The Telegraph
Since 1st March, 1999
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The track record of joint parliamentary committee probes is hardly spectacular. So, if citizens are sceptical about the efficacy of JPC reports, they cannot be blamed and any remaining faith has been dispelled by the 624-page JPC report on the capital market scandal of 2001 and the Unit Trust of India crisis. After examining 20,000 pages of evidence spread over 105 sittings and 20 months, the report tells us nothing that was not already there in the Tarapore committee report. First, there was systemic failure and financial institutions, banks, the securities and exchange board of India, the Reserve Bank of India, the department of company affairs, registrar of cooperative societies, corporates, brokers and auditors are all to be blamed. No individual, barring the hapless Mr Ajit Kumar, is named, as if his briefing the former finance minister on Monday instead of the preceding Saturday was critical. In a subsequent statement, the JPC’s chairman tells the country that mentioning Mr Kumar was also a mistake and had it not been for “staff failure”, this name would also have been removed. Notwithstanding the opposition’s clamour for Mr Yashwant Sinha’s resignation or indictment, the JPC gives the former finance minister a clean chit and no opposition member of parliament on the JPC thinks of submitting a dissenting note. The buck stops with the bureaucracy. This is understandable, because JPCs have representation from the legislature and today’s opposition is tomorrow’s government. Blaming the fraternity will set unhealthy precedents for the future. If Mr Kumar were culpable and had no expertise in capital markets, what was he doing in North Block and who appointed him there'

Second, in this business of systemic failure, did politicians or people close to them not benefit' The entire country knows about the collusion between Mr Ketan Parekh, corporates and private and cooperative banks. If evidence were needed, why did the JPC discard the idea of establishing a separate committee to examine this nexus' Was it because the interests of the political class would have been revealed' Is this the reason the report is weak on the UTI and the role of its managing trustees, with many of the latter now entrenched in regulatory institutions like Sebi and RBI' If this represents culpability and accountability, it is not surprising that there is no guarantee against future systemic failure, because the issue of political interference in regulatory autonomy is not addressed. We are now told that First Global, a major investor in Tehelka, was not guilty of “deliberate bear hammering”. If that is true, who in the political system is responsible, and thus accountable, for the witch-hunt against First Global’s promoters' Whether it is Mr Harshad Mehta or Mr Parekh, JPC reports reveal little. Since there was no dearth of skill and expertise in the present JPC, the country presumes that this lack of indictment is deliberate and is thus an indictment of the JPC system itself. So there is nothing to commend in the so-called recommendations.

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