Investor Issues
De-listing Outpaces Listings
SEBI and ministry of finance remain in their own world, as an important indicator of the spread of equity cult sputters
 
If the disinvestment of shares in public sector undertakings (PSUs) is a part of the Modi government’s grand plan to bridge the fiscal deficit over the next few years, it needs to pay serious attention to markets. Moneylife has repeatedly pointed out that India’s retail investor population has halved in the 25 years when the capital market has been under the watch of an independent regulator. Things are worse for companies. They have to deal with mindless tinkering with disclosure and reporting rules, onerously impractical responsibilities dumped on independent directors and draconian punishments prescribed through amendments to the SEBI (Securities & Exchange Board of India) Act and the Companies Act, 2013. No wonder, as pointed out by a report on 20th January in the Business Standard, the number of companies that have de-listed from the bourses outpaces new listings. 
 
The numbers are worrying. Prime Database has pointed out that only 15 companies have been listed on the bourses since 2012, while nearly thrice the number (42) have de-listed. Essentially, any company that can access private money does not want to go through the rigour of mindless and costly compliance. 
 
This is bad news for ordinary retail investors who, ever since the FERA dilution of the 1970s and the Reliance-led equity cult of the 1980s, had gained significantly by investing in initial public offerings (IPOs) of blue-chip companies and staying invested for the long term. Ironically, the equity cult ended in the early 1990s because the government unleashed thousands of fly-by-night companies on the market when it scrapped the office of the Controller of Capital Issues (CCI) and replaced it with SEBI without putting in place any check or verification of companies, their promoters or business plans. 
 
The past 25 years have been spent on making impractical rules rather than making the markets free from dubious corporate behaviour and stock manipulation. Consequently, despite the euphoric, eight-month rally after Narendra Modi took charge as prime minister, the primary market remains dead and the average, long-term, retail investor remains out in the cold.

User

COMMENTS

KAVIRAJ B PATIL

2 years ago

When reputed promoters like Ambanis give investors a rotten egg like "Reliance Power", what else will investors do other than exit from the markets? You also have a company called Datar Switchgear, that around the year 2001 or so declared a 1:1 bonus and then shortly thereafter disappeared. You also have a promoter who was given a banking licence. Luckily, for the public, before this crook could establish the bank, he was caught in an over Rs.600 crore scam. Then, we have a company called Uniscans and Sonics which vanished. But, some years later, we saw the promoter of this company, boasting about his capability, on the famous Tehelka sting which cost Bangaru Laxman his party presidentship.

NGO Clean Up Needed
Pathetic reporting of NGOs should be a wake-up call
 
Many in the NGO sector believe that the government has unleashed a witch-hunt of sorts against them. A few big NGOs, who receive a flood of foreign exchange every year, are being questioned about its utilisation. This has opened up a Pandora’s Box. What has emerged is a monumental mess with a majority of NGOs failing to prepare even their annual reports. 
 
In a case before the Supreme Court of India (pertaining to alleged embezzlement of funds by NGOs), CBI has said that out of 23,95,579 NGOs in 21 states, some 2,43,955 had filed their balance sheets with the authorities. That is, just over 10% of the NGOs are complying with this basic requirement. In the seven Union Territories, of the 73,213 NGOs, only 50 have submitted their returns. 
 
While it is interesting that the every state is providing details of NGOs and their ‘alleged’ non-compliance, what about the government departments responsible for regulation? Most NGOs will tell you that the charity commissioner and trust offices are terribly overloaded so that simple filings and ‘change reports’ take months, and even years, to be recorded officially. Also, reporting systems are still in the stone-age. Manual registers and processes continue to be mandatory. Nobody bothers to check compliance except when an NGO is being harassed as part of an inquiry. Compliance with reporting requirements consumes a big chunk of an NGO’s time, cost and resources.
 
If the government really wants to clean up the NGO sector, then prime minister Narendra Modi’s promise of minimal governance—simple online reporting requirements and less harassment—is imperative. 

User

COMMENTS

Navroze Havewala null

2 years ago

One of the most corrupt departments of the Maharashtra Government is the Charity Commissioner.
Some people get away with loot of thousands of crores, and honest, charitable folk are harassed.
The officers have no respect for legality, because there is no punishment if an order is reversed in a higher court.

Girish Mittal

2 years ago

I agree compliance take lot of time of volunteer driven NGOs. We give our time, money and talent to provide solutions to people where govt has failed. We need to make life easier for people...everywhere..Corporate, NGO, Individual etc...

Meenal Mamdani

2 years ago

In USA, if a NGO income is less than $25 thousand in a year, all it has to do is file a brief statement online, called a e-postcard.
Similarly, NGO files a short form every year to indicate it is still active, the names and addresses of the directors and a fee of $5 with it takes care of the regulatory requirements.
The Charity Commissioner's office must be brought into the digital age as soon as possible.
If they don't have the (wo)man power, I am sure that they will get many volunteers to help them digitize their records.

Narendra Doshi

2 years ago

Yes, Sucheta you are right. This must see the light of the day sooner than later.

Jaitley says AAP caught red-handed receiving funds from dubious companies

Jaitley said AAP has to answer who were behind the companies that donated Rs2 crore the Kejriwal-led party and what was their source of income 

 

Union Finance Minister Arun Jaitley on Tuesday said Arvind Kejriwal-led Aam Admi Party (AAP) was caught red-handed in receiving funds through round tripping from companies, which did not have any business. He also accused AAP of adopting diversionary tactics to deflect attention.
 
Jaitley called the Rs2 crore donation through cheques of Rs50 lakh each by four companies to AAP a clear case of “round-tripping of black money” and indicated that a probe will be initiated into it by the concerned authorities.
 
AAP Volunteer Action Manch (AVAM), a breakaway group of the Aam Aadmi Party, Monday had accused the Arvind Kejriwal-led party of receiving Rs2 crore last year through four “dubious” companies.
 
AAP has rejected the charges and demanded a Supreme Court-monitored Special Investigation Team (SIT) to probe funding of all three major parties in Delhi polls.
 
“It is obvious that this is a round-tripping of black money into the system of a political party. Now, if you are perhaps trapped in an incident of this kind, this is no position that you should start blaming other political parties and try and deflect the agenda,” Jaitley said.
 
On AAP seeking a Supreme Court-monitored probe into funding of the three major parties in Delhi polls, the Finance Minister said, “These are all diversionary tactics. AAP and its leadership has been caught red-handed in this case.
 
“I’m sure the statutory authorities will do their job as and when their returns are filed and as and when the facts are brought to their notice.”
 
Asserting that it adopted “total transparency” in its funding, AAP accused BJP of attempting to influence the voters ahead of the 7th February polls by bringing out “false” allegations.
 
Rejecting AAP’s argument that it received the donations through cheques, Jaitley said, “The elementary question is when you give your money by cheque, who is the controlling interest behind that company, the party is supposed to know that.”
 
He further said it was “obvious that these companies have been used as pass-through entities, transacted through hawala means or through companies which convert that money and give entries in white money to others.”
 
Jaitley said AAP has to answer who were behind these companies and what was their source of income.

User

COMMENTS

Kiran Aggarwal

2 years ago

http://www.abplive.in/india/2015/02/03/a...#.VNECWjGUePY

AAP 'S REBUTTAL
TO COMPLETE THIS NEWS ITEM

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)