In a jolt to the Maharashtra government, the Reserve Bank of India has recommended the supersession of the board of directors of the Maharashtra State Cooperative Bank and appointed two administrators to manage the bank’s affairs. This followed a negative net worth Rs144.22 crore which came out in the bank’s statutory audit for 2009-10.
Following suspected irregularities in the bank’s functioning, the RBI recommended to the state commissioner of cooperation and the registrar of cooperatives to take action to supersede the MSC Banks’ board. Accordingly, agriculture and marketing principal secretary SK Goyal and planning secretary S Shrivastava have been appointed the new administrators of the apex cooperative bank in the state.
Speaking to newspersons here Saturday evening, Goyal assured the people that “the financial condition of the MSC Bank is sound and depositors need not have any concerns. The decision to appoint an administrative board is primarily directed to further strengthen the financial position of the bank and bring professionalism and transparency.”
As on March 31, the bank’s deposits stood at Rs17,428 crore, of which Rs.1,340 crore are lying in current and savings accounts. The rest are lying under various types of fixed deposits. Besides, the bank has invested another Rs11,986 crore in different government securities. The bank also has a cash balance of Rs1,350 crore, plus its own fund of Rs3,053 crore. The net non-performing assets worked out to 7.5%.
Union agriculture and cooperatives minister Sharad Pawar on Saturday backed the directors of the MSC Bank and said that they hadfollowed the directives of the state government while disbursing loans. Expressing surprise over the dismissal of the borad of direfctors,Pawar said that there was no mismanagement on the part of the board.
He said that the state government had directed the MSCB to disburse loans to some institutions and had provided guarantees for the same. He said that a resolution to that effect was passed by the state cabinet. But this resolution was not followed and the state government did not provide funds against the guarantees when the loans were not recovered. Hence, the bank got into trouble.
Saturday, May 7, 2011
Retail investors make quick exit, and buck, from IPO stocks
BL Research Bureau:
It is not just high net worth investors who “flip” their shares on listing, after scrambling to get allotments in Initial Public Offers (IPOs). Retail investors do so too. Going by the shareholding patterns of the 63 IPOs that came out in 2010, the number of retail investors in these IPOs halved within the first three months of listing. About 80 per cent of these companies saw retail shareholders reduce their stakes as a class, soon after their market debut.
The trend was far more pronounced in IPOs that delivered gains on listing. For this analysis, we considered the shareholding patterns released when the IPO was listed and the quarter that followed immediately.
Gaining from listing
The IPOs of 2010 saw half their retail investors exiting soon after listing. The number of shares held by retail investors as a category too dropped by 33 per cent.
For instance, VA Tech Wabag saw the number of retail shareholders fall to just 28,430, from 1.4 lakh just after listing. The retail stake in the stock dropped to 7 per cent at the end of the December 2010 quarter from 15 per cent at the time it was listed in early October.
More than half the offers in 2010 managed quick gains, closing listing day with gains of over 20 per cent. Retail investors were particularly active in trimming their stakes in such stocks. Aster Silicates, for example, made an impressive market debut with a 69 per cent gain at the close of listing day. The number of retail shares in the company fell by 10 lakh, while the number of shareholders declined by 3,765.
Similarly, in Ravi Kumar Distilleries, the number of retail shares dropped a massive 63 lakh, having listed in late December with a 25 per cent gain. About 4,000 retail shareholders exited the company between its listing and the end of the December quarter.
While they did make a quick exit from offers that delivered gains on listing, retail investors showed greater reluctance to sell IPO stocks whose prices fell on market debut. Considering the shareholding at the end of the March 2011 quarter, retail investors held on to stakes even as prices continued to fall.
The number of retail shares in Pradip Overseas, for instance, rose from 65 lakh shares to 74.1 lakh shares between the June 2010 and March 2011 quarters, even as the stock languished 24 per cent below its issue price.
