So SEBI has one more work for mutual funds. They are supposed to be the conscience keepers for corporate India. Good news.

Next they may be asked to get a ‘good behavior’ certificate from unit holders – saying I will redeem them only for legitimate purposes. I will not use the proceeds for buying a gift for my girl friend / mistress / ex-wife / future-wife…:). It is quite amazing.

What is a mutual fund supposed to do? Suppose it has to invest in a media company – should it ask:

– Why do you not have an independent board (in India an independent media company is a joke) most of them are big businesses and some make more money from rent than from advertisements.

– what happens if they know that one company paid a bribe of Rs. 25,000 to an octroi clerk because of some documentation mistakes. Should they sell the shares? (Well a company which talks all day about corporate governance did it long ago)

– if they find out that a politician holds shares in a company in which they are investing (and that the shares were given as a part of a bigger bribe to clear a loan or a project?) -Should they sell the shares?

Just attending the meeting and voting (and Menaka Doshi and her sisters asking in a shrill voice – ‘Why did you allow the company to build a jetty in Orissa and endanger our turtles’ ) I really pity the fund manager. He has one more job to do. I have no clue whether all this will add to the overall returns. Nor do I know whether the media persons (or the SEBI employees) invest in mutual funds. That of course is a different story, is it not?