Allegations do not fly around when people are in full command of the facts. This unfortunately is missing in the latest saga unfolding in the country around the happenings at the market regulator – the Securities and Exchange Board of India (Sebi). Each day, there is enough and more verbiage in the print and digital mediums on either a new allegation or a supposedly new revelation with the Sebi chairperson Madhabi Puri Buch in the spotlight most of the time. No one seems to have a clear idea on all the disclosures made by her and as a result everyone seems to be shooting in the dark and leaving a retail investor-oriented market players uninformed.
This certainly is not a healthy happening in the world’s fourth largest stock market – next only to the US, China and Japan – with a market capitalisation of over $5 trillion. Other than occasional statements issued by the regulator, there has not been any clear communication between the government/ regulator and the mass retail investors. With all the allegations and concerns around supposedly inadequate disclosures, issues around conflict of interest, questions on the extent to which the regulator is Caesar’s wife remain unattended.
With little awareness on the true facts of the case and public mud-slinging happening all the time in a volatile retail market, there is nothing to assuage the trepidation of those concerned about the health of the markets. At the moment, talk to retail investors (many lining up to participate in the IPO boom) and to the market observers and they clearly point out that the happenings at the market regulator are a matter of concern and lack of clarity on the actual nature of facts is a major concern. Some do point out that with a market booming, all are having a good time but then once the tide turns there could be a tsunami of woes for the regulator and this, they fear, could be big source of worry for the market.
The biggest factor that has compounded the problems and made the regulator a news item each day is a clear failure to communicate. It is high time focus is back on communication with perhaps a press conference held by the government/ regulator to communicate the basics. No one knows if the government is fully aware of the facts. Have the board members of the regulator privily communicated? Is the matter being studied or investigated? What is the nature of enquiry and the interim arrangements made to ensure transparency within the current setup? What can the government/ regulator state in the light of all that has been alleged thus far to build trust with a promise to disclose the truth. The regulator may not be obligated to talk to media but when allegations fly around each day, it may help if the stakeholders in the market stay in full command of the facts.