Stock of scam-tainted company gains 30% in five days; has doubled in value from a low of Rs47.35 in May
Money Matters Financial Services Limited has seen an astonishing more than 100% jump in its stock price since May 2011 when it touched its lowest level this year, following the loans-for-kickbacks scam involving LIC Housing Finance scam that broke in November last year. While the reason for the gain is not known, the stock price continues to go from strength to strength. Market sources say that there is no apparent reason for the sudden surge, except probably that the company is confident about burying the bribery scandal.
The rise in the Money Matters stock began in May and it has shot up higher since the chairman of LIC Mr TS Vijayan was cleared on 4th July. The Money Matters stock gained more than 10% today to close at Rs96.10, up over 30% from its close of Rs73 on 4th July.
While LIC Housing Finance, which suffered the maximum after the scam, has shown a slow recovery of 4% since the crash in November, Money Matters is suddenly galloping at a stunning pace. On 23rd November, the Money Matters stock closed at Rs663.90, while LIC Housing Finance closed at Rs261.63. The next day, when the scam broke, the stocks suffered heavily, and Money Matters fell to Rs531.2 and LIC Housing Finance to Rs213.71.
It was downhill for both stocks after that. LIC Housing recorded its lowest level on 17th January at Rs151.75, while Money Matters plunged to Rs47.85 on 18th May. However, it has started to recover mysteriously since then.
Money Matters, however, refused to say anything about this sudden gain. "Ours is a listed company," a company spokesperson said. "There are a lot of factors that push stock prices up or down. It is difficult to pinpoint any one particular reason. All information is available in the public domain and we cannot add anything to that."
The otherwise little-known Money Matters Financial Services shot into the limelight in November last year, when its managing director and chairman Rajesh Sharma and other senior officials were arrested by the Central Bureau of Investigation for allegedly bribing bank officials to sanction huge loans to housing firms, bypassing rules and regulations.
Some big names from the banking world were also dragged into the controversy. Among Money Matters clients were entities like DB Realty, Hindustan Construction Company, Suzlon Energy and Vatika, all of whom distanced themselves after the scam broke.
Ramchandra Nair, CEO, LIC Housing Finance, Naresh Chopra, secretary (investment) LIC, RN Tayal, general manager of Bank of India (Delhi), Maninder Singh Johar, director, Central Bank of India, and Venkoba Gujjal, deputy general manager, Punjab National Bank (Delhi), were also arrested in the scam. While they were released on bail later, the Bombay High Court refused bail to Mr Sharma earlier this year, saying that he was the 'kingpin' in the multi-crore kickbacks-for-loans scam.
Asked whether the air has been cleared about the controversy and whether some confidence-building exercise has boost the company's stock price, Money Matters was again evasive. "The company definitely does what it is supposed to do and we have taken a few initiatives, but we cannot comment on this. As insiders, we cannot give anyone any information," the spokesperson said.
In the 2010-2011 annual report, Rajesh Sharma had said about the CBI investigation, "We believe this to be the hand work of some of our rivals who wished to curtail our speed of progress. We have denied all the charges and are sure that our officials will prove their innocence. We would not like to offer any explanation here as the matter is sub-judice. However I would only like to add that there has been no case against the company for any sort of wrong doing and there are no restrictions on the functioning of the company."
Commenting on the Money Matters stock movement, an analyst said, "The stock is showing a sturdy recovery. It is difficult to comment further on this, since no information is available publicly about this. But since the controversy hasn't settled down, we would ask the investors to be cautious."
Department states that there has been a more than 70% drop in traffic of these postal items. RTI activist Subhash Chandra Agrawal awaits response from government to his suggestions for changing some basic services
The use of simple postal facilities like postcards and inland letters has declined sharply over the past decade, since the introduction of the quicker Speed Post system and private courier services.
According to data from the postal department received by RTI activist Subhash Chandra Agrawal, the traffic of postcards has dropped 76% from a little over 336 crore in 1999-2000 to about 78 crore in 2008-09. Similarly, the use of inland letters has fallen 72% from 355 crore to 98 crore in the ten-year period.
Mr Agarwal had, in his application to the postal department, asked to know when the use of these postal items was at their peak, but the department could not give this information.
