IL&FS PE bullish on real estate and infrastructure

IL&FS Private Equity plans to take its current infrastructure investment of $660 million to close to $1 billion by the end of this financial year. The fund company is looking for a number of deals both in the infrastructure and real-estate space

IL&FS Private Equity plans to take investments in the infrastructure sector from the current $660 million to around $1 billion by the end of this financial year. On the real-estate front, the company already has investments of around $1.6 billion. The fund company is also looking at a number of deals both in the real estate and infrastructure segments.

"We will invest close to a billion dollars in infrastructure as well by about the end of this financial year," said Shahzaad Dalal, vice chairman, IL&FS Investments Managers Ltd.

In infrastructure, the company expects to complete full deployment of this $660 million by the end of this year. The infrastructure fund is spread across Asia and will be looking at investments in China and Malaysia. At present, partial deployment of the fund has already taken place.

In real estate, the company currently has raised funds worth $1.6 billion, of which $1.2 billion has been spent on more than 30 deals. The company is now actively looking at around 10 more deals. The remaining deployment of $0.4 billion is likely to be completed by the year end. These are expected to be mainly in the residential space, with a couple of commercial deals.

Mr Dalal is highly bullish on the opportunities available in both the infrastructure and real-estate segments. "The outlook is fairly bullish on both real estate and infrastructure. We believe there are a lot of opportunities. There may not be many good projects, but because of our reach and reputation, we do see some really good projects," he said.

IL&FS Private Equity has exposure across various segments in the infrastructure sector-ports, roads, power, logistics and others. Mr Dalal is positive on the power sector, despite the huge investments that have already happened in the energy space. "The power sector still looks good. I don't think we will catch up with our demand requirements for the next four or five years," said Mr Dalal.

The company's most recent deal in the real-estate segment was through IL&FS Milestone Fund in HCC's real-estate project '247 Park' for Rs575 crore for a 74% stake.

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Corruption, fraud & manipulation—all thrown in: Can senior corporate executives stoop any lower?

The MD of Globus Corp, in alliance with a lawyer, has not only forged signatures of another person, but also continued share manipulation in a company promoted by himself, using a director’s name

It doesn't get more bizarre than this. A company's managing director (MD) has actually forged the signature of a director of other company that he himself had promoted. Further, he 'authorised' an advocate to represent himself and the director of the company for a Securities and Exchange Board of India (SEBI) hearing. The MD further went on to manipulate the shares of the company that he had promoted, using the director's name as a front.  

Mahendra C Shah is the MD of Globus Corp Ltd (earlier known as Karuna Cables Ltd). He promoted a company called Ceetee Trading and Leasing Pvt Ltd. Mahendra Shah forged the signature of Ceetee Trading's director Sanjay Shah.

After the above-mentioned hearing, SEBI passed an order against Mahendra Shah and Sanjay Shah. But here comes the twist in the tale. It was discovered later that Sanjay Shah had neither signed any statement nor authorised anybody to appear before SEBI on his behalf.

On the basis of the preliminary findings, pending investigation and passing of the final order, SEBI had issued various directions barring Mahendra Shah, Ceetee Trading and Leasing Pvt Ltd and Sanjay B Shah from the securities market. On 17 March 2009, all the parties appeared before SEBI for personal hearing, represented by advocate Prakash K Shah who made submissions. Following the hearing, on 15 June 2009, SEBI restrained Mahendra Shah, Ceetee Trading and Sanjay Shah from the securities market for six months.

However, on 5 November 2009, Sanjay Shah filed an application under the Right to   Information (RTI) Act seeking certain documents related with the case. SEBI, citing that the information sought by Sanjay Shah related to third parties and was of commercial confidence and that the disclosure of the same would harm the competitive position of a third party, rejected Sanjay Shah's application. He then filed an appeal before the Appellate Authority in SEBI under the RTI Act because he was one of the parties against whom SEBI had passed the order. 

What was shocking is that Sanjay Shah, in his appeal, said that he had never appeared before any authority, tribunal, never signed any statement or authorised any person to appear before SEBI on his behalf and never received any letter from SEBI in this regard. After checking the documents handed over by SEBI, Sanjay Shah told the market regulator in a letter that he is not known to advocate Prakash Shah and had not signed any authority letter. Sanjay Shah also confirmed that the signatures in the authority letters submitted to SEBI were not his.

SEBI then sought an opinion from Hyderabad-based Government Examiner of Questioned Documents from the Directorate of Forensic Science. After checking all the documents, the Examiner submitted a report, which prima facie established that Mahendra Shah had forged the signatures of Sanjay Shah on the authority letters authorising advocate Prakash Shah to appear before SEBI on 17 March 2009 on behalf of Sanjay Shah.

In an order dated 15 June 2009, SEBI said it found that Mahendra Shah was responsible for making premature and misleading announcements as the MD of the company and Sanjay Shah had acted hand-in-glove with him and had transferred the shares of the company held by Ceetee Trading to a group of connected clients, who used those shares for manipulation in the market.

However, in view of the prima facie finding that Mahendra Shah had forged the signatures of Sanjay Shah, SEBI said Mahendra Shah himself was carrying out the manipulative activities of Ceetee Trading under the guise of the name of Sanjay Shah. Mahendra Shah and his wife Hasu Shah were instrumental in transferring the shares of the company held by Ceetee Trading to various persons and entities which were in turn utilised for the manipulation in the shares of the company during the relevant period, SEBI said.

