APEX COURT DECLINES TO USE POWERS TO REVERSE LIQUIDATION
ORDERS
The Supreme Court has
declined to use its powers relegated under Article 142 to revoke the
liquidation order pronounced by National Company Law Appellate Tribunal (NCLAT)
in Steel & Power India and Innoventive Industries saying it will set a
trend in the insolvency proceedings under IBC. Article 142 of the Constitution
allows the Supreme Court to pass any orders it thinks necessary to serve
justice. While considering a common appeal filed by Hyderabad-based Kamineni
Steel & Power India and Pune-based Innoventive Industries against NCLAT’s
liquidation order, a bench led by Justice AM Khanwilkar said it is not possible
to exercise powers under Article 142 of the Constitution as it will result in
issuing directions in the teeth of the provisions as applicable to the cases on
hand. The court also ruled that NCLT has no authority to evaluate the
commercial decision of the Committee of Creditors (CoC) to approve or reject a
proposed Resolution Plan as they have complete autonomy regarding the
commercial decision or wisdom of the financial creditors. Hyderabad-based
Kamineni Steel & Power India’s resolution plan was rejected by lenders
despite receiving 66.67 per cent assenting vote. It received 26.97 per cent
dissenting vote, while Bank of Maharashtra — one of the lenders with 6.36 per
cent vote — abstained from voting. Without taking the abstained vote into
account, NCLT Hyderabad came to a conclusion that the resolution plan had
received 78.63 per cent vote and approved the resolution plan. However, the
dissenting banks Indian Overseas Bank, Central Bank of India and Bank of Maharashtra
moved NCLAT questioning the authority of NCLT to approve the resolution plan
without 75 per cent (subsequently reduced to 66 per cent) of voting share of
financial creditors. NCLAT rejected NCLT’s judgement and ordered liquidation. In
the case of Innoventive Industries, NCLAT had affirmed the order passed by the
NCLT, Mumbai Bench, for liquidation of the company as the resolution plan did
not receive 75 per cent of financial creditors’ approval, a pre-requisite
according to the IBCto get the plan endorsed by the court. The counsel
appearing for the resolution applicant pleaded the apex court to exercise
powers under Article 142 to relegate the case before the NCLT as the threshold
of voting share of financial creditors has been reduced to 66 per cent. However,
the Supreme Court rejected the plea and ordered liquidation of both the
companies. Upon receipt of a rejected resolution plan, the NCLT is obligated to
initiate liquidation process under Section 33(1) of the Code, it said.
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APPLICABILITY OF LIMITATION ACT TO INSOLVENCY APPLICATIONS:
NCLT CARVES OUT EXCEPTION
The Mumbai Bench of NCLT
has held that, a debt that is barred by limitation can be proceeded against
under provisions of the Insolvency and Bankruptcy Code (IBC), if the debt
continued to be recorded in the books of the corporate debtor. The Supreme
Court in in the case of B.K. Educational Services Private Limited Vs. Parag
Gupta & Associates held that Limitation Act, 1963 will apply to proceedings
under the IBC. The judgment found that the right to sue, accrues when a default
occurs. It further held that if the default has occurred over three years prior
to the date of filing of the application, the application would be barred under
Article 137 of the Limitation Act, save and except in those cases where, in the
facts of the case, Section 5 of the Limitation Act may be applied to condone
the delay in filing such application. Following this judgment by the Supreme
Court, several debtors filed applications before the NCLTs on the ground that
the Insolvency Applications have been filed beyond the prescribed period of
limitation, and thereby cannot be proceeded further in view of the Supreme
Court decision. A Section 7 application was filed by TJSB Sahakari Bank Ltd.
(Applicant Bank) against Unimetal Castings Ltd (Corporate Debtor). The
Corporate Debtor raised several objections to the application. It, inter alia,
contended that since it is an MSME, it is extremely important for the national
economy and that, declaration of its account as an NPA is illegal, void and
non-est. The NCLT rejected all these contentions in view of Section 7 of the
IBC, which requires (for it to be only to be satisfied) that a default has
occurred. The Corporate Debtor also raised an objection that, the Insolvency
Application filed against it is barred under Article 137 of the Limitation Act
as the date of default was June 30, 2015 whereas the Insolvency Application was
filed in August, 2018 i.e. 3 years after the debt becoming due. In this respect
the Corporate Debtor relied on the Supreme Court’s decision in the B.K.
Educational Services case. However, in response to this objection on
limitation, the Applicant Bank relied upon an entry in the Corporate Debtor’s
balance sheet for the Financial Year ending 2017. In this balance sheet, the
Applicant Bank’s name and outstanding were both disclosed under ‘Long Term
Borrowings’. It was hence argued that the period of limitation would stand
extended in view of such admission of debt. The Applicant Bank, therefore,
argued that, despite the fact that the Insolvency Application is being filed 3
years after the date of default as disclosed in the Insolvency Application, the
admission of liability in the Corporate Debtor’s balance sheet would extend the
period of limitation. Distinguishing the present case from the Supreme Court
decision, the NCLT rejected the objection raised by the Corporate Debtor in
view of the admission in its balance sheet. The Bench, while agreeing with the
Applicant Bank and relying upon various decisions, held that the objection
raised by the Corporate Debtor that the debt is barred by limitation will not
hold water in view of the admission of liability in its balance sheet.
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RBI SHOULDN'T TREAT EVERY DEFAULT AS NPA ON 90TH DAY: PIYUSH
GOYAL
Piyush Goyal on Friday
said that if a borrower does not get its dues from entities like discoms, it
should not lead banks to classify that borrower automatically as defaulter. Law
cannot be a blind wherein in 90 days arithmetically it becomes an NPA (Non
performing asset). We will also discuss this and we hope to resolve it quickly,
Goyal said. He cited the case of a power producer to which a distribution
company owed money, stating that just because the discom did not pay up, the
power producer does not become a defaulter. It can be noted that sections of
the industry have moved the Supreme Court for special treatment to the power
sector when it comes to classification of NPAs. I think it is worth discussing
with the Reserve Bank that if a payment is overdue and discom is not paying its
bill then we will have to think about NCLT and NPA he said. Exhorting the
industry to report any such instances, Goyal said the Government could ensure
capital markets watchdog Sebi withdraws a proposal to disclose every default by
listed companies, and hinted that similar measures will be taken up with RBI as
well. Goyal also said that there is a need for specialised development finance
institutions like IDBI, IFCI and ICICI, saying that asset liability mismatch
results in difficulties for the banking system to support the infrastructure
sector. He said the Government is also trying to get the remaining eight banks
out of the restrictive prompt corrective action (PCA) framework.
