Panellists at CII conclave underline a crisis of credibility and procedural hassles that are hampering progress in the realty business. Propose exploring new areas
Anurag Mathur, managing director, Cushman & Wakefield India, says the country is in urgent need of a regulator for the realty sector, as without this it would suffer and also bring much suffering for common people.
Mr Mathur was addressing the 'Real Estate & Housing Investment Conclave' organised by CII in Mumbai today. "Without an umbrella regulator, the real estate sector in India is going to face severe crisis, and also cause much suffering to the common man," he said.
"Capital inflow in this sector is being restrained, and builders have to obtain a ridiculous number of clearances for projects. The small, retail investors cannot invest in this sector because apart from buying a physical unit, there is no other way to invest. An umbrella regulator will ensure a systematic and governable way of ensuring capital inflow for the industry and make dealings more transparent," Mr Mathur said. The view was acknowledged by most of the other panellists at the programme.
Pointing to the Securities and Exchange Board of India that regulates the stock market and the Insurance Regulatory and Development Authority that governs the insurance sector, Mr Mathur said, "We need a similar nodal agency which will not only provide guidelines, but also make the process simpler and punish defaulters, thereby making the sector credible in the eyes of people."
Excessive and fragmented regulation, and subsequently excessive taxation has created problems both for builders and buyers, pointed out Ms Kruti Jain, director of Kumar Urban Development Ltd. "If a single-window clearance is available, it will not only save a lot of time and hassles, it will also bring down the prices," she said. "About 40%-50% of the price that the customer pays today is for the multiple taxes the builder has to pay."
Her remarks were echoed by RK Khanna, senior executive director, Housing & Urban Development Company, who also said that unless the speculator is taken out of the picture, prices cannot come down.
Sachin Khandelwal, managing director and chief executive officer, ICICI Home Finance Ltd, said without a long-term vision, the sector could not prosper. "We have laws and regulations that vary according to the region, and a new law is enforced every time a bureaucrat or a minister catches a whim. If we have uniform, permanent laws, that will be most welcome."
The panellists were unanimous about the need for transparency in the sector. They felt that with all the major scams having a real estate company involved, the sector was looked at suspiciously and that a regulator may restore its credibility.
Ms Jain also pointed out that builders and financers should move out of the Mumbai and national capital regions. "If we see the way the smaller towns and cities are growing, it is clear that rates there are reasonable. If there is a regulator with a pan-India reach, these small developers can be included in the process, and customers who are left at the mercy of local contractors can also live in peace."
Both iGATE and Patni would continue to exist as separate listed entities and would work together on an integration exercise with the advice of professional consultants and advisors, iGATE said in a statement
Bangalore: iGATE today announced the successful completion of the Patni acquisition and appointment of Phaneesh Murthy as the chief executive officer (CEO) of Patni Computer Systems. Consequently, Jeya Kumar has stepped down as the CEO of Patni, reports PTI.
iGATE had entered into purchase agreements on 10th January this year to acquire a majority stake in Patni Computers. The transaction marks the completion with the buyout of the principal stockholders, Narendra Patni, Ashok Patni, Gajendra Patni and General Atlantic, and 20% Mandatory Tender Offer (MTO) to the public shareholders.
The MTO was fully subscribed giving iGATE a majority stake of approximately 83% in Patni Computer Systems.
Both iGATE and Patni would continue to exist as separate listed entities and would work together on an integration exercise with the advice of professional consultants and advisors, iGATE said in a statement here today.
"The two companies will operate on an independent basis and in the best interests of their respective stakeholders with a view to building value for both sets of shareholders," it said.
As a consequence of the acquisition, the board at Patni has been reconstituted. Jai Pathak will be board chairman, Phaneesh Murthy the CEO. Shashank Singh, co-head of Apax India and G'ran Lindahl, member of iGATE board are the new directors with existing members Vimal Bhandari and Arun Duggal continuing as independent directors.
Surjeet Singh, CFO, Patni, would continue in office until 31 May 2011 and then step down when the board expects to appoint a new financial officer.
Announcing the acquisition, Phaneesh Murthy said, "Successful completion of the transaction was our single focus over the last four months and I am very excited to formally move from integration planning to integration execution between the two companies."
"Our intent is to generate synergies out of the integration and, with iGATE's differentiated iTOPS-based Business Outcomes model coupled with Patni's micro-vertical focus, deliver value to our customers," he added.
"We believe there are a number of cross selling opportunities across 360 clients of iGATE and Patni and will focus on improving service levels and deepening our engagement with existing clients.
The initial feedback from customers has been very encouraging. In the next three years, our goal is to become leader by capability in two verticals and a significant player in at least three to four other verticals," Mr Murthy said.
According to the new CEO, the company would significantly expand its market presence and, pursuant to its integration programme, go to the marketplace with a common identity called iGATE Patni.
"Under a new logo, iGATE Patni will stand for the combined value of both organisations," he said.
The dismissal of petitions filed by Harshad Mehta's mother Rasila Mehta and sister-in-law Rina Mehta may result in banks and financial institutions receiving an additional Rs800 crore to Rs1,000 crore
The Supreme Court has upheld notifications issued by the Custodian against stockbroker Harshad Mehta's mother Rasila S Mehta and his sister-in-law Rina S Mehta for their involvement in the securities scam of 1992. This decision may result in additional distribution of about Rs800 crore to Rs1,000 crore to banks and financial institutions who are creditors of the Harshad Mehta group.
In March, the office of the Custodian—that operates from Mumbai—released about Rs2,194.9 crore from Harshad Mehta's assets to the State Bank of India (SBI) and the Income-Tax (I-T) department.
Following the apex court's decision, the Custodian is likely to liquidate the assets of the Harshad Mehta group, including shares and immovable properties, apart from cash and fixed deposits.
The judgment of the Supreme Court, delivered by a bench consisting of Justice P Sathasivam and Justice BS Chauhan, laid down clear judicial precepts in ruling that the notifications carried out by the Custodian, which came several years after the securities scam, without any pre-decisional hearing, were not violative of the principles of natural justice.
According to a statement by the Custodian, “The Court said that in construing a statute of this nature, the courts should not adhere to a literal meaning, but construe the same, keeping in view the larger public interest.”
During the hearing, the Custodian argued that the income of these women had risen from near-nil levels to tens and hundreds of crores of rupees, in a short period, without any asset base, through transactions involving huge amounts of money sourced from Harshad Mehta.
With this additional amount, nearly all the principal liabilities of the Harshad Mehta Group towards taxes, banks and financial institutions, are expected to be met.
Harshad Mehta, who died of a heart attack in Mumbai in December 2001, faced allegations of diverting huge amounts of public money to the securities market. The Joint Parliamentary Committee set up to investigate into the 1992 scam had estimated the quantum of the scam at approximately Rs4,400 crore.
Last year, the Bhupen Dalal family agreed to pay Rs12.6 crore to buy back their flat in an auction, against the market value of about Rs9 crore. The Special Court had allowed the auction of the flat at Chitrakoot building, on Altamount Road, in south Mumbai, to recover income-tax dues running into crores of rupees.
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