It is not just high net worth investors who “flip” their shares on listing, after scrambling to get allotments in Initial Public Offers (IPOs). Retail investors do so too. Going by the shareholding patterns of the 63 IPOs that came out in 2010, the number of retail investors in these IPOs halved within the first three months of listing. About 80 per cent of these companies saw retail shareholders reduce their stakes as a class, soon after their market debut.
The trend was far more pronounced in IPOs that delivered gains on listing. For this analysis, we considered the shareholding patterns released when the IPO was listed and the quarter that followed immediately.
Gaining from listing
The IPOs of 2010 saw half their retail investors exiting soon after listing. The number of shares held by retail investors as a category too dropped by 33 per cent.
For instance, VA Tech Wabag saw the number of retail shareholders fall to just 28,430, from 1.4 lakh just after listing. The retail stake in the stock dropped to 7 per cent at the end of the December 2010 quarter from 15 per cent at the time it was listed in early October.
More than half the offers in 2010 managed quick gains, closing listing day with gains of over 20 per cent. Retail investors were particularly active in trimming their stakes in such stocks. Aster Silicates, for example, made an impressive market debut with a 69 per cent gain at the close of listing day. The number of retail shares in the company fell by 10 lakh, while the number of shareholders declined by 3,765.
Similarly, in Ravi Kumar Distilleries, the number of retail shares dropped a massive 63 lakh, having listed in late December with a 25 per cent gain. About 4,000 retail shareholders exited the company between its listing and the end of the December quarter.
While they did make a quick exit from offers that delivered gains on listing, retail investors showed greater reluctance to sell IPO stocks whose prices fell on market debut. Considering the shareholding at the end of the March 2011 quarter, retail investors held on to stakes even as prices continued to fall.
The number of retail shares in Pradip Overseas, for instance, rose from 65 lakh shares to 74.1 lakh shares between the June 2010 and March 2011 quarters, even as the stock languished 24 per cent below its issue price.
Adani to complete Abbot Point acquisition by June
The Adani Group is expected to complete the Abbot Point port deal by June 2011. The company would have a long term-lease of the port premises for a period of 99 years.
The group will acquire shares from State of Queensland to complete the transaction. “Adjustments of payments to State of Queensland will be made through shares and leasing cost,” said Aakansha Joshi, associate manager, Economic Laws Practice.
Adani's Mundra Port and Special Economic Zone (MPSEZ) announced the acquisition of Abbot Point Port in Australia for A$1.8 billion (Rs 9,000 crore) earlier this week. The port would handle both captive and non-captive coal.
The port terminal is operated by Abbot Point Bulk Coal Pty Ltd, a subsidiary of Xstrata Coal Queensland Pty Ltd. The Queensland government would grant the lease of the X50 Abbot Point Coal Terminal to Mundra Port Pty Ltd. Under the lease, the state authority would retain the ownership of the port land and fixed infrastructure like the jetty and the wharf. The state would also continue to facilitate private-sector funded expansion of export infrastructure within the broader port precincts such as Terminal 2, Terminal 3 and the multi cargo facility.
The North Queensland Bulk Ports Corporation would remain the port authority for Abbot Point and would be responsible for the safety, security, efficiency and planning for the port.
The port has two mechanised berths. MPSEZ aims to build another two in the next five years. The coal terminal has two berths which are capable of handling cape size vessel over 2 lakh tonnes deadweight. The port has a capacity of 50 million tonnes but currently uses only 20 million tonnes. Abbot Point port is an operational, fully-mechanised port with ship loaders, stacker reclaimers, conveyor and rail systems. The port also can also raise capacity to 80 million metric tonnes.
In August 2010, Adani had bought coal assets from Linc Energy Ltd for A$3 billion in cash and royalties, the largest acquisition by an Indian company in Australia. The company is targeting its first coal output by the end of 2014 and production of 50-60 million tonnes by 2022.
The Mundra port handles over 50 million tonnes of cargo, and MPSEZ aims to raise the figure to 200 Mmpta by 2020. Adani Group Chairman, Gautam Adani, said, “We have harboured aspirations to expand globally and were in search of the right business opportunity, with a strategic fit. Abbot Point is our contribution to India's increasing global ambition and would boost synergy with other business of the group.”
