In a public notice released today, MCX-SX said "There have been attempts by some elements at spreading misinformation to create doubts among our shareholders and to undermine our reputation and business for their benefit"
Anguished by the lack of clearance from market watchdog Securities and Exchange Board of India (SEBI) to become fully functional despite meeting the norms, Jignesh Shah-led group firm MCX Stock Exchange today went public with its grievance and hit out at competitors, reports PTI.
Without naming the National Stock Exchange (NSE), MCX-SX also said that its rival was killing competition by offering free trading in currency derivatives, and thus making it difficult for it to get business and investors.
In a public notice, released today in the form of advertisements in dailies, MCX-SX said "There have been attempts by some elements at spreading misinformation to create doubts among our shareholders and to undermine our reputation and business for their benefit."
A MCX-SX spokesperson did not respond to queries if the company was alluding to rival exchanges like Bombay Stock Exchange (BSE) and NSE.
In an apparent attack at SEBI, it also said the go-ahead for doing full-fledged business was elusive despite MCX-SX having taken all the necessary steps to make it compliant to the relevant regulations about trading in equities, equity derivatives, interest rate derivatives, mutual fund and debt market among other instruments.
MCX-SX said that one of the key conditions put on it related to bringing down promoters' stake and it did so with a "capital reduction-cum-arrangement" scheme and SEBI was informed about the same, way back in December 2009.
While the scheme was already approved by the board and shareholders, it also got the nod of Bombay High Court in March 2010 and the same was also notified to the SEBI on 7 April, 2010, MCX-SX said.
But, the exchange has got "no response from SEBI in this regard" as of July 2010, it noted.
MCX-SX said that it was operational since October 2008, but was offering only currency derivatives product, and it was first given recognition by SEBI for one year only with a condition that it would meet the shareholding-related regulations by 15 September, 2009.
In another apparent allegation against SEBI, MCX-SX said in the same public notice that the regulator in August 2009 had approved trading in interest rate futures, to be traded on currency derivatives segment, but "it did so for exchanges other than MCX-SX."
"At the same time, SEBI renewed the recognition of the exchange for one year up to September 2010 on the condition that no new class of contracts in securities will be introduced without complying with the MIMPS (Manner of Increasing and Maintaining Public Shareholding in Recognised Stock Exchanges Regulation) regulations."
"Thereafter, it became impossible to get any new investors in the exchange with no revenues due to no fees or charges being levied by the competing exchange in the currency segment and more so because of no possibility of any new product without complying with MIMPS regulations," the public notice said.
"New Investors wanted MCX-SX to have regulatory permission for all segments, before investing, whereas SEBI wanted divestment before giving approval for other segments," it added.
MCX-SX said that this "log-jam" forced it to go for a scheme that required reduction in its share capital to bring down the stake of some entities, including promoter group firms Financial Technologies India Ltd (FTIL) and Multi Commodity Exchange (MCX), to 5% each.
Under the scheme, warrants were issued to the shareholders whose equity capital was cancelled by way of reduction.
MCX-SX said that its shareholders currently comprise of banks and public financial institutions with nearly 89% stake collectively and the "conditions stipulated by SEBI while granting renewal to the exchange up to September 2010 stands complied" after the high court approval in March 2010.
"Since then, MCX-SX is awaiting necessary SEBI approval for providing trading facilities in equities, futures and options on equities, interest rate derivatives, mutual fund trading platform, debt market, etc."
The company also listed out the members of its board of directors and the advisory board, which includes many former top bureaucrats and regulators.
Welcome to the real convoluted world of counterfeit currency in India, where the victim is prosecuted, the fence eats the crop, and the criminals walk free. This is the second part of a three-part series
Here are a few anecdotes that illustrate how tortuous the system has become as far as counterfeit currency in the country is concerned.
1) A first-generation entrepreneur chucks up a great career and is running a small eco-resort in a remote tribal area. Over the decades, the area becomes popular, and soon developers move in next door. Attempts are made to muscle in on his property, and he is being forced to shut down and sell out, advice given by others including yours truly is for him to do so. Things go from bad to worse, his wife leaves him in fear and relocates to his hometown with the children, but he continues fighting the system. One day, off to his bank to deposit cash collected, he is found with three or four counterfeit notes. The bank manager advises him to tear them up, but our friend wants to be a good citizen, and insists that the relevant RBI advisory-based FIR is filed. His enemies, of whom he has quite a few by now, come to learn about this — and now he is in all sorts of trouble.
2) While researching automobiles at fuel-filling stations where the attendants have seen me for decades and have some level of confidence in me, I come to learn that they end up dealing with and then refusing fake currency notes at least two-three times per attendant per shift. This is up from about two-three times per shift for the whole filling station a few years ago, and maybe once a day 10-15 years ago. Despite this, and having counting-cum-detecting machines installed, cashiers find a few counterfeit currency notes in their bundles when re-checked at the banks almost every day. These currency notes are the best of the counterfeits, are returned by the bank to the customers, and then passed on back into the system by using them to pay off suppliers paid in cash. The situation is apparently even worse at liquor shops.
