American Football and Basketball are two games where clock management is crucial – when one team wants a result to stay the same way from say two-thirds of the game, they resort to clock management – essentially running down the clock by defensive measures, waiting for the game to end. Clock management is effective in several situations some of which are listed below:
- When you want to preserve a lead and not get the best players hurt by playing hard (the seasons are bruising and long)
- When you want the status quo maintained
Is the shell company VCPL attempting to do clock management to escape from the Securities Exchange Board of India (SEBI) ruling to pay the long-suffering shareholders their dues? To understand this better, see Figure 1 below:
What a climb down it has been for NDTV! From lofty heights when they thought they could do whatever they want (Did Roy worship the James Bond villain Carver Mead in Die Another Day?) they are now close to shuttering their operations. Their savior VCPL is now playing defense, trying to avoid compensating the shareholders by appealing the SEBI ruling with the Securities and Appellate Tribunal (SAT). Here is where they have tried Clock Management:
- The SEBI ruling, ordering VCPL to make an open offer for NDTV Ltd. shares came on June 26, 2018.
- VCPL had 45 days in which to appeal the SEBI order at the SAT. That would be today (August 10, 2018).
- But everyone knew that the presiding judicial officer, J P Devadhar was completing his five-year term on July 11, 2018. Since he is yet to be replaced, there is just one member in SAT – C K G Nair. This means there is a lack of quorum. Plus, Devadhar’s was a judicial appointment and the current government knew this – yet they have not announced a replacement.
- VCPL played their hand cleverly. Why rush in and appeal to the SAT when they could wait till quorum is lost and then file their appeal!
- This leads to an interesting situation – SAT cannot rule until there is a judicial appointee and hence this is another way of doing tareek pe tareek. Make the patient shareholder wait a few more er years… The lone member in SAT must exercise restraint and tell VCPL to approach another forum such as a High Court or the Supreme Court. Besides, it is beyond his remit to pass any order or to even hear VCPL on the matter. He should just dismiss the Appeal and VCPL should not avoid the open offer as directed by SEBI.
SEBI must protect minority shareholders
When the case comes up before the SAT, SEBI should vigorously oppose a VCPL hearing as its order is quite strong. This despite their not lifting the corporate veil and hauling the real person behind VCPL. SEBI should keep in mind that its primary obligation is to the shareholders and that it represents the shareholders’ interests. 10 years is a long time to suffer. End this here and now. Both SEBI and SAT should set a precedent that under the new regime of Prime Minister Modi, corporate sector and others can’t play games with public shareholders (capital). Time to ensure that irrespective of who you are in the Corporate world, the law will prevail and one can’t get away with financial fraud and scams.
NDTV and Roys Fraud: SEBI vindicates PGurus findings in a stinging order against RIL Group Co. – Jun 27, 2018, PGurus.com
As presiding officer retires, SAT faces a hearing loss – Jul 11, 2018, Hindu Business Line