Meeting the Jalan committee

Yesterday I was at a CII organised event where the Jalan committee defended their report. What was interesting was that they did not address any of the issues being discussed but went on an irrelevant tangent for the entire 2 hours plus (the meeting was supposed to tbe closed doors, but it was not - there was tonnes of media present, therefore I can write on it). In addition one member of the committee made a patently wrong statement - that the shareholders of exchanges were never promised listing at the time of the corporatisation and demutualisation process. This directly contradicts the C&D scheme (linked here) which states:
 
6. Listing of Shares of Bombay Stock Exchange Limited.

Bombay Stock Exchange Limited may at any time list its securities on any recognized stock exchange.

It may be recalled that the C&D scheme is statutory in nature. See the language of S. 4B of the SCR Act.

(4) Where the scheme is approved under sub-section (2), the scheme so approved shall be
published immediately by—
(a) the Securities and Exchange Board of India in the Official Gazette;
(b) the recognised stock exchange in such two daily newspapers circulating in India, as may be specified by the Securities and Exchange Board of India, and upon such publication, notwithstanding anything to the contrary contained in this Act or any other law for the time being in force or any agreement, award, judgment, decree or other instrument for the time being in force, the scheme shall have effect and be binding on all persons and authorities including all members, creditors, depositors and employees of the recognised stock exchange and on all persons having any contract, right, power, obligation or liability with, against, over, to, or in connection with, the recognised stock exchange or its members.

Here are some other jewels presented by the committee: 'you cannot allow cars to be manufactured which pollute the air' - therefore exchanges should not be allowed to make profit and therefore they cannot be listed. This is irrelevant to the discussion. No one is arguing that exchanges should not be regulated. There must be laws to regulate the car manufacturer and the exchange, and no one is disputing that. What is in issue is that you should not prohibit people from making a profit who build the highway otherwise there will be no highway and no cars to speak about.

Another jewel was directed at me - referring to the strong article I wrote in the Economic Times - the panel member said that I did not refer in my article that exchanges are 'state' under the constitution. My response - yes they are, but that point is irrelevant to  the issue. ONGC limited is also state, but it is listed and yesterday it was reported that it paid over Rs. 6,000 crores (60 billion rupees) in advance tax for the quarter. How is being state an argument against listing or being for profit?

Interestingly, none of the points raised by me in the article were taken up or rebutted - including the point that they have not even read the annexure to their own report (the annexure says the opposite of what is asserted in the report as a globally accepted norm).

Disclosure: I am advising exchanges and investors in exchanges on the impact of the committee report.