MPSEZ operates ports at Mundra and Dahej. Currently, it is developing ports at Hazira and coal terminals at Mormugao.
The group will acquire shares from State of Queensland to complete the transaction. “Adjustments of payments to State of Queensland will be made through shares and leasing cost,” said Aakansha Joshi, associate manager, Economic Laws Practice.
Adani's Mundra Port and Special Economic Zone (MPSEZ) announced the acquisition of Abbot Point Port in Australia for A$1.8 billion (Rs 9,000 crore) earlier this week. The port would handle both captive and non-captive coal.
The port terminal is operated by Abbot Point Bulk Coal Pty Ltd, a subsidiary of Xstrata Coal Queensland Pty Ltd. The Queensland government would grant the lease of the X50 Abbot Point Coal Terminal to Mundra Port Pty Ltd. Under the lease, the state authority would retain the ownership of the port land and fixed infrastructure like the jetty and the wharf. The state would also continue to facilitate private-sector funded expansion of export infrastructure within the broader port precincts such as Terminal 2, Terminal 3 and the multi cargo facility.
The North Queensland Bulk Ports Corporation would remain the port authority for Abbot Point and would be responsible for the safety, security, efficiency and planning for the port.
The port has two mechanised berths. MPSEZ aims to build another two in the next five years. The coal terminal has two berths which are capable of handling cape size vessel over 2 lakh tonnes deadweight. The port has a capacity of 50 million tonnes but currently uses only 20 million tonnes. Abbot Point port is an operational, fully-mechanised port with ship loaders, stacker reclaimers, conveyor and rail systems. The port also can also raise capacity to 80 million metric tonnes.
In August 2010, Adani had bought coal assets from Linc Energy Ltd for A$3 billion in cash and royalties, the largest acquisition by an Indian company in Australia. The company is targeting its first coal output by the end of 2014 and production of 50-60 million tonnes by 2022.
The Mundra port handles over 50 million tonnes of cargo, and MPSEZ aims to raise the figure to 200 Mmpta by 2020. Adani Group Chairman, Gautam Adani, said, “We have harboured aspirations to expand globally and were in search of the right business opportunity, with a strategic fit. Abbot Point is our contribution to India's increasing global ambition and would boost synergy with other business of the group.”
MPSEZ operates ports at Mundra and Dahej. Currently, it is developing ports at Hazira and coal terminals at Mormugao.
FIIs turn net sellers, markets in correction mode while investors should be cautious
The domestic stock markets have been going through a correction in the last few days, mainly due to some disappointing results and a sharp hike in the key interest rates by the Reserve Bank of India (RBI) during its monetary policy review last week. The markets have come down by almost eight percent over the last 10 sessions. They are expected to trade in a range with a negative bias in the coming few weeks due to disappointments on the results front and some nervousness in the global economy, especially China and the US.
Long-term investors can use the market corrections to invest in fundamentallygood stocks. There is a lot of volatility in the commodity and currency markets as well. In the currency markets, the US dollar is losing against the basket of major world currencies. The Euro touched almost USD 1.50 mark due to concerns over new job creations and the overall US economy last week.
These are some of the major events of last week that are expected to drive the markets in the short term:
CONCERNS IN US, CHINA
Last week, concerns mounted over the sustainability of the US economic recovery after reports of a slowdown in the services sector and less-than-expected jobs created in the private sector. The Federal Reserve has continued its soft monetary policy but it has failed to yield the expected results in terms of triggering a lasting economic recovery. As the inflation rate is rising, the Federal Reserve is running out of time. It cannot keep on extending its soft monetary policy.
On the other hand, there are concerns of a slowdown in China due to their monetary policy tightening measures . The impact of rising concerns in China is visible in the sharp volatility in the commodity markets. These global These global concerns are adding to the nervousness in the domestic markets.
FII selling
The foreign institutional investor (FII) factor is not in favour of the domestic markets . They have turned net sellers in the markets here recently. This has resulted in the deep market correction . Analysts believe FIIs are taking a cautious approach due to the disappointing results season and several negative factors playing in the domestic as well as global markets.
