Markets reeled under selling pressure on fears that the RBI might increase borrowing costs in its forthcoming policy meeting, to check inflation. The trend is still down
The market was down today after a volatile trading session. The Sensex closed at 17,591, lower by 48 points (0.27%) and the Nifty closed at 5,262, down by 11 points (0.21%). The market rebounded in early morning trade after touching the intraday low. However, trading remained range-bound till mid-afternoon when the bourse touched the intraday high. It slid from there soon and traded in a narrow range for the rest of the session.
Asian stocks retreated from 22-month highs on Friday as fresh doubts about the US economic recovery and the Greece rescue package prompted profit-booking. Key benchmark indices in China, Hong Kong, Indonesia, Japan, Singapore, South Korea and Taiwan fell by 0.24% to 1.52%. Property and banking stocks led the decline in China after Beijing tightened policies on residential property markets on Thursday. US stocks posted their sixth straight day of gains on Thursday as an encouraging profit forecast from United Parcel Service lifted transportation shares, though concerns over a rise in weekly jobless claims limited the market’s advance. The Dow rose 21.46 points (0.19%) to 11,144. The Nasdaq rose 11 points (0.43%) to 2,515 and the S&P 500 rose 1 point (0.08%) to 1,211. European finance ministers discussed the Greek debt crisis today. While an emergency loan facility has been arranged, Greece said that the nation is imposing a painful austerity plan and any external help will be taken only after due consideration, based on the nation’s interest.
Closer home, a pre-monetary policy meeting is scheduled today between the finance ministry and the RBI governor. It is expected that balancing growth while keeping inflation under control will be the major subject of the discussions. The government expects private companies to invest half of the projected $1-trillion investment in infrastructure between 2012 and 2017. Difficulties in acquisition of land, and underdeveloped bond markets have been coming in the way of long-term infrastructure projects.
A new regulation from the Securities and Exchange Board of India (SEBI) has tightened disclosure norms for foreign institutional investors. Foreign investors now have to disclose to the regulator whether investments are in the form of multi-class vehicles (MCVs), segregated portfolio companies (SPCs) or protected cell companies (PCCs).
Foreign institutional investors were net buyers yesterday of Rs99 crore. Domestic institutional buyers were net sellers of Rs76 crore. The rupee recovered from yesterday’s low on dollar inflows.
JSW Energy (up 3.8%), through its wholly-owned overseas subsidiary, acquired 49.8% stake in Royal Bafokeng Capital from Strider Holdings with an option to acquire the balance stake. Ramco Systems (up 6.9%) has entered into an agreement to provide its repair, procurement and invoicing functions to ESIS. The partnership will leverage all versions of Ramco System’s aviation software, maintenance repair & overhaul systems and enterprise resource planning. Aurobindo Pharma (down 0.3%) has received approval for its Abbreviated New Drug Submission for Cefprozil tablets in strengths of 250mg and 500mg and Cefprozil powder for oral suspension (PFOS) in strengths of 125mg/5ml and 250mg/5ml from Health Canada. Reliance Industries (down 0.6%) has invested around 26% in Deccan 360. This investment will be used to increase the air and surface coverage of the logistics company. Goenka Diamond & Jewels (down 5.3%) listed on the market today. The company had priced its initial public offer at the lower end of the Rs135 to Rs145 per share price band following a muted investor response to the issue. The issue was subscribed 1.07 times. Larsen & Toubro (down 0.1%) is in discussions with Mitsubishi Heavy Industries to form a joint venture for manufacturing a wide range of heavy industrial tyres. Pipavav Shipyard (up 0.2%) is in talks to buy an oil rig and shipping company in Europe.
Team Life Care Co, an authorised corporate agent of Bajaj Allianz Life Insurance, is carrying on a multi-level marketing scheme under a sister entity called TLC Insurance (India) Pvt Ltd, in open violation of the law
Peddlers of multi-level marketing (MLM) schemes in insurance products are coming up with new ways to cover up their shady activities. One such company is Team Life Care Co India Pvt Ltd, a corporate agent of Bajaj Allianz Life Insurance Company Ltd.
Team Life Care Co (India) has a website (see here) in which it lists down all the Bajaj Allianz products that it sells. However, Team Life Care Co (India) seems to be running a mirror website in a company called TLC Insurance (India) Pvt Ltd (see here) where it lists down an elaborate and bizarre MLM scheme.
Section (41) of the Insurance Act (1938), clearly says that “a licensed agent, whether individual or corporate, can’t appoint a sub-agent and pass on a commission to another person or entity. Any passing of commission by an agent is construed as rebating and is prohibited under the Act.”
