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Should the chairman of a tainted bank be appointed the president of FICCI?

FICCI has a say in major economic and industrial policies. Its office-bearers interact with top ministers and government officials. Its new president is the chairman of HSBC which has a spotty reputation overseas while in India it is alleged to have been involved in large and crude havala transactions. Is this desirable?

Federation of Indian Chambers of Commerce and Industry (FICCI) is the oldest apex chamber of commerce in India. It covers the country, and represents all sizes of industry, and trade. It consists of numerous specialist and generalist associations. Unlike the other two apex chambers it is not confined to manufacturing companies or to those mainly with foreign shareholding control.


As an apex chamber FICCI has a say in major economic and industrial policies of India. Its office-bearers interact with top ministers and government officials. They are expected to be objective, above any suspicion of vested interest, and represent views of industry and trade for the good of the country. The general reputation of their organizations and themselves must be spotless.


The election of the first woman president of FICCI last week raises concern. A senior and experienced person she is a well-known public personality. She will be the first banker to head FICCI. She has had work experience in three foreign financial institutions—Grindlays (now Standard and Chartered), Morgan Stanley and HSBC. In HSBC she has risen to heights no Indian has before. She is chairperson of the bank in India. Her connections and networking among politicians, administrators and businessmen in India is enviably wide and would be very useful to FICCI in making its voice heard.


Her appointment would normally be very welcome. I am acquainted slightly with her and have no personal animosity to her or her employer.


The latest issue of the ‘Economist’ writes about the big banks (HSBC, Standard and Chartered, UBS, etc) and their illegal activities for which they have paid unusually large fines in the USA. It calls these banks “too large to fail” and that hence their top executives are not in jail. HSBC alone paid a staggering $1.9 billion as fines in the USA to settle charges that included money laundering. The LIBOR scam in the United Kingdom resulted in some banks paying large fines in the UK and the US. The ‘Economist’ says that American regulators wanted to avoid criminal trials of the top executives of the concerned banks including HSBC because these banks are huge and such trials and convictions could have disrupted world financial markets. HSBC has thus a spotty reputation overseas.


In India there have been reports about HSBC being involved in large and crude havala transactions. It was reported that their representatives would collect rupees from homes and offices in India and guarantee that they would be deposited in overseas safe havens on which the depositor could draw cheques. Such transactions are unlawful under Indian laws. No investigation or action by the government has so far been reported. No political party has yet made an issue of this. The allegations may well be false. But they have not been disputed.


Naina Lal Kidwai who has been in HSBC for many years at the highest levels has been elected as President of FICCI. This is despite her bank in the USA being punished for wrongful activities. In India HSBC is alleged to have been involved in what if proven, are criminal acts. Such crimes must have been committed during her time at the top of HSBC India. If the allegations are true, they may have been committed without her knowledge. A full investigation may also clear the bank in India from these charges.


HSBC exposed US to terror fund, money laundering says a panel


The image of industry has taken a beating in recent years (spectrum scam, coalgate, land grabs, and others). The FICCI president must belong to an organization that has a spotless record, as must its representative. All associations (chambers, trade, sports, professional) must follow this good practice.


Read here about Arvind Kejriwal’s HSBC expose.


(Surendra Laxminarayan Rao is a columnist in leading Indian newspapers. He has written or edited fifteen books, many papers and hundreds of articles. His latest book is "Powering India - A decade of Policies and Regulation". He was also the first chairman of the Central Electricity Regulatory Commission)



sohan modak

4 years ago

HSBC has carried out unauthorized m9oney transfers from India in favour of at least one foreign Government against which a complaint has been filed with ED, RBI,, FIU, Income Tax and Service Tax authorities. Such bank representatives should never be allowed to head an Indian organization.

nagesh kini

4 years ago

Why not when a Chairman of a corporate raided for tax evasion sits on the RBI Board?

chandra shekhar

4 years ago

* US-n-UK have not found anything against HSBC to proceed with criminal trials ... if, penalised thats in accordance to theit Law-of-Land ...!

** even in INDIA there are no cases of wrong doings in any courts against HSBC ... !!

*** aam-aadmi-party & IAC have been leveling allegations but, neither they have ever offered any Solutions till date nor they
have shown any Action except mere WORDS ...?

**** since, there is a mention of acquaintance with the Chairperson & the first woman President of FICCI ... if, HSBC
is tainted and its sufficient ground for disqualification of Kidwai as President, Ficci then, by the same yard stick AAP & IAC
are also tainted cause of your acquaintance (as admitted by you) with the Chair AND now, that AAP-n-IAC are political, you have a vested-interest too ??

***** this apart, the whole story is contradictory, under such circumstance "should Chairman of a Tainted Bank, become President of Ficci" doesnt hold water ...

****** also, not a single FICCI member (who are mostly Corporates) have Objected or Opposed Kidwai's candidature, how than a non-member can...???



4 years ago

The fault here lies with mainstream media as well. They have quoted wrong examples to show success of women in corporate sector. There could have been better examples.

Babubhai Vaghela

4 years ago

If tainted Bureaucrat PJ Thomas could not be CVC, Naina Lal Kidwai also cannot be President FICCI considering Institutional Integrity being at stake. President of India should tell FICCI to remove her as President.

