Citizens' Issues
ISRO enters big league with MK-III rocket launch
With the successful launch and completed test of the re-entry module on-board the MK-III rocket, ISRO has taken a big step towards manned missions
The Indian Space Research Organisation (ISRO) test-launched its heaviest launch vehicle, code-named the GSLV Mk-III X/Care, in the morning today. The purpose of the launch was to test the ability of the vehicle to carry heavy payloads and to test the ISRO designed crew re-entry capsule.
On both counts, the test was a success today and it propelled ISRO into an elite league of space agencies capable of sending heavy payloads into space. This means that from now on, India can attract business for launching much heavier satellites than before, and is also on track to be able to send India's first manned mission planned for the early 2020's.
In technical terms, an ISRO statement said, “Also known as LVM3-X/CARE, this suborbital experimental mission was intended to test the vehicle performance during the critical atmospheric phase of its flight and thus carried a passive (non-functional) cryogenic upper stage.”
ISRO said, the mission began with the launch of GSLV Mk-III at 9:30 am IST from the Second Launch Pad, as scheduled, and about five and a half minutes later, carried its payload - the 3,775 kg Crew Module Atmospheric Re-entry Experiment (CARE) - to the intended height of 126 km. Following this, CARE separated from the upper stage of GSLV Mk-III and re-entered the atmosphere and safely landed over the Bay of Bengal, with the help of its parachutes, about 20 minutes 43 seconds after lift-off. The total budget for the mission was Rs155 crore.
"This was a very significant day in the history of Indian space programme for the development of the advanced launch vehicle that could carry a 4-tonne class of communication satellite into orbit,” ISRO Chairman, K Radhakrishnan said.


Yet another committee set up to ensure implementation of Sec 4 of RTI Act
DoPT has again appointed a two-member committee to look into compliance of the most important transparency provision, which is the Section 4, of the RTI Act
It looks like transparency has become a pain in the neck for most public authorities. Section 4 of the Right to Information (RTI) Act, which makes suo motu disclosure mandatory and which is the most powerful section of this transparency law, is being dodged by most government departments despite innumerable circulars, orders and recommendations.
The latest attempt to get government babus to conform to the transparency required by RTI, is the creation of a two member committee for developing a monitoring mechanism to ensure that Section 4 is being implemented to the fullest. This is probably the outcome of the recommendation of the government appointed task force comprising several experts and NGOs, to help the Central Information Commission come up with a way forward.
AN Tiwari, former Chief Information Commissioner and professor MM Ansari, former Information Commissioner, are the two members on the task force, who have been appointed last month for a three month period. The task force was appointed, “for developing detailed guidelines and methodology for monitoring the implementation of Section 4 of the RTI Act, including conducting audit of selected Ministries and Public Authorities, etc.’’
As per the office order issued by the Central Information Commission (CIC) on 26 November 2014, the two member committee is expected to develop basic parameters of disclosure and audit, as per Section 4 of the RTI Act. It is to prepare guidelines for test-checking third party audits in terms of compliance and adequacy of the disclosures. It will look to develop and suggest mechanisms for improving the content and quality of the disclosures, make recommendations for a long term framework for methodology for conducting such audits, identify critical areas which require special focus to give impetus to Section 4 disclosure, conducting sample test audit for few Public Authorities and suggesting a mechanism for identifying agencies for carrying out audit.
It may be noted that the Department of Personnel and Training (DoPT) had sent official memorandums to all public authorities on 15th April, 2013; 10th December, 2013 and a reminder again on 4th September, 2014, reminding them to comply with the guidelines on suo motu disclosures under Section 4 of the RTI Act and send an Action Taken Report on the compliance. It had stated in its letters that, “each Ministry and Public Authority shall ensure that the guidelines for suo motu disclosure under RTI are fully operationalised within a period of 6 months from the date of their issuance i.e. 15.04.2013. It was also mentioned that the Action Taken Report on the compliance of guidelines should be sent, alongwith the URL link, to the DoPT and the Central lnformation Commission soon after the expiry of the initial period of the 6 months. It has been noticed that most of the Ministries/Departments/Public Authorities have not sent the compliance report or Action Taken Report to this Department and Central lnformation Commission.’’
The same letter also said, “each Ministry/Public Authority should get its proactive disclosure package audited by a third party every year and such an audit should be communicated to the CIC through publication on their own website.”
It may be recalled that The DoPT, which had set up a task force in 2011 for comprehensive implementation of pro-active disclosure under Right to Information (RTI), had issued detailed guidelines through an official memorandum of 15 April 2013, to public authorities for pro-active disclosure of information under Section 4 of the RTI Act.
The ultimate reason for setting up of the Task Force was that, “the quality and quantity of proactive disclosure is not up to a desired level. It was felt that the weak implementation of Section 4 of the RTI Act is partly due to the fact that certain provisions of the Section are not fully detailed and in case of certain other provisions there is a need for laying down detailed guidelines… there is also a need to set up a compliance mechanism.’’
In one of its recommendations, the task force had stated that, “the DoPT (should) provide all information Commission with infrastructural support, to be able to undertake audits of the performance of public authorities vis-à-vis their proactive disclosure obligations under the RTI Act. In the absence of such a mechanism, state governments are unlikely to establish effective monitoring mechanism on their own.”
Nonetheless, it is indeed curious that the rules requiring the uploading of all functioning, proposals, decisions and grants by public authorities on the website, should create so much fuss and resistance and waste of public funds. Such committees are set up, for ensuring implementation of elementary information. What is complicated, of course, is the obvious – that skeletons will tumble out of the cupboard if transparency is 100%. Which public authority would want that?
(Vinita Deshmukh is consulting editor of Moneylife, an RTI activist and convener of the Pune Metro Jagruti Abhiyaan. She is the recipient of prestigious awards like the Statesman Award for Rural Reporting which she won twice in 1998 and 2005 and the Chameli Devi Jain award for outstanding media person for her investigation series on Dow Chemicals. She co-authored the book “To The Last Bullet - The Inspiring Story of A Braveheart - Ashok Kamte” with Vinita Kamte and is the author of “The Mighty Fall”.)