Moneylife contacted both Team Life Care Co and TLC Insurance (India) Pvt Ltd. Soumya Nair from Team Life Care Co confirmed that TLC Insurance (India) Pvt Ltd was an outfit that it was running. Saurabh Dahayat from TLC Insurance (India) Pvt Ltd also confirmed that it was a part of Team Life Care Co. Both Ms Nair and Mr Dahayat confirmed that both these entities share a common managing director, one Mr Jagannath (initials or first name not available).
When Moneylife contacted Mr Dahayat from TLC on how the MLM scheme operates and the relationship between the two entities, he said, “Team Life Care is an operations department of TLC where you get a login ID and all your queries are cleared. You have to draw a demand draft (DD) on the name of TLC Insurance. You have to issue one DD in favour of Bajaj Allianz and the other for TLC Insurance (India) Pvt Ltd. Both companies are a part of one group. Our managing director is (the) same. You have to work for TLC Insurance (for the MLM scheme).”
Here is a clear case of a company which is running a legitimate insurance agent business, but which has a mirror entity which is engaging in an MLM insurance scheme, expressly prohibited under the Insurance Act.
If you take a look at the websites of both these companies, you would notice that they carry a common logo (see above links).
Santosh Balan, head, (Corporate Communications) from Bajaj Allianz sent us this email: “We wish to inform you that Team Life Care Co (India) Ltd is a Corporate Agent of Bajaj Allianz Life Insurance and they solicit business through approved specified persons only. All our agents are strictly advised to follow all regulations and procedures while soliciting business. If we find anyone violating any norm or regulations, we would take strict action against them.”
However, Mr Balan also added, “The two entities mentioned in your mail are distinct and are two different companies.”
The question is, why is Team Life Care Co operating an MLM scheme through another entity (TLC Insurance (India) Pvt Ltd)? As we mentioned earlier, both companies have confirmed to us (over the telephone) that they are related to each other and share a common managing director.
What's more, the entity running the MLM scheme, TLC Insurance (India) Pvt Ltd, has a number of 'testimonials' in its website which point to various court orders and attestations from legal luminaries confirming that the MLM scheme that it is running is a legitimate business.
Moneylife is not in a position to confirm the legitimacy (or otherwise) of these various court orders and testimonials that TLC Insurance (India) is carrying on its website.
But if MLM schemes are expressly prohibited under the Act, how can a company run such a scheme under such a guise?
When we contacted the regulator, the Insurance Regulatory and Development Authority, an official told Moneylife (on conditions of anonymity), “Only licensed individuals (are) allowed at the point of sale, and sharing of commission is not allowed.”
The State-run oil companies currently sell petrol at a loss of Rs6.68 per litre, while the loss is Rs5.81 a litre on diesel, Rs18.42 per litre on PDS kerosene and Rs265.27 per 14.2-kg LPG cylinder
State-owned Indian Oil Corp (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) are collectively losing Rs265 crore per day on selling fuel below cost and may end the fiscal with a Rs87,440 crore revenue loss, reports PTI.
“International crude oil prices have firmed up in April and retailers are losing a little less than Rs 265 crore per day on selling petrol, diesel, domestic LPG and kerosene,” an industry official said.
IOC, BPCL and HPCL currently sell petrol at a loss of Rs6.68 per litre, while the loss is Rs5.81 a litre on diesel, Rs18.42 per litre on PDS kerosene and Rs265.27 per 14.2-kg LPG cylinder.
The official said that the three fuel retailers lost Rs47,960 crore on selling fuel below cost in the 2009-10 fiscal.
“This fiscal, under-recoveries (revenue loss) are expected to widen to Rs87,440 crore,” he said.
The government has not yet said how it will make up for the projected losses for this fiscal.
“There is an agreed formula to share under-recoveries for 2009-10, but there is no word for the current year,” the official said.
For FY’10, losses on petrol and diesel are to be met by upstream firms like ONGC and the government was supposed to shoulder the under-recovery on cooking fuel. However, the government has not kept its part of the deal.
Of the Rs29,353 crore revenue loss in the April-December period, upstream firms contributed Rs8,364 crore to cover for the entire shortfall on petrol and diesel. But in the case of the Rs20,989 crore loss on LPG and kerosene in the first nine months, the finance ministry has provided only Rs12,000 crore.
Besides the Rs8,989 crore uncovered amount in the April-December period, about Rs12,000 crore of revenue loss on LPG and kerosene in the January-March quarter remains uncovered.
The official said that IOC, BPCL and HPCL have received Rs12,000 crore to make up for part of the losses on LPG and kerosene in 2009-10.
IOC got Rs7,100.18 crore, BPCL Rs2,370.77 crore and HPCL Rs2,529.05 crore.