Postcards and inland letters were the most popular format and in many places the only means of postal communication some years ago. But fewer and fewer number of people use this service today, particularly in urban areas, where private courier services and e-mail is preferred over the post.
While e-mail is convenient, private couriers are known to be quicker in delivering letters and packages. It is also possible that the use of these once-common postal facilities has gone down even in towns and villages, with the availability of mobile telephone services that has changed the systems of communication quite dramatically.
Of course, a postcard which costs just 50 paise or the inland letter at Rs2.50 is still the only affordable for a majority of people. Some postcards (also called Meghdoot post card) that carry advertisements are even cheaper at only 25 paise.
But Mr Agrawal believes that the postcards should be charged one rupee ("Because 25-paise coins have been discontinued and even beggars refuse to accept coins below one rupee."), while the inland letter service should be discontinued altogether as it has lost its utility.
He has suggested that the Meghdoot post card should be priced at one rupee instead of the ordinary post card tariff of 50 paise and that whatever subsidy on this could be borne by advertisers sponsoring the Meghdoot post card.
In his recommendations to the government that were sent separately in May, Mr Agrawal also said that the Registered Post service be merged with the Speed Post by expanding the Speed Post network to more cities and towns and introducing an acknowledgement-due receipt with Speed Post for a charge of Rs5.
He has recommended a one-nation-one-tariff system of Rs15 for Speed Post instead of the current Rs12 for local and Rs15 for non-local delivery for a package of minimum 50 gm. He also said it was senseless that the next 450 gm is charged an additional amount equivalent to the charge for the initial 50 gm and urged that this loss in revenue be corrected.
Similarly, Mr Agrawal referred to the foreign mail tariffs that were fixed decades ago, saying that there should be separate rates for air mail and sea mail instead of the imposing a surcharge for air mail on the haphazardly fixed sea mail rates.
While refraining from passing any order on a PIL filed against telecom minister Kapil Sibal accusing him of reducing a penalty amount favouring Anil Ambani-headed RCom, the apex court said that persons aggrieved can avail remedy under the law
New Delhi: The Supreme Court on Monday refrained from passing any order on a public interest litigation (PIL) filed against telecom minister Kapil Sibal accusing him of reducing a penalty amount favouring Anil Ambani-headed Reliance Communications (RCom), saying persons aggrieved can avail remedy under the law, reports PTI.
"No order is required," a bench comprising justices GS Singhvi and AK Ganguly said while taking on file the affidavit filed by Centre for Public Interest Litigation (CPIL) accusing Mr Sibal of favouring RCom by reducing the penalty from Rs650 crore to Rs5 crore for alleged violations in the Unified Access Service Licence (UASL) agreement.
"If there is any irregularity allegedly connected whatsoever with telecom, it cannot be linked to the second generation (2G) spectrum," the bench said.
The bench made the remarks after senior advocate Rohinton Nariman, who appeared for the government in place of Solicitor General Gopal Subramanium, replied to a question whether the matter in hand was related to 2G.
"Not at all," replied Mr Nariman.
The bench clarified "persons aggrieved will be entitled to avail remedy in accordance with the law."
During the hearing when advocate Prashant Bhushan appearing for CPIL was pressing for the matter to be investigated as Mr Sibal had taken a unilaterally and final decision.
The bench said "it is open to CBI for investigation. I am not saying anything" adding, "the minister's decision may be right or may be wrong".
Mr Nariman appeared for the government in place of Solicitor General Gopal Subramaniam who was not seen in the court.
The affidavit had alleged that "Mr Sibal abused his position as minister to overrule the unanimous view taken by senior Department of Telecom (DoT) officials, including the telecom secretary, to benefit a private operator by closing the issue with only a penalty of Rs5 crore.
"This abuse of authority by him to benefit Anil Ambani-controlled Reliance Infocomm needs a thorough investigation by the CBI," the application said.
However, Mr Sibal rejected the allegations saying he had not favoured anyone and that the penalty imposed was as per the provisions of the agreement between Universal Service Obligation Fund (USOF) and RCom.
He described the Mr Bhushan's affidavit as the "worst case of forum shopping" and accused him of levelling "malicious and defamatory" charges.