Mumbai: In the wake of outgoing capital markets regulator M. Damodaran’s comment on the holdings of anchors and experts appearing on television channels, executives at the channels claimed they had effective policies in place to prevent conflicts of interest even as one expert said that it was not easy to regulate the media.
Damodaran, who specifically commented on these people, whom he termed anchor investors, and the quality of disclosure of information on the holdings of such people, voiced his concern during an interview with Indian Express’ editor-in-chief Shekhar Gupta on NDTV.
Senthil Chengalvarayan, managing editor, CNBC TV 18, which runs English and Hindi business news channels, says the company follows a strict code of conduct when it comes to allowing its journalists to invest in the stock market.
“None of the journalists, anchors or research analysts at CNBC who have to deal with news flow is allowed to buy shares, derivatives, initial public offers unless they take prior permission from the company,” he adds. Such permission is taken a day in advance and, according to Chengalvarayan, there is a limit on how much they can buy. “They have to hold it (such shares) for six months and the company has the right to not to give them permission,” Chengalvarayan says.
Shivnath Thukral, managing editor of NDTV Profit, a business news channel that is part of NDTV Ltd, says his channel too follows a strict internal code of conduct that regulates the stock market investments of its journalists. “Intra-day trading in futures and options is strictly prohibited but buying shares for long term or investing in mutual funds is allowed,” he adds. Thukral says NDTV’s senior management has the right to ask any anchor or a journalist to disclose his or her equity portfolio at any point in time.
In the interview, Damodaran had also commented on the inadequate level of disclosure on television channels while alerting viewers on the holdings of experts being interviewed. In October 2007, the Securities and Exchange Board of India (Sebi) published draft guidelines on the regulation of investment advisers. The guidelines talked about the kind of market experts who would come under regulatory surveillance but kept the media out of the scope of the regulations. At various public fora, Damodaran has always maintained that the media should regulate itself.
Prithvi Haldea, chairman and managing director of Prime Database, a primary market information provider, says he submitted a report to the market regulator on the issue in 2006.
“I had submitted a report to Sebi chairman to apprise him of the issue... Sebi has also had several meetings with media houses, but as you know, it is not easy to regulate media,” he added.
“I wouldn’t say adequate steps have been taken because every day on TV you see violation of disclosure guidelines,” said Haldea.
Sruthijith K.K. contributed to this story.