As the capital market regulator keeps itself busy with tightening and rewriting corporate governance rules, the near-burnout, and probably bailout, of SpiceJet exposes the sham of this exercise.
As a consumer and victim of flights cancelled by the airline over the past month, you may be frothing with anger at the loss inflicted on you; but there is no redress in sight. As an employee, you are even worse, like the employees of Kingfisher Airlines. You will continue to work in the hope of being paid even while salaries are delayed. Months later, you may still be unpaid, while the Maran brothers, like Vijay Mallya, will see no dent in their lavish lifestyle and will continue to zip around the world in private jets. If you are a shareholder of SpiceJet, you are at the bottom of the heap. Most often, the bourse is seeking a clarification from the company on media headlines with some occasional opaque responses.
Just as it seemed that banks had woken up to RBI governor Raghuram Rajan’s tough talk on bad loans, at the V Kurien Memorial Lecture, the civil aviation ministry ordered banks and oil companies to bailout SpiceJet and the director general of civil aviation (DGCA) to lift curbs on the airline. After waiting for some official clarifications, here are a few questions to which neither shareholders nor taxpayers, who ultimately bear the brunt of all bailouts, have an answer.
• Dr Manmohan Singh and the United Progressive Alliance (UPA) government attributed corporate bailouts and shady deals to the ‘compulsions of coalition dharma’. The National Democratic Alliance (NDA) does it for the ‘larger good of the aviation sector’. The question is: Why hasn’t the civil aviation ministry ordered a quick White Paper on the rules, policies, taxes and other issues, including unhealthy competition (tickets at Rs1), that have destroyed the aviation sector? Six months after assuming power, we have a deafening silence from the government on the massive bailout proposed by the UPA for Air India and not a word on Kingfisher Airlines either. We need a sensible aviation policy and a tough regulator in place, not just for airlines but also to ensure air safety and airport security. The government-ordered bailout, with no public information on the conditions attached, is a terrible idea.
23/12/14 Sucheta Dalal/moneylife.com
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As a consumer and victim of flights cancelled by the airline over the past month, you may be frothing with anger at the loss inflicted on you; but there is no redress in sight. As an employee, you are even worse, like the employees of Kingfisher Airlines. You will continue to work in the hope of being paid even while salaries are delayed. Months later, you may still be unpaid, while the Maran brothers, like Vijay Mallya, will see no dent in their lavish lifestyle and will continue to zip around the world in private jets. If you are a shareholder of SpiceJet, you are at the bottom of the heap. Most often, the bourse is seeking a clarification from the company on media headlines with some occasional opaque responses.
Just as it seemed that banks had woken up to RBI governor Raghuram Rajan’s tough talk on bad loans, at the V Kurien Memorial Lecture, the civil aviation ministry ordered banks and oil companies to bailout SpiceJet and the director general of civil aviation (DGCA) to lift curbs on the airline. After waiting for some official clarifications, here are a few questions to which neither shareholders nor taxpayers, who ultimately bear the brunt of all bailouts, have an answer.
• Dr Manmohan Singh and the United Progressive Alliance (UPA) government attributed corporate bailouts and shady deals to the ‘compulsions of coalition dharma’. The National Democratic Alliance (NDA) does it for the ‘larger good of the aviation sector’. The question is: Why hasn’t the civil aviation ministry ordered a quick White Paper on the rules, policies, taxes and other issues, including unhealthy competition (tickets at Rs1), that have destroyed the aviation sector? Six months after assuming power, we have a deafening silence from the government on the massive bailout proposed by the UPA for Air India and not a word on Kingfisher Airlines either. We need a sensible aviation policy and a tough regulator in place, not just for airlines but also to ensure air safety and airport security. The government-ordered bailout, with no public information on the conditions attached, is a terrible idea.
23/12/14 Sucheta Dalal/moneylife.com
