In your interest.
Online Personal Finance Magazine
No beating about the bush.
A mild-mannered PR person working for the Tatas hanged himself recently. How high are the stakes for companies?
A rather chilling blog post, reproducing a letter from nine journalists (including the Forbes India ex-editor and president of the Press Club of Mumbai) to Ratan Tata and Cyrus Mistry, chairman of the Tata group, has sent shock waves among journalists. After all, it involves India’s most blue-chip group and the suicide of Charudatta Deshpande, a former journalist colleague, who successfully switched to PR over a decade ago.
The mild-mannered Charu (as he was known) joined Tata Steel a year ago after a long stint with ICICI Bank and Mahindra & Mahindra. He had resigned from TISCO a month before his suicide on 28th June. The letter says that Charu was accused of ‘leaking’ confidential documents to journalists for a Cover Story titled “Remoulding Tata Steel”; that he was confined under virtual ‘house arrest’ for two weeks in Jamshedpur and repeatedly threatened. The journalists allege that there was a concerted attempt by “Tata Steel officials and the PR agency to pass off his death as a heart attack, and not a suicide.”
Interestingly, there seems nothing in the Forbes Cover Story to warrant such an extreme reaction from the Tatas. Chairman Cyrus Mistry has responded to the journalists’ request to ‘institute a proper inquiry’ and assured that he has put in place an ‘appropriate mechanism’ to look into their allegations and take necessary action. But this is clearly a test for the new chairman.
Ratan Tata was always hypersensitive to media criticism, a fact that even the Tata group’s high-profile lobbyist Niira Radia is heard acknowledging in a leaked phone conversation. Cyrus Mistry is very low profile and little is known about him as a person.
The Tatas have not exactly covered themselves in glory in the 2G scam and will be subject to close media scrutiny in the future too. Cyrus Mistry’s actions in connection with Charu’s suicide will indicate whether the Tatas are now even more paranoid about the media. Or will they make amends after what happened with Charu—if it was a tragic aberration—by turning more open and practical about negative publicity or criticism, when warranted.
Samir Zaveri, is a rare hero. After losing both his legs in a railway accident at the age of 16, he has dedicated his life to help railway victims. Last week, Mr Zaveri was recognised as one of Mumbai’s top five heroes by Mumbai Mirror. Moneylife Foundation, which started the Coalition for Safe Rail Travel (CSRT) as a loose network of people and organisations interested in railway passenger safety felicitated him
At a meeting of the Coalition for Safe Rail Travel CSRT meeting held on 6 July 2013, Moneylife Foundation felicitated Samir Zaveri on being recognised at a true Mumbai hero by Mumbai Mirror.
Samir Zaveri is an extraordinary activist who has dedicated his life to helping railway accident victims and passengers over the past 20 years without expecting anything I return. Zaveri lost both is legs at the age of 16, when a local train hit him near Borivali. As he says, he would almost certainly have almost died, if someone had not helped him and rushed him to hospital in that first crucial ‘golden hour’ when so many victims simply bleed to death. Ever since, he has been striving to help railway victims – his mission has now gone far beyond merely saving lives. Apart from medical care for accident victims, it extends to helping them get compensation. He got the Railways to install medical facilities at Dadar station through an order from the Bombay High Court, which also ordered payments to private hospitals (to ensure that victims are taken to the nearest hospital) and to ambulance services and helpers, in order to ensure they make haste to help.
He single-handedly does more to push for safe rail travel than other activists put together. His transport is a scooter with sidecar. He uses RTI and litigation effectively to expose the loot and corruption and demand better medical facilities at stations. Corrupt sections of the railway police have filed false civil and criminal cases against him because he has busted their illegal railway court at Kurla Station, through which the railway police used to arrest people travelling with their savings and used to release them on fake bail bonds.
Samir has witnessed the callousness of the Railways, Railway Protection Force (RPF) and even state-managed Government Railway Police (GRP) on several occasions. He even faced the wrath of the Railways and Police for his tireless, never giving up spirit and humble attitude and has now won the case against the Railways and Police.
If anyone asks the ever-optimistic and cheerful Samir Zaveri what they can do to help – he has a stock answer -“All I need is support”. Moneylife Foundation decided to do this by creating a platform for like- minded activists to network and coordinate for the cause of helping railway passengers. The Coalition for Safe Rail Travel meets on every first Saturday of the month at Moneylife’s Knowledge Centre at Dadar. Among its active supporters are veteran activist, Dipak Gandhi, chairman of the Mumbai Suburban Passengers’ Association, activist Gaurang Damani and others. To know more details, click here. Those interested in being a part of this group may please write to Moneylife Foundation at [email protected]. You can also join our Facebook page and Twitter account @SafeRailTravel.