Praveen Sakhuja

2 years ago

When government is bent upon forming committees after committees to look into the lapses and suggest further more lapses to be committed then common man is left no where to get the information. Governments failure is visible in not getting its orders implemented since 2013. It is a clear message that Government is giving free hand to Public Authorities to misuse their vested powers, flout the RTI norms and oblige higher ups for their interests.

Has SEBI finally woken up to stock manipulation in shell companies?

SEBI, says a media report, is pursuing schemes to turn black money into white, something that Moneylife has been persistently pointing out for five years at least


Market regulator Securities and Exchange Board of India (SEBI) is reportedly probing several small companies listed on stock exchanges for their role in enabling conversion of unaccounted cash into legitimate money. Moneylife has been writing for years about precisely such rampant manipulation in such small companies to convert black money into white but SEBI has not bothered to investigate these cases, even as it has constantly tinkered with rules regarding market manipulation and claimed dubious success to controlling such activities. Now, says a media report, after receiving a 'tip-off' from the Income Tax (I-T) department, SEBI seems to have woken up from deep slumber.


According to a report from Economic Times, SEBI received a tip-off from the I-T department that several entities were using the preferential allotment route for claiming long-term capital gains, which on stocks and equity mutual funds are not taxed if held for more than one year.


"Companies sell shares through a broker or make a preferential allotment to the tax evader. The transaction is executed by paying cash. After one-year lock-in period, preferential shares are converted and broker buys back the shares from the client, clocking legitimate long-term capital gains. Typically, the broker sells shares of these paper companies at a low price. He takes cash from the client and routes it through a number of accounts. The share price of the company is boosted through circular trading.


Later, the broker buys the shares back from his client at a higher price. Essentially, the broker has routed the client's own money back to him. Now, the client can show this as legitimate long-term capital gains in his income tax return — a gain which is tax free," the report says.


Moneylife has been writing on the rampant stock manipulation in small, listed companies that are nothing but schemes to convert black money into legitimate white money because capital gains from long-term returns from stocks is tax-free. Read: Stock Manipulation. However there has hardly been any action by either SEBI or stock exchanges like BSE and National Stock Exchange (NSE), who are the first line regulators. The menace is so rampant that Moneylife routinely comes across companies, mostly with poor fundamentals and a track-record of transgressions, whose share prices are brazenly manipulated, making a mockery of SEBI’s surveillance system. We are easily able write at least one such case every issue. Do check out the Unquoted section of the magazine and website. You will be alarmed and shocked to see the ease with which price manipulation goes on in the stock markets.


For example, Exdon Trading Company Ltd risen 6,587%, or 67 times, to hit Rs296.25 on 28 November 2014 from Rs4.43 on 3 October 2013. Similarly, over a one-year period, the share price of Maa Jagdambe Tradelinks (MJT) had gone up nearly 5,799% or 60 times to Rs99.10 from just Rs1.68! This company was even suspended in the past for not complying with the listing agreement. However, this did not result in any disciplinary action against the company by either the stock exchanges or the market regulator.


