Former telecom secretary Siddharth Behura, in his bail application, pleaded to the court that the trial in the case has already started and there cannot be any fear of tampering of evidence or influencing witnesses by him
New Delhi: The Delhi High Court on Wednesday sought the Central Bureau of Investigation’s (CBI) response on the bail plea of former telecom secretary Siddharth Behura, arrested for his alleged role in the 2G spectrum case, reports PTI.
Issuing notice to CBI, justice Shali also asked the probe agency to file a status report by 1st December, the date on which the bail pleas of other five accused including DMK MP Kanimozhi are also slated for hearing.
Mr Behura approached the high court, through senior counsel Aman Lekhi, challenging denial of bail to him by the special CBI court which had refused him the relief saying the charges against him and other accused were of “very serious nature”.
Mr Behura, in his bail application, pleaded to the court that the trial in the case has already started and there cannot be any fear of tampering of evidence or influencing witnesses by him.
He also said the apex court earlier, while refusing bail to Ms Kanimozhi, had asked the accused to approach the court for bail after charges were framed in the case.
The trial court had dismissed Mr Behura's bail plea on 3rd November.
Mr Behura, along with former telecom minister A Raja and latter’s private secretary RK Chandolia, was arrested on 2nd February, this year.
Besides Mr Behura and Ms Kanimozhi, the four others who have moved the high court against the special court order denying them the bail are DMK-run Kalaignar TV MD Sharad Kumar, Kusegaon Fruits and Vegetables Pvt Ltd directors Asif Balwa and Rajeev Agarwal and Bollywood producer Karim Morani.
Maintaining that no additional flights will be cancelled due to the ongoing aircraft reconfiguration, Kingfisher CEO Sanjay Aggarwal said the changes in the flight schedule will only take place by March, once the reconfiguration process was over
Mumbai: Private carrier Kingfisher Airlines, which has posted a net loss of Rs468.66 crore for the second quarter ended 30 September 2011, on Tuesday said it has grounded 10-12 aircraft for reconfiguration, reports PTI.
Maintaining that no additional flights will be cancelled due to the ongoing aircraft reconfiguration, Kingfisher CEO Sanjay Aggarwal said the changes in the flight schedule will only take place by March, once the reconfiguration process was over.
“Whatever the number of flights are published on the website, we will be flying from today. Changes will happen only after March, when the entire plane revamp will be over,” he told reporters here.
“Overall, we have grounded 10-12 aircraft, or 55 flights, out of the 66 planes. But, we also added some flights by additional frequencies and are starting Mumbai-Udaipur from next month,” Mr Aggarwal added.
The beleaguered company doubled its net loss at Rs468.66 crore second quarter compared to Rs230.81 crore in the July-September quarter of 2010.
The company’s net loss during the first six months of the current fiscal rose to Rs732.21 crore from Rs418.16 crore in the corresponding quarter of the previous fiscal.
“We will be joining the OneWorld Alliance during the first quarter of the calendar year 2012,” Mr Aggarwal said.
On the financial results, a Kingfisher statement said, “This has been a challenging quarter for the industry. The momentum has continued with a demand growth of 20% in the second quarter of 2011-12, however, it has been matched by a capacity growth of 20% putting pressure on the yields for the industry... coupled with a more than 35% rise in fuel price as compared to the same quarter last year.”
EBITDA (earnings before interest, tax, depreciation and amortisation) loss for the quarter stood at Rs23 crore against a profit of Rs307 crore in the year-ago period, while domestic operations saw a 5% increase in revenues during the second quarter compared to Q2 last year.
International operations continued to mature with an 11% rise in revenues. The non-fuel unit cost for international operations declined by 4%, reflecting the cost reduction actions of the airline, it added.
Talking to reporters, UB Group president and CFO Ravi Nedungadi said the company hopes to earn around 3% revenue through the complete aircraft reconfiguration, that is adding business class seats to the all-economy planes.
“We hope to earn 3% more revenue once the complete aircraft reconfiguration is over by March. We see an outgo of under Rs150 crore for this. Our working capital loan request to bankers also includes this,” Mr Nedungadi said.
“As late as last month, the promoters have pumped in Rs150 crore, and around Rs800 crore since January this year...
We need a working capital loan of under Rs1,000 crore,” he said when asked about the fund requirement of the company.
“If the ATF (aviation turbine fuel) is allowed to be imported, then we will be able save 18%-20% of the fuel cost even after paying the fees to the service providers.”
