LIC did not get a single share in the REC FPO as other investors put in bids above Rs205 in the last few minutes of the closing of the issue, which prompted the insurer to write to the market regulator to take steps to ensure secrecy in the bidding process
State-owned insurer Life Insurance Corporation of India (LIC) has written a letter to the Securities & Exchange Board of India (SEBI) recently, asking for price secrecy in the bidding process for initial public issues (IPOs) and follow-on public issues (FPOs), reports PTI.
"LIC wrote a letter to SEBI after the Follow-on Public Offer (FPO) of the Rural Electrification Corporation (REC) in March this year, asking the regulator for price secrecy in the French auction bids of institutional investors," the source closely connected to the development told PTI here.
French auction gives institutional investors the freedom to place bids above the floor price and preference is given to those with higher bids.
However, LIC has said disclosure of bid prices gives unnecessary advantage to last minute entrants as in the case in the REC FPO.
For the REC FPO, the floor price was fixed at Rs203 and LIC had put in bids worth Rs3,000 crore at Rs205, Rs2 more than the floor price at a time when the demand was low.
However, LIC did not get a single share as other investors put in bids above Rs205 in the last few minutes of the closing of the issue, the source said, adding, "It was a big blow to the corporation and exposed the weakness of the system."
"To avoid any such scenario in the future, we have requested the regulator to take steps to maintain price secrecy as it will help institutional investors who quote first and also the government to get a better valuation well above the floor price," he said.
"We have requested the regulator to take steps to ensure secrecy in bidding as it happens in any other kind of bidding process," the source said.
Three major employee unions of BoR have called for a two-day strike demanding the immediate termination of the ICICI-BoR merger
A two-judge vacation bench of the Supreme Court (SC) today declined to hear a petition filed by shareholders of the Bank of Rajasthan (BoR), who were objecting to the financial institution's merger with ICICI Bank, reports PTI.
The bench, comprising Justice G S Singhvi and C K Prasad, said that the petitioners may approach another bench as it will not entertain the case.
On 23rd May, ICICI Bank had approved the merger of the Bank of Rajasthan through share-swap in a non-cash deal that valued BoR at about Rs3,000 crore.
Though 25 ICICI shares would be offered with every 118 shares of BoR, promoters Tayal family-which have over 50% stake-would not get a seat on the amalgamated entity's board.
The proposed merger is being opposed by BoR employees. Three major employee unions of BoR-All India Bank of Rajasthan Employees Federation (AIBOREF), All India Bank of Rajasthan Officers' Association (AIBORA) and Akhil Bhartiya Bank of Rajasthan Karmchari Sangh (ABBORKS)-have called the strike demanding the immediate termination of the ICICI-BoR merger proposal.
"We have decided to strike work on 4 and 5 June. If the authorities do not heed to our demand, we will again go on a three-day strike beginning 17th June. All branches of BoR and over 4,000 employees will participate in the strike," AIBOREF, president, Dharmendra Rao told PTI.
"The work culture of both banks are extremely different and it will be difficult for our staff, who are used to the culture of BoR for decades, to integrate with ICICI Bank. There is no guarantee that our jobs will be protected," Mr Rao said.
According to some experts, the least that needs to be done is that UIDAI should make a comprehensive case to justify why what was rejected in the UK is good for India
The Unique Identification Authority of India (UIDAI) has been busy assembling bits and bytes for its ambitious citizen identification (ID) project. However, in another part of the world, a similar identification project has now been scrapped by none other than the UK government. This has given a boost to pro-privacy architects in India who are worried about the privacy implications of the UID project.
The scrapping of the National ID programme by the new government in the UK was not unexpected. Many people, organisations and even some politicians were questioning the viability of the NID project. According to a BBC report, the NID scheme was aimed at tackling fraud, illegal immigration and identity theft—but it was criticised for being too expensive and an infringement of civil liberties.
Theresa May, UK's home secretary, was quoted as saying that the NID will be abolished within 100 days with all cards becoming invalid. The new government would put legislation to this effect before Parliament with an aim to make it a law by August. Around 15,000 people who voluntarily paid £30 for a card since the 2009 rollout in Manchester, will not get a refund, the BBC report says.
What’s interesting is that the UK government has cited higher costs, impracticality and ungovernable breaches of privacy as reasons for cancellation of the NID project. These reasons may have a similar kind of impact in India as well.
According to some experts, the least that needs to be done is that UIDAI should make a comprehensive case to justify why what was rejected in the UK is good for India. They feel surprised about why the media has not publicised the reports that the UK has rejected the UID primarily because of concerns regarding civil liberties.
"One hopes that the UID-related contracts awarded already to E&Y and MindTree do not have any lingering after-effects, should commonsense (we don't have a great track record in commonsense, especially where money is concerned, but it's never too late to hope) hit our government and the UID agency be asked to pack up its tents," said one expert.
While announcing the abolition of NID in the UK, Ms May said, “This Bill is a first step of many that this government is taking to reduce the control of the state over decent, law-abiding people and hand power back to them. With swift Parliamentary approval, we aim to consign identity cards and the intrusive ID card scheme to history within 100 days."
Back home, according to UIDAI, the first UID numbers will be issued from August 2010. Over five years, the Authority plans to issue 600 million UIDs. The numbers will be issued through various ‘registrar’ agencies across the country, UIDAI said on its website.
Finance minister Pranab Mukherjee had sanctioned Rs1,900 crore for the UIDAI in his budget for FY10-11. According to a document on UID numbering available on UIDAI's site, systems that are to be as widely used and for multiple different applications as UID, tend to be very sticky in the sense that these systems would be in active use for centuries. Once a billion plus people have been assigned a UID, and applications using the UID to conduct their transactions are evolved, anything that requires modifications to existing software applications and databases will cost a lot.
Over eight years, the UK government spent around £250 million on developing the national ID programme. However, its abolition means the government will avoid spending another £800 million over a decade. The NID was launched in July 2002 and as of February 2010, its total costs rose to an estimate of £4.5 billion.
The Cost of the UID project may not be a hindrance for the Indian government, whose accounts are flush with money from the 3G auction, but what about its impact on civil liberties? Will there be a comprehensive discussion on the subject? One can only hope that the Indian government and the UIDAI closely study the reasons for the UK government’s decision to scrap its National ID project and then provide compelling reasons for India to go ahead with its UID project.