Citizens' Issues
NBHC says EOW not sealed any of its warehouses

National Bulk Handling Corp has said that EOW searched only three of its warehouses and seized stocks belonging to NSEL and IBMA only

Warehousing services provider National Bulk Handling Corp Ltd (NBHC) said officials of Economic Offences Wing (EOW) of Mumbai police have not sealed any of its warehouses. On Monday and Tuesday, EOW officials searched three warehouses of NBHC while investigating stock of Spot Exchange Ltd (NSEL) and Indian Bullion Market Association (IBMA), NBHC said in a release.


"We, further, hereby clarify that the investigations mentioned, relate to only 3 warehouses, where the stocks of NSEL / IBMA have been stored / managed, and the investigation is specifically restricted to their stocks only. Moreover, the officials of EOW have seized the stocks of NSEL/ IBMA only, which have handed over by the authorities to NBHC as its custodian, till further instructions from them," the warehousing company said.


NBHC said its warehouse at Ganj Basoda is owned by the company while the warehouse at Vidisha - Betwa Pulses & Warehousing P Ltd, is under lease by its owner to the company.

The third warehouse searched by EOW at Delhi - Sunil Dutt Warehouse is under lease to IBMA and the stock belongs to the Association, the release said.


NBHC manages over 1140 warehouses across the country that is used for storage of various commodities on behalf of its clients. 


Sensex, Nifty continue to move higher: Thursday closing report

If the Nifty manages to close above 5,930 the upmove may gain strength

After a break of a day on account of Mahatma Gandhi Jayanti, the market opened with a gap up and continued to rally throughout the session. It closed almost near the day’s high. The Sensex  which opened at 19,586 moved up from the level of 19,584 to 19,929 and closed at 19,902 (up 385 points or 1.97%) while the Nifty opened at 5,819 and after hitting a low of 5,803 it moved up gradually to hit a high of 5,918 and closed at 5,908 (up 130 points or 2.24%). The National Stock Exchange (NSE) recorded a higher volume of 61.70 crore shares.


Except for FMCG (down 0.76%) all the other indices on the NSE closed in the positive. The top five gainers were Metal (3.94%); Media (3.68%); Bank Nifty (3.44%); Commodities (3.20%) and Finance (2.86%).


Of the 50 stocks on the Nifty, 48 ended in the green. The top five gainers were Sesa Goa (7.28%); Jaiprakash Associates (6.58%); Ambuja Cements (6.19%); Axis Bank (5.62%) and Bank of Baroda (5.27%). While the only two losers were Hindustan Unilever (1.81%) and ITC (1.15%).


Fitch Ratings has warned India that any slippage on its policy front would have negative implications for its ratings, currently at the lowest investment grade. It also cautioned India that there is much capital still left which could outflow from the country.


Indian banks will get additional capital to provide loans at lower interest rates for purchases of two-wheelers and other consumer durables, the finance ministry said in a statement on Wednesday. The move is aimed at stimulating demand. It has also decided in principle to inject Rs140 billion in state-run banks in this fiscal year, it added.


US indices closed in the negative on Wednesday although well off the day’s lows. The US government has been in partial shutdown after lawmakers failed to agree on a federal budget. House Speaker John Boehner told reporters that Obama repeated he wouldn't negotiate about passing a funding bill. The government shutdown would continue for a third day on Thursday.


A report showed companies added fewer workers than projected in September, indicating the job market is struggling to gain momentum. The 166,000 increase in employment followed a revised 159,000 rise in August that was smaller than initially estimated, according to the ADP Research Institute in Roseland, New Jersey.


Moody's Investors Service lowered its outlook on Brazil's sovereign rating to stable from positive, citing deteriorating debt and investment ratios and evidence the economy is going through a low-growth period.


The exchanges of South Korea and China remained closed today. Except for Nikkei 225 (down 0.09%) and Straits Times (down 0.25%), all the other Asian indices ended in the green. The Taiwan Weighted Index was the biggest gainer, rising 1.73%. China's official non-manufacturing Purchasing Managers' Index rose to a six-month high of 55.4 in September from 53.9 in August, adding to a growing roster of evidence that China's economy has turned a corner in recent months.


The Philippines won a rating upgrade from Moody's Investors Service, completing the nation's ascent to investment rank as President Benigno Aquino leads a growth resurgence that's outpacing the rest of Southeast Asia. The rating on the nation's government debt was raised one level to Baa3, Moody's said in a statement today. The outlook on the rating is positive. The upgrade puts the Philippines on par with Turkey and Spain.


European indices are trading in the positive while the US market opened lower.


Euro-area services output expanded more than initially estimated in September, as the 17-nation currency bloc's economic recovery gained momentum. An index based on a survey of purchasing managers in the services industry rose to 52.2, exceeding a Sept. 23 estimate of 52.1 and up from 50.7 in August, London-based Markit Economics said today. The gauge has been above 50, indicating growth, for two months.



SEBI allows preferential clauses in share purchase agreements

These changes are likely to help boost the interest of foreign investors, who tend to prefer clauses like 'right of first refusal, tag-along and drag-along' in their M&A deals

Market regulator Securities and Exchange Board of India (SEBI) on Thursday allowed entities entering into merger and acquisition (M&A) deals to include preferential clauses like 'right of first refusal, tag-along and drag-along' in their share purchase agreements. This would give more flexibility to entities entering into M&A deals.


These changes are likely to help boost the interest of foreign investors, who tend to prefer such clauses in their deals. However, the amendments would be effective with prospectively and not to the deals already having taken place.


The demand for allowing such clauses has been gaining ground for quite some time, as certain high-profile merger and acquisition deals, including the Diageo-United Spirits deal and Cairn-Vedanta deal, had to face regulatory hurdles amid lack of clarity on regulations on such clauses.


The government recently cleared a proposal to amend the Securities Contracts (Regulation) Act (SCRA) regulations for allowing put and call options as well as some other provisions to give special rights to investors.


Such options in shareholder agreements give the investor an option to either sell the shares (put option), or to buy additional shares (call option) at a future date.


"... Contracts for pre-emption including right of first refusal, or tag-along or drag-along rights contained in shareholders agreements or articles of association of companies or other body corporate," have been allowed in share purchase agreements, according to SEBI notification.


Right of refusal gives one of the parties in an M&A deal the first option to buy out its partner in the event of the latter wishing to exit from the agreement at a later stage.


Tag-along and drag-along clauses allow one of the partners to join the other party in cases like further acquisition or sell out deals.


Such rights to the parties entering into M&A deals are also covered under 'put and call' options, which allow one party to sell or buy the securities or assets involved in a transaction.


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