Companies & Sectors
Diageo contests tribunal order on exit deal with Mallya
Bengaluru : British liquor major Diageo plc on Thursday contested the Debt Recovery Tribunal's jurisdiction to attach the $75 million deal it signed with industrialist Vijay Mallya his exiting its Indian arm United Spirits Ltd (USL).
 
"The tribunal has no jurisdiction to attach the $75 million deal (Rs.515 crore) signed outside the country and its payment terms as part of the severance package," Diageo said in its objections filed against the tribunal's order, legal sources privy to the case told IANS after the hearing was adjourned to April 29.
 
Tribunal's presiding officer R. Benkanahalli on March 7 directed Diageo not to pay Mallya till it disposed of the State Bank of India's March 2 interlocutory application (IA) and ordered attachment of the deal amount.
 
Diageo, however, confirmed to IANS on March 9 that it had paid Mallya $40 million (Rs.275 crore) on February 25 as part of the package, with the balance $35 million to be paid in equal instalments over the next five years.
 
As part of the sweetheart deal, Mallya resigned as chairman and director of USL and agreed not to compete with Diageo in spirits business the world over for the next five years and not to interfere in its Indian arm's business matters.
 
Diageo also objected to the SBI's April 13 petition for tribunal's direction to deposit the $40 million it transferred to Mallya's bank account outside the country.
 
"The bank cannot ask a tribunal to order depositing the amount paid to Mallya outside the country. The balance amount payment in future is subject to Mallya fulfilling the deal's terms and it (payment) is not guaranteed if they (terms) are not met," it said
 
Though SBI rushed to the tribunal a day after the agreement on February 26 to advance hearing on its original application (OA) filed in June 2013 for recovery of loans it and 16 other state-run and private banks advanced to Mallya's now defunct Kingfisher Airlines between 2004-12, it was not "aware" of Diageo's part payment to the 60-year-old liquor baron.
 
As a lead bank of the consortium of 17 banks to which Kingfisher owes Rs.9,091.39 crore as combined loans with interest, the SBI filed four IAs before the tribunal on March 2 after CBI director Anil Sinha expressed concern over its delay in acting against Mallya.
 
Meanwhile Diageo also argued that since it was not a party to the SBI's OA against Mallya, Kingfisher and United Breweries Holding Company, it cannot be made party to the IA for attaching the latter's property or assets.
 
In a related development, SBI counsel sought time to get clarity from his client on attaching sale proceeds of Mallya's private jet through auction on May 12-13 by the service tax department, as ordered by the Bombay High Court.
 
The SBI had also earlier sought the amount from the sale of Mallya's aircraft by the department to recover a part of the Rs.1,600 crore it had advanced to Kingfisher.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Nifty, Sensex is a highly overbought zone – Thursday closing report
The market may give up some gains if Nifty closes below 7,874
 
We had mentioned in Wednesday’s closing report that Nifty, Sensex looked overbought and that Nifty looked ripe for a small reversal, if it closed below 7,856. The major indices in the Indian stock market closed flat over Wednesday’s close, as there was little new impetus. The trends of the major indices in the course of Thursday’s trading are given in the table below:
 
 
Key Indian benchmark indices were trading higher on Thursday following favourable Asian markets cues but the market indices closed flat by the end of the day, as there was lack of momentum in an overbought market. At the BSE, good buying was observed in banking, finance, and oil and gas sectors, while selling pressure was seen in telecom sector. The S&P BSE Bankex increased by 2.62%, finance index inched up by 1.82% and oil and gas index went up by 0.94%. However, telecom index dropped by 1.15%. Ahead of the start of trading session in India on Thursday, Asian markets moved up higher on account of a surge in global crude oil prices. Most benchmark indices in the Asia-Pacific region were ruling higher, even though the Shanghai Composite and Shenzhen Composite were shaky.
 
