Regulations
Midas Touch asks SEBI to disgorge assets of 692 vanishing companies, promoters
Midas Touch Investors' Association (Midas Touch), a well-known investor organisation, has requested market regulator Securities Exchange Board of India (SEBI) to disgorge all assets of 692 companies, identified as 'vanishing companies' by regional stock exchanges (RSEs) and of their promoters. In addition, Midas Touch also requested SEBI to issue restraint orders to stop further siphoning or diversion or embezzlement of all the assets of vanishing companies which were exclusively listed on RSEs. 
 
"According to our estimates, out of 5,100 companies exclusively listed at 22 RSEs, about 50% or around 2,500 may have vanished. This is an astounding percentage and number without any parallel in any stock exchange of the world. This was possible only because throughout its tenure SEBI remained a wilful defaulter in monitoring companies listed at stock exchanges, which paved way for predatory promoters to loot small shareholders without fear of any law," the investor organisation said.
 
In a letter to SEBI Chairman UK Sinha, the investor organisation, says, "SEBI should invoke penal provisions under section 15HA of SEBI Act for fraudulent and unfair trade practices against promoters, chartered accountants and all those persons who aided and abetted in such a heinous crime. Besides refund of money and assets, we feel strongly that they should be prosecuted and put behind bars by the Court as an exemplary and deterrent punishment."
 
These 692 vanishing companies were identified by the RSEs during the course of stock exchanges de-recognition exercise, and their names put up on dissemination board of National Stock Exchange (NSE) and BSE as required by SEBI's guidelines. 
 
The 10 RSEs identified 692 vanishing companies. Ahmedabad Stock Exchange had the highest number of vanishing companies at 416, followed by Vadodara Stock Exchange at 121 and Guwahati Stock Exchange at 57.
 
According to Midas Touch, the identification of 692 vanishing companies by 10 defunct RSEs also lays bare the hollowness of Co-ordination and Monitoring Committee (CMC). "Till now, CMC has identified 78 vanishing companies as per the list put out by the Ministry of Corporate Affairs (MCA) against 692 identified by the RSEs," it added. 
 
CMC was formed in 1999 to identify companies that have disappeared or have mis-utilised the funds mobilised from public and take penal action against their promoters and directors.
 
Even the Allahabad High Court, in an order passed while hearing a public interest litigation (PIL) filed by Midas Touch, has directed the government and regulators to take action against defaulting companies and their directors and promoters.
 
"Besides this the defaulting companies and their Directors and Promoters will also be subjected to penal consequences under the provisions of the Indian Penal Code and the defaulting companies can also be subjected to proceedings under the Companies Act. At this juncture we may hope and trust that the opposite parties would abide by the decisions taken by them and would bring to notice the names of the defaulting companies as envisaged in the Supplementary Affidavit," the HC had said.
 

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COMMENTS

manoharlalsharma

8 months ago

thanks for 'MIDAS' to appeal to SEBI for seizure of properties and auction and get money back to small investors.

Micro-finance funding skewed towards urban areas
Despite the intended focus on low-income population, the bulk of which resides in rural areas, the loan portfolio of non-banking microfinance companies that touched an all-time high last year, is heavily skewed in favour of India's urban quarters, fresh data shows.
 
According to Sa-Dhan, an association of microfinance institutions, within the loan portfolio of Rs60,328 crore in 2015-16, only 28% or Rs16,892 crore, went to the rural economy, with urban and semi-urban areas accounting for 72% or Rs43,436 crore.
 
In the previous year, rural exposure was 30%.
 
"Demand for the rural loaning is of very low volumes," P. Satish, Executive Director of Sa-Dhan, told IANS, adding credit in the hinterland was is failing to pick up due to limited geographic reach of these finance companies.
 
"If the institutions have to give more credit in rural areas, they need a wider network. Even rural area-focused institutions have their office in semi-urban or urban areas. In urban areas, especially, they have a wider geographical reach,” Satish said.
 
“Moreover, the demand for rural credit is mainly for agricultural loans, which under Centre's various 'krishi' schemes are better catered by banks at a lower interest rate."
 
Microfinance institutions give small loans to entrepreneurs with an income limit of Rs100,000 and Rs160,000 respectively in rural and urban areas with a cap on the indebtedness at Rs100,000.
 
Microfinance Institutions Network, a self-regulatory organisation for the sector established in October 2009, that has a target of providing financial services to 100 million low income households by 2020 feels there are some regulatory issues as well that need to be addressed.
 
“There has been a continuous policy dialogue with the Reserve Bank of India on several policy issues, mainly on microfinance institutions and broader financial inclusion,” said Ratna Vishwanathan, Chief Executive of the network.
 
“The amount of loan portfolio in rural areas is very less compared to the urban areas, which may be a concern -- it, in fact, fell in 2015-16,” Oscar Martins, Director of Financial Services with Protiviti, told IANS.
 
“Migration to urban areas is increasing fast and many of these migrants are also microfinance clients,” added Satish, giving another reason why the loan portfolio is skewed in favour of urban areas.
 
“Despite the talk of universal financial inclusion, as long as there is a demand for small, unsecured loans at the lower end of the economic levels, there will be an expansion of the portfolio of micro-finance institutions in urban and semi-urban areas."
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Madras HC orders CBI probe into pre-poll seizure of Rs 570 cr
The Madras High Court on Monday directed the Central Bureau of Investigation (CBI) to probe the transport of Rs570 crore in three containers and its seizure near Tiruppur in Tamil Nadu in May 2016.
 
The court ordered the CBI to take action as per law if it finds sufficient material in support of the petition filed by a DMK leader.
 
The court heard the petition filed by DMK spokesperson T.K.S. Elangovan alleging serious doubt about the genuineness of the belated claims of the State Bank of India (SBI) over the Rs570 crore seized during the run-up to state assembly elections held on May 16.
 
On May 13, 2016, the Election Commission's surveillance team at Tiruppur chased and seized three container lorries transporting cash to the tune of Rs570 crore.
 
The seized lorries were brought and parked in the office of District Collector of Tiruppur from May 14-17, 2016.
 
The SBI has said that the cash belonged to it and it was being transported to its cash chest in Andhra Pradesh when it was seized by the Election Commission officials.
 
According to Elangovan, huge cash should be transported by rail and escorted by local police which was not done in this case.
 
He also alleged that the cash transfer was not supported by proper documentation.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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