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Making the crash work in your favour

So far there is no indication of credible policy interventions that might arrest the 'Made in China' rout

 

The devaluation of the Chinese yuan, coupled with anxieties about Beijing's ability to revive the flagging economy, tasted first blood with a massive global sensex slide and a currency tumble. Worse is expected, especially for countries that relied on the Chinese economy as the main growth driver. Rumours abound of the contagion spreading, as indeed it did during the East Asian crisis because of the interlocking of economies.
 
So far there is no indication of credible policy interventions that might arrest the 'Made in China' rout. Investors have started pulling money out of developing countries that they invested in to fuel China's appetite for raw materials and there is genuine fear that the anticipated crisis could trigger a full-blown global slowdown.
 
The Indian economy has so far performed relatively better in local currency and dollar terms. Dealers have not been excessively worried at the current depreciation of the rupee because they see it as being over-valued in any case by around 8-10 percent. Nor, indeed, was RBI Governor Raghuram Rajan perturbed and said he was willing to deploy the country's foreign exchange reserves, if necessary, to shore up the currency. Sensing India's macroeconomic fundamentals to be resilient, Prime Minister Narendra Modi sensed an opportunity for India to fill in the space likely to be vacated by China. The crash, in other words, could be converted into an opportunity.
 
With oil prices at an all-time low, a unique opportunity presents itself for India to make that long anticipated transition towards growth. But for this to happen, the government needs to undertake certain key steps.
 
First, it needs to ensure non-interference in the autonomy of the Reserve Bank of India. The RBI governor has firmly ruled out rate cuts, cautioning that without sustained low inflation, a rate cut would be inflationary. Indeed, the rupee slide would make it well near impossible for RBI to cut rates. Reports that the finance minister is at loggerheads with the RBI governor are seriously damaging because they are perceived to be true. What is equally worrisome is the government's aggressive foray into curbing autonomy, whether in institutions of higher learning or even the Supreme Court. Will RBI be the next institution to fall?
 
Second, Finance Minister Arun Jaitley and his ministry need to concentrate on the series of reforms they are tasked with. Indeed, it would be a major disappointment if Jaitley came up with yet another non-budget. The focus on curbing black money and corruption, while laudable, cannot remain the finance ministry's sole preoccupation.
 
Third, India needs to urgently initiate reforms to improve its rankings on the ease of doing business. As per the 2015 World Bank rankings, India stands at 142 out of 189 countries. Modi has been promising progress on this front for over a year. Unless present rankings and perceptions improve, India will not be able to take advantage of China's downturn and attract foreign capital.
 
Fourth, policy makers need to act with a greater sense of urgency. The onion shortfall, for instance, was estimated several months ago but delays in import resulted in the current crisis-like situation.
 
With the Indian economy on a growth trajectory and not dependent on the Chinese economy, even a conservative Moody estimate of 7 percent growth would be a useful plank to build upon. But this requires consistency of purpose and clear policy directives monitored by PMO. Unless, the government seizes the opportunity the crash has presented, Modi would be criticized for presiding over UPA 2 in a new incarnation.

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SEBI asks Aspen Projects, directors to refund money garnered from investors
SEBI asked Aspen Projects to refund money it collected from investors with an interest of 15%
 
Market regulator Securities and Exchange Board of India (SEBI) has asked Kolkata-based Aspen Projects India Ltd (Aspen Projects) and its directors to refund money, the company had illegally collected from investors through secured redeemable debentures and preference shares, along with an interest of 15%.
 
SEBI also prohibited Aspen Projects and its directors Abhijit Dasgupta, Bhaskar Saha, Ashim Maitra, Ujjal Kumar Roy, Avijit Kumar Ganguly, Debopam Sur and Goutam Sarkar from accessing markets for four years. In addition, Ram Sunder Bhattacharya and Mita Roy are barred from continuing as debenture trustees for the secured redeemable debentures of Aspen Projects and also from taking up any new assignments or involvement in any new issue of debentures till further directions.
 
Earlier in June, SEBI had barred Aspen Projects and directors from collecting money from investors and asked it to stop mobilising any funds, sell properties or raise any money from public.
 

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SEBI asks Aditya Global Industries to refund investors' money in three months
SEBI found that AGIL had garnered over Rs92 lakh from nearly 1,100 investors through redeemable preference shares
 
Market regulator Securities and Exchange Board of India (SEBI) has directed Aditya Global Industries Ltd (AGIL), formerly known as Angels Agro Industries, to refund in three months money, the company had illegally collected from investors, along with an interest of 15%.
 
SEBI also barred the company and its directors, Arunava Bose Munshi, Anup Kumar Munsi and Amitava Bose from markets for four years. The regulator has AGIL and its directors to refund money collected through issuance of preference shares with an interest of 15% per annum compounded at half yearly intervals within three months.
 
Probe by the market regulator found that AGIL had garnered over Rs92 lakh from nearly 1,100 investors through issuance of redeemable preference shares, which according to SEBI rules was a 'prima facie' violation of public issue norms.
 
The regulator had observed that AGIL's issue was made to more than 50 people which, under the rules, made it a public issue of debt securities requiring compulsory listing on a recognised stock exchange. AGIL was also required to file a prospectus, which it failed to do. 
 
SEBI also asked Aditya Global Industries to "issue public notice, in all editions of two National Dailies (one English and one Hindi) and in one local daily (in Bengali) with wide circulation, detailing the modalities for refund, including details of contact persons including names, addresses and contact details, within 15 days of this order coming into effect."
 
The company has to file a report of completion of repayment with SEBI within three months and have to provide a full inventory of all their assets and properties and details of all their bank accounts, demat accounts and holdings of shares/securities, if held in physical form, SEBI said.
 
AGIL (formerly known as Angels Agro Industries) and its directors have been "restrained and prohibited from buying, selling or otherwise dealing in the securities market, till the expiry of four years from the date of completion of refunds to investors".
 
In case AGIL fails to comply with the directions, SEBI said it would make a reference to the state government/local police to register a civil/criminal case against the company and its directors. The market regulator said it would also make a reference to Ministry of Corporate Affairs to initiate the process of winding up of the company.

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COMMENTS

Phinjo Dukpa

7 months ago

all the people kept their money in such company but they break their trust strict action must be there they all are not allowed to raise funds from public because the public had face much more difficulties

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