Ample lessons from Amtek

Just got to read this story this morning on how a couple of JP Morgan Debt Funds in India were facing redemption pressure; that they had put up gates on redemption and how the redemption pressure arose because of the sharp drop in NAV arising from the downgrade of a debenture of Amtek Auto that they had held in their Fund, etc.

Read this edit in BusinessLine for it plugs some of the gaps in the MINT story.

For example, few questions:

How can someone’s credit rating drop by 12 notches?
Who has been asleep at the wheel?
What is the extent of corporate disclosure and
What was the corporate governance in these companies?

The question that bothers me always about India is if the people – in the jargon, economic agents – do have the basic foundation of trust, a basic modicum of honesty and integrity – to have a decently functioning market economy.

What is the corporate governance if you can be downgraded 12 notches?

Is this an exception to the rule or is this the rule/norm in India?


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