The company came on the ministry of corporate affairs’ radar because of sharp rise in the value of shares of private investors in Devas Multimedia after signing the deal. The ministry is going to look into valuation of shares, high premium on issue of shares and dilution of shareholding of Devas Multimedia
New Delhi: The ministry of corporate affairs (MCA) has initiated an investigation into the books of Devas Multimedia, embroiled in the controversial S-band spectrum deal with Indian Space Research Organisation’s (ISRO) commercial arm Antrix, for alleged irregularities in its shareholding pattern, reports PTI.
“The MCA is going to look into valuation of shares, high premium on issue of shares and dilution of shareholding of Devas Multimedia,” a senior MCA official told PTI.
The Department of Space has asked the ministry for information on these issues, the official added.
The MCA has formed a three-member team to look into the matter, which is under the jurisdiction of Registrar of Companies, Bangalore.
The investigation has been ordered under Section 235 of Companies Act, 1956, the official said.
Despite repeated attempts, the company could not be reached for comments.
The official added that the company came on MCA’s radar because of sharp rise in the value of shares of private investors in Devas Multimedia after signing the deal.
In September 2009, the company’s board increased the share capital to Rs20 lakh from Rs17.5 lakh.
The Bangalore-headquartered company has been under the scanner for its deal signed with ISRO’s commercial arm Antrix Corporation Pvt Ltd in January 2005.
The space agency had earlier said that “no competitive bidding” was followed for the deal.
As per the deal, Antrix was to provide the crucial S-Band wavelength, which is primarily kept for strategic interests of the country, to Devas for running its digital multimedia service by leasing 90% transponders on two satellites—GSAT-6 and GSAT-6A.
The company had to pay Antrix a total of $300 million (about Rs1,500 crore) over a period of 12 years.
Antrix had signed the contract and got the sanction of the Space Commission and the Union Cabinet for the two satellites at the cost of nearly Rs400 crore without informing them that bulk capacity would be leased to Devas.
In December 2009, ISRO ordered a review of the deal and, subsequently, the Space Commission recommended its annulment on 2nd July, last year.
Last month, a five-member high-level team appointed by the prime minister had completed its probe into the deal.
The government had planned to conclude the ONGC share sale by the third quarter this fiscal, but had to postpone it because of weak stock markets and failure to meet the norms on the required independent directors
New Delhi: The finance ministry will decide on the date of the follow-on offer of Oil and Natural Gas Corporation (ONGC) after the government appoints independent directors for the state-owned company, reports PTI.
“We will file draft papers again once the requisite number of independent directors are appointed on ONGC board,” a finance ministry official told PTI.
The government had planned to conclude the ONGC share sale by the third quarter this fiscal, but had to postpone it because of weak stock markets and failure to meet the norms on the required independent directors.
As per clause 49 of the Securities and Exchange Board of India (SEBI) regulations, half of the company’s board should comprise independent directors.
Three of ONGC’s independent directors—S Balachandran, SS Rajsekar and Santosh Nautiyal—retired on 10th November after the three-year term.
The official said the Department of Disinvestment (DoD) is awaiting approval of the Cabinet Committee on Appointments (ACC) for the new independent directors on the ONGC board.
The DoD is understood to have asked the ministries concerned to fast-track appointment of independent directors, so that they can move ahead with the stake sale programme.
Last month, ONGC withdrew the draft prospectus filed with market regulator SEBI shortly before the 90-day deadline. ONGC had filed the FPO prospectus in September.
The government plans to sell 5% stake, or 427.77 million shares, in the company. The government’s holding is expected to come down to 69.14% from the current 74.14% after the sale.
The post of independent directors is also lying vacant in other disinvestment bound PSUs—BHEL, RINL, Hindustan Copper and NBCC.
BHEL, which has already filed draft papers with SEBI on 30th September for a Rs4,000 crore follow-on public offer (FPO), needs two more independent directors on board.
Besides, Rashtriya Ispat Nigam (RINL) needs three more independent directors, while HCL needs five to meet the listing norms to meet the SEBI requirement.
As against the disinvestment target of Rs40,000 crore in the current fiscal, the government has so far raised only Rs1,145 crore.
Bankers and analysts believe the RBI intervention may come anytime during the week as the payment of advance tax by companies will be due on 15th December. Such a move to lower CRR will result in release of about Rs15,000 crore into the system
New Delhi: With the last date for payment of advance tax drawing closer, pressure is mounting on the Reserve Bank of India to cut cash reserve ratio (CRR) by at least 0.25 percentage points to improve liquidity in the system, reports PTI.
Bankers and analysts believe the RBI intervention may come anytime during the week as the payment of advance tax by companies will be due on 15th December. This will result in substantial amount of money being sucked out from the market.
Such a move to lower CRR, which is the portion of deposit that banks are compulsorily required to keep with the central bank, will result in release of about Rs15,000 crore into the system.
“We expect 25-50 basis point cut in the CRR at any time.
It could happen during this week,” head of a leading public sector bank said.
The CRR has been left unchanged at 6% since May 2010.
However, the policy rates have been raised 11 times during the same period. In October, the central bank raised the repo rate by 25 basis points to 8.50% and the reverse repo rate moved up by a similar percentage to 7.50%.
Repo is the short-term rate at which the RBI lends to banks, while reverse repo is the rate at which it gets funds from banks.
According to senior official of another public sector bank, the liquidity infusion from the RBI looks very likely.
He said CRR cut may happen either during the week or on 16th December when the RBI will release its mid-quarterly review of the monetary policy.
Analysts also feel there would be liquidity easing from the central bank in a gradual manner.
“We expect the Reserve Bank of India to continue to ease liquidity, first through open market operations, and then by cutting the reserve requirements of banks,” Goldman Sachs said in a report.
“Given this backdrop of growth slowing and inflation peaking off, we are relieved that the RBI has finally begun Open Market Operations to cut the money market liquidity deficit and reduce undue pressure on interest rates,” said Bank of America-Merrill Lynch India economist Indranil Sen Gupta said.