Italian police has arrested Giuseppe Orsi, chief executive of the country’s largest defence and aerospace group. The Finmeccanica CEO is alleged to have paid $670 million in bribes for the sale of 12 helicopters to the Government of India
Giuseppe Orsi, chief executive of Italy’s largest defence and aerospace group has been arrested for allegedly paying $670 million in bribes for selling 12 helicopters to the Indian government.
According to media reports, prosecutors in the Busto Arsizio north of Milan ordered a search of Orsi’s home, as well as the headquarters of Finmeccanica’s AgustaWestland helicopter division. The Italian authorities also ordered the house arrest of AgustaWestland CEO Bruno Spagnolini.
The Finmeccanica CEO is alleged to have paid $670 million in bribes for the sale of 12 helicopters to the Government of India.
In a statement, Finmeccanica said that the company will continue operating as usual and expressed support for the executives. Orsi has repeatedly denied paying any bribes.
The company and its executives have been the target of a wide-ranging investigation into alleged corruption in the awarding of international contracts, media reports say.
The medium-term trend remains down. A 3-4 day rally may be met with renewed selling
The market settled higher despite the dismal macro-economic numbers released today, with the Sensex snapping its eight-day losing streak. However, the medium-term trend remains down. A 3-4 day rally may be met with renewed selling. The National Stock Exchange (NSE) reported a volume of 75.64 crore shares and advance-decline ratio of 573:919.
The market opened mixed despite lacklustre global cues. The US markets closed with minor losses on Monday even as Federal Reserve vice-chairperson Jannet Yellen said the central bank’s ongoing easy monetary policy would continue as the labour market is yet to show some progress. The few Asian markets which were open today were trading higher in morning trade.
The Nifty opened down four points to 5894 while the Sensex resumed trade at 19,490, up 29 points over its previous close. The market remained choppy in early trade ahead of the release of the industrial output figures and retail inflation data. PSU, oil & oil, banking stocks were trading higher while IT and power sectors were in the negative.
However, the contraction of IIP for December to a three-month low of 0.6% and retail inflation for January rising to 10.79% saw the benchmarks dipping into the red and touching their intraday lows in late morning trade. The Nifty fell to 5,886 and the Sensex went back to 19,439 at their respective lows.
Brushing aside the negative indicators, the market soon picked up momentum as buying activity resumed, pushing the indices into the green. Gains in oil & gas, healthcare, PSU and consumer goods sectors kept the benchmarks firm in post-noon trade.
Firm trade continued in the late session, as well, on buying in market heavy-weights. The benchmarks hit their intraday highs towards the end of trade with the Nifty rising to 5,928 and the Sensex climbing to 19,584.
The market closed in the green as investors ignored weak macro-economic indicators, ending the eight-day losing streak on the Sensex. The Nifty gained 25 points (0.42%) to 5,923 and the Sensex climbed 100 points (0.52%) to settle at 19,561.
The broader indices underperformed the Sensex, as the BSE Mid-cap index fell 0.31% and the BSE Small-cap index dropped 0.51%.
The top sectoral gainers were BSE Oil & Gas (up 1.52%); BSE Healthcare (up 1.19%); BSE PSU (up 1.15%); BSE Auto (up 0.94%) and BSE Bankex (up 0.63%). The main losers were BSE Realty (down 3.96%); BSE IT (down 0.63%); BSE Metal (down 0.35%); BSE TECk (down 0.33%) and BSE Power (down 0.28%).
Seventeen of the 30 stocks on the Sensex closed in the positive. The chief gainers were ONGC (up 3.81%); Sun Pharmaceutical Industries (up 2.84%); Tata Motors (up 2.65%); Coal India (up 1.85%) and Bharti Airtel (up 1.79%). The major losers were Jindal Steel & Power (down 3.35%); Sterlite Industries (down 1.31%); Infosys (down 1.29%); Tata Power (down 0.77%) and Cipla (down 0.48%).
The top two A Group gainers on the BSE were—AstraZeneca Pharma India (up 10.06%) and Strides Arcolab (up 7.56%).
The top two A Group losers on the BSE were—Unitech (down 17.86%) and Hindustan Copper (down 4.45%).
The top two B Group gainers on the BSE were—Quintegra Solutions (up 20%) and Baba Arts (up 15.47%).
