Former attorney general and senior counsel Soli Sorabji, appearing for DLF said that the SEBI order has been passed in violation of principles of natural justice as the realty firm was not provided an opportunity to present its case before the market regulator
New Delhi: The Delhi High Court on Wednesday reserved its order on a plea of DLF challenging an order of market regulator Securities and Exchange Board of India (SEBI) to probe accusations by a Delhi-based businessman that he was duped of Rs34 crore by the realty major and its alleged associate firm Sudipti Estates, reports PTI.
A bench of justice Vipin Sanghi reserved its order after hearing both sides.
Former attorney general and senior counsel Soli Sorabji, appearing for the construction company, said that the SEBI order has been passed in violation of principles of natural justice as the realty firm was not provided an opportunity to present its case before the market regulator.
He said that no notice was issued and documents against the firm were produced without any information.
Citing a division bench order in the matter, Mr Sorabji also said SEBI’s decision should have been passed after hearing both sides and the non-compliance of the direction led to the violation of principles of natural justice.
Additional solicitor general (ASG) Prag Tripathi, appearing for SEBI, said when a regulatory body passed an administrative order to form a prima facie opinion, there was no need to provide an opportunity to other parties to be heard.
The ASG added that the regulator was still at the stage of investigation to make its mind whether there was any violation of public issue norms or not.
He said if it was found that there was any incriminating material to order a probe during the investigation, the parties would be given opportunity to present their case.
DLF, in its petition, sought quashing of SEBI’s earlier order, issued on 20th October, for investigation into the allegations of complainant Kimsuk Krishna Sinha in 2007 against it and Sudipti Estates.
The construction major said SEBI’s order was passed “erroneously and in blatant non-compliance with the principle of natural justice”.
“Respondent-1 (SEBI) passed the impugned order directing investigation into the affairs of the petitioner (DLF) relying not on complaints of respondent-2 (Mr Sinha) but on various extraneous materials which were not available to the petitioner acting contrary to the jurisdictional mandate set in the order on July 21, 2011,” DLF had said.
It further said the order to probe its affairs has been made in violation of “express directions” of the court.
Earlier, SEBI had ordered investigation into the issue of initial public offers (IPOs) after the high court, in July this year, asked it to look into the complaint of Mr Sinha against DLF Group and Sudipti Estates and pass an order in three months.
In the FIR lodged against Sudipti in Delhi, Mr Sinha had alleged that the company and its directors/agents had “lured and compelled” him to transfer certain plots of land and did not fulfil the promise of developing the land and providing him higher returns.
The market regulator had said, “The Securities and Exchange Board of India shall investigate into the allegations levelled by the complainant in respect of DLF and Sudipti Estates Pvt Limited.”
“The investigations would focus on violations, if any, of the provisions of the erstwhile SEBI (Disclosure and Investor Protection) Guidelines, 2000 read with relevant provisions of the Companies Act, 1956,” SEBI had further said.
Mr Sinha had alleged that Sudipti, DLF Home Developers and DLF Estate Developers were sister concerns, inextricably linked and were part of the DLF Group.
DLF, however, has maintained that Sudipti is a separate legal entity owned and controlled by different individuals.
The construction major in a Draft Red Herring Prospectus (DRHP) filed for a public issue in May 2006 had mentioned that Sudipti was its associate company.
However, the DRHP was withdrawn and thereafter, it filed a fresh prospectus in January 2007, wherein Sudipti was not mentioned as an associate.
Vikram Akula, who had a troubled association with the company, will continue with SKS as a consultant’ till March 2012 and ‘assist with the transition’. Meanwhile, the company has appointed PH Ravikumar as its interim non-executive chairman
Mumbai: Founder and executive chairman of the country’s only listed microfinance institution SKS Microfinance, Vikram Akula, on Wednesday resigned from the board in wake of the huge losses suffered by the Hyderabad-based firm, reports PTI.
Mr Akula, who had a troubled association with the company, will continue with SKS as a consultant’ till March 2012 and ‘assist with the transition’. The company did not give any reason for his resignation.
Terming the resignation of Mr Akula as ‘voluntary’, it said it has appointed PH Ravikumar as its interim non-executive chairman.