On the rights issue, he said: “We have not moved the SEBI (Securities and Exchange Board of India) for the rights issue. We have a board mandate for Rs2,000 crore rights issue. But it could be a Rs1,000 crore rights issue and Rs1,000 crore GDR (Global Depositary Receipt).”
He added that the company had filed for GDR issue in the beginning of the year with the Luxembourg Stock Exchange, but dropped the idea as the markets suddenly turned negative.
Lack of a proper regulatory framework, including lack of proper supervision had played an important role in the disorderly growth of the NBFC MFIs
A recent news item stated that, “In its report ‘Trend and Progress of Banking in India 2010-2011’, The Reserve Bank of India (RBI) states that if State Governments start enacting their own legislations to regulate microfinance institutions (MFIs) including the ones regulated by the Reserve Bank, there will be plurality of regulation leaving scope for regulatory arbitrage. The responsibility for regulating NBFCs has been given to the Reserve Bank, thus, empowering it to regulate the NBFC- MFIs. If other States also come out with legislation similar to the Andhra Pradesh Government, it will raise concerns not only about multiple regulations but also about client protection, as borrowers would then be subject to different regulations. If there are separate regulations governing NBFC-MFIs in individual states, the task of regulation by the Reserve Bank of MFIs operating in more than one State will become even more difficult. This may also impact the business of MFIs, which are operational in more than one State, it says.” (RBI against State Govt regulating microfinance institutions,)
While that is a fair point, without question, it is clear that the lack of a proper regulatory framework (including lack of proper supervision) has played an important role in the disorderly growth of the NBFC MFIs and the challenges arising therein. I shall look at this in detail here and outline the implications Indian micro-finance including the above assertion that state governments have no jurisdiction to regulate micro-finance, even in terms of protection of clients.
In any regulatory framework, there are three major aspects:
1. To provide legitimacy and a proper regulatory framework to MFIs (Legitimacy For Micro-Finance Institutions and Players) and others involved in delivery of financial services to low income people
2. To ensure that MFIs indeed satisfy the broader objectives for which they have come into being (in the first place) and also that they operate and function in a sound and legal manner, in accordance with norms and standards required of such (pro-poor financial) institutions (Regulation and Supervision of Micro-Finance Institutions and Players), and
3. To protect clients from MFI bad practices as well as protect MFIs that operate legally and correctly from usury laws (Protection of Micro-Finance Clients and Institutions)
These are huge diverse tasks spanning financial sector regulation as well as client protection. And given that RBI desires to perform all these roles (directly or through delegation), it seems fair to ask the following questions: a) how are these tasks to be structured at the RBI (assuming that they would be done by RBI in the first place)?; b) Does the RBI have sufficient capacity to effectively and efficiently manage the various tasks including supervision and client protection both of which require a significant local presence across the country?; c) In case the RBI delegates these tasks, what about the alternative institution and its capabilities with regard to these tasks including supervision?; and d) several other aspects
The rationale behind asking the above questions is that a regulatory system is more efficient if the responsibilities are assigned to the institutions/bodies that have the powers, resources, skills, and knowledge to perform their roles most effectively. If one uses this framework of analysis, the assets of various institutions who are candidates for regulation/supervision of micro-finance in India should be compared as they pertain to the required regulatory and supervisory activities. This is a very critical exercise and must be done objectively and with utmost integrity. A related key question here is whether the said institutions/bodies can obtain, sufficient skills, resources, and capacity to undertake the regulatory/supervisory responsibilities effectively. If sufficient capacity does not exist or cannot be developed, building a regulatory structure that relies on such inst6itutions/bodies will not yield the desired result. This needs to be remembered with utmost caution.
That said, other factors should also be considered in choosing the institution/body to function as the regulatory/supervisory authority and they include the following:
I really hope the various stakeholders approach the issue of finalizing the exclusive micro-finance regulator/supervisor using an objective and professional process, giving due consideration to issues such as those identified above.
Without question, the above questions and issues are very relevant and cannot be ignored and need to be analysed thoroughly. The idea here is not to find fault but rather to highlight practical issues that would need to be considered first before passing on the entire responsibility of micro-finance regulation to RBI, as outlined in the proposed micro-finance bill.
And for that, we also need to look at regulatory and supervisory lessons/issues from the present micro-finance crisis (using the example of RBI’s supervision of NBFCs and banks) and raise the important question of whether or not, the RBI and its concerned departments indeed have the wherewithal to perform all of the functions given above – especially given the 2010 crisis that involved banks and NBFC MFIs. This requires an objective analysis of RBI’s past regulatory role and supervision record and is taken up in the succeeding articles…