Like Samir Zaveri, you are invited to become a Moneylife Foundation member today. Also enjoy 16 free benefits on registering as a Foundation member. Click here for free membership.
Savers are not interested in investing in mutual funds. But instead of trying to find out the real reasons, the fund companies seem to think that if they use marketing gimmicks like consumer products companies, they will be able to expand their reach, rather than simpler products and actual performance
The mutual fund industry, which is facing continuous erosion in equity assets for several years now, is clearly worried about its survival. Some desperate measures were discussed at an industry summit in June to meet the objective of ‘reaching out to a larger number of investors’ and focus on ‘investor education & awareness’. The industry believes that its problem lies in the fact that 74% of its market is concentrated in just five cities, so it engaged PriceWaterHouse (PWC) to come up with solutions.
Typical of consulting firms, PWC held out the promise of ‘big opportunity for growth and further penetration’ and offered some neat, if fanciful, solutions that are attractive to companies with spending power but no ideas. PWC’s suggestions were: to market mutual funds as a ‘concept’; use ‘social media’ to spread the word; and use ‘mobile banking’ which could be a potential game-changer in marketing mutual funds. Let’s examine each of these.
Fair & Lovely Mutual Funds: Since a speaker from Hindustan Unilever was invited to tell the industry how to sell mutual funds like personal-care products, let us look at the hottest-selling ‘concept’ created by such companies. Giant multinationals spend crores of rupees every year to tell Indians that being of fairer skin should be our ultimate goal and desire. If you are fair, you are immediately more beautiful, more confident, have more friends, get the best jobs and attract better partners, is their message. In recent years, they have expanded this ‘concept’ to men and doubled their market. Prominent media houses ‘help’ to promote the ‘concept’ of metrosexual males who are unembarrassed about using an array of cosmetics. Such editorial promotions are now part of advertising deals.
More importantly, these companies have no qualms about making claims that are outright false or misleading. They routinely launch products with blatantly false and bogus claims about making your skin X-times fairer, your hair Y-times stronger or use tags like ‘guaranteed’, ‘best’, ‘100%’ and ‘herbal’. They also file complaints against each other’s products which are regularly upheld by the Advertising Standards Council of India (ASCI). The offending ad is withdrawn for a few months until another outrageous ad takes its place. Since ASCI is not a statutory regulator, it remains soft in dealing with ‘habitual offenders’. After all, media and advertisers are beneficiaries of big advertising budgets. What about consumers? Why don’t they protest? Well, because these nicely perfumed gels and lotions may not make you fairer, but they are harmless; they moisturise and they allow people to live in hope. In other words, the consumer is a willing sucker in this case and there is little harm done.
Can mutual funds (MFs) try to sell their schemes like fair & lovely? MFs have an obligation to perform. If an MF scheme, over a period of time, gives you low or negative returns, it hurts your financial future. It is not harmless.
Sell MFs through Mobile Phones? Before you say: ‘What an idea sirji’, pause and think. True, India has a mobile subscriber base of 900 million, but using phones to invest, exit and redeem funds? What do you do about a regulator whose complex KYC (know your customer) procedures make it a hassle even to buy online? Moneylife has been researching the online subscription process offered by leading distribution companies and has come to the conclusion that it is so cumbersome that only net-savvy and dogged individuals would use this option, especially for first-time subscription. If the entry to mutual fund investment is difficult, how can mobile phone transactions make it easier? And who will MFs target for mobile transactions? If it is the affluent class in smaller cities and towns, then access to information is hardly a barrier. Surely PWC does not expect the non-urban poor, who have low income and savings, to use mobile banking to buy mutual funds?
Social Media for Mutual Funds: PWC suggests that mutual funds should use social media for product innovation, customer services and real-time information with the aim to create unique solutions and experiences. Creating twitter handles or facebook pages only works when handled well and for companies that deliver on their promises. It can be brutal and enormously damaging when a company has poor service, grievance redress mechanism or couldn’t care less for customers, which is often the case.
Consider just one example. HDFC Mutual Fund is consistently among the best performers in the industry and HDFC Bank is certainly the best in terms of its stock price and profitability. But check the Bank’s @HDFC_Cares twitter handle and you find that it is a magnet for angry customers to vent their ire. In fact, it would probably do well to avoid a possible negative rub-off. Social media is completely democratic and there are plenty of global case studies to show that the impact of hundreds of instant opinions (including false and uninformed ones) can devastate a brand.
The best advice that PWC can give MFs is to focus on performance and pay attention to consumer needs instead of launching products only to enhance assets under management. The investment will come.