The top two B Group losers on the BSE were—Softech Infinium Solutions (down 19.93%) and Govind Rubber (down 19.78%).
Out of the 50 stocks listed on the Nifty, 31 stocks settled in the positive. The major gainers were ONGC (up 3.62%); Sun Pharma (up 3.29%); HCL Technologies (up 3.16%); Tata Motors (up 2.46%) and Coal India (up 1.94%). The key losers were JSPL (down 3.39%); ACC (down 1.52%); IDFC (down 1.49%); Infosys and DLF (down 1.27% each).
In Asian trade, Japan’s Nikkei 225 surged 1.94% as reports indicated that the Japanese government would continue with monetary easing to spur growth. The Seoul Composite fell 0.26% on political concerns after North Korea carried out a nuclear test. The Jakarta Composite gained 1% in trade today. Markets in China, Hong Kong, Malaysia and Singapore remain closed for the Lunar New Year holidays.
At the time of writing, two of the three the key European indices were in the green. At the same time, the US stock futures were mixed with a positive bias.
Back home, foreign institutional investors were net buyers of shares totalling Rs995.83 crore on Monday while domestic institutional investors were net sellers of equities amounting to Rs940.89 crore.
IT services exporter Zensar Technologies has signed a five-year pact with Assurant Health, a US-based provider of health insurance products, to provide information technology support. The deal includes development, testing, maintenance, enhancement and IT support for suite of business applications used by Assurant Health for policy administration, underwriting and claims. The stock fell 0.44% to close at Rs239 on the NSE.
Infrastructure major Punj Lloyd has reported more than 87% plunge in consolidated net profit at Rs8.77 crore for the quarter ended 31 December 2012, mainly due to muted sales growth and higher interest burden. Net profit for the corresponding previous period was Rs70.35 crore. Net sales rose 3.68% to Rs 2,775.29 crore from Rs2,676.81 crore earlier. The stock tanked 5.47% to close at Rs49.25 on the NSE.
IRDA came out with many initiatives last year including the integrated grievance management system (IGMS). Still, given the amount of mis-selling and fraud, a lot needs to change to improve customer satisfaction including empowering the insurance ombudsman to levy penalty on insurers
The Insurance Regulatory and Development Authority (IRDA) launched new system “Integrated Grievance Management System (IGMS)” to help with consumer redressal. It facilitates online registration of policyholders’ complaints and track the status of their complaints. It gives insurance regulator a tool to monitor the effectiveness of the grievance redressal system of insurers. IRDA can have real-time monitoring and tracking details of all grievances lodged with all insurers, along with their disposal status. It gives mirroring of the complaints database of the insurers through the IRDA portal.
However, customer grievance redressal has not drastically improved even after introduction of new system. There is a need for proactive action against insurers and for IRDA to stop being just a facilitator. IRDA should institute senior citizen-centric nodal officers at the director-level, and also at insurance companies, to specifically address all elder-related issues.
Part of the solution would also be a changed stance from IRDA. At the Moneylife Foundation seminar on 16 May 2012, IRDA chairman J Hari Narayan clarified that IRDA’s job is not to focus on individual complaints; but it does take up such cases on a random basis and investigates insurance companies to protect the insured. IRDA’s approach is to put systems in place and see how they work and the corrections that need to be done in the processes, he added.
It means individual complaints may not get solved by IRDA’s IGMS. Consumers still have to go to the insurance ombudsman, consumer court or civil court. The advantages of ombudsman are no cost to the insured and binding decision on insurance companies. While the insurance ombudsman is good option, there is often a delay in getting a hearing. It can range from six months to one year after making a complaint. In some places the ombudsman’s post gets filled after being vacant for over nine months. This increases the backlog of complaints. The Mumbai ombudsman’s post is currently vacant since October 2012.
In June 2011 we had written about the post of the Ahmedabad insurance ombudsman lying vacant for the past nine months. () The post has since been filled, but the backlog of complaints has increased.
Last month, the Bombay High Court suggested that IRDA should empower the insurance ombudsman to levy compensatory or penal costs on insurance companies for repudiating medical insurance claims on flimsy grounds. It is now up to IRDA to issue guidelines on it.
In the second part of the article we will discuss pending issues that IRDA needs to address to improve customer satisfaction.