INDUSTRY RATHER THAN
STATUTE TO DRIVE FUTURE GROWTH
The Institute of Company Secretaries of India (ICSI) is part
of a triumvirate of professional bodies that were set up expressly to generate
and regulate an army of professionals which could guide, control and regulate
the growth path of corporate India. The current President, Ranjeet Kumar Pandey
has an extended career in the field of corporate and commercial law, and also
an investment banking exposure.
How do you profile the Institute currently?
The Institute of Company Secretaries of India has been
established through an Act of Parliament. It is a statutory body with specific
responsibilities. The appointment of a Company Secretary by corporates is also
a requirement of statute. Beyond the New Delhi headquarters and four regional
offices, we have 70 chapters across the country through which students ask and
receive guidance of different kinds. The registered student strength of the
institute is around four lakh In terms of graduates, our strength is around
57,000. However, the active strength would be slightly less, at around 52,000.
The North and West regions make up strong portions of our active membership. In
the North, our approximate active member count would be 18,000 and in the West
around 17,000. The South region contributes around 11,000 and the East has
6,000. Now let us look at the membership profile. Activity wise, there are two
types of company secretaries — those who are in professional practice and those
who are employed. We believe the number of those in practice would be in the
range of 12,000 and those in corporate employment would be 40,000 As of now,
our annual pass-out quantum would be around 5,000. In the last eight years
there has been a lot of growth, the membership has practically doubled from
2010 levels.
How would you look at the responsibility and relevance of a
Company Secretary?
Once again let us visit the premise under which the Institute
was created by Parliament. The government needed professionals across different
streams of corporate activity. Therefore you had three institutes and three
professional disciplines created with each having separate responsibilities. The
specific responsibility of the company secretary was to look at the areas of
corporate governance, compliance with the Registrar of Companies (RoC) filing
and other needs, and the risk management structure. Hence, the course was
defined accordingly. If you talk of accountability, there are multiple layers
in our discipline structure. There is a code of conduct in place, beyond which
is a disciplinary mechanism, and above that is a disciplinary council which has
representation from the government as well. There are multiple checks and
balances on member conduct. Thankfully, our professionals have not been
involved in any kind of financial scams In fact you marry collect that in the
2008 Satyam case it was actually a company secretary that was the whistle
blower and at that time our role in general was much appreciated by the
authorities.
How do you view the company secretary’s responsibility in the
context of multiple Government operations targeting shell company scams?
This is a somewhat complex matter. Firstly, under the law,
what constitutes a shell company needs to be defined much more clearly. If you
look at the matter in practical terms, a shell company is one where the
financial transactions do not have real-world activity backup. Whereas
according to legal interpretation, any company with zero activity is also
treated as a shell company. The recent years have seen aggressive action to
identify and pursue shell companies. We have seen around 2.5 lakh companies
struck off the register. Now, within those, there were something like 16,000
companies which qualified as big and which would have to engage the services of
some company secretary The remainder were small, and therefore exempted from
the need to engage a company secretary. Another aspect of the matter is that
the reason for finding and weeding out shell companies was financial in nature.
Now the role of a company secretary in monitoring the nature and route of
financial transactions is minimal
How do you see your relevance in future and capacity to
attract student applicants?
There is no question there. We now desire to be more relevant
in the bigger scheme of things. We are internally identifying roles for that
effect. We are also delving into industry wise and segment wise possibilities,
like in banking or insurance or equities. We are trying to explore
opportunities that can be available for a company secretary. It is clear that
the company secretary has the calibre to go much beyond just compliances in
terms of work profile. We are in touch with various industry level bodies. Now
in all this, we are clear that the profile growth, and development of that into
demand, has to be market driven. We are honestly saying that it should not be
statute driven. The demand has to come from industry and corporates, and there
has to be clarity about the competency requirements. That is what will decide
the supply quantity from the side of the institute. There is absolutely no
looking to targets or quantum. We are totally looking at the quality of new
qualifications, of new members and how they will be relevant to the corporate
world and to the nation at large.
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JOB EXPERIENCE AS
ASSISTANT COMPANY SECRETARY/MANAGEMENT TRAINEE CANNOT BE TREATED 'AS' THAT OF
COMPANY SECRETARY: SC
The Supreme Court observed that Job Experience as Assistant
Company Secretary or a Management Trainee cannot be treated 'as' that of a
Company Secretary The issue before the bench comprising Justice L. Nageswara
Rao and Justice MR Shah was whether, the period during which a candidate worked
as 'Management Trainee' and/or 'Assistant Company Secretary' be considered for
treating him/her been appointed 'as' a Company Secretary, when the eligibility
criteria mentioned in the advertisement stipulated experience of five years
'as' a Company Secretary and/or, can it be said that Ritu Bhatia was terminated
from the company on the ground that she did not have the requisite five years'
experience for the post of Company Secretary, as stipulated in the Advertisement
inviting applications to the said post Before the Apex court, the contention
was that she was working as Assistant Company Secretary for the period between
June 2008 to May 2010 in Utkal Investments Limited and that she was working as
Management Trainee in the Delhi Stock Exchange Association Limited for the
period between April 2005 to June 2006, and as the Management Trainee in ONGC
for the period between May 2003 to June 2004. She contended that the period
during which she was working as a Management Trainee is required to be counted
as the requisite experience for the post of Company Secretary. The court
observed that the author of the advertisement is the best person to consider
what they meant by using the word 'as'. The court noted that their intention
behind the advertisement was that the applicant must have been appointed 'as' a
Company Secretary in PSU/Company of repute and functioned as such for five
years to be eligible for appointment The bench said: In the advertisement, it
has been specifically and categorically stated that a candidate shall have post
qualification experience of five years 'as' Company Secretary The word used
experience as Company Secretary has to be given meaning that a candidate must
have been appointed 'as' a Company Secretary and shall have actually worked
'as' a Company Secretary for five years Giving other meaning would be changing
the eligibility criteria as mentioned in the advertisement. Dismissing the
appeal, the bench observed: The word 'as' and the words 'experience as Company
Secretary' used in the advertisement are very clear and it means the candidate
ought to be appointed and worked as such 'as' a Company Secretary.