Global software major Wipro Ltd. on Wednesday projected higher revenue from its IT services business for the first quarter (April-June) of this fiscal (2016-17), while net profit dipped 2% in the fourth quarter (January-March) of last fiscal 2015-16 under global accounting norms. "We expect revenue from our IT services to be $1,901-1,939 million ($1,920 average) for first quarter (Q1), as we had 2.4% strong sequential growth ($1,882 million) in fourth quarter (Q4) of fiscal (FY 2016)," the company said in a statement. The company's net profit for quarter Q4, however, declined 2% annually and was flat (0.3%) sequentially at Rs2,240 crore. For fiscal 2015-16, the net profit marginally increased 3% YoY to Rs8,890 crore. Total revenue for the quarter under reference (Q4) increased 12% YoY and 5.9% quarterly to Rs13,630 crore and 9% YoY for fiscal 2016 to Rs51,240 crore. The company also announced buyback of 40 million equity shares of Rs2 face value at a price of Rs625 per equity share from its investors on a proportionate basis through a tender offer. The buyback payable in cash will cost the company Rs.2,500 crore. The quantum of shares (40 million) for buyback, however, represents only 1.62% of total equity capital. The firm's blue chip scrip closed at Rs601.35, which is Rs12.20 or 2.07% from Tuesday's closing price of Rs589.15 and opening price of Rs595 and the day's high of Rs606.75.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 

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Maple scam and PM Awas Yojana: Where is the transparency?
Pune based Maple Group’s 'housing for all' scandal lacked mandatory disclosure under Section 4 of the RTI Act. The Act mandates voluntary disclosure of information about the scheme on government websites, which are primary public domains for transparency 
 
Sachin Agarwal, Chairman and Managing Director of Maple Group, fraudulently and audaciously used photographs of Prime Minister Narendra Modi; Maharashtra Chief Minister Devendra Fadnavis and Pune’s Guardian Minister Girish Bapat in the company’s full-page advertisements in newspapers luring buyers to register names for the PM’s prestigious Pradhan Mantri Awas Yojana (PMAY) scheme. The scheme PMAY promises housing for all by 2022 and is targeting the weaker sections of the society. Aggrawal launched his ‘housing for all’ or ‘Aapla Ghar’ scheme on the auspicious days of Gudi Padva as well as Ambedkar Jayanti.
 
Maple Group, boldly declares this scheme in newspapers, TV as PMAY scheme, despite the fact that the state government’s mission director of PMAY has categorically stated that no such scheme has been sanctioned in Maharashtra, as yet. The state government has finally directed Maharashtra Housing and Development Authority (MHADA) to initiate criminal action against him. However, despite more than 10 days having passed by since the scandal broke out, only his accounts have been frozen. He is still roaming free.
 
What is shocking, is that, a couple of days back, Agarwal was seated along with Girish Bapat, the Minister in the TV studio for a live primetime debate of Zee 24 Taas on the issue. Police had entered the premises of the TV channel office to arrest Agarwal, but returned empty handed. This follows the filing of a first information report (FIR) against Maple Group and Agarwal for this fraud, in which they have illegally collected registration fees of Rs1,145 each from nearly one lakh prospective buyers (the number of which he brought down to 20,000 after it turned out to be a big scam). 
 
Under this scheme, such collection is illegal. While the police allegedly pretended to nab him, with several of them running up the stairs to reach the TV channel’s newsroom, Agarwal came out from the studio, was protected by his 50-odd men and rode away pillion on a scooter of one of them – all in front of the police. Police acted helpless and Bapat, the Minister says nothing shocking about this escape. See the video here to believe this incredible story: (https://www.youtube.com/watch?v=G59VnOjc7ZQ).
 
What does it imply? That, despite Maple Group having played with the aspirations of the people by misusing and abusing PM’s and CM’s names, politicians and law enforcing authorities are supporting him, brazenly, as shown in the video and clandestinely too.
 
Right to Information (RTI) activist, Vijay Kumbhar, who spotted the advertisement on 14th April (on Gudi Padva Day) and became  suspicious. He wrote a formal complaint to Chief Minister Fadnavis, but did not receive any response. It is only after the CM’s party colleague and Member of Parliament (MP) Kirit Somaiya dashed off a letter, that CM Fadnavis ordered action against the builder.
 