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SEBI NORMS ON SECRETARIAL AUDIT TO IMPROVE CORP GOVERNANCE,
TRANSPARENCY, SAYS ICSI
The latest norms of
markets regulator Sebi on secretarial audit will help improve transparency in
corporate governance practices as well as empower company secretaries to report
everything related to compliances, according to company secretaries' apex body
ICSI. Every listed entity and its material unlisted subsidiaries have to
undertake secretarial audit and also submit a secretarial audit report along
with its annual report with effect from the year ending March 31, 2019. The
secretarial audit and the report has to be done by a practising company
secretary, as per the Sebi. One of the most important component of (corporate)
governance is transparency. You should be transparent and fair to your
stakeholders Transparency will improve as far as compliance and governance are
concerned, ICSI President Ranjeet Pandey told PTI. While secretarial audit is
still done at companies, the report is submitted to a company's management is
not in an elaborate format. Acknowledging that accountability is less in the
current framework for secretarial audit, Pandey said if general statements are
given, then the point of interpretation becomes more than the substance Now, we
(company secretaries) will have to be very clear about our thoughts about what
we are reporting. It will be supported by annexures, which will be more
detailed ones, he noted. Generally, secretarial audit looks at compliances with
respect to Companies Act, Sebi regulations, industrial and labour legislations
as well as system and process of compliance. The latest requirements put in
place by the Sebi will provide more depth and quality to secretarial services
the ICSI President said, adding that the current three-page report format was
more about giving static information. The detailed information which we
(company secretaries) were submitting internally to the board was not coming
into the public. Now, this will be made public and more transparent report. The
qualitative aspect will be highlighted, he said. On a quarterly basis, he said
that company secretaries are giving the audit report and on that basis the
management is taking care and doing the needful. In the final reporting, the
format is not that elaborate the management generally comes to the company
secretary and says this is not fitting into the format, then why are you
reporting it. You don't report it now, everything will be reported. Company
secretaries will be empowered, Pandey said. The Institute of Company
Secretaries of India (ICSI) has around 57,000 members.
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SIGNIFICANT BENEFICIAL OWNERS IN COMPANIES TO FACE STRICT
ACTION FOR WRONG DISCLOSURES
Significant beneficial
owners in Indian corporates might face strict action for inadequate or wrong
disclosures about their ownership and companies too can seek action against
entities in case they fail to provide satisfactory responses, according to rules.
With the corporate affairs ministry amending the rules for significant
beneficial owners under the Companies Act, 2013, corporates are required to
take necessary steps to identify such owners and obtain a declaration from them.
Apart from providing more clearer definitions for determining whether an individual
or an entity has significant beneficial ownership, corporates would be required
to provide the details in a more elaborate manner to the ministry. Significant
beneficial owners, who fail to make a declaration regarding their ownership,
could face fine, imprisonment or both under the Companies Act. In instances,
where such entities have willfully provided incorrect information, then such
acts would be considered as fraud under the Act. Similarly, companies that fail
to maintain registers of significant beneficial owners would also face action,
as per the rules. In cases where a significant beneficial owner does not
provide a response or if the response is inadequate then the company concerned
can approach the National Company Law Tribunal (NCLT) for suitable directions
including freezing of their rights related to their shares. Regarding the
amended rules, an official said on Saturday that the whole principle of
proportional calculation has been done away with. It is very clear on how
significant beneficial owners would be identified in various circumstances. The
rules seek to lift the corporate veil, the official had said. Significant
influence in a company could be exercised through various means, including
through voting, access to dividends and control over key management decisions. If
there are companies that are controlled from across the shores, then we would
like to identify them. Within the country also, every company is duty bound to
identify their significant beneficial owners, the official added.
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SUPREME COURT ADMITS HOMEBUYERS' PETITION CHALLENGING
CONSTITUTIONAL VALIDITY OF WBHIRA
The Supreme Court on
February 11 admitted a PIL filed by a group of homebuyers that challenges the
constitutional validity of West Bengal Housing & Industrial Regulation Act
2017 (HIRA). The apex court issued notice to the West Bengal government to file
its reply within a fortnight. West Bengal is the only state in the country that
has not accepted RERA. The Central Real Estate (Regulation and Development) Act
(RERA) came into effect on May 1, 2017, exactly a year after it was passed by
the Parliament. The petition has been filed by the Forum for People's
Collective Efforts (FPCE), an umbrella homebuyers association. In its petition,
the association has said that if WBHIRA is allowed to continue, it would give
way for state legislatures to enter into other fields to legislate under the
concurrent List, which otherwise are occupied by central legislations. It may
also prompt other states to come out with their own State laws, further
diluting the provisions in favour of builders thereby defeating the purpose of
a uniform RERA and rendering RERA redundant, they have said in their petition.
In its petition, FPCE has prayed that the Supreme Court pass an order declaring
the West Bengal Housing Industry Regulation Act, 2017 as ultra vires the
provisions of the Constitution of India and consequently, issue an appropriate
writ/order or direction in the nature of writ of mandamus/order directing the
State of West Bengal to not enforce the provisions of the West Bengal Housing
Industry Regulation Act, 2017 within the State of West Bengal. It has also
prayed that the apex court issue an appropriate writ/order or direction in the
nature of writ of mandamus/order directing the State of West Bengal to enforce
and act in accordance with the provisions of the Real Estate (Regulation and
Development) Act, 2016 in its letter and spirit within the State of West
Bengal; and, issue such further appropriate writ/order/direction as this
Hon’ble Court may deem fit and proper in facts and circumstances of the case. RERA
made by the Parliament is a 'complete and exhaustive code' and therefore, there
is no scope for any State legislation to be enacted in the area save in terms
of Article 254(2) of the Constitution of India, it notes. Also, 'the
requirement of Article 254(2) to obtain the assent of the President of India
has not been fulfilled while enacting the impugned State Act', it states,
adding It is an admitted position that the State of West Bengal had neither
reserved the impugned State Act for consideration of the President nor had ever
obtained the President's assent inspite of the fact that the entire field stood
occupied by RERA, 2016 enacted by the Parliament. As for the fees paid to the
West Bengal government treasury as registration fees, both builders and agents
say that whichever law prevails, the fees will continue to be paid to the state
treasury. Only the name will change from WBHIRA to RERA in case the state
decides to register projects under RERA. The buyer-builder agreements may also
have to be revised but it does not seem that the state government is willing to
relent anytime soon, says a builder on condition of anonymity.
