Emissions cheating scandal: Volkswagen to recall 5 million diesel vehicles
The German automaker Volkswagen announced that it would recall up to 5 million diesel vehicles that are involved in an emissions cheating scandal.
According to a statement issued by the company, customers of the affected vehicles will be informed in weeks and months and the emissions characteristics will be corrected.
The company said the technical solutions and measures would be presented to responsible authorities in October, Xinhua news agency reported on Tuesday. 
A service procedure is required for some five million vehicles from the Volkswagen Passenger Cars brand out of a total of 11 Group vehicles worldwide, a statement said.
The US Environmental Protection Agency (EPA) earlier this month found the software on Volkswagen diesel cars showed false emission data.
The software installed by Volkswagen in its cars called "defeat device" can turn on full emission controls only when the car is undergoing emission tests so as to meet the legal emission standards.
Under normal driving conditions, the cars with "defeat device" software can emit nitrogen oxides at up to 40 times the standard.
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.


Mumbai trains blasts: Five awarded death, seven life in jail
A Mumbai special court on Wednesday awarded death penalty to five and life sentence to seven others, all convicted in the 7/11 serial blasts in Mumbai suburban trains which killed 189 people.
On September 11, Special Maharashtra Control of Organised Crime Act (MCOCA) Judge Y.D. Shinde found all the 12 prosecuted men guilty of their role in the July 11, 2006, serial blasts in the suburban trains - Mumbai's lifeline - which also left injured 817 peak-hour commuters rushing home that rainy evening.
Those awarded the death penalty are: Kamal A. Ansari, 37, Ehtesham Siddiqui, 30, Faisal Attaur Rehman Sheikh, 36, Asif Khan alias Junaid, 38, and Naved Hussain Khan, 30.
The seven other convicts awarded life in jail are: medico Tanvir A. Ansari, 37, Mohammed Sajid Ansari, 34, Sheikh Mohammed Ali Alam Sheikh, 40, Mohammed Majid Shafi, 30, Muzammil Sheikh, 27, Soheil Mohammed Sheikh, 43, and Zamir Ahmed Sheikh, 36.
During the prolonged, nearly three weeks of arguments on the quantum of sentence of the convicts, Special Public Prosecutor Raja Thakre demanded death penalty for eight of the 12 convicts, terming them as "merchants of death".
A teacher, Abdul Wahid Sheikh, was the lone accused who was acquitted after the trial, while prime accused Azam Chima, alleged to be linked to the Lashkar-e-Taiba (LeT), is among the 17 who escaped and are on the run. The 17 include 13 Pakistani nationals.
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.


Bhushan Steel’s Dubious Restructuring

Banks remain benevolent despite bribe-for-loan charge

In August 2014, Bhushan Steel hit the headlines when the Central Bureau of Investigation (CBI) arrested its vice-chairman, Neeraj Singhal, on charges of bribing SK Jain, chairman of Syndicate Bank, in a bribe-for-loan scandal. We are not sure what happened to the CBI investigation; but once the accused was out on bail in October 2014, it was back to business as usual for Bhushan Steel, in less than a year. This was despite reporting bigger losses for seven straight quarters and a crash in its stock price from around Rs400 (August 2014) to Rs43.70 (23 September 2015). 
The chain of events since August 2014 raises serious questions about the extraordinary power that large borrowers seem to exert over lenders and the absence of any checks on the creation of new doubtful loans. Bhushan Steel has obtained a massive restructuring of its loan, without a murmur from the Reserve Bank of India (RBI) or the ministry of corporate affairs (MCA—which now supervises the draconian new Companies Act 2013) about the quality of the company’s management. 
Immediately after the arrest of Bhushan Steel’s vice-chairman, its 51 lenders put together a joint lenders forum and even talked about a forensic audit of the company’s accounts. There are no reports about any forensic audit, but lenders talked tough until November 2014. The Mint had then reported that lenders were asking Bhushan Steel to sell its integrated steel plant at Orissa to repay Rs15,000 crore and reduce its massive debt which stood at over Rs35,000 crore at the end March 2014. 
There was also talk about forcing the company to bring in a strategic investor. None of these actions materialised, despite Bhushan Steel’s declining financials. An explosion at the Orissa plant had led to cost overrun and delay in commissioning the third phase of expansion. The company was bleeding and reported a net loss of Rs297 crore in the second quarter of 2014. 
By March 2015, the lenders (mostly public sector banks) were only looking for ways to ever-green their loans. RBI’s 5:25 scheme was a boon for them. This scheme has made it easy for lenders to refinance large ‘infrastructure’ projects, apparently even when the management is facing CBI action. Under the 5:25 scheme, companies are allowed to extend the term of their debt to 25 years with flexible restructuring options. By June 2015, lenders had restructured the massive Bhushan Steel loan allowing tenure of 25 years; all approvals were in place by July. The company now feels so confident that, on 24th August, The Mint reported that it was engaged in talks with Monnet Ispat to purchase its 35% stake in Orissa Sponge Iron & Steel Ltd and, by September, it announced fund-raising plans by issuing redeemable cumulative preference shares worth Rs547 crore. 
Not once was there any mention of further action in the bribe-for-loan issue, let alone any reference to action by MCA against the company’s management caught bribing a bank chairman. The demand for asset sales also vanished; all that the company did was a sale and lease-back of its oxygen plant. Meanwhile, losses continued to mount. The stock price chart shows that investors are not at all impressed by the lenders’ and company’s action. 
When it comes to doing business in India, it is clearly different strokes for different folks. On the one extreme, we have the case of Pyramid Saimira Theatre Limited (PSTL) which was forced into liquidation as part of SEBI’s (Securities and Exchange Board of India) action against stock manipulation by the promoters. We have no idea why a profitable company with thousands of employees was made to pay the price for the actions of its promoters. Thousands of PSTL employees became jobless and over 200 entities suffered collateral damage. A ban imposed on the company in 2008 was finally revoked in September 2015. SEBI also auctioned promoter PS Saminathan’s home to recover the fines imposed on him. 
Here, too, it is noteworthy that there has been very little action against Nirmal Kotecha, the other promoter of PSTL, who was accused of inducing a SEBI official to forge a letter in the regulator’s name and plant it in the media. The same regulator (SEBI) has allowed innumerable powerful companies to walk away from gross violations with just a warning or by filing consent terms and paying up some money. And then there is Bhushan Steel whose vice-chairman is caught bribing a banker; but it does not matter. The lesson: If you have the connections and your borrowing is large enough, the lenders dance to your tune. Even the draconian Companies Act 2103 is no headache for the biggest of companies. 




