In a three-page clarification issued Tuesday night, subsequent to reports of allegations by SEBI’s former whole-time member KM Abraham, the finance ministry said that the charges levelled against the finance minister and his adviser were “devoid of any truth and are a complete distortion of facts”
New Delhi: The finance ministry on Tuesday dismissed allegations by a former Securities and Exchange Board of India (SEBI) member of interfering in the market regulator’s job and termed the charges as ‘false, vexatious and defamatory’, reports PTI.
The ministry further said that it has received numerous complaints against the official, KM Abraham, formerly whole-time SEBI member, ranging from corruption to abuse of power.
In a three-page clarification issued Tuesday night, subsequent to reports of allegations by SEBI’s former whole-time member KM Abraham, the finance ministry said that the charges levelled against the finance minister and his adviser were “devoid of any truth and are a complete distortion of facts”.
The finance ministry said that it has received numerous complaints, including by several Members of Parliament (MPs), about his conduct, while references have been received from Central Vigilance Commission (CVC) and the Department of Personnel and Training (DoPT).
Mr Abraham retired from SEBI last month and has lodged complaints with the prime minister about alleged interference by the finance ministry in the functioning of SEBI, including in cases relating to major corporate entities such as the two Reliance groups, ICICI-Bank of Rajasthan, MCX-SX and Sahara group.
In letter dated 1st June to prime minister Manmohan Singh, Mr Abraham had complained that SEBI’s current chairman UK Sinha told him that the finance ministry wanted the regulator to go slow in these cases.
The letter was forwarded to the finance ministry, which later sought response from Mr Sinha on the issue.
Mr Sinha denied any interference by the Finance Ministry in the market regulator’s functioning and termed the allegations made by Mr Abraham as baseless.
Terming these allegations as a ‘figment of imagination,’ Mr Sinha wrote to the finance ministry on 8th July that Mr Abraham was “suffering from persecution complex and delusion and is erratic in behaviour”.
The finance ministry also said that the “allegations made against the finance minister (Pranab Mukherjee) or his adviser (Omita Paul) that any pressure was put on Mr Sinha to manage any case whatsoever or that the regulator’s integrity has been undermined are false, vexatious and defamatory.”
The ministry said that it has been receiving numerous complaints against Mr Abraham since January this year.
“The complaints ranged from abuse of power to corruption and purchase of flat at concessional rate from an entity that had benefited from the sale of office space to National Stock Exchange (NSE), which is regulated by SEBI...,” it said.
The ministry said that the reference has been received on Mr Abaraham’s alleged links with NSE and NSDL in the issue of the SEBI’s role in “trying to save NSDL from the IPO scam that had led to the loss of Rs115 crore”.
The ministry said that Mr Abraham was “making efforts to continue as a whole time member for another two years” and also tried to secure a position at National Institute of Securities Markets (NISM) on the basis of a recommendation made by the former SEBI chairman CB Bhave.
Having failed in getting an extension, Mr Abraham wrote to the prime minister “alleging interference by the ministry of finance in the affairs of SEBI in a host of cases through the present chairman,” the ministry said.
It noted that SEBI chairman UK Sinha has rejected all the allegations made by Mr Abraham as false and has characterized the allegations as ‘a figment of imagination’, ‘unfounded’ and ‘motivated’.
“Mr Abraham has attempted to put words in the mouth of chairman, SEBI, that some sensitive cases engaged the attention of the finance minister or his adviser,” the ministry said.
Mr Sinha apparently wrote to the finance ministry on 8th July that Mr Abraham was worried about the safety of his family members and exhibited a strong element of insecurity.
There have been reports that Mr Abraham has again written to the prime minister, expressing concern about security of his family members in the wake of his complaints having come into public domain.
Mr Sinha had also written that “Mr Abraham was frustrated as he was not neither given extension as SEBI, whole-time member, nor given the post of director, NISM which he canvassed with the chairman to the state of embarrassment.”
The proposals for 5% government stake dilution in BHEL and 10% in Nalco are in various stages before seeking the government approval. Besides, the government has already approved disinvestment in ONGC, SAIL, HCL and NBCC
New Delhi: The government today said efforts are being made to achieve the disinvestment target of Rs40,000 crore for the current fiscal and the proposals of stake dilution in engineering PSU Bharat Heavy Electricals (BHEL) and aluminium producer National Aluminium Company (Nalco) are under consideration, reports PTI.
"The Budget estimate for disinvestment proceeds are Rs40,000 crore for the year 2011-12. All efforts are being made to reach the disinvestment target for the current fiscal year," minister of state for finance SS Palanimanickam said in a written reply to Rajya Sabha.
Mr Palanimanickam said the proposals for 5% government stake dilution in BHEL and 10% in Nalco "are in various stages before seeking the government approval."
He said the government has already approved disinvestment in ONGC, Steel Authority of India (SAIL), Hindustan Copper (HCL) and National Building and Construction Corporation (NBCC).
The government has given approval for sale of its 5% stake in SAIL along with issue of 5% fresh equity. It has also approved disinvestment of 5% of government's holding in ONGC.
So far in the current fiscal the government has been able to mop up over Rs1,100 crore by offloading stake in the Power Finance Corporation (PFC).
Last fiscal, the government had raised Rs22,763 crore from sale of equity in public sector enterprises against a target of Rs40,000 crore. It offloaded equity in SJVN, Engineers India, Coal India, PowerGrid and Shipping Corporation of India.
The provision in 2010-11 includes a countercyclical buffer of Rs2,330 crore toward achieving the 70% Provision Coverage Ratio prescribed by the RBI over-and-above the prudential provision, finance minister Pranab Mukherjee said
New Delhi: The government today said provisioning against the non-performing assets (NPAs) of State Bank of India (SBI) increased more than three-fold to Rs8,792 crore in 2010-11 from Rs2,474 crore in 2008-09 due to a rise in bad debt, reports PTI.
The provision in 2010-11 includes a countercyclical buffer of Rs2,330 crore toward achieving the 70% Provision Coverage Ratio prescribed by the Reserve Bank of India (RBI) over-and-above the prudential provision, finance minister Pranab Mukherjee said in a written reply to a question in the Rajya Sabha.
The NPAs have gone up substantially in agriculture, small scale industries and corporates, he said.
During 2010-11, outstanding loans of Rs210.34 crore given by SBI to Shah Alloys turned into NPAs. At the same time, an outstanding loan of Rs193.99 crore to Indorama Synthetics became a NPA, he said.
Meanwhile, in a separate written reply, minister of state for finance Namo Narain Meena said the government has received a proposal from SBI for raising capital through various instruments-Qualified Institutional Placement (QIP), Preferential Allotment, a Follow-On Public Offer and a rights issue.
The proposal is under examination, Mr Meena added.
In response to another question, Mr Meena said in line with the principles of preserving the long-term value of the country's foreign exchange reserve in terms of purchasing power, minimising risk and volatility in returns and maintaining liquidity, the RBI holds foreign currency assets (FCAs) in major convertible currencies' instruments.
These include deposits of other countries' central banks, the Bank for International Settlements (BIS) and top-rated foreign commercial banks, besides securities representing the debt of sovereigns and supranational institutions with a residual maturity not exceeding 10 years, to provide a strong bias toward capital preservation and liquidity, Mr Meena said.
At the end of March 2011, Mr Meena said out of the total foreign currency assets of $274.3 billion, $142.1 billion was invested in securities, $126.9 billion was deposited with other central banks, the BIS and IMF and $5.3 billion was placed with External Asset Managers.