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INDUS CAP MOVES NCLT AGAINST 3 SUBSIDIARIES OF UPPAL HOUSING
Private equity fund Indus
Capital Partners has moved the National Company Law Tribunal (NCLT) against
three subsidiaries of Delhi-based developer Uppal Housing Pvt. Ltd citing oppression
of investors, mismanagement and diversion of funds In its petition filed on 21
January, the New York-based fund asked the Delhi bench of NCLT to prevent the
developer from creating any third-party rights on its land parcels. Mint has
seen a copy of the petition. The case is yet to come up for hearing. Indus
Capital also requested the tribunal to direct Uppal Housing to give true and
accurate accounts of its subsidiaries, including the use of funds where the PE
has invested. According to two people familiar with the matter, Indus Capital
invested around ₹320 crore in three subsidiaries of Uppal Housing—Umang
Co-developers Pvt. Ltd, Umang Noida SEZ Pvt. Ltd and Umang Realtech—between
2008 and 2010. According to its petition, Indus Capital Partners had invested
about ₹233 crore in Umang Realtech, holding 52% stake since 2010. It
also invested around ₹45 crore in Umang Noida SEZ for a 40% equity stake, and ₹43
crore in Umang Co-developers for a 40% stake. The offshore investor has sought
NCLT’s intervention to retrieve around ₹288
crore from Umang Realtech alone, including interest. It has also requested the
tribunal to direct the builder to complete the housing project where around
1,000 home buyers have invested. Referring to Umang Noida SEZ, the petition
said, Respondents misappropriated and converted to their own use, the entire
amount contributed by the petitioner (PE firm) and respondent No. 2 (Uppal
Housing Pvt. Ltd), which was meant to be utilized for the business of the
company to itself. Respondent No 2 (Uppal Housing) also failed to pay the lease
premium/rental outstanding under the Greater Noida Lease Deed or undertake
development work.
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NCLT QUASHES INSOLVENCY PROCEEDINGS AGAINST SIKKA
INFRASTRUCTURE
The National Company Law
Tribunal (NCLT) has set aside the insolvency proceedings against Sikka
Infrastructure Pvt Ltd, noting that no order was ever passed against the group
and all other companies and projects except Sikka Karnam Greens under the Sikka
Group remain untouched and unaffected by the issue. The action taken against
the only Company of the Group, i.e. Sikka Infrastructure Pvt. Ltd., has been
dismissed by the Tribunal The tribunal also set aside the order of NCLT
appointing a resolution professional to run the company, declaring a
moratorium, freezing of accounts and other orders. Elaborating on the issue,
Harvinder Sikka, MD, Sikka Group, Now with NCLT's decision of quashing the
insolvency proceedings we are really thankful to the court for once again making
us believe in truth and true victory. We would also like to thank our entire
esteemed customers, lenders, and vendors for their unconditional support, trust
& faith during this time period. Also, any of your fears with respect to
the project Sikka Karnam Greens and its development are completely unfounded as
the project development work is undergoing day & night to complete balance
Phase-2 & Phase-3. Occupancy Certificate has been already applied with
Noida Authority and we expect to receive it very soon.
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RBI MSME PACKAGE TO HELP RECAST RS 1-TRN LOANS FOR 700K
ACCOUNTS: GOVT
The Reserve Bank's
restructuring package for small businesses announced last month will help
recast Rs 1 trillion of loans for 700,000 eligible micro, small and medium
enterprises, a top government official has said. The estimate, Rajiv Kumar is
much higher than domestic rating agency Icra's assessment of Rs 10,000 crore.
It comes even as some banks have seen a reluctance among the target MSMEs to
take advantage of the scheme. He said 700,000 MSME units need restructuring They
all can be restructured till March 2020 without downgrading the asset. Rs 1
trillion worth loans will get restructured, Kumar said. He said the scheme will
help free up additional resources which will fuel demand and create further
opportunities in the industry. It can be noted that the scheme was termed as
regressive by analysts, as the RBI had officially discontinued the practice of
restructuring of advances, which is among the factors blamed for the high NPAs
as banks indulged in ever-greening. During the past few years, RBI has been
doing away with various schemes for asset quality forbearance and hence this is
regressive from a credit culture point of view, given the past experiences of
the banking sector with restructuring, Karthik Srinivasan had said. The scheme
was announced by RBI after a recommendation to consider the same by its central
board at a crucial November meeting held amid friction between the central bank
and the government.
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WILL TRY TO LIFT MORE BANKS FROM PCA: GOYAL
After Reserve Bank of
India (RBI) lifted restrictions under prompt corrective action (PCA) on three
public sector banks last week, Piyush Goyal said the government will try to
help lift the restrictions on other public sector banks too There are eight
more public sector banks (PSBs) that are under the PCA framework after
restrictions were lifted from Bank of India, Bank of Maharashtra and Oriental
Bank of Commerce. Goyal said, we will try to lift restrictions on other PCA
banks soon when one industry body pointed out loan growth was impacted since
many banks were under PCA. The government had infused capital in banks that was
used to increase provisions and lower the net NPA ratio enabling RBI to lift
restrictions on the three banks. Breaching net NPA ratio of 6% is one of the
conditions that trigger restrictions. While responding to another question, the
Finance Minister said development finance institutions ‘are pressing need of
the hour’ for infrastructure development. Most of the erstwhile DFIs like
ICICI, IDBI have been converted into universal banks. Goyal said all households
will have electricity by next month. This was in line with the objective of the
gvernment to provide all facilities to all villages including 100% sanitation
coverage, fuel to all households, digital technology, education and healthcare
for all, he said.
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ESSAR STEEL CASE: GPI TEXTILES WITHDRAWS PLEA AGAINST
ARCELOR'S BID
The resolution
professional (RP) of L N Mittal’s younger brother Pramod Mittal-led GPI
Textiles has withdrawn its interlocutory application from the National Company
Law Tribunal (NCLT) Ahmedabad seeking quashing of ArcelorMittal’s takeover bid
of the insolvent Essar Steel. Acting independent of the GPI Textiles’ Committee
of Creditors (CoC), the RP had moved the NCLT's Ahmedabad Bench seeking
quashing of L N Mittal-led ArcelorMittal’s resolution plan on the grounds of
non-payment of dues Apparently,
according to an affidavit submitted with the NCLT, GPI Textiles’ CoC has chosen
not to seek such a quashing. With dues worth Rs 300 crore, the RP had moved
NCLT Ahmedabad without prior approval of GPI Textiles’ CoC or NCLT Chandigarh,
under whose jurisdiction it fell. On the other hand, the two-member bench of
the Ahmedabad NCLT concluded hearing cross arguments between Standard Chartered
Bank, RP as well as CoC of Essar Steel, and ArcelorMittal. Pronouncement of the
order, which could affect ArcelorMittal’s bid, has been reserved for later.
