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Last Saturday, capital market watchdog Securities and Exchange Board of India barred Samir Arora, the flamboyant Singapore-based fund manager of Alliance Capital Mutual Fund and the FIIs/sub-accounts of US-based Alliance Capital Management, from trading directly or indirectly on the capital market. The charges against him? Insider trading and an attempt to create panic in the securities market.
For those who have been watching Sebi chairman Gyanendra Nath Bajpai closely, the news came as no surprise.
Bajpai had made his stance crystal clear after he took over when he told Business Standard: "I am like a traffic policeman. I will punish the rule breakers. When you jump a red light, you have to pay a fine. But if you kill a passerby, the punishment will be severe. I believe in crime and punishment. In the entire decision-making process, I want to reduce the subjective element."
The ban on Samir Arora is the more spectacular demonstration that Bajpai is not diffident about exercising the powers vested in the institution he heads. His recent action against dabba traders (or off-market cash traders) tells the same story.
"Of course, the powers are there. But are we barking enough? Are we biting enough? Powers are there in the books and we must exercise them. That is real empowerment," Bajpai had said.
No doubt he is well aware of the regulator's somewhat tarnished reputation for efficacy following the scandal, which preceded his term, over broker Ketan Parekh's questionable practices that brought the market to its feet in 2001.
A workaholic, Bajpai's mission seems to be to make the capital markets a safer place for small investors. He works 16 hours a day, often staying in office till 2 a m.
Though he's keen to keep the markets clear of the kind of nudge-and-wink trading practices for which it had become notorious, Bajpai also thinks investors need to be vigilant.
"You know, we must tell them that they must get out of the herd mentality. The quality of intermediation has to be improved and we must tell investors that the capital market is a jungle, and there are sharks and quicksand. If a broker is a cheat, he can be taken to task but if the market goes down, what do you do?" he once said.
The 61-year-old market regulator's down-to-earth values could well be rooted in his background. He comes from a village called Bhadras near Kanpur in Uttar Pradesh. His father, the headmaster of a government school, died when he was three years old.
He studied at DAV College, Kanpur, of which the other, more famous, alumnus is Atal Bihari Vajpayee.
His indifference to attracting controversy is no doubt rooted in his work experience. Bajpai joined the Life Insurance Corporation in 1965 as assistant administrative officer and rose to the top post superseding six executive directors for a 25-month term.
In 20 months, he overhauled LIC performance just as private players entered the arena.
Five months ahead of his retirement in February 2002, Bajpai took over as the chairman of capital markets watchdog.
He was never reckoned to be a contender for the job but emerged as the dark horse -- just as he did when he was appointed LIC chief.
He started his innings at Sebi on a somewhat controversial note when he banned companies from announcing dividends by violating the notice period set out in the listing norms in bourses.
To be sure, the order was passed under pressure from the finance ministry which took exception to companies announcing dividends early to skirt the dividend tax imposed in the Budget.
This enraged corporations so much that some CEOs went to the extent of describing Bajpai as a tax collector for the nation. Not that this deterred him from going ahead with his plan.
"My job is to ensure the economic development of India. The nation has a stake in corporations and it must get its share. I am no nationalist but I believe that there has to be a fair balance in wealth sharing," he had said at the time.