Supreme Court had directed market regulator to take a second look at the inquiry report which was previously thrown out, in an obvious attempt to hide wrong-doings
The directors of the Securities & Exchange Board of India (SEBI) will meet on 26th of April to re-consider its exoneration of the National Securities Depository Limited (NSDL) on the direction of the Supreme Court of India. Although technically the SEBI board is meeting again, there will be many new faces around the board room table this time. The directors will once again consider the report of a two-member bench of the SEBI board, whose findings against NSDL were thrown out by a previous set of board members calling them "non-est" (or void).
For starters, the meeting will be headed by the new chairman UK Sinha. The previous meeting was chaired by TV Mohandas Pai, who is still on the SEBI board. Mr Pai stepped in since the then SEBI chief, CB Bhave, had recused himself from decision-making. Mr Bhave headed NSDL when SEBI initiated action against the depository in connection with the IPO scam.
Dr Mohan Gopal (chief of the National Judicial Academy) has been replaced by VK Jairath, former principal secretary of Maharashtra. Dr Gopal also remained absent from the previous meeting as he was one of the two members of the bench, whose findings were considered null and void (or non est), giving a clean chit to NSDL and CDSL.
Similarly, the Reserve Bank of India will be represented by Anand Sinha (instead of Usha Thorat) while the Ministry of Corporate Affairs will be represented by DK Mittal (in place of R Bandyopadhyay). Most importantly, Dr K P Krishnan, joint secretary, capital markets, who dominated all decisions related to the capital market and took the lead in burying the NSDL investigation that exonerated CB Bhave, has been replaced by his successor Dr Thomas Mathew.
The only constant are the three whole-time directors (WTDs) of SEBI, of whom two, MS Sahoo and KM Abraham, are set to complete their term in a few months. They were vociferously in the Bhave/NSDL camp.
In February 2010, the SEBI board focused on technicalities to exonerate NSDL of the charge of failing to detect the massive manipulation of initial public offering (IPO) allotments by a set of operators who packed the retail quota with multiple applications. The exoneration happened at the end of a long series of dubious decisions which ran as follows:
1. Appointment of CB Bhave as SEBI chairman when there were SEBI investigations pending against the organisation he previously headed.
2. The assumption, implicit in this decision that NSDL was not even guilty of minor transgressions or carelessness.
3. Attempt to artificially "ring-fence" Mr Bhave from NSDL-related issues.
4. Appointment of a two-member board committee (comprising Dr Mohan Gopal and former RBI deputy governor V Leeladhar) to decide NSDL-related issues.
5. The mistake in assuming that NSDL will get a clean chit from the bench.
6. The attempt to bury the Gopal-Leeladhar report for several months.
7. Making the report public only after a public interest litigation was filed in the Andhra Pradesh High Court.
8. Exoneration of the rival Central Depository Services Limited (CDSL) through a one-line order, although charges against it were far more serious.
9. And finally the controversial board meeting which exonerated NSDL and refused to consider a contrary legal opinion by no less than JS Verma, former chief justice of the Supreme Court of India.
Unfortunately for SEBI, a Delhi-based NGO called Manav Adhikar filed a special leave petition before the Supreme Court, which led to a direction by the apex court (on 28th March 2011) to reconsider its decision.
Interestingly, the humiliation heaped on Dr Mohan Gopal, a man with a formidable legal knowledge (apart from heading the National Judicial Academy, he taught law at the Harvard Law School) is probably unparalleled in so-called independent government bodies.
In fact, apart from re-examining its orders, the SEBI board ought to re-examine its completely inadequate regulatory authority over NSDL. As Moneylife has pointed out, the depositories are governed by a separate statute, which is administered by SEBI, but have grown far beyond their original mandate into areas where SEBI has no jurisdiction. Consequently, much of the business is dangerously outside any supervisory or scrutiny mechanism.
With such overwhelming evidence of such biased decision-making at the highest levels on this issue, and the Supreme Court deeming it fit to reopen the issue, it remains to be seen which way the new SEBI board, under a new chairman, will tilt. Will it go for the truth or for the status-quo?
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Home loans from SBI will now attract an interest rate of 9.5% to 10.25% depending upon the loan amount. The withdrawal of the teaser rates comes within a month of the new chairman Pratip Chaudhuri taking charge at SBI
Mumbai: Amid concerns expressed by the Reserve Bank of India (RBI), the country's largest lender State Bank of India (SBI) today announced withdrawal of special home loan schemes, or teaser rates, with effect from 1st May, reports PTI.
SBI Easy Home Loan and SBI Advantage Home Loan (teaser rate products) will be replaced by floating interest rate schemes on par with other commercial banks.
Under the teaser home loan scheme, SBI was offering lower rate of interest of 8%-8.5% for the first three years.
It invited severe criticism from RBI, which had said the scheme could impact the asset quality of SBI's home loan portfolio.
The withdrawal of the teaser rates comes within a month of the new chairman Pratip Chaudhuri taking charge at SBI.
Home loans from SBI will now attract an interest rate of 9.5% to 10.25% depending upon the loan amount, SBI said.
The bank had also launched the SBI Advantage Car loan Scheme, under which credit would be provided at 10.75% for a maximum period of seven years.
Company’s IPO prospectus says it cannot compare the promise and performance of Galaxy Entertainment because it does not have the IPO records of Galaxy which are legal documents. Still, SEBI has cleared the Future Ventures’ prospectus, unaware of the irony
Future Ventures India Limited, the Kishore Biyani-promoted investment company, recently announced an initial public offering (IPO) to raise Rs750 crore.
One of its group companies is Galaxy Entertainment Corporation, which was listed on the Bombay Stock Exchange, before Future Ventures acquired it three years ago. But the prospectus for the current IPO planned by Future Ventures says that it does not have any access to information about the promise and performance of this company.
Galaxy was promoted by Purnendu Chatterjee, once an associate of George Soros and a key promoter of Haldia Petrochemicals. Mr Chatterjee sold Galaxy to the Future group after the company's managing director expired. The Future Ventures' prospectus says, "We do not have access to the offer documents and other records of Galaxy. We are, therefore, unable to provide details on the promise made and the performance achieved by Galaxy."
This is strange. As Future Ventures acquired Galaxy and should have had all the records of an important corporate action such as an IPO in place. A prospectus is a legal document. The fact that a listed company has lost a legal document like the prospectus is quite extraordinary.
The prospectus could have been procured through book running lead managers too which helped the company to come out with its IPO. These lead managers are few in number and they should have been able to source the information.
Enam Securities, JM Financial, Kotak Investment Banking are the lead mangers for Future Ventures' IPO and the company could have taken their help to get access to the previous records of Galaxy, including the information for the prospectus.
The data could have come from a third party provider of information like Prime Database. Worst, all prospectuses are screened and examined before they are cleared by the market regulator Securities and Exchange Board of India (SEBI). The company could also have accessed the required information relating to Galaxy from SEBI too-assuming that SEBI has a record of all the issues that it clears! But we are not sure whether Future Ventures made any efforts to get hold of a prospectus.
What is ironical is that SEBI decided to give a 'go-ahead' for the Future Ventures prospectus, unaware of the irony that a prospectus it had cleared 11 years ago has simply vanished from the system! As against this, won't the regulated entities be put through hell if any compliance paper of theirs is found missing?