Both the army and political establishment in Pakistan have pulled the rug under each other's feet often, and nobody knows what really is happening in that country. In this case, India needs to take a firm stand, both politically and for trade relations
Prime Minister of Pakistan, Nawaz Sharif, on Wednesday, invited India to engage in a "comprehensive, sustained and results oriented" dialogue with Pakistan to resolve the long standing dispute on Kashmir. This was the main topic as he addressed the joint session of the Pakistan occupied Kashmir's assembly.
According to the press reports, he is further reported to have stated that the region will remain in the grip of "mistrust and tension" until such time the Kashmir dispute is not settled in accordance with the aspiration of the Kashmiri people.
Every year, on 5th February, Pakistan observes "Kashmir Solidarity Day" when procession and rallies are taken out and organised by various parties including the extremist groups. This year has been no exception, in as much as Jamaat-ud-Dawa (JuD) Chief, Hafiz Saeed, who is wanted in connection with the 26/11 Mumbai terrorist attacks, addressed rallies in Lahore. Such rallies were conducted in Islamabad and reportedly other cities too. It may be borne in mind that JuD is the front for the banned terror group Lashkar-e-Taiba (LeT).
Concluding his address, Nawaz Sharif expressed confidence that Indian leaders would realise the sensitivity of the issue, respond positively to his invitation, and give the right to self determination to the people of Kashmir.
Exactly a month ago, Pakistan Minister Khurram Dastgir Khan was in India to discuss trade issues and had claimed that the most favoured nation (MFN) status that India gave Pakistan in 1996 did "not give MARKET access". So, he said, that instead of calling it MFN, it should be appropriate to called "Non-Discriminatory Access". He wanted "trade and investments" to flow across the border; he claimed that the biggest non-tariff regime from India was the visa issue, which prevented people from travelling freely. Besides, there was no "banking" relationship to permit trade to grow!
Trade restrictions at Wagah border, containerising the cargo, scanning would facilitate the trade. It may be remembered that, not long ago, goods were seized from Pakistani trucks that contained hundreds of bags of contraband materials by the vigilant Indian customs, and arrested the truck drivers. Pakistan wanted both, the drivers and the contraband to be "returned" to them! Pakistan is yet to prove that it can be trusted for what it says.
Nawaz Sharif's appointment of Gen Musharraf as his Army Chief and the subsequent Kargil misadventure is too well known for elucidation. Only President Bill Clinton's intervention and Saudi support enabled Sharif to be exiled abroad. Both the army and political establishment in Pakistan have pulled the rug under each other's feet often, and nobody knows what really is happening in that country, though what happens there internally, is not our problem.
As far as India is concerned, the government needs to take a firm stand and should have a three-point agenda for discussions, and which are:
(a) Pakistan to dismantle and disband the terrorist outfits permanently; they should not be allowed to operate at least 100 miles from Line of Control
(b) Pakistan must stop minting fake Indian currency notes from its security press; forensic evidence clearly has established that the fake rupee notes have been made in Pakistan and are being smuggled into India through various channels
(c) Pakistan must reciprocate the MFN status to India immediately
Until such basic issues are resolved and a good one year period passes from the day this is put into practice, India will not commence any dialogue with Pakistan. Period. If Pakistan wants to nominate a third country or the UN Security Council or preferably International Monetary Fund or World Bank to verify the claim that India has made on the fake currency issue, India willingly will provide all the evidence to such party. In that event, Pakistan must agree to dismantle and destroy all the plates and manufacturing equipment that mints the fake currency.
India not only needs to take such a firm stand, but stick to it, no matter what.
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)
More than 70% of companies in the queue for Super Bowl XLVIII spots have been accused of false or deceptive marketing within the last five years by either regulators, competitors, consumers in class-action lawsuits, or the industry’s own self-regulatory board
Super Bowl commercials are certainly entertaining and advertisers have forked over millions to wow audiences so that consumers will not only remember whether the Seahawks or Broncos won, but also the brands that sponsored it all. But what viewers don’t know is that many of these companies have run into trouble for past advertisements that failed the truth meter. TINA.org reviewed the list of companies in the queue for Super Bowl XLVIII spots and found that more than 70 percent have been accused of false or deceptive marketing within the last five years by either regulators, competitors, consumers in class-action lawsuits, or the industry’s own self-regulatory board.