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ICSI BOARD OF DISCIPLINE
DISMISSES MISCONDUCT ALLEGATIONS AGAINST FORMER PRESIDENT CS MAKARAND LELE
The Board of Discipline of the Institute of Company
Secretaries of India has dismissed a complaint filed against the former
President CS Makarand Lele alleging several misconduct charges A complaint was
lodged against CS Makarand Lele alleging that by his influence as a member of
the Western India Regional Council, he charged a fee of Rs. 11,000/- per
student as against the prescribed fee of Rs. 5,000/- per Student even after the
violation was pointed out by the Complainant in one of the meetings of the
Management Committee of Pune Chapter. It was further alleged that the
respondent, being an editor of monthly News Letter of WIRC named as Focus,
violated the Guidelines for News Letter/E-News Letter of the Councils and
Chapters. According to the complainant, he used Focus for creating his own
visibility keeping an eye on the then forthcoming Central Council elections and
for free promotion and free publicity of self and his Firms at the cost of
WIRC. There were several other allegations against the respondent. Before the
board, the respondent submitted that the complaint was a vindictive and
desperate act arising out of the loss in the Central Council Election of ICSI
held in 2014. The Complainant filed a complaint under Section 10A of the
Company Secretaries Act, 1980, challenging the election of the Respondent. The
Appeal of the Complainant to the Election Tribunal was rejected The respondent
further pointed out that the timing of the present complaint which was filed in
January 2018, makes it amply clear that the Complainant had only been waiting
to abuse the process for a political/personal vendetta against the Respondent. While
the allegations in the complaint relate to the year 2013, the Complainant chose
to file a complaint on the eve of the forthcoming election to the Central
Council of the ICSI. After hearing both the sides, the Board of Discipline held
that the matter relating to the abatement for violation of Guidelines for
conducting Management Skill Orientation Programme (MSOP) for the Professional
Examination Passed Students by the Chapters/ Regional Councils, has already
been dealt with by the concerned Committee and the Council and necessary
instructions were issued to be concerned Regions/Chapters on the matter. As
regards the violation of the Code of Conduct and Ethics for Council Members and
Senior Management of the Institute, there are no documents on record to
substantiate the allegations made in the complaint, the Board said. It was
further observed that the Newsletter ‘Focus’ published prior to the Respondent
being appointed as an Editor by the WIRC. The previous publications also show
the same pattern and the publications made under the Respondent’s editorship
was duly approved by the WIRC before publication. Allegation relating to
charging of higher fees than prescribed by the ICSI for Management Skill
Orientation Programme (MSOP) by the Chapters and the Regional Council, the
Respondent cannot be held guilty of professional misconduct as the decision was
not taken by the Respondent but the elected body of the Chapter. There is no
evidence to show that the Respondent influenced the decision in any manner. The
allegation that the Respondent was able to influence the functioning of
Managing Committee of Pune Chapter which was alleged to be run by the
Respondent de-facto is also not borne out from the facts or material on record,
it said.
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CABINET APPROVES MOU
BETWEEN INDIA AND MALAYSIA FOR MUTUAL COOPERATION IN THE FIELD OF COMPANY
SECRETARYSHIP
The Union Cabinet chaired by Prime Minister Narendra Modi has
approved the signing of a Memorandum of Understanding between India and
Malaysia for Mutual Cooperation to raise the status and prestige of the
Practicing Company Secretary in both countries, and to facilitate the movement
of the Company Secretaries across borders in the Asia-Pacific Region. Approval
of the Cabinet is in respect of Memorandum of Understanding (MoU) between the
Institute of Company Secretaries of India (ICSI) and Malaysian Association of
Company Secretaries (MACS) to strengthen cooperation and to raise the status
and prestige of the Practicing Company Secretary in both jurisdictions and to
facilitate the movement of the company secretaries across borders in the Asia
Pacific region.
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RCOM TAKING INSOLVENCY
ROUTE OUT OF 'DISHONEST INTENTION': ERICSSON TO SC
In a fresh contempt plea moved before the Supreme Court,
Ericsson India has alleged that the insolvency route taken by Anil Ambani-led
Reliance Communications (RCom) has dishonest intention intended to frustrate
the orders of the court, sources close to the development said. The Supreme
Court had ordered RCom to pay Rs 550 crore to Ericsson India latest by December
15. The purpose of the application filed by RCom to take the company into
voluntary winding up is to obtain a moratorium which would prevent it from
making any payments to all creditors, including Ericsson, sources said. In the
fresh petition, Ericsson has further alleged that despite the completion of
sale of RCom's fibre and related infrastructure worth Rs 3,000 crore to RJio,
the dues of the company were not paid. As State Bank of India was the lead
banker for the Joint Lenders Forum, which had allowed the spectrum sale of RCom
to RJio, it should also be held liable for the nonpayment of dues till date,
the sources said.
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NCLT APPROVES BAFNA
PHARMACEUTICALS’ CORPORATE INSOLVENCY RESOLUTION PLAN
Chennai-based Bafna Pharmaceuticals announced that the Chennai
Bench of the National Company Law Tribunal (NCLT) has approved the resolution
plan submitted by the company under the corporate insolvency resolution
process. The resolution plan approved by the Committee of Creditors (CoC) on
January 4, 2019 was submitted to the NCLT Chennai on January 17 by Resolution
Professional (RP) Radhakrishnan Dharmarajan, the company’s statement said. The
plan provides resolution for all the financial creditors of Rs. 34.46 crore
against a total claim of Rs. 49.23 crore. The resolution plan also provides
that 70 per cent of the admitted claims of all the financial creditors shall be
paid within three months from the ‘approval date’ as full and final settlement
of the dues and personal guarantees.
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STANCHART GETTING MORE
THAN TWO TIMES ITS SHARE: ESSAR STEEL COC TO NCLT
Contrary to its allegation, Standard Chartered Bank has not
been discriminated and has been allotted its valid share in ArcelorMittal's
takeover bid for Essar Steel, the committee of creditors (CoC) to the stressed
steelmaker told the Ahmedabad Bench of National Law Company Tribunal (NCLT) on
Wednesday. The CoC's legal counsel told the two-member Ahmedabad Bench that
Standard Chartered was actually getting two times its share. The allocation
among creditors has been made on the basis of value of security held by them
with Essar Steel. As a result, almost all the other members of the CoC held a
direct share in Essar Steel India’s assets worth Rs 45,000 crore. As against
this, Standard Chartered’s value of security came to around Rs 24 crore in form
of shares pledged by Essar Steel as a guarantee to the bank's loan in its
subsidiary Essar Mauritius Offshore, the CoC told NCLT. Essar Steel had
defaulted on its guarantee for Standard Chartered's loan to its Mauritius-based
subsidiary Essar Steel Offshore worth Rs 3,700 crore. The fair value of Essar
Steel shares in Essar Mauritius Offshore, which it has pledged with Standard
Chartered is Rs 24 crore unlike other creditors who have a direct security
worth Rs 45,000 crore in the former's assets. SCB now wants to dip into the
assets of Essar Steel, which belong to rest of the members of the Standard
Chartered. We don't have any objection of Standard Chartered being secured
financial creditors but only to the extent of the value of their security which
it cannot dip into others' security, the CoC told the NCLT. As against a
security value of Rs 24 crore, Standard Chartered is getting over Rs 60 crore
under the resolution plan, the CoC's counsel further stated. The CoC's
arguments came on the back of Standard Chartered's submission made in the
tribunal on Tuesday to be treated equally with other members of the CoC. The L
N Mittal-led ArcelorMittal's resolution plan worth Rs 42,000 crore to takeover
Essar Steel has been approved by the CoC with a 92 per cent vote and has been
placed in the NCLT, with Standard Chartered and operational creditors (OCs)
challenging the same.