In the absence of any positive triggers possible in the near term, many FIIs are holding their positions in cash. Investors should be cautious as the markets are expected to remain volatile with a negative bias in the short term.
SELL-OFF IN GOLD, SILVER
Profit booking happened in gold and silver last week. There was a sharp drop in the prices. Silver almost lost 20 percent over the last one week and gold also lost quite significantly. Analysts believe the main reason for such a sharp drop is the cut down in speculative positions due to increase in the margin requirements at various commodity exchanges.
However, the current decline in price is good for the long-term investor who can look at taking positions at lower price levels. The investment outlook for gold and silver is still quite bullish due to uncertainties at the global level. Investors can also take a cue from the fact that the central banks of many developed and developing countries are constantly investing in precious metals.
INFLATION
The inflation rate which was a problem mainly in emerging nations last year is slowing rising in the developed countries as well, due to the rising prices of commodities in the global markets. In India, the headline inflation rate is around nine percent. It is expected to remain high in the short to medium terms.
However, policymakers are committed to taking strong measures to control the inflation rate even if it is at the cost of economic growth to an extent. The RBI recently raised the key interest rates by 50 basis points to check the rising inflation rate which is expected to aggravate further due to the expected fuel price rise in the coming days. concerns are adding to the nervousness in the domestic markets.
FII SELLING
The foreign institutional investor (FII) factor is not in favour of the domestic markets . They have turned net sellers in the markets here recently. This has resulted in the deep market correction . Analysts believe FIIs are taking a cautious approach due to the disappointing results season and several negative factors playing in the domestic as well as global markets.
In the absence of any positive triggers possible in the near term, many FIIs are holding their positions in cash. Investors should be cautious as the markets are expected to remain volatile with a negative bias in the short term.
SELL-OFF IN GOLD, SILVER
Profit booking happened in gold and silver last week. There was a sharp drop in the prices. Silver almost lost 20 percent over the last one week and gold also lost quite significantly. Analysts believe the main reason for such a sharp drop is the cut down in speculative positions due to increase in the margin requirements at various commodity exchanges.
However, the current decline in price is good for the long-term investor who can look at taking positions at lower price levels. The investment outlook for gold and silver is still quite bullish due to uncertainties at the global level. Investors can also take a cue from the fact that the central banks of many developed and developing countries are constantly investing in precious metals.
INFLATION
The inflation rate which was a problem mainly in emerging nations last year is slowing rising in the developed countries as well, due to the rising prices of commodities in the global markets. In India, the headline inflation rate is around nine percent. It is expected to remain high in the short to medium terms.
However, policymakers are committed to taking strong measures to control the inflation rate even if it is at the cost of economic growth to an extent. The RBI recently raised the key interest rates by 50 basis points to check the rising inflation rate which is expected to aggravate further due to the expected fuel price rise in the coming days.
Long-term investors can use the market corrections to invest in fundamentallygood stocks. There is a lot of volatility in the commodity and currency markets as well. In the currency markets, the US dollar is losing against the basket of major world currencies. The Euro touched almost USD 1.50 mark due to concerns over new job creations and the overall US economy last week.
These are some of the major events of last week that are expected to drive the markets in the short term:
CONCERNS IN US, CHINA
Last week, concerns mounted over the sustainability of the US economic recovery after reports of a slowdown in the services sector and less-than-expected jobs created in the private sector. The Federal Reserve has continued its soft monetary policy but it has failed to yield the expected results in terms of triggering a lasting economic recovery. As the inflation rate is rising, the Federal Reserve is running out of time. It cannot keep on extending its soft monetary policy.
On the other hand, there are concerns of a slowdown in China due to their monetary policy tightening measures . The impact of rising concerns in China is visible in the sharp volatility in the commodity markets. These global These global concerns are adding to the nervousness in the domestic markets.
FII selling
The foreign institutional investor (FII) factor is not in favour of the domestic markets . They have turned net sellers in the markets here recently. This has resulted in the deep market correction . Analysts believe FIIs are taking a cautious approach due to the disappointing results season and several negative factors playing in the domestic as well as global markets.