3) At a conference pertaining to cash management and payment processing, a person from the railways who I get friendly with (I grew up in a railway town and am passionate about trains, and know quite a bit about the railways as well as their cash-management systems) lets drop a nugget — they have trunks full of counterfeit currency notes which they do not know what to do with. Probably no other wing of the Indian government collects as much cash as does the Indian Railways. And the problem, which at one stage used to be restricted largely to the border and coastal areas, is now almost nationwide. The Indian Railways, incidentally, is amongst the fastest in adopting non-cash transaction systems. And monsoons as well as other natural calamities are a good way of declaring currency damaged and destroyed.
4) A recent phenomenon is the surfacing of counterfeit notes from ATM dispensers, and the refusal of the concerned banks as well as authorities to do anything about it, leaving the customer eventually with a loss. This is an activity that is extremely suspect, as “stuffing” of ATM cartridges is supposed to be an intensely-controlled and monitored activity, one that this correspondent is familiar with. There is no way counterfeit currency notes can be delivered through ATMs unless there is internal complicity of a very high nature, and complaints of this sort should be escalated to the highest in the relevant bank as well as the RBI, without any issue of the suspect bank/branch being permitted to interfere on any grounds whatsoever. As mentioned before, the rules regarding compulsory 100% scanning and verification of currency notes dispensed, do not come into play till March 2011.
All this, however, still does not answer the basic question — what is the man on the street supposed to do when saddled with a fake currency note? Destroying, holding on to, or transporting a fake currency note is a crime in itself. The only option is to surrender it to the authorities. But which one?
A few more points on my experience with this subject:
1) To try and go to the local RBI office, as this correspondent did one fine sunny day in Delhi, to try and find out, was like committing suicide. A polite and helpful elderly guard at the entrance, when told about my mission, took me to one side and said that even entering the RBI premises with a fake note was a crime and that he would have to detain me till the local police came to take me away. So it was better if I did not visit the RBI.
2) The bank is obliged to lodge an FIR with the local police, which in itself is not an issue if you have the wherewithal to handle the subsequent eventualities, but the stated format of the report to be filed with the local police is enough to place you as the customer at the centre of the investigation. Even if that is not a problem and you wish to be an honest citizen, fact remains, you have lost the value of the counterfeit currency for sure. And the bank as well as the RBI, instead of supporting you legally for what you may perceive as having done your duty, will expect you to fight the legal battle on your own. This is also seized upon as a great opportunity by your enemies to put you into even more trouble.
3) The local police are always keen to catch people in the business of counterfeit currency. Sadly, any victim will do, and local traders dealing in cash are extremely susceptible to this. Besides, it makes for great headlines, and anybody caught, howsoever innocently, is immediately a social outcast.
4) Sending currency notes by uninsured post is also illegal. So the option of sending a fake or counterfeit currency note by post to the Financial Investigation Unit in Delhi, which is one more entity dealing with this issue, may not really be correct. In any case, as of now, they do not accept complaints from the general public.
There is a Parliamentary ‘House Panel Committee on Counterfeit Currency’. Not much is known about what they do, but yes, a few months ago, they expressed shock at the government's decision to outsource the printing of currency notes to the USA, UK & Germany. So maybe you could write to your elected representative on the subject. Maybe not, too.
A few decades ago, statistics on satisfaction levels of meals on trains and telephone users were calculated based on the actual complaints received. Needless to say, the number of complaints received was very low, so it was presumed that the satisfaction level was very high.
Likewise, the authorities would have us believe that the amount of counterfeit currency in circulation is very low, and one reason is because the number of complaints are very low — ignoring the fact that if citizens complain about counterfeit currency, they go straight to jail.
(The third part of this series will appear on Monday, 19th July).
“The arrival of new players in the Indian mobile sector has led to fierce competition, which has sustained the strong subscriber growth,” research firm Gartner said
India’s mobile subscriber base is expected to touch 993 million by 2014, led by the rural market, reports PTI.
Research firm Gartner expects the world's fastest-growing mobile market to close this year with over 660 million subscribers, it said in a statement.
"The arrival of new players in the Indian mobile sector has led to fierce competition, which has sustained the strong subscriber growth seen in 2009," Gartner senior research analyst Neha Gupta said.
With a mobile penetration of 44.5% in 2009-end, there is still ample room for growth in 2010 and beyond, she added.
India is the second-largest wireless market in the world, after China with 618 million mobile subscribers at the end of May 2010, according to telecom regulator Telecom Regulatory Authority of India (TRAI).
"Mobile market penetration is projected to increase further, mainly due to the service providers increasing their focus on the rural market and lower priced handsets," Ms Gupta said.
By the end of 2014, total mobile services revenue in India is forecast to exceed to $23 billion from $19.3 billion at the end of 2010, she said.
Moreover, Gartner expects the growth to slow down a bit in the coming years.
"Sharp fall in call charges and launch of services by new mobile operators helped the country step up mobile subscriber additions in the past one year, but increasing mobile penetration could lead to some slow down in future growth," she said.
Ms Gupta added the average revenue per user (ARPU) will go down further and data usage would go up in the next few years.
"Expect a dramatic decline in growth of voice revenue from 2010 until the end-2014, although this will be balanced by increased revenue from data services that will significantly contribute to the overall growth of mobile services in India," she said.