Political Economy

From Ambani and Adani, a Most Consequential Defiance of the Modi Regime

SEBI's decision to roll-over in the face of corporate non-compliance and make the separation of chairperson and managing director of India's top companies 'voluntary' is a clear case of the betrayal of public confidence in the power of lawful authority.

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Except for a gentle tut-tutting in a couple of business newspapers, a definite and clear case of resistance to the Modi regime has gone totally unnoticed. This defiance comes not from the rowdy street but from the elegant board rooms of Corporate India and becomes all the more telling because it underscores, once again, that the ruling regime is skating on very thin ice.

A few days ago, the Securities and Exchange Board of India (SEBI) rolled over and gave in to big corporate entities like Mukesh Ambani’s Reliance Industries, Gautam Adani’s Adani Ports, Sanjiv Mehta’s Hindustan Lever, Sajjan Jindal’s JSW Steel, etc. SEBI meekly adjusted itself to these and other giant corporations who refused to show compliance with its decree that the top 500 listed companies by market value had to have separate – and unrelated – persons as chairperson and managing director. Before its deadline of April 1, 2022 expired, SEBI made its directive on separation a “voluntary” requirement. A classic case, if there was one, of what BJP leaders like to call ‘tushtikaran‘, or appeasement, plain and simple.

It is reasonable to assume that SEBI’s directive on separation, proposed five years ago, grew out of the reformist impulses of the 2014 Modi regime. The new ruling crowd was clamouring to sweep the Augean filth out of the corporate corridors. Consequently, the separation directive was introduced in March 2018 and the corporate sector had time till April 2020 to fall in line. Some did; but not all. In 2020, the deadline was extended by two years. Now again, no show by the modern lalas, who are not prepared to dilute their families’ stranglehold on these vast economic entities.

Undoubtedly, the SEBI directive met all the requirements of a good and reasonable law: neither arbitrary nor capricious nor whimsical. The rationale behind the SEBI separation directive was good governance in the large corporate entities which are not, and cannot be, totally beyond the ken of public scrutiny because none of them is entirely untangled with public finances (i.e. the taxpayers’ money), and are therefore enjoined to promote paramount social interests.

The fact is that the SEBI directive of 2018 was a small, even a minor, sub-set of a larger assertion. Perching itself on the ultra-deshbhakti pulpit, the Shahenshah and Shah regime has sought overarching and overreaching authority for itself because it claims, rather insistently, that it alone is unafraid to protect and promote the public interest.

The regime seeks extra moral authority and extraordinary legal powers for itself because it asserts that it is not beholden to any one section of society; that it is beyond the grip and reach of vested interests – and is beholden only to the idea of restoring the glory and prosperity of Ma Bharati.

Because this commitment is unprecedented, unique and unsullied,  the Shahenshah and Shah regime argues, rather self-servingly, that there can be no social institution – universities, media, religion, business— beyond its curative reach. For example, it will not hesitate to correct and rectify “regressive” practices among the Muslims. It will not allow itself to be overly-impressed with the claims of an independent media and is ready to sort out the recalcitrant practitioners of journalism of dissent and defiance. Similarly, it will not tolerate universities becoming autonomous and vibrant sites of independent and critical thinking.

Also read: Irresponsible or Worse? What SEBI’s Probe of NSE Tells Us About Its Stellar Board of Directors

The bottom-line is that its 24-carat deshbhakti and incontrovertible dedication to Mother India entitles the Shahenshah and Shah regime to violate, if need be, any red line, drawn in the Constitution of India or by conventions and traditions. Consequently, it reserves the right to demand compliance from one and all sections of society. The imperium, in other words, recognises no holy cows. Or so it would like the people to believe.

SEBI’s decision to roll over in the face of corporate non-compliance is a clear case of betrayal of public confidence in the power of lawful authority. No lawful authority can exercise its powers – of exemptions and coercion, or of patronage and penalty – in total disregard of the principles and logic of good and reasonable governance. In this case, however, SEBI allowed itself to be influenced by what in the 19th century of rough and raw European capitalism used to be called “whispered accommodations.”

It is, of course, clear that given the cast of corporate characters involved in non-compliance, the resistance witnessed is not just to SEBI the regulator but is also a definite defiance of SEBI’s political masters preening themselves atop Raisina Hill.

Could it be that after seven years of their huffing and puffing, Corporate India is no longer willing to concede to the ruling coterie any kind of moral nobility? Corporate India may recognise the Shahenshah’s claims of political power but it does not necessarily concede that Narendra Modi is – or should be – the sole interpreter of our collective best dreams.

On the other hand, Corporate India, rather cunningly, feeds the Emperor’s conceit. The saffron commissars think they  harvest considerable political capital and electoral dividends when they attribute any evidence of  corporate malfeasance and mismanagement to the ancien regime’s patronage and protection of this or that bad egg. In its signature tune habit of blaming the old order, the new regime completely ignores the fact that the maladies which afflict and hobble the corporate sector are systemic. After all, venality, incompetence, overblown egos, flawed judgments, false assumptions and fake data are not the monopoly of the politicos. Corporate India has its own calculus of contaminations.

Take, for instance, the so-called innovation of electoral bonds. It is a device that is supposed to drive dirty money out of politics and facilitate clean money in the service of clean elections. While the regime pats itself on the back for “cleansing” the electoral process, the corporates know that purchasing these ‘anonymous’ bonds can bring them immunity from this or that regulator’s directives. While electoral bonds do enable the core of the ruling coterie to enjoy a certain kind of financial autonomy vis-à-vis party chief ministers (the traditional fund-collectors), they do little to enhance the party leadership’s moral standing. After all, every corporate honcho knows how these bonds are prised out of reluctant hands. Extortion remains extortion and it diminishes both the sides involved in the transaction.

The SEBI surrender to corporate India suggests that the assurance of old money and the brazenness of new capital have come together to tell the fading durbar of its limits and vulnerabilities. The angry farmers had to sweat it out in defiance for nine months before  the “new arrogants” would withdraw their firman called the farm laws. The corporates have coolly and quietly inflicted an inglorious defeat on an ageing emperor.