In the absence of any positive triggers possible in the near term, many FIIs are holding their positions in cash. Investors should be cautious as the markets are expected to remain volatile with a negative bias in the short term.
SELL-OFF IN GOLD, SILVER
Profit booking happened in gold and silver last week. There was a sharp drop in the prices. Silver almost lost 20 percent over the last one week and gold also lost quite significantly. Analysts believe the main reason for such a sharp drop is the cut down in speculative positions due to increase in the margin requirements at various commodity exchanges.
However, the current decline in price is good for the long-term investor who can look at taking positions at lower price levels. The investment outlook for gold and silver is still quite bullish due to uncertainties at the global level. Investors can also take a cue from the fact that the central banks of many developed and developing countries are constantly investing in precious metals.
INFLATION
The inflation rate which was a problem mainly in emerging nations last year is slowing rising in the developed countries as well, due to the rising prices of commodities in the global markets. In India, the headline inflation rate is around nine percent. It is expected to remain high in the short to medium terms.
However, policymakers are committed to taking strong measures to control the inflation rate even if it is at the cost of economic growth to an extent. The RBI recently raised the key interest rates by 50 basis points to check the rising inflation rate which is expected to aggravate further due to the expected fuel price rise in the coming days. concerns are adding to the nervousness in the domestic markets.
FII SELLING
The foreign institutional investor (FII) factor is not in favour of the domestic markets . They have turned net sellers in the markets here recently. This has resulted in the deep market correction . Analysts believe FIIs are taking a cautious approach due to the disappointing results season and several negative factors playing in the domestic as well as global markets.
In the absence of any positive triggers possible in the near term, many FIIs are holding their positions in cash. Investors should be cautious as the markets are expected to remain volatile with a negative bias in the short term.
SELL-OFF IN GOLD, SILVER
Profit booking happened in gold and silver last week. There was a sharp drop in the prices. Silver almost lost 20 percent over the last one week and gold also lost quite significantly. Analysts believe the main reason for such a sharp drop is the cut down in speculative positions due to increase in the margin requirements at various commodity exchanges.
However, the current decline in price is good for the long-term investor who can look at taking positions at lower price levels. The investment outlook for gold and silver is still quite bullish due to uncertainties at the global level. Investors can also take a cue from the fact that the central banks of many developed and developing countries are constantly investing in precious metals.
INFLATION
The inflation rate which was a problem mainly in emerging nations last year is slowing rising in the developed countries as well, due to the rising prices of commodities in the global markets. In India, the headline inflation rate is around nine percent. It is expected to remain high in the short to medium terms.
However, policymakers are committed to taking strong measures to control the inflation rate even if it is at the cost of economic growth to an extent. The RBI recently raised the key interest rates by 50 basis points to check the rising inflation rate which is expected to aggravate further due to the expected fuel price rise in the coming days.
Political unrest, quakes hit air travel in March
MUMBAI: For the second year in a row, weather-related catastrophes have hit international air traffic. If it was Iceland's volcanic eruptions last year, it's the tsunami and earthquakes of Japan this year that crippled the growth in passenger traffic. But it was not just the weather, for the airline industry, the year began on a difficult note with political unrest in countries in North Africa.
The International Air Transport Association (IATA) announced scheduled international traffic results for March 2011 showing that year-on-year growth in passenger demand had slowed to 3.8% from the 5.8% recorded in February. Conversely, year-on-year growth in freight markets rebounded to 3.7% in March from the 1.8% recorded in February. Compared to February, global passenger demand fell by 0.3% in March, while cargo demand expanded by 4.5%.