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RELIANCE GROUP COMPANIES TAKE LEGAL ACTION TO PROTECT
STAKEHOLDERS
Anil Ambani-led Reliance
Group companies on Saturday said they will take all appropriate legal steps against
L&T Finance to protect and enhance the value of their respective
stakeholders. The group companies which have decided to take independent legal
recourse include Reliance Infrastructure, Reliance Capital and Reliance Power.
The development comes a day after Reliance Group said a few NBFCs,
substantially L&T Finance and certain entities of Edelweiss Group, have
invoked pledge of listed shares of Reliance Group and made open market sales of
the value of approximately Rs 400 crore from 4.2.2019 to 7.2.2019. The market
capitalisation of the three companies were badly impacted due to the open
market sales. The three companies together have around 46.75 lakh shareholders.
On Friday, Reliance Group said: The purported exercise of rights to enforce the
security is illegal and excessive and against the process and requirements of
the respective borrowings' documentation. The illegal, motivated and wholly
unjustified action by the above two groups has precipitated a fall of Rs 13,000
crore, an unprecedented nearly 55 per cent, in market capitalisation of
Reliance Group over just these four days, causing substantial losses to 72 lakh
institutional and retail shareholders, and harming the interests of all
stakeholders, the statement said. The Reliance Group claimed the sale by
L&T Finance and others is in violation of various regulatory provisions
including the SEBI (Prohibition of Fraudulent and Unfair Trade Practices)
Regulations, which are applicable to all persons (including NBFCs) dealing in
listed securities, whether on invocation of pledge or otherwise. The statement
said group company Reliance Communications (RCOM) has announced plans for debt
resolution through the National Company Law Tribunal (NCLT) and there was no
adverse impact of this unrelated RCOM proposal on Reliance Capital Ltd.,
Reliance Infrastructure Ltd. and Reliance Power Ltd. As per loan and pledge
agreements, borrower did not cure various events of defaults including
providing margin for shortfall in the stipulated security cover. Despite various
notices in the past few months, events of defaults continued, L&T Finance
said in a statement.
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ESSAR STEEL CASE: SUPREME COURT REJECTS PLEAS BY OPERATIONAL
CREDITORS
The Supreme Court has
rejected the pleas by the operations creditors of Essar Steel, seeking a stay
on a National Company Law Appellate Tribunal (NCLAT) order asking the NCLT
Ahmedabad to pass an order on the debt-laden company's insolvency case by
February 11. The SC order of rejecting the pleas means that the NCLT will have
to decide on the case and thereby approve ArcelorMittal's bid. The petition
before the National Company Law Tribunal (NCLT) was moved on February 1 by the
former managing director of Essar Steel Dilip Oommen along with its project director
Rajiv Kumar Bhatnagar, as well as Ruia. This fresh move by the Essar Steel
directors came after the NCLT-Ahmedabad had on January 29 rejected the debt
settlement proposal put forth by the Essar Steel Asia Holdings despite it being
much higher at Rs 54,389 crore than the former's Rs 42,000-crore bid. The
Supreme Court on Monday said the Essar promoters are acting through operational
creditors, people and proxies to delay the process and it has been 571 days
since the inception of the insolvency proceedings. The NCLAT had said if the
orders are not passed by February 11, it will result in them taking over the
proceedings.
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AIRCEL FILES CONTEMPT PETITION AGAINST DOT
Bankrupt telecom operator
Aircel has filed a contempt of court petition in the Supreme Court against the
department of telecommunications (DoT), including secretary Aruna Sundararajan,
for failing to refund Rs 298 crore despite repeated orders The appellants
submit that the DoT had failed to pay Rs 298 crore to the appellants by
24.01.2019 despite clear and unambiguous directions in this regard, said Aircel
and its unit Dishnet Wireless in the contempt petition. The petition alleged
that DoT has wilfully and blatantly breached the apex court's orders and has committed
contempt of the said orders and sought appropriate actions against DoT and its
officials for contempt of the orders. The telco has asked the SC to direct the
department to refund its amount, and the top court is scheduled to hear the
case on Tuesday. Getting the money back is vital for Aircel, which needs to
maintain its assets so that they can be sold for a better value. Aircel,
reeling under a debt of Rs 19,000 crore, is in the last leg of a corporate
insolvency resolution process, which is being run by a resolution professional
(RP) from Deloitte. DoT had asked for these payments to clear the deal. The top
court later passed an order cancelling bank guarantees, which meant Airtel had
to pay the amount to Aircel, and asked DoT to return Rs 298 crore to Aircel by
January 24. However, Airtel paid about Rs 341.8 crore and deducted Rs 112 crore
as adjustments. The bankrupt telco moved SC again demanding the return of the
deducted money which meant the fight between the bankrupt Aircel and Airtel
continues.
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RELIANCE POWER WANTS SEBI TO BAN EDELWEISS FROM TRADING IN
STOCK MARKETS
Reliance Power has asked
the Securities and Exchange Board of India (Sebi) to prohibit the Mumbai-based
Edelweiss financial services group from trading in the securities market. The
strongly worded letter is dated February 6. It asks the regulator to issue a
cease and desist instruction from engaging in market abuse, which allegedly led
to its share price plunging 57 per cent in two days. It asks Sebi to
investigate this disruption of Reliance group (Anil Ambani’s) shares, which
include examination of the dealing room records, including records of phone
calls and SMS of all persons at the broking firms where the bulk of the sale
transactions took place, and the relevant fund flows. The letter alleges
Edelweiss had pressed huge sale orders significantly below the prevailing
market price thus majorly contributing to downward movement in the last traded
price. Such selling was enforced not only in the cash but also in the
derivatives segment in a disorderly manner. Leading to deliberate hammering
down of the price of Reliance Power shares. R-Power has 3.1 million
shareholders and debt of over Rs 30,000 crore. The promoters had raised the
loans by pledging their shareholding in the company, one of which was issued to
the Edelweiss group. The share sell-off was primarily by Edelweiss and L&T
Finance of pledged shares. The two lenders have denied any wrongdoing and plan
to approach Sebi to clarify their position. In its letter, R-Power says there
was no more than margin shortfall and breach of some loan covenants However,
the entities of Edelweiss resorted to enforce the pledge on Reliance Power
shares and dumped the same in the market.