Despite revenues of just Rs78 lakh over four quarters, Pearl Electronics Ltd (PEL) stock was up 7,579%, or 76 times, to Rs43 as on 4 September 2014, from Rs0.56 as on 19 March 2013. While the stocks of PEL and Pearl Agriculture Ltd from the same group are being brazenly manipulated, SEBI and Exchanges could not care less.


Moneylife even did a cover story on this, which can be accessed here: Stock Manipulation.


Earlier in August, Finance Minister Arun Jaitley had a meeting with SEBI Board. Later when asked about the surveillance functions of SEBI, Sinha told reporters that the market regulator also presented before the board a report on all such actions taken by it during the last quarter.


This is the same SEBI, which last year in June, declined to provide information on its real time market surveillance system. Moneylife had filed an application under the Right to Information (RTI) Act on 9 April 2013, requesting information on SEBI’s surveillance statistics and had asked SEBI to disclose the number of suspicious cases its sophisticated Integrated Market Surveillance System (IMSS) and Data Warehousing Business Intelligence System (DWBIS) had detected till 31 March 2013.


In its reply, the SEBI said, “It is informed that the information sought by you is not available with the concerned department of SEBI.” This was impossible, because if the surveillance department did not have such information, then who did? Who was really in charge of monitoring the data captured by the surveillance department?


It must be noted here, that SEBI had spent a whopping Rs50 crore in installing the so-called “state-of-the-art” surveillance systems: IMSS and the more modern DWBIS.


India is now at a stage where financial institutions are committing criminal offences and assisting their clients in the process of money laundering on a regular basis. The regulators and law enforcement agencies do not appear to have the will or resources to prosecute those involved criminally. Many financial institutions either turn a blind eye or positively collude with clients to place suspect finance in offshore jurisdictions through shell companies, with nominee directors making it very difficult to discover the true beneficial owner.


Earlier, EAS Sarma, former secretary to the Government of India (GoI) had sent a suggestion to ministry of corporate affairs (MCA) on the increasing menace of shell companies with a suggestion to tighten the procedure of registration of companies to pre-empt unethical persons indulging in money laundering. A copy of this letter was marked to the SEBI chairman.


What is more shocking is the use of shell companies to turn black money into white is not limited to businessmen alone. Several politicians are found using the same route, although for companies that are not usually listed.


As Moneylife has reported earlier, it was common in Hyderabad for politicians to sell their stakes in companies controlled by them to big businessmen at a huge premium. In return, they got access to natural resources (like iron ore) or land for infrastructure projects. The CBI has also quizzed N Srinivasan of India Cements, who was also allegedly using the quid pro quo model, for funding Jaganmohan Reddy, in return for limestone allocations. A similar arrangement with the Gali brothers of Bellary, who were ministers in the Karnataka government, had been scrapped few months back.


These are not the only examples. Former Jharkhand Chief Minister, Madhu Koda, who ripped off Rs4,000 crore for the State’s rich mineral resources is also understood to have used a string of companies to transfer wealth abroad.


Investigators have also found a link between him and erstwhile Maharashtra Congress minister Kripashankar Singh, who began life as a vegetable vendor and turned enormously wealthy as a politician.


Interestingly, many of the companies that have funded politicians in return for massive land, infrastructure contracts or other goodies are listed entities. The dubious investment companies have all been floated because the Ministry of Corporate Affairs (MCA) pays no attention to what is happening under its watch.


Thanks to lax laws on the subject of deeper enquiry on who or what is really behind a company, the business of khoka and shell companies have brought India to a point where we already do not know who or what is behind the major airlines, airports, telecom provides, seaports, hotels, highway toll collectors, real estate companies and similar. Likewise, we do not know who or what is behind the mysterious army of consultants and analysts providing multiple services at great costs to our country and those who would govern us. We do know, however, that large amounts of money flow in and out in this way, changing colour and provenance at every step, while the regulators either turn a blind eye or did not want to come out of their deep sleep.


You may also want to read...


The premium game: How politicians generate white money through shell companies


Mr Sinha, did SEBI make the FM aware of these cases of brazen price rigging?


Khoka companies”—empty corporates make no noise...



olga tellis

2 years ago

congrats your effort has finally paid off. but what is disturbing is the sheer incompetence of the regulator sebi which claims to have a state of the art surveillance system. everyone except sebi and nse and bse are not aware of what is going on. if it is so then they should be penalised for their inefficiency. either way their failure to curb manipulation in the markets is scandalous and raises questions about their credibility and competence.

Radhakrishnan Subbiah

2 years ago

Wonderful country.... with systems to help those bent on looting the public. And the public..that doesn't care two hoots about all these goings on ??
Appreciate your work, inspite of being ignored
( for years) by the system & the public as well.
At the least , public should have the sense & awareness to stay away from such systems.....stock exchanges... den of gamblers & cheats.

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