Incomplete disclosure

This book by the former chairman of the market regulator is an account of the 1976-batch Indian Administrative Service (IAS) officer’s eventful six-year tenure (2011-2017) at the Securities and Exchange Board of India (Sebi) — rightly described as “police for companies” by his two-and-a-half-year old granddaughter in the book.
 
The book’s catchy title, Going Public (a pun on a private company becoming publicly-traded) raised hopes that U K Sinha would spill the beans on large corporations that were in the news for violations such as insider trading or unauthorised money collection. The book, however, rarely ventures into muddy waters and even refrains from naming certain companies or individuals despite pages being dedicated to the nature of their transgressions.
 
Mr Sinha’s tenure at Sebi kicked off on a controversial note. Within weeks of his appointment, Sebi’s whole-time member (the second-most important post at Sebi) K M Abraham wrote a letter to the prime minister alleging that then Finance Minister Pranab Mukherjee and his adviser Omita Paul had pressured Mr Sinha to go soft on high-profile cases.
 
Mr Sinha tells his side of the story and discusses what could have prompted Mr Abraham to write that letter. He also gives a detailed account of the various public interest litigations (PILs) challenging his appointment, recounting how most of them turned out to be frivolous but caused him and his family considerable distress apart from impacting Sebi employees’ morale. Arguably, this chapter makes for the most interesting read. However, there was scope for more to be told, which Mr Sinha promises to do in another book.
 
Going Public has six sections and 19 chapters but is broadly structured in two parts. In the first part, Mr Sinha dwells on his family background, his journey towards becoming a public servant and then into capital markets, where he wore a number of hats such as joint secretary, capital markets, chairman and MD of UTI Mutual Fund and, finally, Sebi chief. He had a tenure of an unprecedented  six years (his three predecessors had only three-year terms each) and served under both Congress- and BJP-led governments.
 
This section offers an interesting perspective on the complexities of bureaucracy, handling of crises and India’s evolving regulatory landscape. Mr Sinha has thrown in some anecdotes that makes it appealing for someone who closely follows the financial markets.  The book has a lot to offer for anyone who needs to understand the so-called US-64 crisis (UTI’s infamous guaranteed- returns equity scheme that went bust).
 
The second part of the book focuses on Sebi. After clearing the air on the various controversies that followed his appointment, Mr Sinha has dedicated nine chapters to various aspects of the securities market such as mutual funds, overseas investments, corporate governance and secondary market.
 
Here he talks about the initiatives Sebi took under him, with a bit of historical perspective thrown in. Some of these chapters read like copies of his speeches during his Sebi tenure, with little information beyond what is already in the public domain.
 
Sebi handled many interesting cases under Mr Sinha, such as the Reliance Industries’ Rs 500-crore unlawful gains case, the co-location controversy at the National Stock Exchange (NSE) and  the Rs 5,600-crore scandal at the National Spot Exchange (NSEL). The book, however, finds no mention of them, an odd omission considering that they dominated his tenure.
 
Instead, the book gives a detailed account of the subject of unauthorised money collection schemes. Mr Sinha explains well the regulatory arbitrage that helps these schemes flourish and later offers brief summaries of some of the cases (PACL, Rose Valley Group, Saradha).
 
Mr Sinha has dedicated a chapter to Sahara, but here again, there is little beyond what is known already. But it is interesting that he showers praise on Mr Abraham for his work on the case. “[Abraham’s] order [against Sahara] became the foundation for appeal before SAT and then before the Supreme Court by Sahara,” he writes. The book highlights the discrepancy in number of investors Sahara claimed and the actual number of investors who claimed refunds. He terms Sahara’s claim of 20 million investors as “one of the most important mysteries in the modern finance of the country”. He, however, refrained from sharing his view on the mystery.
 
Mr Sinha also touches on the various finance ministers and prime ministers he has worked with. He reserves high praise for the late Arun Jaitley and Narendra Modi. “The biggest strength was his firm belief that no person, big and small, should be spared,” Mr Sinha writes of Mr Modi, who he used to meet every quarter to apprise him of financial market developments.  Mr Sinha, however, criticises the government’s recent move to ask Sebi to park its income in a public account and seek approval before incurring any capital expenditure. “Such efforts are not conducive in [sic] creating a strong and independent regulatory environment,” he writes.