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ESSAR STEEL CASE: STANDARD CHARTERED DELAYING INSOLVENCY
PROCESS, COC TELLS NCLT
Standard Chartered Bank
(SCB) doesn’t have anything to argue as its loan is not secured with project
assets but it is still delaying the case using arm-twisting and blackmailing
tactics, the Committee of Creditors (CoC) counsel told the Ahmedabad bench of
National Company Law Tribunal (NCLT) on Friday during the hearing of Essar
Steel insolvency case. Rejecting all charges made by SCB counsel, including
that of conspiracy against SBC and entire process of resolution plan as a ‘big
scam’ the CoC counsel said that decision on distribution plan was taken on best
commercial wisdom of CoC. He further said that through negotiation
core-committee could raise ArcelorMittal’s bid from Rs 35,000 crore to Rs
39,500 crore plus minimum guarantee of Rs 2,500 crore as working capital. Don’t
trivialise negotiation through imaginary conspiracy. Decisions were taken on
the basis of quality, nature and depth of security, he alleged. SCB counsel
said that the heart of the resolution plan lies in distribution mechanism and
suggested to increase the offer made by ArcelorMittal. He argued that the
procedure was non-transparent, fraud and illegal and as SCB was not amongst the
majority, its voice was not heard. In the case of liquidation value is Rs 15000
crore, distribution would be done as per security. Similarly, distribution of
Rs 42000 crore (ArcelorMittal’s bid) should be placed accordingly, he added. Meanwhile,
in another development related to Essar Steel’s Insolvency case, GPI Textile,
owned by Prmod Mittal, the younger brother of ArcelorMittal’s LN Mittal,
withdrew its application with liberty to file it afresh GPI Textile had
approached NCLT Ahmedabad bench and sought quashing of ArcelorMittal’s
resolution plan, claiming that it still owes his company s 300. ArcelorMittal
and resolution professional of Essar Steel had opposed GPI Textile counsel’s
plea, stating committee of lenders in a written submission before the NCLT
Ahmedabad had said they did not object to ArcelorMittal plan.
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INSOLVENCY COURT DISMISSES STANCHART’S PETITION IN RUCHI SOYA
CASE
The Mumbai bench of the
National Company Law Tribunal (NCLT) on Thursday dismissed Standard Chartered
Bank’s petition to reclassify it as a financial creditor to Ruchi Soya
Industries Ltd, stating the lender is too late in seeking such a change
Standard Chartered, which had filed the case on 3 September, is trying to
recover $52.5 million (around ₹375 crore) from Ruchi Soya, which is undergoing insolvency
resolution. The company owes more than ₹10,000 crore to banks and
financial institutions. There was a tripartite agreement between Standard
Chartered Bank, Ruchi Soya, and its subsidiary Avanti Industries. Under this
agreement, Ruchi Soya received the money from Standard Chartered to supply
goods to Avanti, and subsequently, Standard Chartered had to collect money from
Avanti, Shyam Kapadia, counsel for Standard Chartered, told NCLT. The nature of
the debt was working capital and hence it qualifies as financial debt, Kapadia
said. The Hong Kong branch of Standard Chartered had given a trade finance
facility to Ruchi Soya to supply goods to Avanti and the company had agreed to
repay the money along with interest which is purely a financial transaction,
the Standard Chartered counsel argued. Kapadia said that $105 million was
disbursed of which $52.5 million is outstanding. However, the NCLT bench of
judicial member V.P. Singh and technical member Ravikumar Duraiswamy, in its
oral order, dismissed the plea, observing that the resolution professional had
called for claims in January but the lender chose to come to court only in
September. On Thursday, the tribunal also directed Ruchi Soya’s resolution
professional to comply with the Supreme Court order to hold a fresh meeting of
the committee of creditors to decide on the resolution plans. NCLT will next
hear the case on 5 March after lenders decide on a successful bidder.
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PACL INVESTORS CAN SUBMIT CLAIM APPLICATIONS TILL APRIL 30,
SAYS SEBI
Investors of PACL who are
seeking claims from the company can submit their applications to the panel
headed by retired Justice R M Lodha till April 30, according to Sebi. The
committee was set up by markets regulator Sebi following a Supreme Court order
for selling the properties of PACL and using the sale proceeds to refund the
investors. In a separate release, Sebi said that only the committee is
authorised to sell the properties directly or indirectly associated with PACL. Accordingly,
it is clarified that the committee has not authorised any individual/entity to
sell the properties of PACL Ltd. It is also stated that any attempt by
individuals/ entities to illegally and unauthorisedly take possession of the
properties of PACL Ltd shall invite necessary action under law, the release
noted.
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SEBI ROLE IN PROMOTER FINANCING, MF JUMBLE
In the recent furore over
fancy structures used by mutual funds for promoter financing, market regulator
Securities and Exchange Board of India (Sebi), unfortunately, displays similar
weaknesses. To start with, its market intelligence comes across as
extraordinarily poor, if not absent Reports say the regulator is now concerned
about undue risks taken by mutual funds, although there was no inkling of any
concerns of the kind anytime in the past. Likewise, while market participants
are now calling for better disclosures of such financing structures by listed
companies, Sebi is yet to make a statement on this. J.N. Gupta, says: Sebi will
have to revisit regulations governing mutual fund investments The trigger for
Sebi’s examination of the issue was a sharp drop in the shares of Zee
Entertainment Enterprises Ltd and Dish TV Ltd after some lenders sold pledged
shares in the market. With a large number of such pledges outstanding, there
may well have been a cascading impact if other lenders too followed suit and
sold shares. Promoters of the group later said that the lenders had agreed to a
standstill, adding they had been granted time till September to reduce
leverage. Reports that mutual funds agreed to such a deal, without receiving
additional collateral, has the regulator worried as well. Some experts worry
that this is akin to the ever-greening phenomenon that got Indian banks into
trouble with bad debts. There are related worries about the structure used for
such lending, which masks the extent of leverage of some promoters. The modus
operandi is as follows: A promoter entity approaches a credit rating agency
asking for a rating on bonds to be issued by it, based primarily on the comfort
that the value of underlying shares held by it will always be 150-200% of the
value of bonds outstanding. For instance, for ₹100 crore worth of bonds
outstanding, ₹150-200 crore worth of shares are said to be backing the
bonds. Armed with an investment grade rating, these bonds are then placed
before mutual funds. In case the value of the share price falls, the promoter
entity is expected to add more shares, such that the value of the total number
of underlying shares remains above the agreed upon threshold, or redeem some
bonds. When funds are raised in such fashion, the underlying shares are not
technically pledged. This was first reported by Bloomberg columnist Andy
Mukherjee, who said that these debt covenants are as fluffy as cotton candy.
These are essentially unsecured loans to private investment companies, not
suitable for mutual funds, he wrote. You may not curb the freedom of mutual
funds to invest, but you have to ask them to make more disclosures, says SES’s
Gupta. Whether Sebi demands more disclosures or a step-up in risk management,
it is high time it made its stand clear. To be sure, there is another view that
Sebi doesn’t hold the keys to the problem. Sebi cannot stop all misdeeds. It is
for the mutual fund industry to do what is right for investors, rather than
side with promoters says Shriram Subramanian, founder and managing director,
InGovern Research Services Pvt. Ltd. All pledges should be disclosed Pledges
for raising funds for third-party use are non-benign for minority shareholders,
as promoters continue with their voting rights, but reduce financial exposure.