``The profile of the recovery in air transport sharply decelerated in March. The global industry lost 2 percentage points of demand as a result of the earthquake and tsunami in Japan and the political unrest in the Middle East and North Africa (MENA),'' said Giovanni Bisignani, IATA's Director General and CEO. The impact of the events in Japan on global international traffic was a 1% loss of traffic in March. Looked at regionally, Asia-Pacific carriers saw a traffic loss of over 2%, North American carriers had a 1% drop and Europe's carriers a 0.5% fall. Japan's domestic market was the most severely impacted with a 22% fall in demand. The disruptions in MENA cut international travel by 0.9 percentage points. Egypt and Tunisia experienced traffic levels 10-25% below normal for March. Military action in Libya virtually stopped civil aviation to, from and within that country. Capacity adjustments lagged behind the sudden drop in demand. Against global demand growth of 3.8%, capacity expanded by 8.6%. The average load factor fell by 3.5 percentage points to 74.6%.
Asia-Pacific carriers saw the broadest negative turn of fortunes in March. Compared to the previous year passenger demand was flat. Compared to February however demand contracted by 2.2% while 0.8% was added to capacity. This led to a sharp 2.3 percentage point fall in load factors to 74.2% in March. Also, Asia-Pacific carriers, which account for 43% of global freight markets, saw air freight demand contract by 0.6% in March compared to the previous year. This is considerably better than the 5.4% fall in February which was exceptionally depressed due to plant closures associated with the Chinese New Year. Compared to February, freight demand actually improved by 8.2%. Were it not for the earthquake and tsunami in Japan, the rebound would have been much stronger.
The International Air Transport Association (IATA) announced scheduled international traffic results for March 2011 showing that year-on-year growth in passenger demand had slowed to 3.8% from the 5.8% recorded in February. Conversely, year-on-year growth in freight markets rebounded to 3.7% in March from the 1.8% recorded in February. Compared to February, global passenger demand fell by 0.3% in March, while cargo demand expanded by 4.5%.
``The profile of the recovery in air transport sharply decelerated in March. The global industry lost 2 percentage points of demand as a result of the earthquake and tsunami in Japan and the political unrest in the Middle East and North Africa (MENA),'' said Giovanni Bisignani, IATA's Director General and CEO. The impact of the events in Japan on global international traffic was a 1% loss of traffic in March. Looked at regionally, Asia-Pacific carriers saw a traffic loss of over 2%, North American carriers had a 1% drop and Europe's carriers a 0.5% fall. Japan's domestic market was the most severely impacted with a 22% fall in demand. The disruptions in MENA cut international travel by 0.9 percentage points. Egypt and Tunisia experienced traffic levels 10-25% below normal for March. Military action in Libya virtually stopped civil aviation to, from and within that country. Capacity adjustments lagged behind the sudden drop in demand. Against global demand growth of 3.8%, capacity expanded by 8.6%. The average load factor fell by 3.5 percentage points to 74.6%.
Asia-Pacific carriers saw the broadest negative turn of fortunes in March. Compared to the previous year passenger demand was flat. Compared to February however demand contracted by 2.2% while 0.8% was added to capacity. This led to a sharp 2.3 percentage point fall in load factors to 74.2% in March. Also, Asia-Pacific carriers, which account for 43% of global freight markets, saw air freight demand contract by 0.6% in March compared to the previous year. This is considerably better than the 5.4% fall in February which was exceptionally depressed due to plant closures associated with the Chinese New Year. Compared to February, freight demand actually improved by 8.2%. Were it not for the earthquake and tsunami in Japan, the rebound would have been much stronger.
IPO scam: Sebi does U-turn on Bhave
NEW DELHI: Cornered by the Supreme Court, the Securities and Exchange Board of India (Sebi) has agreed to restore orders indicting its own recently retired chief, C B Bhave, in the 2006 initial public offering (IPO) scam. In an affidavit to the Supreme Court on May 5, Sebi said it would "reconsider" the very orders it had declared as "non est" (invalid) in November 2009 when Bhave was chairman.
The affidavit annexed minutes of the April 26 Sebi board meeting disclosing its decision to reconsider those orders passed against Bhave in December 2008 "with a view to accepting the same".
The minutes admitted that this U-turn on the orders relating to Bhave's earlier avatar as chairman of the National Securities Depository Limited (NSDL) was in keeping with "the spirit of the observations" made by the Supreme Court on a PIL challenging Sebi's alleged bid to shield him in the IPO scam.