Kumbhar says, “Only very few people would know that the PMAY is to be implemented through four verticals giving option to beneficiaries, Urban Local Body’s (ULB) and State Governments. These four verticals are ‘In situ’ Slum Redevelopment, Affordable Housing through Credit Linked Subsidy, Affordable Housing in Partnership and Subsidy for beneficiary-led individual house construction. However this was not mentioned in the advertisement for which (the Maple) group was inviting applications. It appears from further developments that they were talking of Affordable Housing through Credit Linked Subsidy (CLS).”  
 
What adds fuel to the fire is the fact that, the Maple Group in this scheme is collecting processing fee without any authority as mentioned in the PMAY guidelines. Kumbhar says, “As per the PMAY, primary lending institutes (PLI) will be given a lump sum amount of Rs1,000 per sanctioned application. PLIs will not take any processing charge from the beneficiary. That means collecting processing charges from flat buyers was not allowed.”
 
Since this scheme affects a large number of people, the information related to it comes as suo motu disclosures under Section 4 of RTI Act. The PMAY guidelines state that the scheme has been designed for:
 
? Economically Weaker Section (EWS) households with an annual income up to Rs3.00 lakh.
 
? Lower income group (LIG) households with an annual income between Rs3.00 lakh to Rs6.00 lakh.
 
Hence, it was the mandatory for the central government to create a new website or put up all information on to an existing website to let the people know what it is all about, in a people-friendly way. The advertisement of Maple Group had received huge response from all corners of Maharashtra.
 
Kumbhar says, “A group of 50 people were all set to come to Pune from rural Maharashtra for booking their flats until they read about the controversy.”
 
What about the Maharashtra State Government? Just yesterday, on 20th April, the urban development department, issued a circular that all processes pertaining to building department comes under suo motu disclosure under Section 4 of the RTI Act. It also directed all public authorities to put up the information with immediate effect, on its respective websites. Here is the link: (https://www.maharashtra.gov.in/Site/Upload/Government%20Resolutions/Marathi/201604201705339425.pdf). This means, it includes the Pradhan Mantri Awas Yojana too, as it has already constituted its state appraisal committee with Project Director as its head.
 
It is only when the right kind of information reaches the common man that con men like Maple Group will be wary of brazenly fooling them. For this Section 4 of the RTI Act is the only answer. Till then, we will continue to have Maple Group like frauds, with few activists like Kumbhar, picking up the gauntlet to bring out their wrong doings in public.
 
 
What is Pradhan Mantri Awas Yojana (PMAY)
 
The scheme comes with an aim of constructing more than two crore houses across the length and breadth of the nation within a span of next seven years.  This means the scheme which is started in year 2015 would conclude successfully in the year 2022.  The target beneficiaries of the scheme would be poor and people living under EWS and LIG categories in urban establishments of the country.
 
Slum rehabilitation of Slum Dwellers with participation of private developers using land as a resource
 
Promotion of Affordable Housing for weaker section through credit linked subsidy
 
Affordable Housing in Partnership with Public & Private sectors
 
Subsidy for beneficiary-led individual house construction
 
Primary Lending Institutions are Scheduled Commercial Banks, Housing Finance Companies, Regional Rural Banks (RRBs), State Cooperative Banks, Urban Cooperative Banks or any other institutions as may be identified by the MoHUPA.
 
 
(Vinita Deshmukh is consulting editor of Moneylife, an RTI activist and convener of the Pune Metro Jagruti Abhiyaan. She is the recipient of prestigious awards like the Statesman Award for Rural Reporting which she won twice in 1998 and 2005 and the Chameli Devi Jain award for outstanding media person for her investigation series on Dow Chemicals. She co-authored the book “To The Last Bullet – The Inspiring Story of A Braveheart - Ashok Kamte” with Vinita Kamte and is the author of “The Mighty Fall”.)

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COMMENTS

Param

8 months ago

EWS cut off is 3lac & income tax cutoff is 2.5lac. what is going on???

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