Here’s what TINA.org want consumers to know about the companies vying for your attention:
Bank of America
The nation’s second largest bank, which will feature do-gooder Bono and his band U2 introducing a new song in its Super Bowl ads, has faced a slew of lawsuits stemming from the 2008 financial crisis (aka The Great Recession), which we mention because, if not outright false advertising, it’s part of misleading consumers. In February 2012, a mortgage servicing subsidiary of BOA agreed to settle FTC charges that it violated an earlier settlement with the agency by illegally assessing more than $36 million worth of fees against struggling homeowners. The bank also agreed in Sept. 2012 to pay $2.43 billion to settle a class-action lawsuit in which shareholders alleged that the bank made false or misleading statements about its financial health as well as the financial health of Merrill Lynch, which it acquired in the midst of the 2008 financial meltdown. Also in 2012, NAD told the bank it must modify its 1-2-3 Cash Rewards credit card advertisements to disclose spending limits for its bonus rewards.
made deceptive claims about the health benefits of its children’s drink, BOOST Kid Essentials, in its advertisements. The company claimed the product, which came with a straw embedded with probiotics, could prevent upper respiratory tract infections in children and protect against colds and flu. To settle the FTC charges against Nestle HealthCare Nutrition Inc., the company agreed in 2010 to stop making the claims unless they were approved by the FDA. It also agreed to stop making the claim that the product could reduce absences unless it had clinical studies to back it up. More recently, Nestlé is facing class-action lawsuits alleging that it is misbranding its Dryer’s and Edy’s Fruit Bars as “all natural” when they actually contain artificial ingredients and misleadingly labeling its Eskimo Pies as “no sugar added” when they actually contain other sweeteners. Another class-action lawsuit similarly accused the company of misleadingly labeling its Juicy Juice products as “all natural” and “no sugar added.” Nestle will be promoting Butterfingers Peanut Butter Cups in its ads. Look for lots of sugar in that.
This company’s margarine marketing did not sit well with some consumers who filed a class-action lawsuit in 2009 asserting that the company falsely marketed the product as healthful despite the fact that the margarines had dangerous levels of artificial trans fat. The company settled the case in 2011 agreeing to remove partially hydrogenated vegetable oils from the margarines. Unilever’s Super Bowl commercial will introduce its new Axe Peace Line. Make love, not war and maybe use butter on your shared morning muffin?
Coca-Cola vs. POM Wonderful & POM Wonderful v. FTC
Stephen Colbert will be featured in Wonderful Pistachios’ Super Bowl commercial this year. But the nut purveyor’s sister company, POM Wonderful, is embattled in false-advertising issues that are proving a tough nut to crack. This month, the U.S. Supreme Court agreed to hear a case POM brought against Coke in 2008 alleging that Coke’s Minute Maid brand of Pomegranate Blueberry juice has very little pomegranate juice in it. The case pits the Food, Drug and Cosmetic Act, which regulates labeling, against the Lanham Act, which among other things, regulates false advertising. A spokesperson for POM reportedly told Food Navigator that the company was hopeful the Supreme Court would rule in the company’s favor and “send a clear message to all food companies that they cannot engage in false advertising through their product labels.”
But wait, POM itself, invoking the First Amendment, is appealing a 2013 FTC ruling that it deceptively advertised the products and did not have adequate support for claims that the products could treat, prevent, or reduce the risk of heart disease, prostate cancer, and erectile dysfunction, and that they were clinically proven to work.
Call it the Super Bowl of pomegranate wars.
Nobody likes to do their taxes, but a group of consumers who filed a class-action lawsuit against TurboTax were particularly irked by their experience with the company. The lawsuit charged that it failed to properly disclose fees and steered many customers who qualified for a free federal and state filing away from taking advantage of that opportunity. Intuit agreed in 2013 to pay $6.5 million to settle the case and refund customers. However, a class-action member has objected to the settlement and is appealing.
The soda giant’s Naked Juice brand was sued for allegedly falsely advertising its beverages as “all natural.” Consumers charged that the juices and smoothies have GMOs. The company agreed in August 2013 to a $9 million settlement and to refund customers. Hopefully Bruno Mars, who will star in Pepsi’s Halftime show, will be a natural hit.
General Mills Cheerios
Cheerios has been in the news of late both for its Super Bowl ad this year, which will feature an adorable child of a mixed-race couple who is driving a hard bargain for a puppy, and for announcing it will drop GMOs from Cheerios. The GMO action was spurred on by pressure from consumer activists and came after the company spent millions to defeat GMO labeling bills in California and Washington. So with all this good cheer for Cheerios, consumers might also want to know that the company received a warning from the FDA in 2009 for making unauthorized health claims for Cheerios Toasted Whole Grain Oat Cereal. The FDA warned that the ads, which said eating the cereal could help lower cholesterol, were making drug treatment claims associated with high cholesterol diseases.
