SAT, which is mandated to hear appeals against orders of SEBI, may become the new Financial Sector Appellate Tribunal that can hear appeals against all regulators
The government is contemplating strengthening the Securities Appellate Tribunal (SAT) as the Appellate Tribunal which can hear appeals against any action of any financial regulator.
Moneylife has reliably learnt that Rajeev Chandrasekhar, Member of Parliament (MP) from the Rajya Sabha and Member of Standing Committee on Finance, in a letter to the finance minister, has called for the government to convert the SAT into a Financial Sector Appellate Tribunal or a quasi-judicial forum to resolve disputes between regulators.
In a written reply, the finance ministry said it is contemplating strengthening the SAT by making it a Financial Sector Appellate Tribunal (FSAT). The FSAT can hear appeals against any action of any financial regulator in the context of legislative proposals in the Forward Contracts (Regulation) Act (FCRA) and Insurance Regulatory and Development Authority (IRDA) amendment proposing to mandate SAT as the appellate authority under these Acts, the ministry said.
However, since the proposal is at the initial stage and would require extensive discussions with all financial sector regulators, the ministry has said that it is not able to provide more details and any timeline by when a final decision will be taken.
Last month the government had to issue an ordinance due to a turf war between the Securities and Exchange Board of India (SEBI) and the Insurance Regulatory and Development Authority (IRDA) over the popular unit-linked insurance plans (ULIPs).
Earlier this month, Parliament passed the Securities and Insurance Laws (Amendment and Validation) Bill 2010 that will replace the ordinance. The Bill provides for a joint mechanism headed by the finance minister to resolve differences among the financial regulators - SEBI, IRDA, Reserve Bank of India (RBI) and the Pension Fund Regulatory and Development Authority (PFRDA). The Bill seeks to amend the Reserve Bank of India Act, 1934; the Insurance Act, 1938, and the Securities and Exchange Board of India Act, 1992.
Finance minister Pranab Mukherjee while replying to the debate on the Bill had said that the first stages of arbitration would be a high-level committee chaired by the governor of the RBI. "If two regulators claim jurisdiction over the same product and if they are unable to resolve it, it will not come to the joint mechanism automatically. I have expressed my intention publicly and I have also made the institutional amendment," Mr Mukherjee had said.
New Delhi: With Cairn Energy Plc voluntarily offering to meet government conditions, the oil ministry may find it difficult to nix its deal to sell majority stake in Cairn India to Vedanta Resources, reports PTI.
The oil ministry has shown signs of discomfort at a non-oil firm taking control of a company whose main property is the Barmer district oilfields in Rajasthan and has been in a huddle for the past two weeks combing through the deal.
"I think the ministry never had a case against Vedanta.
Legally speaking, they cannot stop Cairn Energy from selling up to 51% stake in Cairn India to Vedanta," a source in know of the development said.
Cairn India's contract with the government for three oil and gas producing properties including the one in Rajasthan, do not provide for prior government approval in case of a change of control happens at the corporate level.
The only contracts that provide for government permission in case corporate ownership of Cairn India changes are seven exploration blocks the company had won under New Exploration Licensing Policy (NELP).
"Hypothetically speaking, if the oil ministry was to act tough, Vedanta can tell the ministry to keep the exploration blocks and walk away with the Rajasthan oilfield, the Ravva oil and gas field (in eastern offshore) and the Cambay block," he said. "The $9.6 billion that Vedanta is paying is for these three fields and not for the exploration areas."
Also, the Production Sharing Contracts (PSC) that Cairn India has signed with the government for exploration and production of oil and gas, provides for government giving or denying it consent for change of ownership in "reasonable time period" which it is to use to establish credentials of the new party.
"Vedanta is a credible Indian group and world's fifth largest miner. It is willing to undertake all financial obligations for performance of Cairn India's obligations under the PSC. Also it has promised to keep Cairn India an independent entity like it exists now. So where is the case for rejection of the deal," the source said.
Besides, the letter Cairn Energy Plc chief executive Bill Gammell wrote to oil secretary S Sundareshan last week addresses all concerns the ministry may have.
