CBI opposes bail plea of corporate honchos in 2G scam

"From being suspects, they have now become accused and hence, will have to justify their bail plea," senior advocate UU Lalit, who has been appointed as a special prosecutor by the Supreme Court said

New Delhi: The Central Bureau of Investigation (CBI) today opposed the bail plea of five corporate honchos, who appeared as accused after being named in the charge-sheet in the second generation (2G) spectrum allocation scam case, in a Delhi court saying that from being "suspects" they have become "accused", reports PTI.

"The status of a person changes in law after filing of the charge-sheet. They are not entitled to release on bail ipso facto (by default) on appearance before the court. From being suspects, they have now become accused and hence, will have to justify their bail plea," senior advocate UU Lalit, who has been appointed as a special prosecutor by the Supreme Court, said.

"There are nearly 180 prosecution witnesses and some of them are under political perception of threat," Mr Lalit said and gave some classified documents to CBI judge OP Saini who has been appointed to hear exclusively the 2G case on day-to-day basis.

After defence lawyers sought a copy of the document, Mr Lalit said "It is not for you. I may use them in our reply."

The plea drew sharp reactions from defence lawyers, including senior advocates Mukul Rohatgi, KTS Tulsi and Ranjit Kumar who said in fact it is CBI which will have to justify the arrest in the backdrop of the fact that the accused were not arrested during the investigation.

Top corporate leaders Swan Telecom director Vinod Goenka, Unitech Wireless (Tamil Nadu) managing director Sanjay Chandra, and three top officials of Reliance ADA Group Gautam Doshi, Surrendra Pipara and Hari Nair appeared in the packed courtroom along with a battery of lawyers. They were not arrested in the case.

Within minutes of commencement of hearing, Mr Rohatgi, appearing for Vinod Goenka of Swan Telecom, moved the bail application saying "the accused is entitled to release on bail."

"The charge-sheet has already been filed, cognizance taken. If an accused is not arrested during the investigation, then there is no question of his arrest subsequently," Mr Rohatgi said.

"What is the apprehension of CBI? I have appeared before it during the investigation and now I am before the court and there is no precedent that the accused is denied bail after being summoned in such a case," he said.

The maximum sentence in such cases is seven years and the prosecutor has made an argument as if it is a heinous offence, Mr Rohatgi said, adding "cite a case where bail is denied to an accused who is summoned after filing of the charge-sheet in such cases."

"The prosecutor has made a topsy turvy argument. The court could have issued a warrant but the summons were issued," he said.


Muthoot Finance plans to open more branches in northeast

The gold loan company has fixed the price band for its upcoming IPO at Rs160-Rs175 and said the proceeds from the issue will improve its capital adequacy

Gold financing company Muthoot Finance plans to expand its presence in northeast Indian states, by setting up more branches there soon.

"We have around 1,700 branches in south India, while in north and west India we have about 450 and 250 branches respectively. To tap the growing opportunity in the northeast states, we will set up more branches there," George Muthoot, managing director, Muthoot Group, told at a news conference in Mumbai today.

As of 30th November 2010, over 75% of the company's gold loan portfolio was from Kerala, Karnataka, Tamil Nadu, Andhra Pradesh and Pondicherry. Muthoot Finance has 97 branches in the eastern states of the country.

Muthoot Finance, the largest gold loan company in India in terms of loan portfolio, will raise around Rs900 crore from its initial public offering (IPO) that opens on 18th April. The company has set a price band of Rs160-Rs175 a share for the planned sale of 5.15 crore equity shares. At the lower end of the price band, Muthoot Finance will raise Rs824 crore, while at the upper end it could fetch Rs901.25 crore.

The IPO will close on 20th April for qualified institutional buyers and on 21st April for retail and non-institutional investors.

"We will use the IPO funds to meet capital adequacy needs and working capital," said   Oommen K Mammen, chief operating officer, Muthoot Finance Limited.  "In our business we need a lot of cash and the IPO funds will help us to meet that need." The company's capital adequacy is currently below the 15% mark.

The public issue will constitute 13.85% of fully-diluted post issue paid-up equity share capital of the company.  After the IPO the promoters will come down to 80% from the current 93%. Four financial investors-Matrix Partners, Baring PE Partners India, Kotak India PE and Wellcome Trust-own 7% stake.

Muthoot Finance gives both business and personal loans against gold ornaments and it has no plans to diversify its business. "We are in a growing market and we do not have any plans to diversify our business," said George Muthoot.

As of November 2010, the company holds 97 tonnes of gold. Non-performing  assets are below 4%, Mr Mammen said.  

The maximum tenure for a gold loan is one year, while the average tenure is three to six months. The current cost of borrowing is 9.5%. "The cost of borrowing currently is 9.5%, while we offer loans starting at 12% with a regulatory cap of 30% on the upper limit," Mr Mammen said.

HDFC Bank, ICICI Securities and Kotak Mahindra Capital Company are the book running lead managers for the Muthoot Finance public issue.




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6 years ago

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SEBI to give final view on Takeover Code later this month

As per the takeover guidelines proposed by a SEBI panel headed by C Achuthan in July last year, an entity buying 25% stake in a company will need to make an open offer to the rest of the shareholders

New Delhi: Market regulator Securities and Exchange Board of India (SEBI) is likely to give its final view on the Takeover Code for merger and acquisition deals at its board meeting scheduled later this month, reports PTI.

"We are in consultation process. Probably we will get it (Takeover Code) through in the next board meeting," SEBI executive director Usha Narayanan told reporters on the sidelines of an Assocham event here.

As per the takeover guidelines proposed by a SEBI panel headed by C Achuthan in July last year, an entity buying 25% stake in a company will need to make an open offer to the rest of the shareholders.

Under the existing norms, the trigger point for making an open offer to shareholders was acquisition of 15% equity in the target company through market operations or through a negotiated deal.

SEBI had sought comments from various stakeholders on the Achuthan report.

"The two issues that got maximum feedback are relating to non-compete fee," Ms Narayanan said.

In his report, Mr Achuthan had recommended abolishing non-compete fees to be paid by acquirer to the promoter of the target company.

In mergers and acquisition deals, a non-compete fee is paid by the acquirer to the promoters of the target company for not entering the same trade, and such payments could be as high as up to 25% of the deal value.

If the report of the SEBI takeover panel is accepted by the regulator, the open offer would be available to all shareholders.

The proposed new norm of making an open offer for 100% stake would give all shareholders an opportunity to exit the company and get fair price for their equity stake.

At present, the open offer is for 20% of the share capital.

The Achuthan panel was set up in September 2009 with the aim to provide guidelines that will shape acquisitions in India for the next 5-10 years.


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