 "Jignesh Shah and his friends")
Thirukural, the ancient Tamil classic which our finance minister is fond of quoting in his Budget speeches, sets lofty standards for friendship. It says:
"Udukkai izhandavan kai pol Ange
Idukkan kalaivadam natpu" - Verse 788, Chapter Friendship.
Let us see what Jignesh Shah's friends, whom he decorated with board positions in his companies, are doing. First to go was P G Kakodkar. On July 30, a day before the government ordered suspension of trading on National Spot Exchange (NSEL), the veteran banker and former chairman of State bank of India, quit the board of Financial Technologies India Ltd (FTIL) on grounds of ill health.
Kakodkar was on the board of FTIL since 2001. The FTIL annual report said he was a director in four other public companies. It is not clear if the "ill health" affected the FTIL directorship in particular or other directorships as well.
Ravi Sheth, another long-time ally and friend, also washed his hands of on August 13. Sheth, a shareholder and non-independent director of the company withdrew his consent for re-appointment as a Director at the ensuing annual general meeting after looking at the developments.
R Devarajan and P R Barpande, both senior chartered accountants on the company's boards were the next to go. Their exits came on August 23 after FTIL's troubled child defaulted two settlements in a row.
On the day of these two exits, FTIL appointed IIM-A alumnus and a financial services professional N Balasubramanian as an additional director. Balasubramanian survived barely a few days. On August 28, after FTIL announced a bridge loan of Rs 177 crore to help NSEL's settlement Balasubramanian called it quits. Alongwith him senior solicitor C M Maniar also walked out.
Shah has lost more friends in Multi Commodity Exchange (MCX). Chairman Venkat Chary, former managing director Lambertus Rutten and four others resigned at the end of August, after the NSEL bluff was called and regulators said fit and proper criteria of promoters and directors in MCX will be scrutinised. Though different technical reasons such as age and pre-occupations were given for such exits, the timing was not lost on investors.
Thus, Jignesh's friends did the exact opposite of what Verse 787 of Thirukural says:
"Azhivi Navaineekki Aaruyththu Azhivinkan
Allal Uzhappadhaam Natpu"
It means friendship turns one aside from evil ways, makes him walk the good path, and, in case of loss if shares his sorrow. May be Thiruvalluvar did not foresee the changed dynamics of friendship in modern screen-based exchange business.
Both FTIL and MCX are listed companies. Therefore, though these elite professionals entered the board due to their friendship and familiarity with the promoter Jignesh Shah, they also owed a duty to the other shareholders of these companies who part-funded millions they earned in sitting fees, perks and other benefits. While on the board they had a fiduciary duty to ask the right questions about the subsidiary/ sister concern that was blatantly abusing the system. But for that, they had to keep their eyes and ears open. Instead, they are off to greener pastures when shareholder wealth is going up in smoke.
"Udukkai izhandavan kai pol Ange
Idukkan kalaivadam natpu" - Verse 788, Chapter Friendship.
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This verse means that real friendship is the one which rushes to help in bad times like the reflex of a person's hand to the loss of a piece of clothing. Salman Khan may not appreciate it much, but Thiruvalluvar's definition adds another dimension to the English adage "A friend in need is a friend indeed." Thus, a friend should not only help when in need, but also help quickly and without any prompting.
Let us see what Jignesh Shah's friends, whom he decorated with board positions in his companies, are doing. First to go was P G Kakodkar. On July 30, a day before the government ordered suspension of trading on National Spot Exchange (NSEL), the veteran banker and former chairman of State bank of India, quit the board of Financial Technologies India Ltd (FTIL) on grounds of ill health.
Kakodkar was on the board of FTIL since 2001. The FTIL annual report said he was a director in four other public companies. It is not clear if the "ill health" affected the FTIL directorship in particular or other directorships as well.
Ravi Sheth, another long-time ally and friend, also washed his hands of on August 13. Sheth, a shareholder and non-independent director of the company withdrew his consent for re-appointment as a Director at the ensuing annual general meeting after looking at the developments.
R Devarajan and P R Barpande, both senior chartered accountants on the company's boards were the next to go. Their exits came on August 23 after FTIL's troubled child defaulted two settlements in a row.
On the day of these two exits, FTIL appointed IIM-A alumnus and a financial services professional N Balasubramanian as an additional director. Balasubramanian survived barely a few days. On August 28, after FTIL announced a bridge loan of Rs 177 crore to help NSEL's settlement Balasubramanian called it quits. Alongwith him senior solicitor C M Maniar also walked out.
Shah has lost more friends in Multi Commodity Exchange (MCX). Chairman Venkat Chary, former managing director Lambertus Rutten and four others resigned at the end of August, after the NSEL bluff was called and regulators said fit and proper criteria of promoters and directors in MCX will be scrutinised. Though different technical reasons such as age and pre-occupations were given for such exits, the timing was not lost on investors.
Thus, Jignesh's friends did the exact opposite of what Verse 787 of Thirukural says:
"Azhivi Navaineekki Aaruyththu Azhivinkan
Allal Uzhappadhaam Natpu"
It means friendship turns one aside from evil ways, makes him walk the good path, and, in case of loss if shares his sorrow. May be Thiruvalluvar did not foresee the changed dynamics of friendship in modern screen-based exchange business.
Both FTIL and MCX are listed companies. Therefore, though these elite professionals entered the board due to their friendship and familiarity with the promoter Jignesh Shah, they also owed a duty to the other shareholders of these companies who part-funded millions they earned in sitting fees, perks and other benefits. While on the board they had a fiduciary duty to ask the right questions about the subsidiary/ sister concern that was blatantly abusing the system. But for that, they had to keep their eyes and ears open. Instead, they are off to greener pastures when shareholder wealth is going up in smoke.