"Both Cairn Energy and Vedanta Resources are willing to comply with any reasonable conditions of the government of India/ministry of petroleum and natural gas as may be necessary in the circumstances to ensure performance by Cairn India of its obligations under the PSCs," Mr Gammell wrote on 26th August.
Mr Gammell said Cairn Energy was willing to comply with all contractual obligations in sale to Vedanta which was 10 times bigger than his own firm.
The oil ministry had on 19th August written to Cairn Energy stating that certain PSCs have parent company guarantees and some PSCs have explicit provision of prior government consent in case of change of ownership.
Cairn India holds 70% operator interest in the 6.5 billion barrels Rajasthan block where state-owned Oil and Natural Gas Corporation (ONGC) has the remaining 30%.
The PSC for the Rajasthan block provides for explicit government approval only in case of a party selling its interest in the block, but does not make the nod mandatory in case of change of ownership at corporate level like in the Cairn-Vedanta deal.
Similar is the case with its other producing properties - the Cambay basin block and Ravva oil and gas fields. But the seven exploration blocks it won in NELP rounds have provision for seeking prior government approval before ownership of a participating company is changed, the source said.
ONGC believes that by virtue of its stake in Rajasthan block, it has the pre-emption or right of first refusal to buy Cairn India in case the company's ownership changed.
But, the Joint Operating Agreement, between Cairn India and ONGC, gives partners pre-emption rights in case of sale of interest by either parties in the block but not in case of corporate ownership change, he added.
Cairn Energy said the proposed sale of majority stake "will not adversely affect the performance or obligations under the various Production Sharing Contracts (signed by Cairn India) nor be contrary to the interests of India."
Besides having a successful experience in executing and operating complex large scale industrial projects, Vedanta has a culture of empowering management as evident in its previous acquisitions, Mr Gammell wrote to Mr Sundareshan.
The ad ought to have been screaming ‘innovation’ in its idea, style, treatment, everything! Sadly, it does not
Volkswagen has decided time has come to launch an umbrella corporate campaign for its various brands of cars. Clearly, they have felt the need to carve out a core ideology for the organisation, so that consumers understand what the mother brand stands for.
It's a sound strategy. Apart from individual car features, we must know what is the Big Promise one buys into when one deals with Volkswagen. Maruti Suzuki has recently done a similar exercise, and their corporate pitch is 'fuel efficiency'. 'Innovations for Everyone' is Volkswagen's umbrella message. And at face value, it seems to be the correct thing to say. Because innovations cue freshness in their various brands, and it also implies engineering and scientific expertise.
So far so good. The problem lies in the interpretation of this core ideology, and that's utterly boring. Firstly, the slogan itself: 'Innovations for Everyone' is a dull, lifeless, un-involving statement, it's much too generic for either connectivity or memorability as far as consumers go. They definitely needed a slogan that catches your attention and your fancy. I suspect this line is what the client's brand manager wrote, and did not want the ad agency copywriters to tinker with it. Bad idea, that!
And as if this was not bad enough, the Volkswagen people have released a TV commercial that's even more boring than the slogan. The ad is nothing more than a poorly executed corporate brochure. Each car brand gets featured, and its key innovation highlighted. Because they needed to do justice to all the brands (else a left-out brand manager would go into a sulk!), it becomes a laundry list of cars and features. Bi-Xenon Cornering headlamps, DSG gearbox, TSI technology, iconic design, electronic stabilisation programme, fuel efficient engine… Phew…. I am breathless already! The entire story passes by before you have registered anything at all. In fact, before you fall asleep.
Here's the stark irony: The Volkswagen dudes overlooked a factor that ought to have been staring at them from the windscreen: When you claim to stand for innovations, if that's the promise you are making from the rooftops, then the LAST thing you must do is to put out an un-innovative, boring advertisement. It just doesn't make sense. The ad ought to have been screaming 'innovation' in its idea, style, treatment, everything!
Bottomline: How can I trust people with innovations in their cars when they can't do ditto in a simple bloody advert?