The SEBI order said that by representing Sanjay Shah on the basis of a forged authority letter, Prakash Shah together with Mahendra Shah, had not only deprived Sanjay Shah of the reasonable opportunity available under law for a just and a fair representation, but have also subverted the quasi-judicial process of SEBI which also amounts to the contempt of the same.

SEBI barred Mahendra Shah and his wife Hasu Shah from the securities market till further notice. It further prohibited Mahendra Shah from holding any managerial position, including directorship or any other key position in any listed company in India, an intermediary or any market participant in any capacity.

As far as the punishment for advocate Prakash Shah was concerned, SEBI said that it would forward a copy of its order to the Bar Council of Maharashtra and Goa with a copy to the Bar Council of India, for appropriate action against him as may be deemed fit. This is for the first time that the market regulator has asked for an action against an advocate to the Bar Council.

Advocate Prakash Shah is secretary of Ghatkopar-based Investor Education and Welfare Association, an investor association recognised by SEBI as well as a compliance officer of EquiSearch Stock Broking Pvt Ltd. SEBI, however, did not announce any punishment for Prakash Shah. The market regulator has preferred to send copies of the order to both the investor association and the brokerage.
 

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COMMENTS

R Balakrishnan

6 years ago

This is SOP for most promoters. I can tell stories about the depths plumbed by captains of industry who get awards for corporate governance, that will make the above guy sound like a hero. In corporate life, trust no one and you will not get disappointed.

AMFI chief admits industry is in for a rough ride

HN Sinor, chief executive of mutual fund body AMFI, feels that the industry will go through a rough patch for at least six more months

Now that the finance ministry has granted the Insurance Regulatory and Development Authority (IRDA) regulatory supervision over Unit-linked Insurance Plans (ULIPs), participants in the mutual fund industry are a worried lot. HN Sinor, chief executive of the Association of Mutual Funds in India, in a candid interview with Moneylife, admitted the consequences of this decision on the mutual fund industry. "It is very clear now that it is a law, as an ordinance has been passed. So there is no question of dispute on this. I believe that we may go through a rough patch for the next six months, because distributors would prefer to distribute insurance products, wherein the commission structure is quite different from the mutual fund products. So naturally, distributors will ask why they should sell something where they are not earning anything."

Capital market regulator Securities and Exchange Board of India (SEBI) had abolished the entry load on mutual funds in August last year and attempted to regulate ULIPs earlier this year. However, the finance and law ministries passed on ordinance that has stopped SEBI in its tracks and granted IRDA powers to continue to regulate ULIPs.

Mr Sinor expressed the hope that, in the meantime, the insurance regulator would further tighten the commission structure to bring in an alignment with the system.

Already, IRDA has made several attempts at revamping the product structure by introducing cap on surrender charges and mandating a certain amount of life cover on all ULIP products.

Speaking about the entry load ban on the occasion of a recent industry summit, Mr Sinor had said, "Commission payouts are an integral part of this industry. A fresh review is needed in this regard. Such attempts (at regulatory change) could disturb the industry." Responding to a question whether SEBI will be open to rethinking on the matter, he said, "That was a proposal which we made yesterday.

But if I heard Mr Bhave correctly, it would be difficult for them to review this. Anyway, our job is to keep on trying and their job is to see what is best for the investors."

Commenting on the proposals in the revised paper of the Direct Tax Code that suggests introducing long-term capital gains tax on equity-linked instruments, Mr Sinor pointed out that AMFI was reviewing the matter and that it would make suggestions to the Central Board of Direct Taxes (CBDT). "The major issue is, if certain long-term investments are in EEE (Exempt-Exempt-Exempt) category, then benefits should also flow to small investors in mutual funds. If it were stated that there would be no exemption hereafter for anything, then I can understand that it cuts across everybody. But if it is available for one financial product and not for another, then it is not proper."

(Look out for a detailed interview with the AMFI chief on Monday, 28th June)

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COMMENTS

ac

6 years ago

why is it dificult for SEBI to review its decision?

Mr Bhave's work is to Save and grow MF industry and not to save and grow his own ego.

It seems that Mr Bhave is saving and growing his own ego at the cost of MF industry.

Ranjan D Gupta

6 years ago

SEBI had taken an abrupt decision to cut entry load without giving much serious thought to the consequences.Apparently it gives a sense of comfort to the investors that there is no entry load on their investment. But because of apathy of the distributors Mutual Fund Industry is suffering from lack of fund,this in turn restrict them to invest more money when the market comes down to a point when further investment is required to boost performance of the scheme and such a condition draging down the scheme - performances.Therefore an inference can be drawn that ultimately investors are not gaining anything from "No entry load" system rather they are losing more due to deterioration in fund performances.

jignesh n vyas

6 years ago

If you improvr invesment in mf and also business in rulear india you first start up-fron commission to advisor. sebi all ready fail and damage of mf. you have re thinking of antry load ben.

T D Joshi

6 years ago

Start paying up-front commissions to Mutual Fund Agents / Didtributors.This shall improve sales of MFs.

Dillip kumar swain

6 years ago

Actually sebi failed to provide protection to investors. ulip is never transparent like mutual funds. finance minister has no experience in buying ulip.he will also not qualify to buy.irda play the game by enhancing 10 times coverage of annual premium.mortality charges will eat the customers premium on rising trend every year.it is difficult to pay minimum return to policy holders by LI companies.So policyholders be cautious to buy ULIPS FROM L.I. COMPANIES.BUY TERM PLAN OR M.F.'S ULIP.

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