Media needs to be more transparent
Switch on any business channel on television and you have the same picture. An anchor sits in a plush studio with two “experts” gleefully telling the viewers which stock to buy, and which to dump. By the way of exposure you have a half a second clip which tell you that the said “expert “ holds stock in the very company he is pontificating about. This has clearly irritated the country’s stock exchange watchdog the securities and exchange board of India. Its out going chairman Mr. Damodaran made this much plain in a recent interview to the Indian Express. When a regulator held in wide esteem as a sensible overseer takes notice of the media it raises several questions.
In the United States, especially post Enron, there are specific provisions that channels have to follow including a detailed discourse of number of stocks and likely investment positions in the futures markets before they come on television and speak on a particular stock. None of this alas is in existence in the Indian media.
The lack of such disclosure has the potential to create a herd mentality in bull runs. It can also hurt the retail investor given the fact that some of the large business houses hold a significant percentage as ownerships in business channels. Thus if an industrialist has a major stake in a media house that owned a television channel and comes up with an IPO it can be a case of conflict of interest for him to manipulate a stock.
The real concern is that although SEBI has made two attempts to work out a self-regulating code of conduct for the media there has been no response from the media. This arrogance may cost the media some of its dearly loved freedom. When self-regulation is absent, inevitably governments find ways to impose their will.The media needs to heed this wake up call and line up a code of conduct that makes their manner more transparent. Such a move will help them, their viewers and the retail investors. Not so doing could cost the media its credibility and some of its freedom.
Switch on any business channel on television and you have the same picture. An anchor sits in a plush studio with two “experts” gleefully telling the viewers which stock to buy, and which to dump. By the way of exposure you have a half a second clip which tell you that the said “expert “ holds stock in the very company he is pontificating about. This has clearly irritated the country’s stock exchange watchdog the securities and exchange board of India. Its out going chairman Mr. Damodaran made this much plain in a recent interview to the Indian Express. When a regulator held in wide esteem as a sensible overseer takes notice of the media it raises several questions.
In the United States, especially post Enron, there are specific provisions that channels have to follow including a detailed discourse of number of stocks and likely investment positions in the futures markets before they come on television and speak on a particular stock. None of this alas is in existence in the Indian media.
The lack of such disclosure has the potential to create a herd mentality in bull runs. It can also hurt the retail investor given the fact that some of the large business houses hold a significant percentage as ownerships in business channels. Thus if an industrialist has a major stake in a media house that owned a television channel and comes up with an IPO it can be a case of conflict of interest for him to manipulate a stock.
The real concern is that although SEBI has made two attempts to work out a self-regulating code of conduct for the media there has been no response from the media. This arrogance may cost the media some of its dearly loved freedom. When self-regulation is absent, inevitably governments find ways to impose their will.The media needs to heed this wake up call and line up a code of conduct that makes their manner more transparent. Such a move will help them, their viewers and the retail investors. Not so doing could cost the media its credibility and some of its freedom.
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