India Inc hails government's decision on insurance, pension funds

Corporates feel that the forward looking measures would infuse the much-needed capital in the insurance and pension sectors


New Delhi: India Inc has termed government's second wave of reforms, including decisions to open the pension sector to foreign investment and raising the foreign direct investment (FDI) cap in insurance to 49%, as 'path-breaking and landmark', reports PTI.


"The new instalment of big bang reforms is a clear message that the government is determined to strengthen the economy," FICCI President RV Kanoria said.


He said that these forward looking measures would infuse the much-needed capital in the insurance and pension sectors.


Kanoria also urged the government to make investment guidelines more flexible so that such funds can be used to support infrastructure development.


"Today, insurance and pension funds are constrained to participate in infrastructure projects as these are required to invest a substantial portion of their funds in government securities and also not allowed to invest in projects rated below a certain level. These limitations need to somewhat relaxed," he added.


Sharing similar views, CII said the industry was anxiously waiting for the clearance of the Companies Bill for its introduction in Parliament.


"The new company law is expected to be more streamlined and facilitative than the existing 55-year-old Companies Act, it seeks to replace," CII Director General Chandrajit Banerjee said.


Banerjee said on enactment, the Companies Bill will be a boon for business, corporates, investors and stakeholders at large.


"The new law would strengthen the concept of shareholders democracy and offer protection of the rights of minority stakeholders," he said.


Poor showing by the manufacturing sector pulled down the GDP growth to 5.5% in the first quarter, the decade's worst Q1 performance.


Rating agency CARE gets SEBI go-ahead for IPO

The shareholders like IDBI Bank, Canara Bank, SBI, IL&FS, Federal Bank, IL&FS Trust would reduce their stake in the IPO of CARE

Mumbai: Domestic rating agency Credit Analysis & Research Ltd (CARE) has got a go-ahead from the market regulator Securities and Exchange Board of India (SEBI) for its proposed initial public offering (IPO), reports PTI.
CARE had filed its draft red herring prospectus (DRHP) with SEBI about a year ago for the proposed public offer, which would comprise sale of about 72 lakh shares by its shareholders.
While the exact size of the offer is yet to be determined, the shares to be sold would constitute 25.22% of the company's post-offer equity capital.
SEBI issued its final observations on the draft offer documents on 24th September, as per the latest update by the market regulator. SEBI's observations are necessary for the companies to launch any public offer.
The main promoters of CARE are two domestic banks, IDBI Bank and Canara Bank, and the company competes with other rating agencies like Crisil and ICRA, which are already listed on the stock exchanges.
The proposed offer is being made by the selling shareholders and there will be no fresh issue of shares by CARE. As a result of which all the proceeds would go to the selling shareholders and not to the company.
The shareholders selling their shares in the offer include IDBI Bank, Canara Bank, SBI, IL&FS, Federal Bank, IL&FS Trust (for shares held on behalf of Milestone Fund), Milestone Trusteeship (for shares held on behalf of Milestone Army Trust), ING Vysya and Tata Investment.
Along with CARE, SEBI has given its go-ahead to a total of 10 companies between August and September for their public offers.
These firms include Goodwill Hospital, which had withdrawn its IPO in January 2012 due to poor investor response and again filed the draft papers with SEBI in May this year to raise Rs 98 crore.
Other companies that have got SEBI's green signal are Aurangabad Electricals Ltd, Repco?Home Finance Ltd, Tara Jewels Ltd, Usher Eco Power Ltd, Harisons?Steel Ltd, Supreme Alloys Ltd, IFCI Factors Ltd and TV vision Ltd.
Beside, companies like Tunip Agro Ltd, NKG Infrastructure and Mukesh Udyog have withdrawn their IPO plans, while SEBI has returned the documents of Madhya Bharat Agro Products Ltd.
Most of the companies plan to utilise their proposed IPO proceeds for capacity expansion as well as working capital requirements.


SAT dismisses appeal of financiers against SEBI's order

SEBI had slapped a fine of Rs14 crore on Dushyant N Dalal and Puloma Dushyant Dalal, the two chartered accountants for alleged unlawful gains made during the infamous IPO scam of 2003-05

Mumbai: The Securities Appellate Tribunal (SAT) has dismissed an appeal by two financiers--Dushyant N Dalal and Puloma Dushyant Dalal--against orders issued by Securities and Exchange Board of India (SEBI)that had imposed a penalty of Rs14 crore on them for allegedly making gains in the initial public offering (IPO) scam, reports PTI.


"The appeal (of Dushyant N Dalal and Puloma Dushyant Dalal) stands disposed of (against SEBI)...," SAT said.


SEBI had slapped a fine of Rs14 crore on the two chartered accountants in June last year for alleged unlawful gains made during the infamous IPO scam of 2003-05.


The two had been accused of making unlawful gains of over Rs 4.94 crore by cornering shares of various companies meant for retail individual investors and the penalty is three times of the amount.


Hearing an appeal against a SEBI order, SAT directed market regulator to pass orders expeditiously since the case relates to an old matter.


Besides, Tribunal asked the two individuals to fully co-operate with SEBI and "avail of the earliest opportunities for speedy finalisation of the adjudication proceedings."


The Dalals had been charged with being financiers to two key operators -- Sugandh Estates and Investments Pvt Ltd and Purshottam Budhwani.


The key operators had allegedly opened large number of demat accounts in the name of non-existent persons or name lenders and acquired shares of various companies by making applications in fictitious names.


The key operators subsequently transferred these shares through off-market deals to ultimate beneficiaries who had acted as financiers.


The Dalals were charged with being parties to such unlawful act of cornering shares and acting in connivance with others to make unlawful gains at the cost of other individual investors.


IPOs of major firms like IL&FS, IDFC, FSC Software Solutions, Gateway Distriparks, Provogue, MSP Steel, Nectar Lifesciences, Shoppers' Stop and Suzlon were alleged to be targeted by the two key operators the Dalals had allegedly connived with.


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