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SIRPUR PAPER MILL ALL SET
TO BEGIN OPERATIONS
The stage is set for the much-awaited commencement of paper
production soon from one of the eight machines of the revived Sirpur Paper
Mills (SPM) Private Limited on February 8, bringing cheer to employees. The TRS
government, in its maiden term, played a vital role in reopening the sick unit
which was closed five years ago leaving its workers jobless. SPM unit head
Mayank Jindal told Telangana Today that machine no. VII will be tested on
Friday and commence manufacturing paper in two to three days. The trial run of
the boiler brought from BHEL was successfully performed recently. The machine,
to be run on modern ‘silent drive system’, will produce 1.40 lakh tonnes of
paper per annum.
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BIDDERS FOR INSOLVENT
FIRMS CAN BORROW ABROAD TO REPAY RUPEE LOANS
The Reserve Bank of India has allowed bidders of insolvent
companies to raise extra commercial borrowings abroad and use those proceeds to
repay the rupee loans of the targeted insolvent companies they are keen on
acquiring. The RBI decided to ease the existing limitation on end-use of ECB
proceeds after realizing that many bidders may find it cheaper to borrow abroad
to acquire such distressed assets. Companies keen to raise ECBs will need the
approval of the central bank. The RBI will allow companies to raise these
foreign funds from all eligible lenders except from overseas branches and
subsidiaries of Indian banks. Guidelines in this regard will be issued by the
end of this month, an RBI release said. The RBI’s move to relax the provisions
on end-use of ECB proceeds comes after feedback from industry and other
stakeholders and will be a shot in the arm for the Insolvency and Bankruptcy
Code, one of the more successful economic policies of the Prime Minister
Narendra Modi-led government. The resolution of debt belonging to bankrupt
companies has been a big hurdle in the government’s intent to clean up the
system. Liquidity has been tight, largely owing to the IL&FS imbroglio,
debt defaults by other corporates and high NPAs in the banking sector.
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FD RATES LIKELY TO RISE AS
BANKS NEED RS 20 LAKH CRORE FRESH DEPOSITS TO MEET CREDIT DEMAND
To meet credit growth of 13-14% on average banks will have to
raise about Rs 20 lakh crore fresh deposits over the two fiscals, estimates
rating company Crrisil. That would be well above the average annual deposit
mobilisation of ~Rs 7 lakh crore over the past few years. It would also put
upward pressure on the interest rates bank offer on deposits, the rating
company said. In the last few months, deposits rates have gone up by an average
of 0.40-0.60 per cent, which will increase the cost of funds for the lenders,
its director Rama Patel said. For the year till January 4, 2019, bank deposits
have grown 9.9% while credit has grown 14.5%. Banks will need Rs 25 lakh of
which Rs 5-6 lakh crore is expected to become available through the release of
statutory liquidity ratio (SLR) funds, Rs 20 lakh crore would need to be raised
through fresh deposits. Bank credit in India would grow at a pace of 13-14% on
average between fiscals 2019 and 2020, significantly faster compared with the
8% seen in fiscal 2018, which would force a change in the deposit mobilisation
plans of banks over the medium term, said Crisil. Traditionally, banks have
utilised their excess SLR in the initial period of credit revival. They would
do that this time around, too. That said, bulk of the credit demand would be
met by deposit growth and to a minor extent by other resource raising options
like infrastructure bonds. Also, the government has allocated annual
expenditure of Rs 75,000 crore for Pradhan Mantri KIsan SAmman Nidhi (PM-KISAN)
to provide an assured income support to the small and marginal farmers into
their Jan Dhan accounts. This is likely to give a boost to banking sector at a
time when credit is growing faster than deposit.
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MUTUAL FUND HOUSES ASK
SEBI TO GIVE TIME TO ESSEL GROUP PROMOTERS TO ROPE IN STRATEGIC INVESTORS
Mutual fund houses with an estimated Rs 8,000-crore exposure
to Essel Group have asked regulator Sebi to permit them to modify the framework
of Subhash Chandra-led Group’s debenture trust deeds to give promoters time to
rope in strategic investors officials said. The Essel Group, on Sunday, sealed
a formal agreement with its lender including mutual funds and non-banking
finance companies (NBFCs), to get time till September to de-leverage or pare
its debt. The agreement is with those lenders who have taken pledged shares of
the group flagship and listed entities, Zee Entertainment Enterprises and Dish
TV India. The group, on January 27, had confirmed that an understanding with
the lenders had been achieved, which was finalised last Sunday. The agreement
was not to declare the company a defaulter as it had admitted that it could
service the debt only up to December. According to officials, several mutual
fund houses have approached markets regulator Sebi asking it to revise the
‘terms and conditions’ of Essel Group’s debenture trust deeds. The move will
give the promoters time to bring in a strategic investor rather than the
selling pledged shares in case of decline in the prices of the security, they
added. The debenture trust deed is a document made by the company, whereby
trustees are appointed to protect the interest of debenture-holders before they
are offered for public subscription. Also, it specifies the equity cover that
promoters need to maintain.
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BROKERS CRY CRISIS AS
ACTION LOOMS ON 148 MEMBERS
As the ministry of corporate affairs is all set to take action
against fraudulent stockbrokers in the Rs 5,600-crore National Spot Exchange
(NSEL) scam, the brokers’ body is upset about the ministry’s move. Uttam Bagri,
said, Any across-the-board action on hundreds of intermediaries affects the
entire financial ecosystem. The masterminds of the scam are attempting to
divert the regulatory attention from them by targeting brokers who are the
victims themselves. Brokers, however, feel that if the Securities and Exchange
Board of India (Sebi) adjudicates, then the markets regulator will declare 300
brokers as not ‘fit and proper.’ Consequently, they will not be allowed to
carry out any business in the securities market. This will have serious
repercussions on the capital markets. If Sebi stops 300 brokers from doing
business, millions of retail investors will panic and lose their hard-earned
money and foreign investors will flee India. It will be catastrophic, to say
the least, said another senior official at an industry forum. The Serious Fraud
Investigation Office (SFIO) has found that over 148 brokers are involved in the
massive NSEL scam. Sources said that the SFIO has got nod from the ministry to
prosecute them. The SFIO has also got instructions from the ministry to file
winding up petition against at least 20 defaulting companies. It has also been
asked to take action against the auditors of all the companies, the source
added.
