For most people, the Securities and Exchange Board of India (SEBI) is a mysterious organisation because they have little idea of its mandate and functions. There is only a hazy thought that it has something to do with regulating the stock exchanges. But there is no understanding of how that is done, and the challenges that the SEBI faces in the process. More importantly, there isn’t adequate realisation that the Board’s decisions and actions are critical to ensuring that scams don’t hit the markets — scams that rob the ordinary citizen of the hard earned money he has invested in the stock market, often without proper knowledge of its inner functioning. The SEBI is, therefore, a custodian of sorts.
Former SEBI chief GN Bajpai has in his book demystified the working of the organisation through various examples that deal with real issues, real challenges and real obstacles that he had faced. In that sense, the book is as much about his experiences as it is about SEBI itself as a regulator and enforcer. It has been written keeping both the expert and the lay reader in mind. Every single reader, once he is done with A Game Changer’s Memoir, will have seen the cobwebs removed from his mind and all be able to better appreciate the organisation, despite its occasional failings.
The author’s refreshing approach to a dense subject has been possible largely because he had been an ‘outsider’ when he joined SEBI to helm it. He had already acquired a high profile and competence during his stint as Chairman of Life Insurance Corporation of India. It can be argued that leadership skills are all that is needed. But we have seen in many cases that such a skill is often not enough; a leader has to often unlearn many things when a job switch happens. Only those who succeed in doing so, make a mark. Bajpai was one such leader.
He took charge at a especially challenging time for the organisation in February 2002. The Ketan Parekh scam had taken place and public confidence in SEBI was not exactly at a high. To add to woes, Bajpai was not — by his own admission — certain he had the rapport with the Government that IAS officers have. He said at the start of the book: “The inadequacy of my political capital became apparent right at the beginning when I was pushing certain important amendments of the SEBI Act.” But he took these obstacles head-on and converted them into opportunities.
What did he do and how did he achieve results? That is the story in the book. To begin with, he had to restore the sagging confidence of his people. He then had to fight for the required legislation that gave teeth to SEBI, which most believed then had become a paper tiger. He had to deal with politics and the larger system. Bajpai managed them well, though not before going through frustrating moments and wondering if he would at all justify the confidence the Government had reposed in him.
The author is candid, without being sensational, in recounting those challenges. And he did achieve a great deal, going by the book. From enhancing transparency not just in the functioning of stock markets but also within SEBI, to putting in place an integrated market surveillance system, to fine-tuning the IPO process, to managing the erratic regional stock exchanges, to eliminating conflicts of interest in the functioning of stock exchanges — the list is impressive. It is important to list here his contribution to the effective regulation of the derivatives market. This market was, in his own words, “used to manipulate the prices of commodities, leading to notional shortages, inflation, etc.” Besides, as commentators had observed, the Forward Markets Commission had been functioning below par. As he noted in the book, there were two choices: either strengthen the Commission or merge it with SEBI. Bajpai favoured the latter because it shared many of the goals of the Commission. It was a long battle, but eventually Bajpai had his way; the merger was announced in the Union Budget of 2004. But there is a twist to the tale. The merger did not happen because of bureaucratic interventions. It was only in 2015, well after Bajpai’s tenure was over, that his dream fructified and a unified regulatory mechanism was put in place.
Bajpai achieved a lot as the SEBI chief, but he downplayed those achievements when he was asked about it by the media on the last day of his tenure. He said, “I am neither a legend nor has my tenure been legendary. I am a manager by training and made an honest professional attempt to discharge the obligations of the post.” Managers don’t succeed in the way he did; only leaders do.