Once there is a separate disclosure of non-benign pledges, the market will
weigh in the risk factors, and discount it in the price, says Gupta. The
reference to a non-benign pledge is with regards to pledges made for outside
needs, or ventures unrelated to the company.
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SBI, ORIENTAL BANK PUT ON SALE STRESSED ACCOUNTS TO RECOVER
DUES OF RS 5,740 CR
State-owned State Bank of
India (SBI) and Oriental Bank of Commerce (OBC) have put on sale various
financial accounts to recover dues of around Rs 5,740 crore. The country's
largest lender SBI has invited bids from asset reconstruction companies (ARCs)
and financial institutions (FIs) to recover an outstanding of Rs 4,975 crore.
The bulk of accounts up for sale by SBI are of small and medium enterprises
(SMEs) that have dues amounting to Rs 4,667 crore. OBC wants to sell 13
accounts with a collective outstanding of Rs 764.44 crore, according to the bid
document placed on its website. As many as 281 SME accounts are up for sale by
SBI, belonging to those firms that have dues of up to Rs 50 crore. The
collective dues on these SMEs are Rs 4,666.50 crore. Also, SBI will sell three
accounts -- Dennis Steels Pvt Ltd with outstanding of Rs 258.73 crore, Shiva
Speciality Yarns (Rs 37.90 crore) and Bansidhar Spinning & Weaving Mills
Ltd (Rs 11.73 crore). Inviting expression of interest from ARCs and FIs,
Oriental Bank of Commerce said it proposes to sell its stressed financial
assets comprising 13 accounts with principal balance of Rs 764.44 crore.
E-bidding for SBI accounts will take place on February 27. For OBC, the
e-bidding is scheduled for February 25.
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LIC AND SBI ALLOWED IL&FS TO HAPPEN: EX RBI GOV YV REDDY
Former RBI governor YV
Reddy blamed two public sector behemoths - LIC of India and the State Bank of
India - for the collapse of Infrastructure Leasing & Financial Services,
which triggered a crisis among non-banking finance companies grappling with a
cash squeeze. RBI should be concerned at the risk-assessment capabilities of
public sector giants like LIC and SBI that allowed this to happen while having
large stakes in IL&FS, Reddy said. If IL&FS faced a liquidity problem,
it would have been the responsibility of RBI. IL&FS began to default on repayments
in September amid allegations of mismanagement. LIC, the largest shareholder,
held more than a 25% stake in the group, while SBI owned about 6.5%. Perhaps
the government intervened since both LIC and SBI, owned by it, are large
stakeholders in IL&FS and also because many infrastructure projects are
involved, Reddy said. Investors panicked, resulting in a spurt in the borrowing
costs of para banks. A secondary market trade kicked off fear mongering. DSP
Mutual Fund sold Dewan Housing Finance bonds as high as 11%. The extent of the
RBI’s response to the liquidity conditions faced by non-banking financial
companies is another point of friction between the government and the RBI, said
Reddy, who was appointed the 21st Governor of the RBI in September 2003.
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NSE TO INTRODUCE DYNAMIC PRICE BAND FOR FUTURES CONTRACTS
The National Stock
Exchange Friday said it will introduce a dynamic price band for futures
contracts in order to prevent erroneous order entries There are no fixed price
band applicable for stock futures contracts. However, in order to prevent
erroneous order entry, a dynamic price band for futures contract shall be kept
at certain percentage of the base price as defined by the exchange from time to
time, the bourse said in a circular. The dynamic price band will be relaxed by
5% in case of a market trend in either direction. In a separate circular, the
bourse said there would also be operating ranges for no price band securities There
is no price band in respect of securities, for which derivative products are
available. However, in order to prevent members from entering orders at
non-genuine prices in such securities based on pre-trade risk control
guidelines, the exchange has set the dummy circuit (dynamic price bands) filter
(operating range) at 10% it said.
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MUTUAL FUNDS OUT OF FAVOUR AS INFLOWS HIT 24-MONTH LOW
Net inflows of investments
into mutual fund equity schemes have hit a 24-month low with only ₹6,158
crore accruing in January 2019. The continuing volatility in stock markets and
political uncertainty seem to have impacted overall sentiment, except for one
silver lining—retail investment in such funds seems to be intact. January’s
net mutual fund inflows are down 6.7% from ₹6,606 crore in December
2018. Compared with the ₹15,390 crore net inflows into equity mutual fund schemes a
year ago, the fall is a steep 60%. The picture gets bleaker after factoring in
fund flows from arbitrage funds—according to the latest data, arbitrage funds
saw an outflow of ₹1,076 crore in January 2019. This places the net inflow at ₹3,838
crore at the end of January 2019, less than a third of what the industry
collected last year. The other worrying factor is the steady increase in
redemptions: ₹11,397 crore was redeemed from equity funds in January 2019,
against ₹11,234 crore in the previous month. The amount collected
through systematic investment plans (SIP) in January 2019 was ₹8,063.67
crore, compared with ₹8,022.33 crore in the previous month, according to the Amfi
data. The slowdown comes even as domestic liquidity has become crucial for
equity markets, with foreign institutional investors (FIIs) retreating from
Indian shares. FIIs sold off Indian equity worth $4,557.39 million in 2018 and
$75.35 million in January. On the other hand, domestic institutional investors,
including mutual funds and insurance companies, were net buyers of Indian
shares worth ₹1.09 trillion in 2018 and ₹2,146.87 crore in January.
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M-CAP EROSION: ANIL AMBANI-LED RELIANCE GROUP FIRMS RECOMMEND
LEGAL ACTION
A day after accusing
L&T and Edelweiss entities of causing huge market value erosion by illegal
and motivated sale of their pledged shares, Anil Ambani-led Reliance Group
Saturday said boards of its three listed firms have recommended all appropriate
legal steps to protect shareholders' value. In separate regulatory filings,
Reliance Capital, Reliance Infrastructure and Reliance Power said their respective
boards met on Saturday to review the events of last week, leading to a sharp
fall in their market capitalisation and destruction of wealth. L&T Finance
and Edelweiss Group have refuted the allegations and have counter-alleged
Reliance Group of failing to make timely payments, which they said necessitated
sale of pledged shares. In its filing, Reliance Capital said its over 7 lakh
shareholders have been impacted by what it termed as illegal, motivated and
unwarranted actions of L&T Finance. The financial services arm of Reliance
Group said its board has recommended and approved that the company take all
appropriate legal steps to protect and enhance the value of all its
stakeholders, especially its over 7 lakh retail shareholders. Reliance Power separately
said its board also reviewed the events leading to a sharp fall in market
capitalization and destruction of wealth due to illegal, motivated and
unwarranted actions of L&T Finance Limited and Edelweiss Group impacting
its over 3.1.75 lakh shareholders. Its board also recommended and approved all
appropriate legal steps to protect and enhance the value of all its
stakeholders, especially the over 31 .75 lakh retail shareholders of the
company. The illegal, motivated and wholly unjustified action by the above two
groups has precipitated a fall of Rs 13,000 crore, an unprecedented nearly 55
per cent, in market capitalisation of Reliance Group over just these four short
days, it had said. The group said the actions have caused substantial losses to
72 lakh institutional and retail shareholders, and harming the interests of all
stakeholders. Further, the group said that Reliance Capital, Reliance
Infrastructure and Reliance Power as well as their various subsidiaries are
performing satisfactorily on all operating parameters, and there is no change
whatsoever on any aspect as compared to the position prevailing prior to these
sales. As per loan and pledge agreements, borrower did not cure various events
of defaults including providing margin for shortfall in the stipulated security
cover.
