Companies & Sectors
Andhra HC asked to decide on Ranbaxy-Sun Pharma merger
Sun Pharmaceutical, Ranbaxy Laboratories and Daiichi Sankyo approached the Supreme Court seeking its direction to vacate interim order of the Andhra Pradesh High Court, which had stayed the merger
 
The Supreme Court on Wednesday asked the Andhra Pradesh High Court, which had passed an interim order staying the $4 billion merger of Ranbaxy with Sun Pharma, to decide the issue within next two days.
 
Hearing appeals filed by Sun Pharmaceutical, Ranbaxy Laboratories and Daiichi Sankyo Company against the interim order issued by the High Court, a Bench of justices BS Chauhan and AK Sikri asked the HC to decide the issue and posted the case for hearing on 27th May.
 
The pharmaceutical giants approached the court seeking its direction to vacate interim order of the High Court which had on 25th April stayed the merger and ordered status quo.
 
The HC had passed the order on a petition filed by two individual investors,  who alleged that there was heavy trading of Ranbaxy stock before the merger, with Sun Pharma, was announced on 6th April.
 
They had pleaded the Court to direct market regulator Securities and Exchange Board of India (SEBI) to investigate the insider trading of Ranbaxy shares and take appropriate action against Sun Pharma and Silver Street.
 
Senior advocate Abhishekh Manu Singhvi, appearing for Sun Pharmaceutical, submitted that there is absolute abuse of process of law in the case as the order was passed on a petition of two individuals, which would affect the biggest deal in the pharma sector.
 
The Bench, however, said that shareholders have right to challenge the merger and asked the HC to decide the issue.
 
The Mumbai-based Sun Pharma had on 6th April announced that it would fully acquire Ranbaxy in an all-stock transaction with a total equity value of $3.2 billion, along with debt of $800 million, taking the overall deal value to $4 billion. 
 
As reported by Moneylife, over six trading days, prior to the announcement of its acquisition by Sun Pharma on Monday, Ranbaxy shares rallied 34%. The stock rose by as much as Rs116 (34%) in days before its made public announcement, a huge rise of 8.18% happening on 4th April, the last trading day before the actual announcement! This was extremely unusual and pointed to a clear case of insider trading. (Read: Insider trading in Ranbaxy?)
 
For months before Sun Pharma decided to buy Ranbaxy for $4 billion, Sudhir Valia, the executive director of Sun Pharma, through a partnership firm, had been seen buying stake in Ranbaxy. (Read: Was Sun Pharma's Valia betting big on Ranbaxy?)
 
According to information available on the BSE, Silverstreet Developers, a firm in which Valia was one of the partners, had been seen buying stake in Ranbaxy since December quarter. Silverstreet Developers LLP's stake in Ranbaxy was 1.41% as on December 2013 end. The stake increased to 1.64% at the end of March 2014. And days after this, Sun Pharma announced the big takeover. 

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US banks continue to steal homes
The largest US banks continue to fabricate documents, rip off customers and illegally kick people out of their homes, says Salon.com
 
While announcing the National Mortgage Settlement on 9 February 2012, President Barack Obama had said that it would “end some of the most abusive practices of the mortgage industry, and begin to turn the page on an era of recklessness that has left so much damage in its wake.”  However, in an investigative report, Salon.com says, it does not appear that any of those abusive practices have ended and the government, at all levels, has basically walked away from its responsibility to protect homeowners. The largest banks in the US have apparently continued to fabricate documents, rip off customers and illegally kick people out of their homes, even after inking a series of settlements over the same abuses, says Salon.com in a report. It reports that, “...the worst part of it all is that the main settlement over foreclosure fraud was so weakly written that it actually allows such criminal conduct to occur, at least up to a certain threshold. Potentially hundreds of thousands of homes could be effectively stolen by the big banks without any sanctions.”
 
The National Mortgage Settlement, the $25 billion deal concluded in February 2012 between 49 state attorneys general, federal agencies like the Justice Department and the Department of Housing and Urban Development, and five largest mortgage servicers: Bank of America, JPMorgan Chase, Wells Fargo, Citi and GMAC/Ally Bank. Under the settlement, banks pay a trifling amount in hard dollars to the states as well as foreclosure victims, and provide principal reductions and other loan modifications to struggling borrowers. They also agreed to comply with a broad set of servicing standards for the time period of the settlement, covering three years.
 
According to Salon.com, much of the focus (of this settlement) has been on the principal reductions, and whether the banks are actually accomplishing them for the benefit of home owners. But it’s these servicing standards that are being violated. That’s the inescapable conclusion of new evidence disclosed by the Centre for Investigative Reporting and NBC Bay Area. Focusing on mortgage documents and foreclosures in the San Francisco region, they found that “banks and their subsidiaries continue to file invalid documents and foreclose on properties to which they appear to have no legal right,” the report says.
 
Citing an example, Salon.com said, one mechanical engineer Joji Thomas, in a last-ditch bid to save his home, delivered a cashier’s check for $27,777.85 to Bank of America, which promptly lost the payment, and foreclosed anyway. In another case, BofA transferred a property to a separate entity that was already closed down, and they clumsily switched the dates on the document to make it look correct. Reporters also uncovered documents prepared by “robo-signers,” individuals hired to attest to the veracity of thousands of mortgage documents without having any underlying knowledge of the contents (basically a mass perjury scheme), the report added.
 
