SEBI gets a troubleshooter in new chief
The new Securities and Exchange Board of India (SEBI) chief is a seasoned troubleshooter, whose mild-manners and people management skills have helped salvage two large state-run financial institutions in less than five years.
A career bureaucrat, Meleveetil Damodaran, named to head SEBI for three years late on Thursday, has a fan club at the stock market.
"If only SEBI was a listed entity, I would have put an immediate buy call on it," said country head of equities and private banking at HDFC Bank Ltd Abhay Aima.
The 58-year-old will need all his skills to restructure the market regulator, which has lost most of its rulings on appeal and does not inspire much investor confidence.
Damodaran takes over at a time when foreign investors are pouring into the booming Indian stock market. His main challenge will be to steer it clear of the scandals that have spooked it in the past.
Foreign funds moved more than $1.3 billion into Indian stocks in February, lured by strong quarterly earnings in an economy that is expected to expand seven per cent in the current year ending March.
The inflows lifted the benchmark Bombay share index to an all-time high on Monday, topping out a rally of some 10 per cent over four weeks. The index dropped 1.3 per cent in the past three days, but was up again 0.5 per cent by the afternoon on Friday.
Soccer fan Damodaran, who is said to have a good rapport with Finance Minister P Chidambaram, declined to comment about his appointment. "I am yet to take charge," he said.
On a Sunday evening in 2001, Damodaran was rushed to the financial capital of Mumbai to rescue state-run Unit Trust of India from collapsing, after a scandal rocked the nation's largest mutual fund manager.
The fund had some 20 million unit holders, mainly pensioners and widowers, and Damodaran went to work to restore their confidence in the trust.
No sooner had he nursed back it to health, thanks to some restructuring and a stock market rally, than the graduate in economics and law was sent on another tricky mission: to rescue state-run Industrial Development Bank of India Ltd.
Damodaran turned the lender, which was reeling from bad loans and its exposure to troubled energy trader Enron's India plant, into a commercial bank, and set the ball rolling for its merger with IDBI Bank Ltd, which it had founded.
Since his appointment in September, 2003, IDBI shares have nearly trebled.
"He should have stayed here for at least three more years,"
Executive director of IDBI JN Godbole told Reuters. "He was not afraid of taking unconventional decisions."
Shares in IDBI and IDBI Bank fell about four per cent on Friday. Traders said this was because investors were worried about the future following Damodaran's departure.
He takes over from GN Bajpai, whose three-year term ends on Friday.