1 year ago

unfortunately ever greening is always promoted by the managements of the banks.what we require is few sincere & intelligent RBI officers to scrutinise the actual NPAs & report the same. If a farmer/small artisan who has borrowed say 25000 can be chased to his death, why not these company managements? & why such loans are given when every one knows that most loans have a padding of atleast 25%

Gopalakrishnan T V

1 year ago

A good article exposing the lapses in the system.Unless and until the lapses identified can be fixed by way of demonstrative punishment and the brains behind them are totally exposed and punished,these things can go on for ever. There are Several such cases in Banking and many go unnoticed. The write off of loans, restructuriong of loans, offering of various concessions and reliefs accommodating the defaulters accounts, sanctioning fresh loans are very common in our banking and they seldom get reported or detected easily.Knowingly or unknowingly the authorities including SEBI and Ministry of Company affairs and others are all parties encouraging camouflaging of bad loans and commitment of irregularities.More the number of banks the better to hoodwink the authorities. like wise more the nummber of subsidiaries for any company all the more better to fool the banks and the authorities. There are several Companies with an unbelievable number of subsidiaries enabling the companies to raise capital, bank loans and other funds from market and seldom they declare any dividend or even a small profit. They continue to provide always encouraging news by fudging the balance sheets and false news which get accepted by the authorities and gullible investors. The very fact that when the companies have many subsidiaries and many lenders, the control on them is simply difficult and the managements' intentions are only to loot., It is all the more impossible to fix them when the authorities are relaxed and casual in their approach for obvious reasons.

Good to note that money Life makes all possible attempts to expose some of the irregularities and lapses and keeps a vigilant eye.

Abhijit Joshi

1 year ago


Nice article. If banks had indeed pursued with forensic audit, the extent of skeletons tumbling out of cupboards would have been hard to predict. This reminds of a dialogue from BBC serial Yes Minister "You should only set up an enquiry if you are sure of the findings of the enquiry beforehand”.

But someday the chickens would come home to roost.


1 year ago

Rbi leaning towards govt the fate of NPAS will hang on to the depositers and on tax payers since these are govt companies loose talk to become ED/Director of a PSU bank huge bribe is required to be paid it looks modi govt further damaging the future of the country by not focusing on real issue and focusing on periparal issues to create an image for himself BJP should be defeated in BIhar otherwise there appears to no future to the country and the govt will be no better than UPA

Arun N

1 year ago

Why talk of just Bhushan Steel? The same is true of most private steel cos. - including Essar - and power and infra companies.
In fact, this whole 'restructuring' business is a sham. If the RBI were to not come up with such fraudulent schemes, banks in India would have to report their true NPAs which would be several times the 'officially' stated values. And if the whole world were to come to know of the sorry state of banks in India and the economy in general, no one will invest in India.


1 year ago

Today only Raghuram Rajan said the relationship between the RBI and the government has been strong, but added that he did not always agree with the finance minister’s point of view. But now find even RBI may be having bandicoots inside who may be in connivance with Ministers ripping of Public Sector Banks



In Reply to TIHARwale 1 year ago

The word 'Bandikoots' seems to have been derived from the word "Bank".

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