A status check of Indian economic growth as free market prevails
Kotak Securities, voted to be the best broker of India in couple of subsequent years, sent me a notice few weeks back that our trading account is being closed due to lack of documentary evidence. It further went on to state that there exists no share in our trading/demat account.
Surprised at that so called â€˜legal noticeâ€™; we wrote back to them denying both their statements. We had documentary evidence (however we also know documentary evidence means nothing in India).
They retracted, acknowledged that they have all documentary evidences and also acknowledged that there exists share in our account.
When I called my acquaintances in Kotak; he said that it must be a computer-generated statement; and mistakes like that are rampant. I am however not an expert on legal matters; and donâ€™t know how to react if tomorrow my banker claims through a legal notice that my account with them is closed and it didnâ€™t have any money. I hope no one should take that lightly!
I am not sure what would have happened to one, in the same position as mine, if s/he kept quite against that e-mail and physical legal notice. Kotak could have well made money by selling the stocks (what else can be the motive?); and the money could have well gone from investorsâ€™ pockets to the ownersâ€™ pockets. At least, it being the best brokerage firm in India, Kotak bothered to issue that (faulty) notice. In India, one could have done that without the notice as well.
Anyway, that incident was just weeks ago. And this morning again, I was surprised to receive another such mail from that so-called best brokerage house of India.
Realizing that enough is enough, I opened SEBI site; explained the case and tried to submit the complaint online against the broker, Kotak here. Till some time back; SEBI (equivalent to SEC of the US) claimed in its site that their aim is to be best regulator of the world. My prior experience was anyway otherwise. They rather identify the weakest investors to attack rather than safeguarding investors community, and for the large brokerage houses, who are often found to be indulging in malpractices globally, SEBI simply donâ€™t exist and can even be manipulated when it comes to creation of liquidity through margin calls.
After keying in some 2400+ out of permissible 2500 characters; when I wanted to submit the complaint; it failed and I receive a feedback informing me that the complaint contains â€˜invalid charactersâ€™. Anyone would be at a loss, and so was I. I desperately try to identify what could be an invalid character of the keypad as per the definition of SEBI. It didnâ€™t identify any; nor provided any clues.
So I frantically remove all punctuations, remove numbers, remove parentheses â€“ it still does not work. I cut back the characters to couple of hundreds; still it does not work.
Utterly disappointed, I finally put the simplest possible 8-10 of words without explaining the background; then it finally gets submitted.
No reference number comes online; SEBI would rather prefer to send me a physical courier with the complaint number.
There goes the story of the best brokerage firm of India and the regulator who wants to be the best regulator in the world. God help the investors of the world if SEBI, by chance, ever becomes the best regulator with its present level of knowledge, understanding and services!
The crime that Kotak committed is equivalent to a doctor issuing a death certificate when the unsuspecting victim is healthy and living fine (it must be noted here, that government agencies are reputed in India in declaring a living person dead; and bringing back life to the dead as well from its records).Â Kotak did it once; got away with it without any learning, and they know they can fleece their clients as much as they want; because India is like that today. People with the know-how know that if monitoring and implementing fair practices is carried out properly; 95% of Indian brokerage firms should be ideally closed down.
So effectively as an individual; no common citizen can do anything to get exemplary justice. Even if one approaches judiciary; one would spend much and the case would drag years.
And thereby the ground is perfect for brokers to fleece, banks to loot and regulators to party in â€˜incredible Indian growth storyâ€™.
And with 1.1 billion population, and a sheer fraction of them availing any services; service providers know hundreds of millions more can be cheated. So why care about ethical fair practices for repeat customers? You fleece the 1st time customer; make his/her life hell to showcase excellent profit, and take the next victim from the masses.
The cycle continues from political parties to banks to brokers. The only hope is media and alternate media â€“ however we know other than making some noises; it equally is ineffective. Until and unless customers wake up collectively and boycott these so called best service providers; brokers would fleece investors, banks would loot customers and regulators would party â€“ all at our expenses.
(The writer can produce whatever documentary evidences possible to proof the veracity of this article).
Ranjit Goswami is a research scholar with the Indian Institute of Technology (IIT), Kharagpur, India; and is the author of the book â€œWondering Man, Money & Go(l)dâ€™â€œ.