More trouble for Ghai as CAG raps AP govt over land allotment

Filmmaker Subhash Ghai's film institute is facing trouble in Andhra Pradesh as well over allotment of 20.10 acres of prime land

Hyderabad : Filmmaker Subhash Ghai's film institute is facing trouble in Andhra Pradesh as well with the Comptroller and Auditor General (CAG) rapping the state government over allotment of 20.10 acres of prime land to the institute in alleged violation of rules, reports PTI.

Mr Ghai is locked in a legal tangle in the AP High Court over the land allotment.

The CAG, in its latest report on land allotments in the state, related to the YS Rajasekhara Reddy government tenure, found fault with the allotment for Whistling Woods International Limited "in violation of AP Ancient and Historical Monuments and Archaeological Sites and Remains Rules 1960."

Based on a writ petition filed by a private person, the AP High Court had in January 2010 suspended the state government's order (dated August 19, 2009) giving 20.10 acres of land to Mr Ghai.

The case is pending disposal even as the state government is set to review the allotment in the light of the High Court order as well as the CAG's observations, official sources in the Revenue Department said.

The land allotted to WWIL in survey Nos. 173 and 178 at Ibrahimbagh village under Golconda mandal in Hyderabad district was adjacent to a protected monument (Premamati Mosque).

"While the market value of the land was assessed by the Hyderabad district Collector at Rs4.84 crore per acre, the government allotted the land at Rs2 crore per acre. The lease rent was fixed at 0.2% of the market value at which the land was allotted (Rs 2 crore per acre) for the first three years," the CAG report noted.

"The allotment was made through APIIC for establishing a world-class training institute of film, television, animation and media arts. This was followed by a lease agreement in October 2009, between APIIC and WWIL for allotment of 17.01 acres to WWIL for a tenure of 66 years, renewable for a further period of 30 years," it said.

The Supreme Court had on Wednesday upheld the Bombay High Court order quashing the 20 acre land allotted to his film institute at Filmcity in Mumbai.

From the fourth year onwards, the lease rent was to be enhanced to one per cent of the market value. Further, the agreement allowed WWIL to exercise an option to purchase the land at a concessional rate of Rs2 crore per acre after ten years, duly adjusting the lease rentals paid by that time, the CAG report said.

"The Government, thus, gave undue benefit to WWIL both in terms of concession in charging half the actual market value of the land and the option given to it for purchasing the land ten years down the line at the same rate irrespective of appreciation of land value. Further, allotment of land in a protected area for commercial purposes violated Government rules," it said.

In fact, audit scrutiny revealed that at the time of alienating the land, government had already decided to sign an MoU with the Islamic Republic of Iran for taking up the restoration and conservation of the monuments adjacent to this land," the CAG noted.

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Govt to kickstart coal block auction says Jaiswal

Following furore over an initial report by CAG that estimated huge losses to the exchequer in the allotment of mines, the government is readying for auction during first half of the year

New Delhi: Following furore over an initial report by the Comptroller and Auditor General (CAG) that estimated huge losses to the exchequer in the allotment of mines, the government has said it is ready with the list of coal blocks to be bid and the auction process will kickstart by June.

"The work of identification of 54 coal blocks is complete ...The bidding process would begin in the first half of this year," Coal Minister Sriprakash Jaiswal told PTI.

The government is also ready with the list of the blocks to be alloted to Central PSUs like NTPC and state undertakings by it, he said.

"Barring 12 blocks out of 54, all others would be auctioned to firms for end-use projects," Mr Jaiswal said.

The initial report of CAG estimated that the government incurred Rs10.67 lakh crore by allocating 155 coal blocks without auction between 2004-2009 to private and public sector companies.

Mr Jaiswal, however, had dismissed the report on allocation of coal blocks without auction as "illogical" and "baseless" arguing that when the blocks were given to the private and public sector companies for their captive usage, there was not much demand for coal.

Coal India's subsidiary CMPDI has been assigned the task of hiring a consultant for coming out with a methodology of fixing the reserve price of blocks, finalising bid documents and assisting in the bidding process.

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SEBI mulls new ethics code for brokers, frequent inspections

The capital market regulator would also ask all the market entities, including brokers and mutual funds, to implement the new common KYC (Know Your Client) norms even for their existing clients in a phased manner

With an aim to check flow of illicit funds and other manipulative activities in the stock market, regulator SEBI is planning more frequent inspection of various market entities and a new code of conduct for brokers.

Besides, the capital market regulator would also ask all the market entities, including brokers and mutual funds, to implement the new common KYC (Know Your Client) norms even for their existing clients in a phased manner.

These are part of the policy initiatives proposed by SEBI for the current fiscal year, 2012-13. These have been approved by its board and would be implemented over the year ending 31 March 2013.

The proposed 'code of conduct' would detail various obligations that the brokers have towards their clients and would be drafted by SEBI in consultation with the stock exchanges.

The SEBI would also look at setting up an alternative trading mechanism for small-cap companies, which witness concentrated shareholding and low trading volumes, thus posing potential risks to the investors.

 Among other initiatives, SEBI would also look at establishing and maintaining a more effective information management system, employing latest technology and developing teams of expert officers for benefit of various market segments, especially the derivatives trade.

 Regarding various market entities, SEBI is of the view that all of them must maintain high standards of integrity and fairness and also act with due skill, care and diligence in the conduct of their business, with high levels of compliance.

 SEBI has said that the number of inspections of intermediaries was enhanced considerably during the last fiscal, and steps are being taken to strengthen and monitor the process of follow-up of the findings of such inspections.

“This process will continue in the year 2012-13 also with further increase in the number of inspections,” SEBI said, while adding that it was examining a proposal of carrying out inspections of market entities through chartered accountants.

“We also propose to review the internal audit and inspection process of the stock exchanges and the depositories and their penalty structures with a view to take steps for further improvement,” the regulator said.

 Besides, SEBI would also consider carrying out “some specific inspections to check the compliance of anti-money laundering rules by the intermediaries”.

In this regard, the SEBI also plans to strengthen the concept of beneficial ownership in KYC process in coordination with other financial regulators like RBI and IRDA

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