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RETAIL INVESTORS' WEALTH
ERODES AS NEGATIVE NEWS-FLOW DENTS SENTIMENT
Retail investors have burnt their fingers and have seen their
wealth erode over the past six months. An analysis of the shareholding pattern
of 206 companies from the S&P BSE All-cap index where retail investors have
increased their stake over 1 percentage points in past six months shows up to
86 per cent fall in stock prices during the period. The S&P BSE All-cap
index accounted for 97 per cent market capitalisation of companies listed on
the Bombay Stock Exchange (BSE). YES Bank, Dewan Housing Finance Corporation
(DHFL), Shankara Building Products, Prabhat Dairy, Deepak Fertilisers and
Chemicals, Indiabulls Real Estate, Reliance Capital, Reliance Communications
(RCom), Manpasand Beverages and Dilip Buildcon have tanked over 40 per cent
since July 2018. Most of these stocks were under pressure on back of negative
news-flow and weak set of financial results. The combined market capitalisation
(market-cap) of these 206 companies slipped 30 per cent to Rs 574,844 crore as
on February 5, 2019. In comparison, the benchmark S&P BSE Sensex has gained
3 per cent, while the S&P BSE Mid-and small-cap indices slipped 6 per cent
and 14 per cent, respectively. Many retail investors have seen their wealth
erode due to averaging. Buying at peak levels and then trying to average or
reduce the holding cost in a falling market is a bad strategy. One must look at
the valuation, credibility of promoters and the business growth model before
taking an investment call, advises G Chokkalingam. RCom closed an all-time low
of Rs 5.44 on Wednesday and has tanked 53 per cent in the past three days,
after the company decided to opt for insolvency proceedings. Retail investors
increased their stake in the company by 1.4 percentage point on a sequential
basis to 22.8 per cent in December 2018 quarter. The retail shareholding in
DHFL, too, has risen by 7.2 percentage point since September quarter, but the
stock has tanked 81 per cent from its June 29, 2018 level on the back of
negative news-flow. The retail shareholding in both these companies at their
respective record high levels in December quarter, the data shows. YES Bank
slipped 48 per cent since July after the Reserve Bank of India (RBI) curtailed
the term of lender's founding chief executive officer (CEO) Rana Kapoor.
However, with the appointment of Ravneet Gill as his replacement, analysts say
the bank is on the road to recovery.
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BANKS CANNOT BE ABSOLVED
OF LIABILITY FOR UNAUTHORISED WITHDRAWALS: KERALA HC
The Kerala High Court has said banks cannot be absolved of
liability for unauthorised withdrawals from their customers' accounts. Justice
P B Suresh Kumar also made it clear that banks are liable for unauthorised
withdrawals even if customers did not respond to SMS alerts:SMS alerts cannot
be the basis to determine the liability of a customer, for there would be
account holders who may not be in the habit of checking SMS alerts regularly,
the court said. It stated this while dismissing an appeal filed by the State
Bank of India recently against a lower court order asking it to compensate a
customer who lost Rs 2.4 lakh due to unauthorised withdrawals The customer had
sought a refund of the amount with interest. The bank had submitted that SMS alerts
were sent to the customer about the disputed withdrawals and he should have
requested that his account be blocked immediately. It contended that since the
customer did not respond to the SMS alerts, the bank was not liable for the
loss caused to him. One thing is certain that where a bank is providing service
to its customer, it owes a duty to exercise reasonable care to protect the
interests of the customer, the court said. (It is) needless to say that a bank
owes a duty to its customers to take necessary steps to prevent unauthorised
withdrawals from their accounts, it added. As a corollary, there is no
difficulty in holding that if a customer suffers loss on account of the
transactions not authorised by him, the bank is liable to the customer for the said
loss, the court said. It also said it is the banks' obligation to create a safe
electronic banking environment to combat all forms of malicious conduct
resulting in losses to their customers. In short, there is also no difficulty
in holding that if a customer suffers loss in connection with transactions made
by fraudsters, it has to be presumed that it is due to the bank's failure to
put in place a system which prevents such withdrawals, and the banks are,
therefore, liable for the loss caused to their customers, the court said.
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RUPEE LIKELY TO DEPRECIATE
FURTHER TO 78 AGAINST US DOLLAR IN 2019: REPORT
The rupee may depreciate to 78 per US dollar this year,
largely owing to widening fiscal and current account deficits, which are the
biggest pain points for the domestic currency. According to Karvy's Annual
Commodity and Currency Report 2019, this is expected to be a mixed year for the
commodities and currencies market and the rupee may depreciate further on
account of twin deficits USD/INR is expected to move higher with a base of 68
to 69.50, with an upside at 73.70-74.50, Ramesh Varakhedkar said. He further
noted that if the Indian rupee crosses the 74.50 level, then it is very likely
that the domestic unit will depreciate further towards the 78 level in 2019. The
CAD for H1 FY18-19 was at USD (-) 34.94 billion, against USD (-) 48.72 billion
for the complete FY2017-18. If continued at a similar pace, FY18-19 CAD could
be the widest in Indian history, the report noted. Meanwhile, the BOP for H1
FY19 is at USD (-) 13.20 billion, the first negative BOP since 2011-12 and just
a third in the last 20 financial years. The widest BOP of USD (-) 20.08 billion
was reported in FY09 when global economy was hit by a financial crisis. Further,
copper and aluminium prices are expected to trade on a weaker note, while
cotton prices are expected to remain firm this year due to tighter supply
situation. The report further noted that the soybean market could see selling
pressure during the second half of the year on account of bumper crop harvest.
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ZEE PROMOTERS IN TALKS
WITH MORE THAN 2 BUYERS TO SELL OVER 50% STAKE
Promoters of Zee Entertainment Enterprises Ltd (ZEEL), the
flagship firm of troubled Essel group, are open to sell over 50 per cent of
their holdings in the firm as a part of their asset monetisation to repay debt,
and are in talks with more than two investors for the same, a senior company
official said. Zee Entertainment Enterprises had announced in November last
year that its promoters, led by Subhash Chandra, planned to sell up to 50 per
cent of their equity stake in the company to a strategic partner.' Our intent
has not changed but if somebody is making an offer (to buy) beyond the 50 per cent
stake we will look at it, ZEEL MD and CEO Punit Goenka said. He was responding
to a query on whether the promoters would be looking to sell a higher stake
considering their holding has went down to 39.08 per cent following sale of
24.38 million pledged shares. As on December 31, 2018, promoters held 41.62 per
cent stake in ZEEL. Goenka, however, said, as part of the talks with the
potential investors, the promoters had earlier indicated willingness to sell
around 20 per cent of their holding. Responding to another query on the number
of potential buyers, Goenka said the figure of at least two or more players
which he had put out in an earlier call with analysts still holds. While he did
not give an exact timeline for concluding stake sale by the promoters, Goenka
said.