At the last hearing on March 28, shortly after Bhave's retirement, a bench comprising Justices R V Raveendran and A K Patnaik pulled up the Sebi board for preventing the orders against NSDL from coming into effect. While directing it to make amends, the bench asked the Sebi board to "pass an appropriate resolution and place it before this court for further consideration".
The orders now being adopted by Sebi came to light in March 2009 when TOI reported the failure of the regulatory body to publish them on its website even three months after they had been passed by a specially-constituted committee consisting of those who were then its part-time members: Mohan Gopal, director of the National Judicial Academy, and V Leeladhar, then deputy governor of RBI.
The purpose of entrusting the NSDL cases to this committee in August 2008 was to keep Bhave out of the decision-making loop on matters involving conflict of interest on his part.
In its December 2008 orders, the Gopal-Leeladhar committee held that NSDL's systems during Bhave's stewardship were so lax that tens of thousands of fake depository accounts were created to corner shares reserved for retail customers. The committee also directed NSDL to carry out an independent inquiry to establish individual accountability for supervisory lapses.
It was after sitting on these orders for almost a year that the Sebi board, reacting to a PIL in the Andhra Pradesh high court, came up with its unprecedented decision to overrule the quasi-judicial verdicts against Bhave. The reason it cited for its November 2009 decision was that the Gopal-Leeladhar bench had also blamed the IPO scam on regulatory lapses committed by Sebi.
Interestingly, despite agreeing to restore the orders against NSDL under SC pressure, the board is still opposed to the part where even Sebi is not spared for contributing to the IPO scam. In the minutes of its last meeting, the board reiterated its objection to the part of the orders relating to Sebi as they had been "passed ex parte without giving it any opportunity of being heard".
The activism displayed by the apex court is in contrast to the reaction displayed by the Delhi high court in October 2007 to the same PIL. The high court had dismissed the petition and slapped a fine of Rs 50,000 on the NGO, Social Action Forum for Manav Adhikar, on the charge of filing a frivolous case.
The affidavit annexed minutes of the April 26 Sebi board meeting disclosing its decision to reconsider those orders passed against Bhave in December 2008 "with a view to accepting the same".
The minutes admitted that this U-turn on the orders relating to Bhave's earlier avatar as chairman of the National Securities Depository Limited (NSDL) was in keeping with "the spirit of the observations" made by the Supreme Court on a PIL challenging Sebi's alleged bid to shield him in the IPO scam.
At the last hearing on March 28, shortly after Bhave's retirement, a bench comprising Justices R V Raveendran and A K Patnaik pulled up the Sebi board for preventing the orders against NSDL from coming into effect. While directing it to make amends, the bench asked the Sebi board to "pass an appropriate resolution and place it before this court for further consideration".
The orders now being adopted by Sebi came to light in March 2009 when TOI reported the failure of the regulatory body to publish them on its website even three months after they had been passed by a specially-constituted committee consisting of those who were then its part-time members: Mohan Gopal, director of the National Judicial Academy, and V Leeladhar, then deputy governor of RBI.
The purpose of entrusting the NSDL cases to this committee in August 2008 was to keep Bhave out of the decision-making loop on matters involving conflict of interest on his part.
In its December 2008 orders, the Gopal-Leeladhar committee held that NSDL's systems during Bhave's stewardship were so lax that tens of thousands of fake depository accounts were created to corner shares reserved for retail customers. The committee also directed NSDL to carry out an independent inquiry to establish individual accountability for supervisory lapses.
It was after sitting on these orders for almost a year that the Sebi board, reacting to a PIL in the Andhra Pradesh high court, came up with its unprecedented decision to overrule the quasi-judicial verdicts against Bhave. The reason it cited for its November 2009 decision was that the Gopal-Leeladhar bench had also blamed the IPO scam on regulatory lapses committed by Sebi.
