny information by saying that it is exempt from the RTI, because it is about a third party, and that the information is of commercial importance. That is not what the Act says," said Mr Gandhi.
He cited section 8(1) (d) that lists the exemptions. The section says that the disclosure must not 'harm' the third party whose views should be taken into account while replying to the query. The 'competent authority' must be satisfied that the larger public interest warrants the disclosure of information. "The other reason PIOs give for these queries about PPPs is that the information is held in a 'fiduciary' capacity. However, public interest overrides such restrictions," said Mr Gandhi.
The Central Information Commission, in a recent ruling, also spoke in favour of bringing PPPs under the RTI. In the order, Mr Gandhi said that even if private bodies resisted the RTI, it was the duty of the government to provide information to the public. The order also referred to guidelines issued by the Comptroller and Auditor General of India (CAG) that say the functioning of PPPs must be accountable and transparent.