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FPIS TURN NET BUYERS IN FEB; INFUSE RS 5,300 CR IN LAST 6
TRADING SESSIONS
Foreign investors have
infused close to Rs 5,300 crore in the Indian equity markets in the last six
trading sessions, mainly on expectations of higher economic growth. This comes
following a pullout of Rs 5,264 crore by foreign portfolio investors (FPIs) in
January. Prior to that, they had put in Rs 5,884 crore in the stock markets
during November-December 2018. According to data available with depositories,
FPIs put in a net amount of Rs 5,273 crore in equities during February 1-8.
However, they pulled out a net sum of Rs 2,795 crore from the debt market
during the period under review.
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EIGHT OF TOP 10 FIRMS ADD RS 53, 741 CR IN M-CAP; RIL, TCS
BIGGEST GAINERS
Eight of the 10 most
valued Indian firms together added Rs 53,741.36 crore in market valuation last
week, with Reliance Industries Ltd (RIL) and TCS becoming the biggest gainers. Only
ITC and HDFC from the top-10 list suffered losses in their market
capitalisation (m-cap) for the week ended Friday. Others in the gainers list
included HDFC Bank, Hindustan Unilever Ltd (HUL), Infosys, SBI, Kotak Mahindra
Bank Ltd and ICICI Bank. RIL's valuation jumped Rs 19,047.69 crore to Rs
8,09,669.50 crore. The market cap of Tata Consultancy Services (TCS) zoomed Rs
12,007.64 crore to Rs 7,74,023.16 crore and that of HDFC Bank advanced by Rs
8,569.51 crore to Rs 5,77,598.58 crore. Kotak Mahindra Bank added Rs 7,144.3
crore to Rs 2,47,151.12 crore and HUL Rs 4,578.23 crore to Rs 3,93,403.30
crore. ICICI Bank added Rs 282.99 crore to reach Rs 2,28,644.74 crore. On the
other hand, ITC's valuation dropped Rs 6,063.49 crore to Rs 3,37,901.54 crore
and that of HDFC fell by Rs 2,931.69 crore to Rs 3,34,256.62 crore. In the
ranking of top-10 firms, RIL was at the number one position, followed by TCS,
HDFC Bank, HUL, ITC, HDFC, Infosys, SBI, Kotak Mahindra Bank and ICICI Bank.
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GOVT INSURANCE FIRMS POST HUGE LOSSES AS MERGER DELAY HITS
BUSINESS
According to rough
estimates, in the officers’ grade alone, close to 600-900 posts are vacant
since the last one year. At the clerical and subordinate level, the staff
shortage is around 12,000 said sources in the companies. The impact is already
telling on the financial performance of the companies. In addition, at least
two firms — National Insurance and United India Insurance — significantly lost
market share. While National lost market share from 10.78 per cent in December
2017 to 8.63 per cent in December 2018, United India Insurance came down from
11.02 per cent to 9.27 per cent over the same time span. Lack of clarity on
merger was a reason for the premium to come down. Shortage of manpower was
another reason. Further, the firms had to make huge provisions over third party
motor losses, said a senior official of the public sector general insurance
sector.
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CAPITAL FLIGHT: FOREIGN INVESTORS PULL OUT $443 M FROM BOND
MARKET IN 4 DAYS
Foreign portfolio
investors (FPIs) pulled out nearly $443 million from the bond market between
Monday and Thursday. This is higher than the total net outflow of $370 million
from the bond markets in January. The rupee appreciated by 0.2 percent to 71.32
on Friday, compared with 71.45 on Thursday. The RBI in its sixth bi-monthly
monetary policy meet on Thursday relaxed the rules for FPI holding of corporate
bonds by withdrawing its April 2018 regulation wherein no FPI was allowed an
exposure of more than 20 percent of its corporate bond portfolio to a single
corporate. The quota for FPI investment in gilts was Rs 2.23 lakh crore as on
February 8, according to CCIL data. The utilisation as on February 8 was 72.5
percent for gilts. The NSDL data show that as of February 7, the limit for FPI
investments in corporate bonds was `2.89 lakh crore while the utilised level
was 70.26 percent.
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PF CHIEF CALLS FOR EXEMPTED TRUSTS’ HOLDING IN IL&FS ARM
The Central Provident Fund
Commissioner (CPFC) has stepped in to protect thousands of middle-class
salaried people, who run the risk of losing crores invested in IL&FS group
companies through standalone trustees. The apex retirement body has written to
the trustees, asking them to disclose individual exposures along with
securities details. CPFC has desired to know the exposure of exempted trusts in
the securities of IL&FS, it said, seeking details of investments purchased
by those trusts. The investments made by the exempted Trusts in such securities
may not be able to earn desirable returns. CPFC would assess the scale of the
crisis and also appraise the labour ministry, market sources said. Although
provident funds do not have the obligation of markto-market accounting every
quarter like mutual funds, the actual losses are likely to reflect in the books
of account at the end of the financial year on March 31. Those standalone funds
are owning either bonds or deposits or other debt securities of the failed
infrastructure lender, whose credit ratings were cut to junk category following
a series of defaults. About a month ago, UBS analysts estimated that lenders
might have to take haircuts ranging from Rs 11,300 crore and Rs 28,500 crore.
Privately-managed retirement funds may be running a bigger risk as these firms
would have to make good any losses as per the condition laid down by the EPFO
wherever it permitted such funds management.
