The government is keeping close watch on social welfare spending by corporates to check whether they are complying with the CSR norms, minister of state for corporate affairs told the Rajya Sabha
The Indian government will keep close watch on social welfare spending by corporates to check whether they are complying with corporate social responsibility (CSR) norms under the new companies law.
Certain class of profitable companies are required to spend at least 2% of their three-year average annual net profit towards CSR activities. The norms came into force from 1 April 2014.
Replying to questions in Rajya Sabha, Minister of State for Corporate Affairs Nirmala Sitharaman said the Companies Act, 2013 came into operation this year only and the government was watching the spendings under CSR.
“We are keenly watching” the companies,” she said, adding, in case a company does not meet the norms, government would certainly ask for reasons.
The Act does not mandate CSR for all companies. However, every company having net worth or net profit of Rs500 crore or more or turnover of Rs1,000 crore or more during any financial year has to constitute a CSR Committee of the Board and take up CSR activities.
Sitharaman said there are no tax exemptions for CSR activities, except for spending on 11 specific activities.
In her written reply, she said the issue of amending rules relating to CSR with a view to plugging any loophole can be examined only after some information about the actual implementation is available.
As relevant provisions of the law have come into force this year and CSR policies of companies are in the process of formulation, specific details would be available once Board reports are available after September, 2015, she said.
The market regulator found that Hyderabad-based Viswas Real Estates had mobilised funds from public by promising them plots of land in its real estate ventures without necessary approvals from SEBI
Clamping down on an unauthorised real estate investment scheme, market regulator Securities and Exchange Board of India (SEBI) has restricted Viswas Real Estates and Infrastructures India Ltd and its two directors from collecting money from investors.
SEBI said it found that the Hyderabad-based company had mobilised funds from public by promising them plots of land in its real estate ventures without necessary approvals from SEBI.
It was alleged that Viswas Real Estates had collected an amount of Rs30 crore by deceiving public through its investment schemes.
SEBI noted that Viswas Real Estates "has not obtained any certificate of registration under the regulations for its fund mobilising activity from the public" and it was the regulator's mandate to ensure that no investors are defrauded by the company.
Consequently, SEBI has asked the firm and its directors -- Vaka Saradhi and Eshararao Gundala -- "not to collect any fresh money from investors under its existing schemes" and "not to launch any new schemes or plans or float any new companies to raise fresh money".
The company and its directors also have to "immediately submit the full inventory of the assets including land obtained through money raised by Viswas Real Estates and Infrastructures India" to SEBI.
Further, the company cannot dispose of any of the properties or alienate the assets including land obtained directly or indirectly through the money raised and cannot divert any of these funds.
SEBI has also asked the company and its directors to furnish all the information/details sought by the market regulator within 15 days.
The information is with respect to details of amount mobilised and refunded till date, scheme wise list of investors and their contact numbers and addresses, audited accounts for the last three years, among others.
The market regulator had received a complaint dated 6 March 2014 against Viswas Real Estates alleging that the firm had collected an amount of Rs30 crore from the public under its 'Viswas Own Your Lumpsum Property Advance Scheme Agreement Bond Monthly Plans'.
SEBI found that Shubham Karoti Foods was collecting money from common people in Silvassa through certain food schemes without due authorisation
Market regulator Securities and Exchange Board of India (SEBI) has barred Pune-based Shubham Karoti Foods Pvt Ltd and its two directors from mobilising money from investors and launching any new scheme.
The capital market regulator found that the company was collecting funds from common people in Silvassa through certain food schemes without due authorisation.
The Pune-based company is stated to be engaged in the business of food products including tea, groundnut, soya oil, mineral water, among others in Maharashtra.
"Protecting the interests of investors is the first and foremost mandate for SEBI and therefore steps have to be taken in the instant matter to ensure only legitimate investment activities are carried on by Shubham Karoti Foods and no investors are defrauded," the SEBI said in an order.
Accordingly, SEBI has directed the company and its directors -- Somit Kishanchandra Saxena and Sudhir Nathuram Pawar "not to collect any more money from investors including under the existing schemes" and "not to launch any new schemes".
Besides, the entities have been asked not to dispose of any of the properties or alienate any of the assets of the schemes and not to divert any funds raised from public.
The company has to furnish all information regarding the schemes with details of the investors and also details of insurance policies and compensation given under the policies as part of the schemes, to SEBI.
The directions shall take effect immediately and shall be in force until further orders, SEBI said.
The regulator said that the company "is prima facie engaged in mobilising funds from the public, by floating or sponsoring or launching 'collective investment scheme...without obtaining a certificate of registration from SEBI".
SEBI had begun a probe in the matter after receiving a reference on 20 November 2013 from the Reserve Bank of India (RBI) about the company.