Black money case: SC pulls up Enforcement Directorate

The Supreme Court was angered by the fact that the ED had filed a charge-sheet in the black money case involving Hassan Ali Khan without informing a high-level committee formed by the government to monitor probe in sensitive cases. The court stated that it had come to know of the charge-sheet through the newspapers two days after it was filed

New Delhi: The Supreme Court today pulled up the Enforcement Directorate (ED) for filing a charge-sheet against Pune-based stud farm owner Hassan Ali Khan in a case of alleged money laundering without informing a high-level committee formed by the government to monitor probe in sensitive cases, reports PTI.

The apex court was also anguished that during the last hearing on 4th May when the ED placed its status report on the investigation in the black money case involving Mr Khan and others it did not make a mention of the charge-sheet to be filed on 6th May before a special court in Mumbai.

“You (ED) filed the charge-sheet without placing it before the committee you have constituted and we are surprised,” a bench comprising justices B Sudershan Reddy and SS Nijjar said.

“We heard the matter on 4th May but there was no mention in the status report that the charge-sheet was ready to be filed which was filed on 6th May. You did not mention this in the status report. There was no mention of the charge-sheet.

Why it was not mentioned that the charge-sheet is to be filed?” the bench asked.

The bench also queried, “Why it was not mentioned that the investigation is complete and the charge-sheet will be filed? Two days later we read in newspapers that the charge-sheet has been filed.”

It said that the status report filed on 4th May had stated that the investigation was still going on.

The bench said it was “surprising” that the charge-sheet was not placed before the 10-member high-level committee headed by the revenue secretary.

“We thought that somebody should look into the charge-sheet. It should have been put before a committee created by the government,” the bench said.

It said the question was about monitoring the probe for which a mechanism was created by the government while opposing the setting up of special investigation team.

“We are surprised that you have suggested the mechanism and created the committee for monitoring,” the bench told Solicitor General Gopal Subramaniam.

Mr Subramaniam agreed that the charge-sheet should have been placed before the committee and said corrective measures will be ensured.

The court directed the ED to provide the copy of the over 900-page charge-sheet to the petitioners.

The court was hearing a petition filed by eminent jurist Ram Jethmalani and others seeking action for bringing back black money stashed away by Indians in banks abroad.


SC directs SEBI to proceed with probe into Sahara OFCD scheme

Judges worry that lack of understanding about the scheme among common people, could lead to them feeling cheated, as in the Harshad Mehta scam

New Delhi: The Supreme Court today asked the Securities and Exchange Board of India (SEBI) to proceed with its probe into the Sahara group’s Optionally Fully Convertible Debentures (OFCD) scheme, saying that investors might not have proper knowledge about the product and could get cheated as in the Harshad Mehta scam.

“We are of the view that on the question of OFCD, it requires the decision of (market regulator) SEBI. Let SEBI hear and pass an order,” the court said, during the hearing of a case related to the OFCDs issued by two Sahara group firms, reports PTI.

Hearing the case, a three-judge bench headed by chief justice SH Kapadia observed that the order of SEBI would not be operational till the court gives further directions on it. “The order would not apply... We want to see the order of SEBI on OFCD,” the judges said.

The court also allowed the Allahabad High Court to proceed with its hearing of a petition in which the Sahara group has challenged SEBI’s direction to produce details about its investors.

The Court also sought to know from Sahara, the law under which it was operating the OFCD scheme. The Sahara counsel tried to explain the OFCD scheme, but the judge was not satisfied and said: “Till today, I do not know what is OFCD. How can some investors know. We want SEBI to decide.”

“We want to know on what basis you were calling for investment in OFCD,” the judges said. The judges said that the scheme was meant for rural people who would not know much about it. “Investors are not aware of OFCD. At the end of the day, they would come and say that they were cheated... You know the Harshad Mehta case; same modus operandi was there. Investors were not aware of the scheme.”


Food inflation at 18-month low, govt warns against core prices

The decline in food inflation is seen as a breather for the government, as the rate of price rise has stubbornly remained high despite its fiscal measures and the RBI’s monetary tightening steps

New Delhi: Food inflation fell to an 18-month low of 7.7% during the week ended 30th April on the back of declining prices of pulses and vegetables, prompting the government to predict further moderation in prices due to record production of many food items, reports PTI.

The government, however, warned that the price rise of non-food items would continue to pose problems in the days ahead.

Food inflation, as measured by the Wholesale Price Index (WPI), was 8.53% in the previous week. It had stood above 21% in the last week of April 2010.

"The current trend in food inflation is welcome and we hope to see further moderation in food inflation in the coming weeks... However, there are concerns on price momentum in non-food articles," finance minister Pranab Mukherjee said.

India is estimated to have achieved record foodgrain production of 235.88 million tonnes in the 2010-11 crop year (July-June). This is on the back of all-time high output of wheat, pulses and maize. Apart from foodgrains, the country has produced a record quantity of oilseeds-30.25 million tonnes.

His reaction came in response to the decline in food inflation numbers to their lowest level since separate data for the segment was introduced in late 2009.

During the week under review, prices of pulses declined by 9.05% year-on-year, while vegetables became cheaper by 3.64%. Potatoes also came down by 3.58%.

"Sustained high non-food primary prices are creating cost-push inflationary conditions in the manufacturing sector.

Thus, even though food inflation is declining, concerns on higher core inflation remains," Mr Mukherjee said

He, however, exuded hope that recent monetary policy measures like the Reserve Bank of India's (RBI) hike in policy rates, would help in addressing the issue.

The RBI had hiked interest rate by 50 basis points earlier this month to tame demand and control inflation. It was the ninth hike in short-term lending and borrowing rates made by the central bank since March 2010.

Headline inflation was 8.98% in March, much above the government's comfort zone of around 5%. In its monetary policy for 2011-12, the RBI had projected inflation to average 9% during the first half of this fiscal before moderating to around 6% by the year-end.

Though rising food prices were the main contributor to inflationary pressure in 2010, recent months have witnessed a rise in prices of core (non-food) items. Core inflation was above 7% in March.

During the week under review, inflation in non-food primary articles was 28.62% during the week under review.

Fibre prices rose by almost 86% and minerals by 11.95%. Fuel and power were up 14.91%.

Core inflation is expected to grow further in the near future as the government is likely to soon announce a hike in retail prices of petroleum products.

"Fall in food inflation is on expected lines and the rate will remain moderate unless the coming monsoon fails. But global commodity prices, especially of oil, and their impact in the country have to be monitored," Crisil chief economist DK Joshi said.

Global oil prices continue to hover around $100 per barrel on account of the civil war in Libya, a major exporter and OPEC member, though it is down from the two-and-half high of over $120 per barrel touched in April.

While pulses and vegetables showed a moderation in prices during the week ended 30th April, other food items became more expensive year-on-year.

Cereals became dearer by 4.54% while fruit prices were up by over 35% on an annual basis. Onions grew 12.42% more costly on an annual basis.

Milk was also costlier by 4.3% in the week ended 30th April as compared to the corresponding seven-day period last year. Eggs, meat and fish were also up by 4.62%.

"The food inflation rate is gradually showing a trend toward normalisation. While this is encouraging, it is important to monitor the movement going forward. Usually rate spikes are seen in the post-monsoon period due to seasonality of agricultural output and supply side inefficiencies," Deloitte, Haskins & Sells director Anis Chakravarty said.


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