Regulations
Delhi HC issues notice to SEBI to implead Midas Touch in a PIL on consent orders

Midas Touch has argued that that it has additional information relating to consent orders

The Delhi High Court (HC), on Tuesday, issued notices to the market watchdog Securities and Exchange Board of India (SEBI) and a petitioner, for impleading Midas Touch Investor Association in the public interest litigation (PIL), challenging the constitutional validity of the popular “consent orders” mechanism by SEBI used to settle disputes related to securities law offences.

Midas Touch moved an application stating that it should be allowed to be impleaded in the PIL as it has additional information relating to the case, following which orders were issued by bench of acting chief justice AK Sikri and justice Rajiv Sahai Endlaw.

In a press note, Midas Touch stated that, “it was one amongst the privileged eight unconnected organizations and individuals invited by the JPC (Joint Parliamentary Committee) for personal deposition before it. Therefore, impleading the applicant in the PIL would enable it to assist the Hon’ble Court in dispensing justice.”

A PIL was filed in October last year, by Delhi-based businessman Deepak Khosla challenging the SEBI’s 2007 circular enabling adjudicating officers (AOs) to issue consent orders without fixing guilt of parties involved. The plea also sought quashing of the circular and cancelling all consent orders passed by SEBI or by the AOs in pursuance of the circular.

The SEBI circular enables AOs to settle “administrative or civil actions” in cases where a person is prima facie found to have violated rules without fixing the guilt of the parties involved. Such cases also include those which are pending before the courts or appellate authority.

Virendra Jain, president, Midas Touch says that, “Such unfettered powers can be conferred in an authoritarian state and have no place in a democracy.”

The writ petition further said that there is no power with SEBI to frame such a “Super Amnesty” scheme, especially since the scheme is completely contrary to the SEBI Rules and Regulations Act.

It also states that the consent guidelines issued by SEBI have been grossly abused. It has referred to the constitution and recommendations of Joint Parliamentary Committee (JPC) formed following the 2002 securities scam, also known as Ketan Parekh scam. The report submitted by the JPC in 2002 had noted that there was a nexus between Ketan Parekh, banks and corporate houses. It recommended SEBI, the ministry of company affairs, along with other enforcement and investigating agencies, to investigate this nexus and action taken under relevant laws. SEBI invoked the consent mechanism in numerous such cases which has enabled the market regulator to settle cases in defiance of the will of the Parliament.

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Financial Technologies gains 6% as SC rejects SEBI plea on MCX-SX

Shares of FTIL witness robust buying interest from investors soon after the court decision

New Delhi : Shares of Financial Technologies (FTIL) on Wednesday soared by 5.75%, as the Supreme Court asked the market regulator Securities and Exchange Board of India (SEBI) to reconsider FTIL-promoted MCX-SX's application for a full-fledged stock exchange, reports PTI.

The apex court today asked SEBI to consider within three months the application of MCX-SX seeking permission to launch an equity trading platform, which has been previously rejected by the capital market regulator.

The shares of FTIL witnessed robust buying interest from investors soon after the court decision and settled for the day with a gain of 5.75% at Rs747.10. Prior to the court decision, the stock was trading nearly flat for most part of the trading session today.

Shares of Multi Commodity Exchange of India (MCX), the FTIL-promoted commodity bourse, also settled 0.9% higher at Rs1,268.40 on the BSE in an overall weak market.

Commenting on the development, an MCX-SX spokesperson said: "We always had full faith in our regulatory and judicial institutions and systems. "We remain committed to the growth and development of Indian capital market which has a significant role to play in the overall development of the economy," the spokesperson said in a statement.

SEBI had approached Supreme Court after the Bombay High Court set aside a SEBI order rejecting permission to MCX-SX.

The apex court passed the order on the basis of a consensus reached between SEBI and MCX-SX vis-a-vis amendment to the MIMPS (manner of increasing and maintaining public shareholding in recognised stock exchanges) rules which the stock exchange also agreed to adhere to.

SEBI's counsel told the bench that regulator was willing to amend the rules within three months and Mr Salve assured the court that the company was willing to abide by the proposed amended rules upon which the court passed the order.

Earlier the Bombay High Court had set aside the SEBI order rejecting permission to MCX-SX to launch an equity trading platform, asking the regulator to reconsider afresh the bourse's application within a month.

The SEBI had rejected MCX-SX' application on grounds, including violation of the MIMPS rules which mandates promoters to hold only 5% stake.

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Alfa Laval becomes latest MNC to delist from Indian bourses

Shares of company have jumped 34% since its delisting offer commenced on 15th February

New Delhi: Shares of Alfa Laval India on Wednesday traded for the last time on the Indian bourses, as its Swedish parent joined a host of other multinational companies (MNCs) to delist their local units from the Indian stock market, reports PTI.

The trading in the shares of the company were discontinued after close of market hours today, pursuant to a delisting offer made by its promoter, Sweden-based Alfa Laval Corporate AB, for the public shareholders earlier this year.

In its last trading session, the stock on Wednesday closed 0.11% up at Rs3,946.50 on the Bombay Stoch Exchange (BSE). At the National Stock Exchange (NSE) also, the stock today closed 0.18% higher at Rs3,948.90.

However, the shares have jumped 34% since its delisting offer commenced on February 15.

The stock market has witnessed a slew of delisting offers in the recent months and the promoters have been MNCs for most of these entities. Some of the entities having announced or got delisted so far in 2012 include IT firm Patni Computer, media and entertainment firm UTV Software Communications, Carol Info Service and Exedy India.

Market experts attributed the trend to an opportunity for the promoters to buy out the minority public shareholders at low valuations prevailing currently.

Several other MNCs, whose overseas parents hold more than 75%, may also come out with delisting offers for their Indian units in the next few months.

According to brokerage firm ICICI Direct, Oracle Financial Services, Novartis, Honeywell Auto, Thomas Cook, Singer, Gillette, Astrazeneca Pharma, Blue Dart, 3M India among others, as probable candidates.

With SEBI mandating all listed companies to increase public shareholding to a minimum 25% by June 2013, these companies have to take a call sooner or later whether to reduce promoter holding or go for delisting mechanism.

The corporates, particularly fundamentally strong MNCs, may not have the inclination to increase their public holding and therefore could resort to delisting to have better flexibility in taking business decisions.

The delisting of Alfa Laval India, which offers heat transfer, separation and fluid handling technologies, involved its promoter offering to acquire up to 2,040,202 shares, accounting for a 11.23% stake in the domestic entity.

At that time, promoters held 88.77% stake in the company, which came down to 94.45% by March 31, 2012.

The remaining public shareholders can offer their shares to the promoter at Rs4,000 per share (exit price) for a period of one year starting from 19 April 2012.

After the delisting offer, Alfa Laval India had requested the BSE and NSE to delist its shares, pursuant to which the exchanges decided to discontinue the trading in its shares with effect from 12 April 2012. The stock would be delisted from the exchange records with effect from 19 April 2012.

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