Should the chairman of a tainted bank be appointed the president of FICCI?
FICCI has a say in major economic and industrial policies. Its office-bearers interact with top ministers and government officials. Its new president is the chairman of HSBC which has a spotty reputation overseas while in India it is alleged to have been involved in large and crude havala transactions. Is this desirable?
Federation of Indian Chambers of Commerce and Industry (FICCI) is the oldest apex chamber of commerce in India. It covers the country, and represents all sizes of industry, and trade. It consists of numerous specialist and generalist associations. Unlike the other two apex chambers it is not confined to manufacturing companies or to those mainly with foreign shareholding control.
As an apex chamber FICCI has a say in major economic and industrial policies of India. Its office-bearers interact with top ministers and government officials. They are expected to be objective, above any suspicion of vested interest, and represent views of industry and trade for the good of the country. The general reputation of their organizations and themselves must be spotless.
The election of the first woman president of FICCI last week raises concern. A senior and experienced person she is a well-known public personality. She will be the first banker to head FICCI. She has had work experience in three foreign financial institutions—Grindlays (now Standard and Chartered), Morgan Stanley and HSBC. In HSBC she has risen to heights no Indian has before. She is chairperson of the bank in India. Her connections and networking among politicians, administrators and businessmen in India is enviably wide and would be very useful to FICCI in making its voice heard.
Her appointment would normally be very welcome. I am acquainted slightly with her and have no personal animosity to her or her employer.
The latest issue of the ‘Economist’ writes about the big banks (HSBC, Standard and Chartered, UBS, etc) and their illegal activities for which they have paid unusually large fines in the USA. It calls these banks “too large to fail” and that hence their top executives are not in jail. HSBC alone paid a staggering $1.9 billion as fines in the USA to settle charges that included money laundering. The LIBOR scam in the United Kingdom resulted in some banks paying large fines in the UK and the US. The ‘Economist’ says that American regulators wanted to avoid criminal trials of the top executives of the concerned banks including HSBC because these banks are huge and such trials and convictions could have disrupted world financial markets. HSBC has thus a spotty reputation overseas.
In India there have been reports about HSBC being involved in large and crude havala transactions. It was reported that their representatives would collect rupees from homes and offices in India and guarantee that they would be deposited in overseas safe havens on which the depositor could draw cheques. Such transactions are unlawful under Indian laws. No investigation or action by the government has so far been reported. No political party has yet made an issue of this. The allegations may well be false. But they have not been disputed.
Naina Lal Kidwai who has been in HSBC for many years at the highest levels has been elected as President of FICCI. This is despite her bank in the USA being punished for wrongful activities. In India HSBC is alleged to have been involved in what if proven, are criminal acts. Such crimes must have been committed during her time at the top of HSBC India. If the allegations are true, they may have been committed without her knowledge. A full investigation may also clear the bank in India from these charges.
The image of industry has taken a beating in recent years (spectrum scam, coalgate, land grabs, and others). The FICCI president must belong to an organization that has a spotless record, as must its representative. All associations (chambers, trade, sports, professional) must follow this good practice.
Read here about Arvind Kejriwal’s HSBC expose.
(Surendra Laxminarayan Rao is a columnist in leading Indian newspapers. He has written or edited fifteen books, many papers and hundreds of articles. His latest book is "Powering India - A decade of Policies and Regulation". He was also the first chairman of the Central Electricity Regulatory Commission)
More in Moneylife
Is the interest in Gold ETFs waning? +3857 views
TODAY'S TOP STORIES
Keep your Money Safe: Avoid money traps and MLM
- Phaneesh Murthy: Let off by Infosys, sacked by iGate over sexual harassment charges
- Is the interest in Gold ETFs waning?
- OMCs to stop LPG deliveries to houses with multiple-connections from 1st June
- BSE to shift 29 scrips to T group category for failure to comply with demat norms
- Sun TV Networks announces 11% jump in its net profit
- S&P cautions India of rating downgrade; retains negative outlook
- COMPAT orders cement cos to pay 10% of the Rs6,307 crore penalty
- ITC net profit up 19.4%, aided by non-cigarette and agri-business segments
- Vikram Pandit to buy stake in JM Financial, to head its proposed banking arm
- MMM India, another MLM taking people for “double-your-money” ride
- RBI tells HDFC Bank not to make up its own KYC verification rules
- Why I-T returns of Pawar, Jindal and Gandhi are exempted from RTI?
- The draconian LBT: Local Body Tax explained
- How much longer can the FM, RBI ignore HSBC in India?
- Aadhaar: Private ownership of UID data- Part I
- Aadhaar: Who owns the UID database? –Part II
- Did HSBC Bank resort to toxic churning and illegitimate transactions to earn commissions?
- PNB Metlife refunds Rs25,000 to the correct policyholder: another Moneylife victory
- The draconian LBT: Local Body Tax explained
- Goa’s Advocate General is the highest paid across the country, reveals RTI
- Mass mis-selling: 59,000 investors in Kolhapur are alleged to have lost money in LIC ULIPs
- Do FIIs buy high and sell low – I? Maximum buying at peak index levels
- Investors lost Rs1 lakh crore due to poor regulation. Will there be a CBI probe?
- Directors of public sector banks: The ground reality
- Do FIIs buy high and sell low–II? Momentum-chasing
- Do FIIs buy high and sell low–III? Panic-selling during declines
- Has Rakesh Maria tried to salvage his image through Ram Gopal Varma’s film on the 26/11 attack?
What's your say?
What you said
Thanks for casting your votes! View Previous Polls
Join 22, 000 Others
- Daily & Weekly newsletters
- Access to www.moneylife.in to comment, create alerts
- Your own profile in Moneylife.in
- All special mailers
- Basic membership to MSSN, our new initiative
- Free ebooks
- Invitation to events
- Invitation to round-table meets
- Access to Insurance helpline
- Access to counselling sessions
- Access to Reading room in Mumbai