BSE Sensex, Nifty trying to fight off downtrend: Tuesday Closing Report

The market is trying to rise but the trend is still down

The market brushed the status quo maintained by the Reserve Bank of India on the interest rates and closed slightly off the day’s highs on across-the-board buying support. The market is trying to rise but the trend is still down. The benchmarks are doing their best to fight off the downtrend. The National Stock Exchange (NSE) recorded a volume of 85.40 crore shares and advance-decline ratio of 1003:730.


The market opened in the green tracking global cues and on hopes that the Reserve Bank of India (RBI), in its mid-quarter monetary policy review later in the morning, will ease rates in an attempt to spur growth. In the global arena, markets in Asia were trading firm on expectations that US policy makers would conclude a budget plan before fresh taxes come into effect early next year. Overnight US stocks settled near the day’s highs on hopes of an answer to the “fiscal cliff”.


The Nifty opened trade at 5,874, up 16 points and the Sensex started off 49 points higher at 19,293. Buying interest in auto, capital goods and consumer durables stocks helped the market remain in the positive, but were range-bound till the RBI policy announcement.


The central bank’s decision to keep key rates unchanged saw the market sliding into the red. The reversal led the benchmarks to their lows with the Nifty touching 5,823 and the Sensex retracting to 19,149.


However, the market bounced back from the lows on buying interest in metal, capital goods consumer durables and power sectors. An uptick in the key European markets in early trade also supported the sentiment in the domestic market.


The market continued to trade firm with the benchmarks hitting their high at around 2020pm. At the high the Nifty scaled 5,906 and the Sensex climbed to 19,396.


The indices closed off their highs with 12 of the 13 sectoral gauges in the green. The Nifty gained 39 points (0.66%) to 5,897 and the Sensex surged 120 points (0.63%) to finish trade at 19,365.


Among the broader indices, the BSE Mid-cap index gained 0.52% and the BSE Small-cap index advanced 0.59%.


The top sectoral gainers were BSE Realty (up 2.38%); BSE Metal (up 1.78%); BSE Capital Goods (up 1.50%); BSE TECk (up 1.14%) and BSE Power (up 1.08%). BSE Oil & Gas (down 0.21%) was the lone loser.


Twenty three of the 30 stocks on the Sensex closed in the positive. The chief gainers were Bharti Airtel (up 4.23%); BHEL (up 4.14%); Tata Steel (up 3.76%); Hindalco Industries (up 2.66%) and Sun Pharmaceutical Industries (up 2.33%). The chief losers were Maruti Suzuki (down 1.64%); ONGC (down 0.87%); Dr Reddy’s Laboratories (down 0.68%); Bajaj Auto (down 0.45%) and Reliance Industries (down 0.35%).  


The top two A Group gainers on the BSE were—Unitech (up 5.75%) and Zee Entertainment Enterprises (up 5.47%).

The top two A Group losers on the BSE were—Jaiprakash Power Ventures (down 6.86%) and Hindustan Zinc (down 2.67%).


The top two B Group gainers on the BSE were—Polar Industries (up 19.95%) and Vertex Spinning (up 18.84%).

The top two B Group losers on the BSE were—Mahanivesh India (down 19.99%) and Comfort Intech (down 13.19%).


Out of the 50 stocks listed on the Nifty, 37 stocks settled in the positive. The major gainers were BHEL (up 4.39%); Bharti Airtel (up 4.36%); Tata Steel (up 4.12%); Hindalco Ind (down 2.62%) and Jaiprakash Associates (up 2.55%). The key losers were Maruti Suzuki (down 1.57%); Dr Reddy’s (down 0.97%); Ranbaxy Laboratories (down 0.81%); Bajaj Auto (down 0.60%) and RIL (down 0.59%).


The Asian pack settled mostly higher following a report that US president Barack Obama made compromises in negotiations for a budget deal. Investors are awaiting the outcome of the Bank of Japan’s policy meeting on Wednesday for fresh stimulus announcements.


The Shanghai Composite added 0.10%; the KLSE Composite gained 0.66%; the Nikkei 225 climbed 0.96%; the Seoul Composite advanced 0.51% and the Taiwan Weighted rose 0.16%. On the other hand, the Hang Seng fell 0.08%; the Jakarta Composite declined 0.33% and the Straits Times lost 0.06%.


At the time of writing, the key European indices were trading with gains between 0.07% and 0.54% and the US stock futures were in the positive.  


Back home, foreign institutional investors were net buyers of shares totalling  Rs886.68 crore on Monday while domestic institutional investors were net sellers of equities amounting to Rs690.32 crore.


Healthcare major Apollo Hospitals Enterprise today said it will invest Rs400 crore to set up 10 specialised hospitals in India by 2015 for treatment of heart diseases and cancer. Out of the total, five will be focused on treatment of heart diseases and the other five on cancer treatment. These will be in addition to the group's plans of adding 2,000 beds. The stock added 0.15% to settle at Rs812.80 on the NSE.


Industrial solutions provider Honeywell Automation India today said its promoter Honeywell Asia Pacific Inc has sold 6.24% stake in the company for an estimated Rs 130 crore. The stake sale was done to bring down promoters’ holding to 75%, in compliance with SEBI guidelines. Honeywell Automation tanked 6.75% to close at Rs2,590 on the NSE.


Pharma major Aurobindo Pharma today said it has received US health regulator’s final approval to market Abacavir Tablets, used in the treatment of Human Immunodeficiency Virus (HIV), in the American market. The annual sale of the product is approximately $88 million. The product has been approved out of Unit III formulations facility in Hyderabad, India, the company said. The stock gained 2.03% to close at Rs190.80 on the NSE.


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