Srei Infrastructure Finance got an order from the Calcutta High Court to restrict Fitch from publishing its current ratings in their year-long dispute
Fitch Ratings said it cannot publish or update its ratings on Kolkata-based Srei Infrastructure Finance (Srei InfraFin) due to an order from the Calcutta High Court. Srei InfraFin, on the other hand, has refused to comment saying that the matter is sub-judice. This is the first instance, not just in India, but across the world where one company has restricted a ratings agency from publishing ratings through an order from the court.
In a statement, Srei InfraFin said, “In view of the fact that various media persons are wanting to know the reaction of Srei on the information published by Fitch today, we would like to mention that this matter has gone to the Calcutta High Court. There has been long protracted dispute for last one year between the parties resulting the matter taking a legal shape. Since the matter is sub-judice, it would not be possible for us to comment on this matter anymore”.
Earlier, in a release, the ratings agency said, "Fitch Ratings has received an order from the High Court at Calcutta dated 20 March 2012 pursuant to which Fitch India has been restrained from publishing a rating action with regards to SREI Infrastructure Finance. Fitch is therefore unable at this time to publish a current rating on the issuer, according to Fitch.”
The application filed by Srei InfraFin is scheduled to be heard on 29 March 2012. Earlier, during a hearing on 22nd March, Fitch told the court that under the Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999, it is bound to make a credit rating of an issuer (Srei InfraFin) and publish it in the print media and its website otherwise its licence was liable to be cancelled.
After this submission, justice IP Mukerji, allowed Fitch to submit a copy of the court order to SEBI for record.
Last year in March, Fitch had accorded“AA-” (AA minus) ratings on Srei InfraFin’s bonds of Rs250 crore sold in 2010. Fitch also changed its outlook on the bonds to negative from stable in 2011 citing growing leverage at both Srei InfraFin and its main operating unit Srei Equipment Finance Pvt Ltd. It said, the negative outlook reflects high credit risk posed by the low seasoning and high concentration in Srei InfraFin’s infrastructure project finance books that were adding pressures on rating levels at that time.
Jewellers at some places are still on strike against the increase in duties in the Budget 2012-13. However, some industry experts feel that since the market and consumers have adjusted with the hike, there is no need to continue with the strike
The three-day strike of the jewellery industry has now become an indefinite strike in certain areas. The jewellers are protesting against the Budget proposals announced by the finance minister which they claim will make buying gold and silver dearer for the consumer.
To control the current account deficit (CAD) partly caused by the imports of gold and other precious metals in the first three quarters of this fiscal, the finance minister has proposed additional duties to limit the imports of gold and silver. Finance minister Pranab Mukherjee has proposed to increase import duty on gold to 4%, increase excise duty on branded and non-branded jewellery by 1%, 2% tax on cash sales of over Rs2 lakh, while removing the 1% excise duty on branded silver jewellery.
According to the Gem & Jewellery Export Promotion Council (GJEPC) this has put the entire jewellery industry of India and the 3.5 million people it directly employs under great uncertainty. The jewellers are demanding a roll back of excise duty. The jewellers are alleging that jewellery will out of reach for the aam admi. The new measures will encourage black market or smuggling. Jewellers are alleging that too much of unnecessary paper work would be involved.
“The strike is against the announcements, such as increase in custom duties, imposing excise duty, made in the recent Union Budget. All the jewellers are united to fight and safeguard the interest of the customers who cannot fight with the government. For instance before the Budget, for buying one kilogram of gold one had to pay duties of around Rs80,000-Rsd90,000. But after budget it rose to whopping Rs1.7 lakh. The jewellers will pass on this additional cost to the customer. But the buyers have to shell out extra money. Because of this we expect the imports to come down significantly” says Karan Vasa, associate vice president, RiddiSiddhi Bullions Ltd.
However, some people feel that after the Budget the market has adjusted to the prices by passing the hike on to consumers and there is no need for the strike. Mukul Sonawala, former president of the Bombay Bullions Association, said, “In my view such strike is not required. Post budgetary announcements, the prices have been adjusted in the local market. Retailers and wholesalers will pass on the cost to the customers. But the cost itself comes to just 0.3% which the customers will bear. In my view that (the increase in cost) is little. People who want to buy gold will buy in any case.”
Measures announced in Budget 2012-13:
According to the Standard Chartered Bank report, to meet the expectations of the Asian affluent, banks need brand reputation, service and advisory process
Despite a slight dip in short-term wealth confidence due to an uncertain economic landscape, affluent Asians remain confident in growing their wealth - they have an aggressive wealth target of growing their wealth to $4 million in 10 years. This means they need an annual return of 12%. This is according to The Future Priority Report: a study conducted from October to November 2011 by Standard Chartered Bank and Scorpio Partnership which captures sentiment of over 2,700 Asian affluent individuals across nine markets.
The report also reveals that while most respondents see Asia as the region offering excellent wealth creation opportunities, in the longer term they adopt a more international perspective. Further, Asian affluent are sophisticated wealth builders, adopting a dual-prong approach of investing, and using credit or leverage to enhance their returns.
According to the report, wealth is created through a balance of investing and managing debt. To meet the expectations of the Asian affluent, three factors stand out in importance for banks namely brand reputation, service and advisory process. There are three themes which will grow in importance in the future for banks namely education, internet and advice.
Wealth confidence is a defining characteristic of the affluent and a strong majority of Asia’s affluent (77%) remain confident in growing their wealth in the next 12 months, although the confidence level is slightly lower than that of the previous year (81%). Of the nine countries surveyed, India and Indonesia stand out as being the most confident (88% and 98% respectively), while Singapore, Hong Kong and Taiwan share similar levels of wealth confidence at 70%, 68% and 67% respectively.
Foo Mee Har, global head of priority and international banking, Standard Chartered Bank, said: “Customers, not banks, are driving the agenda in Asia. The Asian affluent are clearly wealthier and more sophisticated than before. They have distinctive and more complex needs and hence cannot be treated with a ‘one size fits all’ approach. Therefore, to succeed in this important client segment, banks need to focus more on their service and quality of their advisory processes, rather on the products they sell. Assuming the role of a trusted advisor also means really listening to what the client is asking for, and treating them in a holistic manner to include their families, their business and their global ambitions.”