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ALLAHABAD BANK Q3 NET LOSS
NARROWS TO RS 733 CR
State-owned Allahabad Bank Wednesday reported narrowed net
loss at Rs 732.81 crore for third quarter ended December of the current
financial year due to reduction in bad loan provisions. The bank had posted a
net loss of Rs 1,263.79 crore in the same period of the previous fiscal. Total
income was nearly flat at Rs 4,756.88 crore for December quarter of 2018-19, as
against Rs 4,755.33 crore in the same period of 2017-18, Allahabad Bank said in
a regulatory filing. On the asset front, the bank witnessed rise in its gross
non-performing assets (NPAs) at 17.81 per cent of the gross advances as at
December-end 2018, as against 14.38 per cent by December 2017. In value terms,
gross NPAs or bad loans stood at Rs 28,218.79 crore, higher than Rs 23,260.81
crore a year ago. However, the net NPAs were brought down to 7.70 per cent (Rs
10,865.26 crore) from 8.97 per cent (Rs 13,646.52 crore). The provisions for
bad loans also reduced to Rs 1,900 crore for the reported quarter, as against
Rs 2,044.23 crore a year ago. The overall provisions and contingencies were at
Rs 1,495.34 crore, down from Rs 2,413.46 crore. For accounts under provisions
of Insolvency and Bankruptcy Code (IBC), the bank is holding provision of Rs
4,887.17 crore (75 per cent of total outstanding as on December 31, 2018, it
said. The non-performing loan provision coverage ratio of the bank stood at
69.64 per cent by end of December 2018.
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UNITED BANK OF INDIA SAYS
WON'T HAVE ANY SLIPPAGES IN Q4FY19
United Bank of India has reported a net loss for the seventh
quarter in a row, with the third quarter seeing the highest loss ever for the
bank This is the worst quarter for me, said MD Ashok Kumar Pradhan. I was
expecting around Rs 800 crore. We had to provide for in fact IL&FS, so that
brought an additional pressure of about Rs 300 crore My exposure to IL&FS
is Rs 1,078 crore. We have provided for Rs 400 crore of loss but we have made a
prudential provision at the rate of 20 percent for the entire group, he said. In
terms of slippages numbers, he added that It was around 4.46 percent so the
bank won’t expect any slippages henceforth. It was about Rs 2,300 crore in
rupee terms. Corporate slippages is around Rs 1,800 crore, he added. Pradhan
said that, I won’t have any slippages in this quarter unless and until
something extraordinarily happens. As far as National Company Law Tribunal
(NCLT) accounts are concerned, we have provided to the tune of about 74-75
percent. So there won’t be any additional requirement in this quarter.
Provision coverage ratio (PCR) is about 65 percent. On prompt correction action
(PCA) framework situation, he further mentioned that, I will be in the black in
Q4 itself. My net NPA has come down to 12 percent. So I should be below 9
percent and in the threshold I by March quarter.
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RBI EXPRESSES CONCERNS
OVER FPI-NRI ROUTE MERGER
The Reserve Bank of India (RBI) has expressed concerns over
the market regulator’s proposal to merge investment route of non-resident
Indians (NRIs) with foreign portfolio investor (FPI) route, said three people
privy to the development. The central bank is against the plan in its current
form because the regulations that govern both the modes of inflows are
separate, and clubbing the two would cause a regulatory haze. RBI is concerned
over what rules would apply to the non-market investments made by NRIs through
the non-resident external Rupee (NRE) route if they were merged with the
foreign portfolio route. Further, different investment limits apply to NRIs and
FPIs Monitoring of investment limits also becomes a challenge. While flows from
off-shore investors come under Sebi’s ambit, investments by NRIs are regulated
by RBI. The issue was raised by central bank officials in a meeting of the HR
Khan Committee — appointed by the Securities and Exchange Board of India (Sebi)
– held late January. An email sent to RBI remained unanswered. Sebi had approved
proposals of the HR Khan Committee including the merger of NRI and FPI route
after the regulator’s circular on April 10 that introduced additional curbs on
domestic investments by NRIs sparked panic among offshore funds. While FPIs can
buy or sell shares in the Indian markets through their custodians, mainly
foreign banks, NRIs can make the investments only through their designated
banks. These investments are regulated by RBI’s portfolio investment scheme
(PIS). The NRE accounts are also used for other investment purposes including
real estate purchases and fixed deposits. There are several practical
challenges with the implementation of the FPI-NRI merger and more than two lakh
NRIs who hold both fixed deposits and market investments will be impacted, said
a source privy to the consultations. In the meeting, RBI officials had raised
concerns on the issue and asked the HR Khan Committee to dwell upon how the
problems can be resolved before taking the issue forward. The panel will meet
RBI officials once again in second week of February to take a final call, the
source said Investment limits work differently for FPIs and NRIs. As per RBI
rules, an FPI can hold up to the sectoral cap applicable in a company. In
several sectors, 100 per cent FPI investment is allowed; while in sectors such
as banking, off-shore funds can own up to 74 per cent. NRIs together cannot own
more than 24 per cent in a listed company. If both the schemes are merged, it
is unclear as to what limits would have to be considered. If both the routes
are merged, the designated banks will have to register with Sebi. Various
market participants too are opposed to the proposed merger of NRI and FPI
routes. This is impractical as the merger is going to be full of complexities,
said another source cited above.
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IL&FS HIRES GRANT
THORNTON TO REVIEW BOOKS
Infrastructure Leasing and Financial Services (IL&FS) has
hired auditing and advisory firm Grant Thornton India to conduct audit and
assist the Serious Fraud Investigation Office (SFIO) in its probe into alleged
financial irregularities in the company. SFIO had, in January, signed up a
forensic auditing firm to help in the investigation, an official in the know of
the development told. We want SFIO to expedite its investigation and submit its
final report. The two firms will help the probe agency in completing its
investigation and submitting a final report to the ministry of corporate
affairs (MCA), the official said. Grant Thornton (GT) would look into the company’s
accounts. GT will go through the balance sheets, account statements and
investment details to see if there were any financial irregularities. They
would look into the lender details, project details, dealings with private
entities and if there was any fudging of accounts. The same would be
communicated to SFIO. The two audit firms are working in tandem with SFIO, the
official said.
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BUILDERS IN TOP 8 CITIES
OWE LENDERS RS 4 LAKH CRORE: REPORT
Builders in the top eight Indian cities owe banks and NBFCs Rs
4 lakh crore even as their total sales each year are worth just Rs 2.47 lakh
crore. Real estate research institute Liases Foras, which based its report on a
database of 11,000 developers said it will take seven years to clear the
outstanding amount based on current rate of earnings per year. The annual EMI
on this total loan is itself Rs 1.28 lakh crore. Moreover, the actual earnings
of these developers (before interest and tax) are barely Rs 57,000 crore a
year. IL&FS default and the ongoing speculation about DHFL have made
industry stakeholders anxious yet again. Moved by the upheaval we have tried to
gauge impact of the liquidity squeeze on the sector and developers,'' said the
report. The situation of developers is akin to an elephant in a well which is
unable to come out on its own. Somebody needs to replenish the well. But can we
find cheap capital to refill the well? said Pankaj Kapoor. The existing
scenario signifies the industry is at an inflection point and is staring at
long-due price correction in order to improve sales. But is there a scope to
bring down prices? he added. The report said that if builders have to make a 15
per cent profit, they have to increase their sales by 2.6 times the current
levels to stay afloat. In the past decade, while value of sold stock increased
1.56 times, the value of unsold stock increased 4.72 times In terms of units,
volume of sales has gone up by 1.28 times, while inventory increased to 3.33
times between 2009 and 2018. In the same period, lending to the real estate
sector has gone up from Rs 1.2 lakh crore to Rs 4 lakh crore. The situation of
developers is akin to an elephant in a well which is unable to come out on its
own. Somebody needs to replenish the well. But can we find cheap capital to
refill the well? said Pankaj Kapoor. The existing scenario signifies the
industry is at an inflection point and is staring at long-due price correction
in order to improve sales. But is there a scope to bring down prices? he added.
