Wednesday, 20 March, 2013

Who watches the watchdog?

Who watches the watchdog?

Just read a news item which essentially says:

Den Networks, along with 24 other entities, including its chairman and managing director (CMD), Sameer Manchanda and Raghav Bahl, founder and managing director of Network18, has paid Rs4.93 crore to settle a case of alleged violations with market regulator Securities and Exchange Board of India (SEBI). Thus, it appears that these entities have taken advantage of SEBI’s consent order mechanism by collectively paying a huge fine in order to escape possible punishment, public shame and possible debarment from the securities market.

This is neither the first (nor, unfortunately, the last time) that an organisation is going in for a "settlement" by simplying paying money without admitting or denying guilt.

Interesting observations include:

  • No admission / denial of guilt

  • No declaration as to the specific nature of violations

  • No indication as to the kind of and extent of evidence that was available to prove the alleged violations

  • No publicity in the media

  • Involvement of Rajiv Bahl, Founder & Managing Director of Network 18, which, if I'm not mistaken runs a couple of news channels including a business news channel in the alleged violations (He has also paid some fine for his role in the alleged violations)

  • ALL media houses scream from the roof tops when a politician or a "corporate honcho" indulges in any major or minor financial fraud / scam. And rightly so. But there appears to be an absolute SILENCE when it comes to these kind of matters when their own "brother/sister media persons" are involved.

By now you'll be wondering as to what this post is doing in a financial blog. You would probably think that it belongs to my "Multiple shades of grey" blog. My reasoning is quite simple:

If the media houses are as transparent in their dealings and as "honest & straightforward", you can very well imagine the extent to which you can rely on any information that comes from such media houses.

Please don't get me wrong. I'm not, for a moment, suggesting that one particular media house is not dependable - I'm sure that all of them are entirely capable of "doing such things" - only the degree is likely to vary from one organisation to the other.

On the contrary, what I'm suggesting is that you should be quite wary of anything that you read / hear / watch (including my blog posts). You should take things with a pinch of salt. You should continue to remain cynical. You should watch your steps and watch your back.

Most importantly, before parting with your money in making any investment, you should think a hundred times about what Warren Buffett is known to repeatedly emphasize:

  • Return OF Capital is always more important than Return ON Capital!

Stay wary. Keep reviewing your investments. Stay invested.



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