Dannon & Chobani
In perhaps one of the steamiest commercials of the Super Bowl, a beautiful woman licks Oikos yogurt (Dannon’s Greek yogurt line) off John Stamos’ lips. But a few years ago, the company had the FTC breathing down its neck for exaggerating the health benefits of its Activia yogurt and DanActive dairy drink, which contain probiotics. Dannon settled the case in 2010, agreeing to drop claims that Activia would relieve temporary irregularity and to stop making claims that its yogurts and probiotic food and drinks reduce the likelihood of cold or flu.
Meanwhile, competitor Chobani is also being asked to stop making claims. Chobani’s Super Bowl ad will focus on its natural ingredients, but just this week a U.K. advertising review board said the brand could no longer label its yogurts sold there as Greek because the yogurts are made in the USA.
Timely disclosure of shareholding is an important aspect of takeover regulation and non-compliance. However, penalty levied by SEBI on HUL promoters is a bit harsh given that there was neither reportable change in promoter shareholding during the defaulting years nor the duration of such delay enormous
Market regulator Securities and Exchange Board of India (SEBI), on 31 January 2014, imposed a penalty of Rs50 lakh on seven promoter entities (Promoters) of Hindustan Unilever Ltd (HUL). The penalty was imposed for delay in filing of disclosure requirements under Regulation 8 (1) and 8 (2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (SAST Regulations, 1997) and Regulation 30 (1) read with Regulation 30 (2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (SAST Regulations, 2011).
Facts of the case:
SEBI, on 29 November, 2013, issued a show cause notice (SCN) to the Promoters of HUL for violations of the provisions of:
The SCN was issued on the basis of an open Letter of Offer made by Unilever PLC along with Unilever NV for acquisition of 22.5% shares of HUL.
Regulations 8 (1) of the SAST Regulations, 1997 required persons holding 15% shareholding in the company to make annual disclosure to the company within 21 days of the year ending 31st March of every year. Regulation 8 (2) of the SAST Regulations, 1997 and Regulation 30 (1) read with 30 (2) of the SAST Regulations, 2011 required promoters to make annual disclosure of their shareholding and voting rights to the company within 21 days and 7 days respectively.
Upon examination it was found that the promoters had delayed in filing of annual shareholding disclosures under SAST Regulations, 1997 and SAST Regulations, 2011. The promoters of HUL also acknowledged such delays and submitted that the non-compliance has been inadvertent in nature without any intention to conceal any information or gain any advantage.
They also contended that there was there was no change in promoter holding for the said years and therefore there was no unfair benefit attained by the promoters nor was any harm caused to the investors or public at large due to the delayed disclosure. It was observed that the delay was not prolonged and ranged between 4 to 31 days.
SEBI placed reliance to the judgment of the Securities Appellate Tribunal in the matter of Milan Mahendra Securities Pvt Ltd Vs SEBI and ruled out the view that violation was technical in nature and should be dealt with leniently.
For the purpose of levying monetary penalty, SEBI also referred to Supreme Court’s decision in the matter of SEBI Vs Shri Ram Mutual Fund, wherein it was held that once a violation of statutory requirements has been made, imposition of penalty becomes essential irrespective of the intension of the parties.
Referring to the Sections 15A (b) and 15J, SEBI held a strict view and contended that the disclosure requirement were ‘an important component of the legal regime governing substantial acquisition of shares and takeovers’ and ‘in the absence of these timely disclosures, the investors will be deprived of important information at the relevant point of time.’ It also noted that the non-compliance was not a one-time incident and was repetitive in nature.
Given the above, an important question that may arise here is whether the penalty of Rs50 lakhs was justified?
We hold an opinion that the penalty levied on the Promoters of HUL was a bit harsh given that there was no reportable change in promoter shareholding during the defaulting years and neither was the duration of such delay enormous. We believe that the Promoters could not have gained anything substantial from such delay, nor can the loss attributable to the investors be huge enough to prompt such high penalising amount.
Though we strongly affirm that timely disclosure of shareholding is an important aspect of takeover regulation and non-compliance to it should be dealt with appropriately, we also believe that SEBI should consider the material nature of such delay.
The Supreme Court in Ranjit Thakur V Union of India AIR 1987 SC 2386 observed that "Sentence has to suit the offence and the offender. It should not be vindictive or unduly harsh. It should not be so disproportionate to the offence as to shock the conscience and amount in itself to conclusive evidence of bias."
(Shampita Das works as an Associate in Corporate Law Group at Vinod Kothari & Company)