The report said that if builders have to make a 15 per cent profit, they have
to increase their sales by 2.6 times the current levels to stay afloat. The
eight cities include Mumbai Metropolitan Region, National Capital Region, Pune,
Hyderabad, Chennai, Banglaruru, Ahmedabad and Kolkata. In the past decade,
while value of sold stock increased 1.56 times, the value of unsold stock
increased 4.72 times. In terms of units, volume of sales has gone up by 1.28
times, while inventory increased to 3.33 times between 2009 and 2018. In the
same period, lending to the real estate sector has gone up from Rs 1.2 lakh
crore to Rs 4 lakh crore. While debt has grown in a monumental manner and so
has inventory, sales did not go up in the same proportion. Having borrowed
money from different sources, new players kept coming in the market and kept
adding housing stock into the market without any productivity. Since sales
remained abysmal all this while, developers are finding it difficult to meet
their debt obligations at this point, said the report, released early this
week.
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VODAFONE IDEA REPORTS RS
5,005-CRORE LOSS FOR OCT-DEC QUARTER POST MERGER
Telecom operator Vodafone Idea on Wednesday reported a
consolidated loss of Rs 5,005.7 crore for the third quarter of 2018-19. The
books of Vodafone Idea recorded comprehensive loss of Rs 1,284.5 crore in the
same quarter a year ago. However, the year-on-year figure is not comparable as
the merger between Vodafone and Idea completed on August 31, 2018. The loss,
however, widened on a sequential quarter basis. Total income of Vodafone Idea
stood at Rs 11,982.8 crore during the reported quarter. The income increased by
52 per cent compared to Rs 7,878.6 crore in the previous July-September
quarter. The initiatives taken during the quarter started showing encouraging
trends by the end of the quarter. We are moving faster than expected on
integration, specifically on the network front, and we are well on track to
deliver our synergy targets, Balesh Sharma said.
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AS VODAFONE IDEA WALKS A
TIGHTROPE, A RIGHTS ISSUE THROWS A NEW GOOGLY
Vodafone Idea Ltd’s shares have fallen 27% since its promoters
said in mid-November that they would contribute up to ₹18,250
crore to its planned capital raise. That creates sizeable problems for the
company, which later said that the route used for the fundraising would be a
rights issue. To start with, because of the drop in the share price, the dilution
of Vodafone Idea’s current equity will be about 15% more compared to
mid-November, when the company first talked of the fundraise. At current
prices, the dilution in the equity may be as much as 100%. In 2008, when Tata
Motors Ltd tried to partly fund the Jaguar Land Rover acquisition through a
rights issue, its shares had fallen heavily. The promoter, Tata Sons Ltd, had
to eventually bail out the issue. There are similar worries about Vodafone
Idea’s issue among analysts. The company plans to raise ₹25,000
crore in all which means minority shareholders are expected to bring in nearly
a billion dollars, alongside the massive $2.5 billion infusion by the
promoters. For a stock that’s fallen to nearly a fourth of its levels from January last
year, that’s a monumental ask. There isn’t much appetite for fresh investments
into the company, especially given the stock’s past performance and the state
of the industry, says an analyst. Note that Vodafone Group Plc itself hasn’t
been open to making fresh investments into India; its subscription to the
rights issue will reportedly be funded through a special purpose vehicle that
is, in turn, raising funds by pledging its shares in the India assets. In any
case, Vodafone Idea’s promoters can’t follow the Tata Sons script, and lap up
the entire unsubscribed part of the rights issue. This is because they aren’t
very far from prescribed norms for minimum non-promoter shareholding. In fact,
unless minority shareholders subscribe to shares worth at least ₹5,000
crore, the promoters will breach the 75% mark for maximum promoter shareholding
set by the Securities and Exchange Board of India (Sebi). And if minority
shareholders commit, say, only ₹2,500 crore to the issue, that would mean Vodafone Idea’s
promoters will be able to buy equity shares worth only ₹11,000
crore or so, which is 40% lower than the amount they have earmarked.
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KERALA SELECTS 4
INVESTMENT FUNDS FOR START-UPS
Kerala is poised for a stronger start-up ecosystem as four
investment funds are likely to invest more than ₹1,000 crore in new
business ventures in the next four years. Since the pact mandates investing 25
per cent of the volunteered amount in the next four years, the State is
guaranteed with a minimum investment of ₹300 crore by 2022 fiscal,
he said. The Kerala government has adopted the Fund of Funds model to
invigorate angel and VC funds. The State, on its part, provides an annual
investment of ₹15 crore. The first leg of 2017-launched ‘Seeding
Kerala’ saw encouraging results, prompting the government to aim at raising
investments worth ₹60 crore. The State got 34 expressions of interest, from which
four funds were invited to the KSUM endeavour on developing the state’s
start-up ecosystem, he added.
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ESSAR BUYS STAKES FROM BP
IN PIPELINE, TERMINALS FOR UK REFINERY
Essar Oil (UK), a unit of India’s Essar group, announced the
acquisition of assets from BP to further strengthen the company’s logistics
infrastructure in the UK, where it owns and operates the Stanlow refinery
located on the south side of the Mersey estuary near Liverpool. This latest
expansion means Essar has now invested nearly $1 billion in building the UK
business since first acquiring the Stanlow manufacturing complex in July 2011,
the company said in a statement. Essar will acquire an equity stake in the UKOP
pipeline, a share of the contractual joint venture with Shell that runs the
Kingsbury terminal and a 100% interest in the Northampton terminal.
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NSE TO REVISE TRADE
EXECUTION RANGE FOR CURRENCY FUTURES, OPTIONS
The National Stock Exchange will revise the trade execution
range for currency futures and options contract from February 11. In a circular
Wednesday, the exchange said orders shall be matched and trades should take
place only if the trade price is within the trade execution range based on the
reference price of the contract. The reference price for each contract would be
computed on the basis of various parameters. Among others, for contracts that
have traded in the last one minute, the reference price would be revised
throughout the day on a rolling basis at one minute intervals. The changes
would be effective from February 11, the circular said.