After his resignation Mr Akula said, “The current leadership is well-equipped to take SKS into the next phase of its evolution. I will, of course, remain committed to the sector, and will continue my involvement in the industry at a policy level. I will also be involved in a mobile banking initiative.”
Speaking to reporters after a board meeting, SKS chief financial officer Dilli Raj told reporters, “Ravikumar, who has been an independent director with us for the past five years and chair of the audit committee for the past four years, has been appointed as non-executive chairman for the interim.”
Mr Raj said no severance package has been given to Mr Akula.
“On the issue of compensation, I confirm there is no severance package. If there is a compensation that is not material in comparison with our annual operating expenditure.”
The company had signed certain non-compete and confidentiality agreements with Mr Akula, who founded the company in December 1997 and made history when his initial public offer (IPO) was overbought 14 times and was listed with 11% premium over issue price of Rs985 in July 2010.
“The company has signed certain agreements with Mr Akula relating to confidentiality, non-compete clauses etc,” Mr Raj said, without going into specifics.
Mr Raj also denied reports that there was pressure from the board on Mr Akula to hang up his boots.
Mr Akula now holds around 3% stake in the company, in which PE firm Catamaran, set up by Infosys co-founder NR Narayana Murthy, is a major investor.
“Vikram turned an idealistic vision into a business that today serves millions of rural women. I have witnessed first hand the amazing impact SKS has had in India. But a lot more needs to be done,” Vinod Khosla co-founder of Sun Microsystems and a significant shareholder in SKS said.
Mr Akula, who founded SKS in late 1997, led the organisation until 2004 and became its poster boy with the massive success of the IPO. Then he joined McKinsey & Co in Chicago, only to return to SKS in 2005 and convert it to a for-profit company.
SKS was the first microfinance firm to go public in South Asia. SKS shares had touched a lifetime high of Rs1,402.30 on 28 September 2010.
But soon the bumpy ride began and the scrip fell to Rs640 on 18th November after crisis hit the Rs20,000-crore sunshine industry in Andhra Pradesh, its largest market, following an ordinance that massively curbed the industry’s operations.
The AP ordinance followed a spate of suicides by farmers, allegedly due to coercive methods adopted by collection agents.
SKS had also witnessed some low moments following the ouster of CEO Suresh Gurmani in October last year. Mr Gurmani, who was at the helm of the microfinance lender at the time of its dazzling IPO, was replaced by MR Rao.
The hike in rates is intended to make such funds more attractive at a time when the rupee has depreciated sharply during last few months
Mumbai: The Reserve Bank of India (RBI) on Wednesday hiked interest rates on Non-Resident (External) rupee term deposits and Foreign Currency Non-Resident (Banks) deposits, a move expected to increase the flow of foreign exchange amid the weakening domestic currency, reports PTI.
“Interest rates on fresh Non-Resident (External) rupee (NRE) term deposits for 1-3 years maturity should not exceed the LIBOR/SWAP rates plus 275 basis points, as on the last working day of the previous month, for US dollar of corresponding maturities,” the RBI said in a notification.
The interest rates will also be applicable to deposits with the maturity period exceeding three years and to deposits renewed after their present maturity period.
The interest rate on NRE deposits was LIBOR/SWAP rates, plus 175 basis points since November 2008.
The LIBOR rate is the average interest rate that leading banks in London charge when lending to other banks. The SWAP rate is the exchange rate associated with the fixed portion of a currency swap.
The revised rate will come into force with immediate effect.
“Interest rate on FCNR (B) deposits of all maturities contracted effective from the close of business in India as on 23 November 2011, will be within the ceiling rate of LIBOR/ SWAP rates plus 125 basis points for the respective currency/ corresponding maturities,” RBI further said.
The interest rate on these deposits was earlier LIBOR/ SWAP rates plus 100 basis points.
The hike in rates is intended to make such funds more attractive at a time when the rupee has depreciated sharply during last few months.
Falling for the eighth day in a row, the Indian rupee on Wednesday closed at 52.35/36—its all-time closing low—against the US dollar amid continuing signs of capital outflows and steep fall in stock markets.