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IL AND FS CRISIS DERAILS RS 15,000 CRORE INFRA PROJECTS
The crisis wrought by
Infrastructure Leasing & Financial Services Ltd (IL&FS) has stalled the
progress of about half a dozen high profile infrastructure projects in the
country to the tune of Rs 15,000 crore and fate of many more such projects are
hanging in uncertainty. Ahead of that, GAIL India scrapped two projects, which
it had awarded to IL&FS Engineering and Construction Company Ltd, a unit of
the troubled IL&FS. The contracts worth Rs 270 crore were awarded only last
year, and the 260-km pipeline projects were part of the 2,655-km natural gas
pipeline-laying under Pradhan Mantri Urja Ganga, connecting Uttar Pradesh,
Bihar, Jharkhand, West Bengal and Odisha.
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GENDER IMBALANCE IN BOARDROOMS ISN'T DELIBERATE, INDIA MUST
WIPE OUT UNCONSCIOUS BIASES
Men need to stand up,
women need to be who they are and unconscious biases needs to be overcome if
India Inc is to truly benefit from the value that comes with having more women
serving on corporate boards. For over a decade now, Trenowden has been building
a strong case why FTSE100 companies need to have more women directors. It was a
candid discussion, and intense in addressing the issues at hand, but not
without humour. Vittal said India has to challenge an unconscious bias on the
subject. She cited the example of a blue chip company which set up a strategic
team to address a crucial issue but did not pick any women on this team The
list didn’t include a single woman. And it was not deliberate at all. This
wonderful organisation was not even aware of this gap until pointed out, she
said. Left to itself, the gender balance on India Inc’s boards is unlikely to
correct quickly, Vittal said. She argued that an old-fashioned quota system may
perhaps be required. Behaviours change after experience, but for that to
happen, it’s important to bite and for that quota is important, she said.
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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.
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MAHARERA FINES BUILDER FOR NOT REGISTERING SALE DEED
The MahaRERA recently
fined a developer for not registering the sale agreement with a buyer. During a
hearing, MahaRERA found that even after 10 years, the developer hadn't
registered the agreement although he had accepted 10 per cent of the total
consideration. The body penalised the developer and asked him to pay Rs 1.5
lakh to MahaRERA for the violation of section 13 which makes it mandatory to
register the agreement once the buyer has paid 10 per cent amount.
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SHOW US REPORT ON 51 BUILDERS' FUNDS: NOIDA HOMEBUYERS
Homebuyers of several
delayed projects in Noida took to Twitter on Sunday to demand that the Noida
Authority release a report by Currie and Brown, a real estate research agency,
on the alleged diversion of funds by 51 builders The buyers claimed that the
report, released over the latter part of 2017 and 2018, contains crucial
information on how the developers diverted finances that they had secured from
buyers for other purposes. Repeated calls to several Authority officials on
whether they would release the report went unanswered. Currie and Brown had
been engaged by the Authority on November 8, 2017, to trace the finances of 51
builders. The agency found irregularities in the finances of 14 builders,
following which a forensic audit was ordered in the first phase in 2018. The
remaining 37 builders were investigated in the next phase.
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TAMIL NADU RERA CHIEF APPOINTED AFTER MORE THAN YEAR'S DELAY
After an inordinate delay,
the state government has appointed K Gnanadesikan chairperson of the Tamil Nadu
Real Estate Regulatory Authority (TNRERA). The state made the appointment more
than a year after the regulatory body was set up. Gnanadesikan will take over
the duties from S Krishnan, secretary of the housing and urban development
department, who was also serving as the interim chairperson of the regulatory
body. S Manohar, engineer-in-chief, buildings, public works department and V
Jeyakumar, advocate have been appointed as its members. N Balasubramanian,
retired district judge, as its judicial member and Leena Nair, retired IAS
officer, as the administrative member of the tribunal. TNRERA was set up in
June 22, 2017 with an aim to protect the interest of home buyers. According to
the Real Estate (Regulation and Development) Act, 2016, every state government
must establish a real estate regulatory authority within one year from the date
of the Act coming into force through a notification. The body must consist of a
chairperson, and not less than two full-time members. However, since its
establishment no appointments were made in Tamil Nadu.
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HOUSING SALES IN SOUTHERN CITIES HIGHER THAN NORTH AND WEST
INDIA IN 2018: ANAROCK
According to a report,
housing sales in the main southern cities collectively rose by 20 per cent as
against 18 per cent rise in the north and 15 per cent in the west. New housing
launches increased by 77 per cent in 2018 to 67,850 units over the previous year.
National Capital Region (NCR) saw an increase of just 16 per cent in new supply
while the main west Indian cities of Mumbai Metropolitan Region (MMR) and Pune,
together, saw a mere 17 per cent jump in new residential supply. Anarock also
found out that the collective unsold stock in these southern cities is a mere
19 per cent of the total 6.73 lakh unsold units across the top seven cities.
NCR alone has nearly 28 per cent of the total unsold stock. This clearly
indicates that the housing markets in the southern cities are exceptionally
resilient, and were quick to recover from the overall slowdown in the Indian
real estate sector, said Santhosh Kumar, Vice Chairman of Anarock Property
Consultants. The housing market in southern cities are driven by end-user
demand, particularly from people working in IT/ITeS sector, while the NCR
market is backed by investors, he said.
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WIPRO FOR DATA LOCALISATION, DIFFERS FROM NASSCOM STAND
Wipro has favoured
mandatory domestic incorporation and data localisation for technology
intermediaries that generate and collect sensitive and personal data and data
critical to national security, economy, public health or safety in order to
enable government access in the event of a cyber breach. Wipro’s response was
in stark contrast to software lobby group National Association of Software and
Services Companies (Nasscom), which said local incorporation requirement is
arbitrary, goes against the ethos of free and open internet reduces competition
in the digital economy, acts as a disincentive to enter India and gives rise to
tax concerns. Wipro and Nasscom were responding to amendments proposed by the
Ministry of Electronics and IT (MeitY) to Information Technology
(Intermediaries Guidelines) Rules under Section 79 of the Information
Technology Act. The IT Act currently provides a legal shield for technology
intermediaries such as internet service providers, online payment sites,
ecommerce sites and social media companies. Apart from stringent rules
regarding tracing messages, law enforcement assistance and takedown requests
without judicial oversight, the government in December proposed that all
platforms with more than fifty lakh users must have a registered entity in
India. We believe that this data localisation requirement is crucial as it
enables storing of information and data domestically especially sensitive and
personal data and data that is generated and collected by operators of critical
information infrastructures which facilitates easy access and quicker remedial
responses in case of occurrence of a cyber incident, Wipro stated in its
submission. The IT Act says critical information infrastructure means the
computer resource, the incapacitation or destruction of which, shall have a
debilitating impact on national security, economy, public health or safety. In
these countries, Wipro said, digital service providers are subject to their
respective domestic Cybersecurity Act only if their main establishment is
located within the territory of the country, or have a representative appointed
in the member state in which they offer their services.
#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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