According to the report, these are precisely the kinds of abuses that state and federal regulators professed to stop with the National Mortgage Settlement. It said, “...this is not the only evidence that Bank of America and its counterparts simply went on with business as usual, fabricating documents to prove a shaky chain of ownership before initiating foreclosures, or ripping off borrowers seeking a modification or trying to save their homes. A few brave county recording clerks have examined mortgage documents in their offices and found massive fraud. And the same week that state and local officials announced the settlement, Wells Fargo posted online job listings seeking a “loan servicing specialist” to basically robo-sign documents.”
 
The question is whether these criminal activities violate the terms of the National Mortgage Settlement and could this be the lever to reopen the entire foreclosure fraud case against the banks?
 
Salon.com says, the answer is yes and no. “The individual cases do violate the terms. Banks agreed in the settlement to stop robo-signing, to provide modifications for those homeowners who qualify, to keep accurate payment records and deposit payments properly, to only charge applicable fees, and other steps. There’s even an oversight monitor, empowered to check incoming data from the banks, ensure compliance, and make quarterly reports on their actions,” it said.
 
Quoting writer and attorney Abigail Field, the reports says, he (Field) first pointed out last year, for all of these different servicing standards, the banks have a “threshold error rate” that allows them to violate their obligations, up to and including illegally taking someone’s home, a certain amount of times. 
 
For the vast majority of standards, the threshold error rate is 5%, for a few it’s as high as 10%. That means that banks could violate these standards, which often leads to illegal foreclosures, on one out of every 20 mortgages they service, and the settlement monitor has no ability to do anything about it. For context, RealtyTrac estimated 1.8 million foreclosure filings just in 2012. Under the National Mortgage Settlement, 90,000 of those could be fraudulent, without sanction.
 
According to Salon.com, it gets worse. It says, “That 5% threshold is based on “reportable errors” in a given reporting period, such as a quarter. The settlement monitor, Joseph Smith, does issue quarterly reports, but as it says right in the Office of Mortgage Settlement Oversight FAQ and in the settlement language, the oversight process begins with compliance reports from the banks themselves.”
 
It said, “An 'Internal Review Group' tests the servicing standards to compute the quarterly metrics. They are allegedly 'independent from the line of business whose performance is being measured', but they are still paid by that bank, and they compose the baseline review that the settlement monitor uses.”
 
“The monitor can solicit more information from the banks if he perceives a non-compliance problem (though he doesn’t really have the resources to engage in a full review). But really, their job is one of checking the banks’ work. If this is such a good idea, we should stop sending out food inspectors and let agribusiness self-report their findings on tainted meat and produce, and the inspectors will sit back in Washington and verify everything. (Oh wait, we’re doing that too.),” the report added.
 
The first court-ordered quarterly report from the settlement monitor is due in May, and there is little reason to believe it will give anything other than a free pass. Even if by some miracle the monitor did find violations above the threshold, under the settlement, the banks have the right to appeal the findings. The settlement monitor must “confer” with the servicer over non-compliance, and the servicers have the “right to cure” any violation, sort of a “no harm, no foul” situation where the bank fixes some errors to get below the threshold.
 
One of the main points of a law enforcement apparatus is to collectively look out for individual abuses, and to use their leverage and resources to bring criminal enterprises to justice. That just isn’t happening in the case of foreclosure fraud. Instead, we see settlements where the criminal conduct gets institutionalized, and where hundreds of thousands of violations go unpunished, really all of the violations — since there’s no independent, workable compliance system in place, Salon said in the report.
 
Courtesy: Salon.com

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Maharashtra asks doctors to issue only typed post-mortem reports
Illegible handwriting of doctors, especially in the medical reports, like post-mortem report, causes tremendous problems during court trials and was one of the impediments in meeting the ends of justice
 
The Maharashtra government through a circular has directed all doctors in the state to issue only typed post-mortem reports instead of the hand-written ones. The circular comes after the Nagpur bench of Bombay High Court issued a notice to the state government.
 
Citing a notice issued by the High Court, the recently issued circular by the state public health department said it should be seriously noted by all concerned that henceforth, no handwritten post-mortem report should be issued, in any circumstances.
 
The responsibility of its proper implementation has been fixed on civil surgeons, district health officers and in-charges of hospitals.
 
In January 2013, Nagpur-based Dr Indrajit Khandekar, who was peeved by the illegible handwriting of doctors especially in medico-legal reports (MLRs) including clinical, forensic and postmortem reports, had filed a public interest litigation (PIL) in the Bombay High Court. He had prayed for computerisation of all MLRs and its generation through forensic medical software.
 
The PIL was based on his detailed study report, which was earlier submitted to the state government.
 
Khandekar, an associate professor at Sewagram's Mahatma Gandhi Institute of Medical Sciences (MGIMS), found that illegible handwriting of medicos in forensic reports often resulted in several problems during dispensation of justice in courts and criminal justice system was adversely affected. 
 
The PIL had pointed out that illegible handwriting caused tremendous problems in day-to-day functioning of the courts and was one of the impediments in meeting the ends of justice. It led to wastage of valuable time of judiciary during the trial of cases.
 
The PIL also submitted that the MLRs prepared by doctors in sexual assault cases, injuries in cases of assault and other such cases played a major role in meeting the ends of justice.

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