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ALLAHABAD BANK POSTS NET
LOSS OF RS 733 CORE IN Q3; NPA RISES TO 18%
Bank posted a net loss of Rs 733 crore for the third quarter
of the present financial year, against a net loss of Rs 1,264 crore in the same
period of the last financial year. In Q2 of FY19, the net loss stood at Rs
1,822 crore. The slippages of the bank the last quarter stood at Rs 2,450
crore, against the expectation of less than Rs 2,000 crore, said S S
Mallikarjuna Rao. About Rs 300 crore exposure in three accounts to IL&FS,
turned into NPAs, he said. The bank has total exposure of about Rs 1,245 crore
to IL&FS covering 12 to 13 accounts. The rest of the accounts worth about
Rs 900 crore are in standard category, he said. The bank expects to break even
by June 2019, and present its plan to come out of PCA (prompt corrective
action) to the RBI, said Rao. The bank expects 10 major accounts in NCLT, with
an exposure of around Rs 2,749 crore, to be settled by March 2019, with a
haircut of around 51 per cent. The bank expects a write back of about Rs 350
crore from these accounts. The bank will seek further capital infusion from the
government by March 2019. At present, the government shareholding in the bank
stands at about 83 per cent. However, since the bank needs to bring down the
government shareholding to 75 per cent by October 2020 according to
regulations, it will go to market in tranches to reduce the government stake
after March 2019, said Rao. The gross NPA as a percentage of total advances
stood at 17.81 per cent in the last quarter, against 14.38 per cent in the same
period of the last financial year. The net NPA percentage stood at 7.7 per cent
in Q3 of FY19, against 8.97 per cent in the same period last financial year.
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ESSAR STEEL OPERATIONAL
CREDITOR MOVES SC CHALLENGING NCLAT'S POWERS
Kamlaljeet Singh Ahluwalia, an operational creditor of Essar
Steel, moved the Supreme Court on Wednesday challenging two orders of the
National Company Law Appellate Tribunal (NCLAT) directing the Ahmedabad bench
of the National Company Law Tribunal (NCLT) to pass an order on the insolvency
case filed against it by 11 February. The orders in question passed by the
appellate tribunal are of 23 January and 4 February were issued in the Essar
Steel insolvency case. The matter is likely to be mentioned before a bench
headed by Chief Justice Ranjan Gogoi on Thursday. The plea sought setting aside
of the orders as it claims them to be contrary to the settled legal
propositions and against the principles of natural justice. According to the
petitioner, the NCLAT erred in passing the impugned orders and dictating the
procedure to the NCLT in conducting a matter, which is contrary and beyond its
scope of jurisdiction. The appellate authority while exercising powers under
Section 61 of the Insolvency and Bankruptcy Code, 2016, cannot assume
supervisory jurisdiction over the adjudicating authorities and issue directions
dictating the procedure to conduct the hearing of applications before the
adjudicating authority, the petition said.
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BHUSHAN POWER LENDERS
LIKELY TO REJECT SANJAY SINGAL’S LAST-MINUTE OFFER
Lenders to Bhushan Power and Steel (BPSL) are likely to reject
the last-minute offer made by the debt-ridden firm’s erstwhile owner Sanjay
Singal of repaying financial creditors in full. JSW Steel has already been
chosen by the lenders as the most preferred bidders for BPSL. The lenders are
scheduled to meet on February 8 to decide on the matter. Singal has offered to
pay the financial creditors in full and take the company out the corporate
insolvency resolution process (CIRP), under section 12 A of the Insolvency and
Bankruptcy Code (IBC), by converting their entire debt into cumulative
redeemable preference shares, payable over 17 years. Sources said both SBI and
PNB, having around 20% and 9% shares, respectively, in the committee of
creditors (CoC), may oppose Singal’s offer at the Friday meeting. A proposal to
withdraw an application under Section 7 or Section 9 or Section 10 of the IBC,
on an application made by the applicant, has to have 90% of voting share of the
CoC. A clutch of 34 financial creditors have claimed Rs 47,303 crore from the
company as on January 3, 2019, of which, the RP has admitted claims worth Rs
47,150 crore. Singal, sources said, has also offered to pay the operational
creditors of the company their due in 5-6 years. Sources also said that as per
the National Company Law Appellate Tribunal’s February 4 order, BPSL’s
resolution professional Mehender Kahndelwal would submit JSW Steel’s resolution
plan either on Friday (February 8) or Monday (February 11).
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DEBT-RIDDEN JET AIRWAYS
SELLS LOYALTY MILES TO RAISE RS 250 CRORE
Jet Airways has secured Rs 250 crore from advance sale of
redemption miles to its associate firm. The airline is also in discussion with
lenders for short-term loans. The board of Jet Privilege Private Limited
(JPPL), the company managing the loyalty programme, approved the transaction on
Tuesday. The airline has also received Rs 250 crore as interim funding from
promoter Naresh Goyal, who is negotiating a resolution plan with its strategic
partner Etihad Airways and lenders. Banks are expected to convert debt into
equity and infuse fresh capital in the airline, which is facing a serious cash
crunch and has defaulted on payments to lessors, vendors and staff salaries. A
senior executive from a public sector bank said consortium leader (SBI) is
likely to extend Rs 200 crore as an immediate financial assistance. This amount
will help to run the operations. A clear picture will emerge in the middle of
the next week, he said. Goyal is expected to step down as the airline’s
chairman and negotiations are underway on issues like board composition and rights,
governance mechanisms. A due diligence of the airline is underway.
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GAIL TERMINATES CONTRACT
WITH IL&FS FOR LAYING PIPELINE
Natural gas processing and distribution major GAIL has
terminated a contract given to IL&FS for laying pipeline in Bokaro-Durgapur
section due to poor project progress. The company in a regulatory filing to the
BSE on Wednesday said that the Bokaro-Durgapur section (124 km) is now
re-tendered and awarded to three different contractors to expedite construction
efforts. Besides, GAIL also informed that the project consultant, Engineers
India Ltd, was replaced by Metallurgical & Engineering Consultants (India)
Ltd for overseeing the project activities in this crucial stretch.
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MAHARERA ASKS KOHINOOR
DEVELOPERS TO PAY INTEREST ON DELAYED POSSESSION
Maharashtra Real Estate Regulatory Authority (MahaRERA) has
directed Unmesh Joshi-promoted Kohinoor Developers to pay simple interest at
rate of 10.55 per cent on a home buyer’s investment of Rs 1.25 crore from
January 1, 2017 for every month of delayed possession. MahaRERA member
Bhalchandra Kapadnis also imposed a penalty of Rs one lakh on the developer for
violating section 13 of Real Estate (Regulation and Development) Act by not
registering an agreement for sale despite the buyer paying 87 per cent of the
flat cost. The Authority also directed the developer to execute a registered
agreement for sale in consonance with the terms and conditions in the allotment
letter with a mutually agreed date of possession. Home buyer Turab Fidvi had
booked flat no 12B071 in Phase II of Kohinoor City project at Kurla West and
had filed a complaint with MahaRERA seeking interest on delayed possession
under Section 18 of RERA. He also pointed out that the developer had failed to
execute an agreement for sale despite paying Rs 1.25 crore out of total flat
cost of Rs 1.44 crore, violating Section 13 provisions. Kapadnis said Section 4
of Maharashtra Ownership of Flats Act (MOFA) prohibits the promoter from
accepting more than 20 per cent and Section 13 of RERA prohibits him from
accepting more than 10 per cent of the flat cost without first entering into a
registered agreement for sale. It was the duty of the respondents to execute
the registered agreement for sale in complainant’s favour before accepting more
consideration than the prescribed limit, he observed before imposing a penalty
of Rs 1 lakh for the violations. He also asked the developer to pay Rs 25,000
to the complainant towards the cost of the complaint.
