is certainly shaking up things a month before his own term comes to an end. These include allowing all classes of investors to short-sell shares, ensuring mutual funds do not charge any entry load in case investors invest directly into a fund, tightening insider trading norms, and fast track listing of corporate bond issues, among others.
And, when the rupee seemed like it would keep strengthening with no let in forex inflows, with full support of the finance ministry, Damodaran put curbs on participatory notes. While many said this would finish the market's buoyancy, Damodaran stuck to his guns. Events have shown his assessment, that this would be a temporary blip, proved correct. Call it timing, or luck, but during his tenure as the stock market regulator, the indices have more than doubled.
Damodaran, of course, is used to being controversial and in the limelight. On July 9, 2007, when the BSE invited him for its annual day celebrations and successful completion of its demutualisation, Damodaran said that just divesting equity didn't mean demutualisation, and suggested that making profits should not come in the way of exchange's function as a self regulating organisation. He also said that having a large number of listed companies was not good enough, and that if they were not traded, they should not remain listed.
Damodaran, though, is known to be a man who gets things done. While at UTI, he ensured the government bailout for US-64 investors took place and he played a key role in transforming IDBI into a bank, in the footsteps of fellow development finance institution ICICI, which led the way in becoming ICICI Bank.
The biggest setback in Damodaran's Sebi tenure, of course, is what was perceived by many to be a witch-hunt against NSDL in the IPO-allotment scam.
In April 2006, Sebi found evidence to show market operators were creating fictitious demat accounts to apply for IPOs in the mandatorily-reserved category for small investors. Sebi then passed orders against various depositories (like NSDL) and depository participants asking them to disgorge the ill-gotten funds.
A high-profile case, Sebi had to eat crow when the Securities Appellate Tribunal (SAT) said Sebi had not proved that those who it considered guilty had gained through the IPO scam. In several other high profile cases, Sebi has suffered similar setbacks at SAT.
Damodaran, though, appears to have taken the verdict in his stride and continues to do things his way. Just recently, he reiterated his unpopular stand that there would be no relaxation for PSUs who failed to appoint independent directors under Clause 49, and that those who didn't would be delisted.