Interestingly, despite agreeing to restore the orders against NSDL under SC pressure, the board is still opposed to the part where even Sebi is not spared for contributing to the IPO scam. In the minutes of its last meeting, the board reiterated its objection to the part of the orders relating to Sebi as they had been "passed ex parte without giving it any opportunity of being heard".
The activism displayed by the apex court is in contrast to the reaction displayed by the Delhi high court in October 2007 to the same PIL. The high court had dismissed the petition and slapped a fine of Rs 50,000 on the NGO, Social Action Forum for Manav Adhikar, on the charge of filing a frivolous case.
Friday, May 6, 2011
Nissan starts work to double production
CHENNAI: Nissan Motor has started feasibility work to double production capacity to four lakh units a year at its car plant in Oragadam, near Chennai.
Nissan and Renault signed a memorandum of understanding (MoU) with the Tamil Nadu state government to set up a greenfield plant in 2008. The plant now employs 3,200 persons. The alliance partners were to invest Rs 4,500 crore in the plant which would be shared by both partners.
"Micra rolled out in July last. It is less than a year and we have begun the process to double our capacity," Kiminobu Tokuyama, MD of Nissan India, said. With Renault also announcing aggressive growth plans for the Indian market, the capacity expansion is inevitable. The partners have invested Rs 2,600 crore so far in the plant.
On cards for Nissan is to launch a sedan on the Micra platform later this year which will be followed by a multipurpose vehicle next year. "The sedan will be in the C segment (competing with Ford Fiesta and Honda City) while the MPV will compete with Innova," he said.
The company is also learnt to be working with the Hindujas on a small car project , smaller than the Micra. "There is a big market in that segment. We are in the conceptualization stage. I do not wish to comment on with whom we are working with on that project," Tokuyama said.
Component sourcing by Nissan from India for its worldwide operations is also gaining momentum. The company had envisaged $10 million worth components to be sourced from Indian vendors for its plants in Thailand , China, Japan and the UK. "For the last year we sourced components worth $40 million. For the current fiscal (ending March 2012), we will source $100 million worth parts," he said.
On Micra, he said that from July 2010 (when the car was launched) till March 2011, the company sold 14000 cars in India and exported 56000 units to Europe, Africa and Middle East. "Going by those numbers it might sound as if we are concentrating only on exports. For us, the priority is Indian market ," Tokuyama said.
The dealer footprint is rising . As of March 2011 the company had 32 dealers and this will touch the 100-mark by March 2013.
Nissan and Renault signed a memorandum of understanding (MoU) with the Tamil Nadu state government to set up a greenfield plant in 2008. The plant now employs 3,200 persons. The alliance partners were to invest Rs 4,500 crore in the plant which would be shared by both partners.
"Micra rolled out in July last. It is less than a year and we have begun the process to double our capacity," Kiminobu Tokuyama, MD of Nissan India, said. With Renault also announcing aggressive growth plans for the Indian market, the capacity expansion is inevitable. The partners have invested Rs 2,600 crore so far in the plant.
On cards for Nissan is to launch a sedan on the Micra platform later this year which will be followed by a multipurpose vehicle next year. "The sedan will be in the C segment (competing with Ford Fiesta and Honda City) while the MPV will compete with Innova," he said.
The company is also learnt to be working with the Hindujas on a small car project , smaller than the Micra. "There is a big market in that segment. We are in the conceptualization stage. I do not wish to comment on with whom we are working with on that project," Tokuyama said.
Component sourcing by Nissan from India for its worldwide operations is also gaining momentum. The company had envisaged $10 million worth components to be sourced from Indian vendors for its plants in Thailand , China, Japan and the UK. "For the last year we sourced components worth $40 million. For the current fiscal (ending March 2012), we will source $100 million worth parts," he said.
On Micra, he said that from July 2010 (when the car was launched) till March 2011, the company sold 14000 cars in India and exported 56000 units to Europe, Africa and Middle East. "Going by those numbers it might sound as if we are concentrating only on exports. For us, the priority is Indian market ," Tokuyama said.
The dealer footprint is rising . As of March 2011 the company had 32 dealers and this will touch the 100-mark by March 2013.
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