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VIOLATION OF RERA ORDER:
REALTOR REFUNDS ONLY 20 PER CENT BOOKING AMOUNT TO HOME BUYER
Violating a direct order from the Real Estate Regulatory
Authority (RERA) asking it to refund the entire booking amount of Rs 1.8 crore
to a home buyer, a construction company has refunded only 20 per cent of the
amount. The company, Oberoi Realty, took 30 per cent of the total cost of two
flats from the home buyer. However, according to RERA norms, a builder can take
only 10 per cent before registering a flat sale agreement. The RERA order
stated that the customer paid Rs 1.8 crore for two flats of Rs 90 lakh each.
With the price of the flat quoted by the company at Rs 2.5 crore, this amounts
to 30 per cent for each. The RERA directed the developer to refund the full
amount within 30 days, but the developer has refunded only Rs 37 lakh so far.
The buyer, Parminder Singh who is the owner of Asset Auto, told that he and his
mother had booked two flats and paid three instalments of 10 per cent each in
2015. This was without the agreement for sale which is also against RERA norms.
Then after nearly two and a half years, on August 12, 2017, we got a mail from
them for registration of agreement for sale. We went to meet them at the site
and were shocked that practically no work on the ground was being carried out,
he said.
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HOME BUYERS DEMAND FAST
EXECUTION OF RERA ORDERS
IT security consultant Shreeram Mulay has been for a year
following up with MahaRERA regarding his complaint related to the possession
delay in a DSK project The Maharashtra Real Estate Regulatory Authority
(MahaRERA) had in November last year issued a recovery warrant notice. But
because of the alleged Rs 2,0911.11 crore economic fraud by D S Kulkarni and
his group of firms, the complainant is not getting the recovery amounts despite
frequent visits to the MahaRERA and Pune collector offices. All that they cite
is ‘technical reasons’ for the delay in the recovery. Why can’t MahaRERA
appoint officials to ensure proper follow-ups of such cases and serve the basic
purpose of the Real Estate (Regulation and Development) Act, 2016? asked Mulay,
who had invested his mother’s pension amount in the project. My struggle began
before 2018 and I am still at it, he told. Shripad Desai from Phursungi is
facing a similar situation. The project in which he had invested in is
incomplete for 10 years. MahaRera is not taking actions against the faulty
builder, he said. In Desai’s case, the builder had approached the civil court
though the matter is pending with MahaRERA. This has led to unnecessary
litigations. A common man has to fight a battle both in the civil and MahaRERA
courts, he said, adding that MahaRera should speed up execution of orders and
adjudicate cases within 60 days.
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RERA APPELLATE TRIBUNAL
YET TO SEE LIGHT OF DAY
The state government is continuing to sit on the proposal of
constituting authority and appellate tribunal of the Real Estate Regulatory
Authority (RERA), Rajasthan much to the chagrin of home buyers and developers
Almost one year and 10 months after the RERA was enacted, home buyers and
builders still do not have a clear road map The RERA was introduced with an aim
to bring more transparency in the existing system and protect the interests of
home buyers. However, in absence of half-hearted attempt of the state
government to implement the law, both developers and buyers are facing
inconvenience. Government of India had enacted the Real Estate (Regulation and
Development) Act 2016 and all the provisions of the Act came into force on May
1, 2017 in Rajasthan. However, as the state government failed to constitute
full-fledged committee over 650 complaints related to issues over flats and
housing schemes in Rajasthan are waiting to be heard. A senior official at RERA
said, Since May, no case was heard at RERA. Rajasthan government had earlier
appointed additional chief secretary (ACS) of urban development and housing
(UDH) department as the head the RERA. But as per the act, it is mandatory that
after one year complaints can only be heard after constituting full-fledged
authority and appellate tribunal, he said. With this, the developers too are
facing problem as they cannot market their project without procuring a RERA
registration number as per the law.
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TRAI REFUTES CRISIL REPORT
ON RISE IN TV VIEWING BILLS UNDER NEW TARIFF REGIME
TRAI Wednesday asserted that price sensitive consumers will
see a drop in their monthly bills as market forces come to play under the new
tariff regime for broadcasting and cable services, and strongly contested a
Crisil report that claimed that costs may rise by 25 per cent R S Sharma said
the assumptions made in the said report had been wrong and unrealistic and
hence the conclusions, were not correct. TRAI has received consumer complaints
related to blackout (on one DTH platform), long duration packs and offerings
for multiple TV connections, and the regulator is looking into the grievances
and issuing suitable directions to operators. Consumers must have a choice and
interfering with their freedom is a violation of regulatory framework, Sharma
said. He said that price sensitive consumers can expect to see a reduction in
their monthly TV viewing bills. TRAI has also asked platform operators to
revert, in two days, with special schemes and plans for households with
multiple TV connections. TRAI has emphasised that players have to allow
individual set top boxes (even within a same household) to have separate choice
of channels if the consumer wishes. As per regulations, players can choose to
offer discounts or even waive off network capacity fee on the subsequent
connection. TRAI said it is maintaining a close watch on the issue and will
intervene, if required. To a specific query, the TRAI chief said that his own
bill has come down substantially under the new framework, but did not
elaborate.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ___
NEW BROADCASTING REGIME TO
CUT DOWN TARIFF BY 15%: TRAI
The Telecom Regulatory Authority of India (Trai) Wednesday
said that the new tariff regime for the broadcasting sector would reduce
monthly subscription cost by nearly 15% in metropolitans, and consumers would
be fully protected and freely exercise their choice. We expect bills will go
down. Everything will be determined by market forces and there was no upper cap
while the content pricing is under forbearance, Ram Sewak Sharma said. Citing
statistics based on 1.5 million viewers’ choices, provided by the IndusInd
Media & Communication Limited (IMCL), Sharma said that the average revenue
per user (ARPU) was, however, reduced to 10% to 15% in metropolitans and up to
10% in the Digital Addressable System (DAS) notified areas under phase -III and
IV. With the new norms, a consumer paying Mumbai could save Rs 54 on a monthly
basis and would have to pay Rs 271 from the earlier Rs 325 while consumers in
Delhi who pay Rs 303 per month would have to pay Rs 267 only. Sharma said that
the overarching objective of the new regulatory framework was not pricing but
transparency and empowerment of consumers. Citing BARC data, he said that
nearly 90% consumers watch 50 channels or less, and added that the new regime
is a pull model while earlier it was a push strategy adopted by platform
service providers.
#For Source of Information copy and paste the heading in google.
Thanks & Regards,
CS Meetesh Shiroya
Thanks & Regards,
CS Meetesh Shiroya
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