The collapse of Saradha group, which has been supported first by the Left Front and then by Trinamool Congress, was expected. What will come as a shock to the average person is the political patronage received by such fly-by-night fund collectors
West Bengal Chief Minister Mamata Banerjee on Monday instituted a high-level inquiry and deputed a special investigation team (SIT) to probe the collapse of chit-fund company, Saradha Group, which has hit thousands of depositors across the state.
After a high level meeting, the chief minister told reporters that a SIT under the director general of police (DGP) would go into the fiasco and a high-level inquiry under the Commission of Inquiry Act was being instituted.
Last week, Moneylife reported that Saradha group, one of the biggest finance companies in West Bengal was on the verge of collapse and the state government had issued an order for arresting Sudipta Sen, chairman and managing director (CMD) of the company for default on repayments. Sen is reported to be absconding.
According to media reports, about 200 commission agents of Saradha group met Trinamool Congress leaders demanding immediate intervention by the state government for recovering money from the group. The agents claimed that Saradha group has started defaulting on repayments since January and it is they who have to face the brunt of depositors. The farce is that the Saradha group was close to all political parties as long as the going was good. Kunal Ghosh (former chief executive of the Saradha group's media unit) is a Trinamool MP in the Rajya Sabha.
So far, all deposit-taking companies, chit funds and collective investment schemes (CIS) operators, have received patronage from politicians across the party lines. Especially in West Bengal, the ruler got changed but patronage has remained the same. The CID and state finance department officials had once raided Rose Valley's office in Tripura, but to everyone's surprise, no arrests were made. Many people had attributed the outcome to Rose Valley's cosy relations with the Left Front.
Mamata Banerjee has said that a draft for promulgating an ordinance having more teeth to restrict operations of chit-fund companies was prepared. Stating that strong laws were needed to curb the illegal activities of chit-funds, Banerjee said since their operations were governed by central laws and not by the state government, “the onus lies with the central government.” She probably does not know that these companies have used the local connections to evade the law of Collective Investment Scheme of the Securities & Exchange Board of India (SEBI).
She said that she had telephonically requested president Pranab Mukherjee, to see that the bill passed by previous Left Front government seeking to restrict chit-fund operations, was returned to enable the state government to incorporate more stringent provisions to deal with such illegal activities.
“Laws that the Left Front government had proposed, had some flaws in it and the chit-fund business mushroomed during the Left regime,” the Trinamool Congress chief alleged, ignoring how her own MP was heading the dubious media business of Saradha.
The company’s revenues and profit were helped by the good performance of its infrastructure and technical support vertical as well as the depreciating rupee
Mindtree has reported a 16.5% year-on-year (y-o-y) increase in revenues from Rs525.70 crore to Rs612.4 crore, in rupee terms. Net profit of Mindtree rose 14% y-o-y, from Rs69.2 crore to Rs78.9 crore, in rupee terms as well. Net profit margin expanded by 12.9% y-o-y, from 13.2% to 16.7%. This was helped by the depreciation of the rupee from Rs50.88/dollar to Rs54.29 per dollar. However, on a quarterly basis, the rupee actually gained strength, from Rs55/dollar to Rs54.29 per dollar. It was also helped by its infrastructure and technical support (IMTS) vertical, which grew 53.2% y-o-y. This is more of a low-margin vertical however. Its manufacturing and retail vertical grew 19.5% y-o-y.
“FY 12-13 has been a landmark year for Mindtree. In a challenging year, we have delivered revenue growth and better margins. We have also delivered consistently quarter after quarter, setting up a platform for continued improvements. We have made solid investments in leadership development, brand building and sales force enhancement. We are confident that all these will help us create an expertise led organization that delivers sustained growth and shareholder value” said Krishnakumar Natarajan, CEO & Managing Director, Mindtree.
During the March 2013 quarter, 55.3% of the revenues came from the United States when compared to 57.3% recorded for the corresponding period last year. Similarly, domestic revenues dipped from 7.5% during the March 2012 quarter to 6.1% for the March 2013 quarter.
Mindtree has two divisions: IT services and Product Engineering Services (PES). Almost three quarters of its revenue (70.2%) for the March 2013 quarter came from the former while the latter took the remaining 29.8% of the total revenues for the quarter.
The company made significant inroads in targeting and acquiring high value customers. It added four more customers with ticket value of over $20 million which having a total of 232 active customers as of 31 March 2013.
The company had 11,591 employees as of 31 March 2013 and added 974 employees during the quarter on a gross basis.
The Aditya Birla Group company Ultratech Cement posted disappointing results amidst cost pressure and railway freight hike. It commits to expansion of its Rajasthan plant at a cost of Rs2,000 crore
UltraTech Cement Company’s net Sales stood at Rs5,389 crore for the quarter ended 31 March 2013, as compared to Rs5,334 crore in the corresponding period of the previous year, a marginal increase of 1.03% year-on-year (y-o-y). However, net profit declined by 16.26% for the quarter ended 31 March, from Rs867 crore to Rs726 crore. The poor result was due to continuing pressure on input and logistics costs, given the increase in railway freight and hike in diesel prices though there was some relief on account of softening in prices of imported coal.
The combined cement and clinker sales of grey cement were almost flat at 11.13 MMT, while for white cement it is 1.56 LMT (1.63 LMT). With the commissioning of new cement projects, the cement capacity of the company has increased from 48.75 million metric tonnes to 50.90 million metric tonnes. The clinkerisation plant of 3.30 million tonnes per annum in Karnataka is expected to go on stream in Q1FY14.
The company’s board approved the expansion of capacity at Aditya Cement Works in Rajasthan by 2.9 million metric tonnes, including the setting up of two grinding units. This expansion envisages a capital outlay of around Rs2,000 crore to be funded through a mix of internal accrual and borrowings. The additional facility is expected to be commissioned by March 2015.
The board of directors has recommended a dividend of 90%, at the rate of Rs9 per share of face value of Rs10 each aggregating Rs246.76 crore. The company will absorb the corporate tax on dividend amounting to Rs41.94 crores, resulting in a total payout of Rs288.70 crore.