Post-job Problems
This is with regard to ‘Retirement Crisis’. Let us rephrase it as post-job problems, as our understanding of retirement is age-related and ‘retirement’ presumes job security. Even the present governor of the Reserve Bank of India (RBI) once mentioned that, these days, people do not think of remaining in the same job for more than 10 years. It would be an interesting study, if one factors in the social security issues that worry Americans into the thought process of Indian workers. 
 
During the past decade, India has destroyed a pension system which was admittedly available only to a small percentage of the Indian work force. The substitute, namely, National Pension System (NPS), is yet to put its act together. 
 
The previous Central government had talked about an annual matching contribution of Rs1,000/- (rupees one thousand only) to those who join NPS, as an incentive. It is beyond comprehension as to what benefit a family will get by a fund created out of annual deposit of Rs2,000/-.
 
Post-job worries are about shelter, healthcare and a source of income, which will not dry up. For those who can take up new jobs for earning adequate income, support for re-skilling or up-skilling should be made available.
 
It is comforting that the debate on social security is being kept alive by Moneylife.
MG Warrier, online comment
 

Go Through Hell!

This is with regard to “Reasonableness, Again” by Bapoo Malcolm. This is very clearly explained by Bapoo Malcom and I am sure it will help readers in case something similar happens to them. I can relate my personal case—my car was stolen and later recovered. I had to go through hell (different police stations, courts, lawyers) to get it back. The procedure is so cumbersome and lengthy that one wishes that if a vehicle is stolen, it is never found.
Deepak R Khemani, online comment
 

Customer Centrality!

This is with regard to “Delhi elections bring to the fore governance issues again” by Sucheta Dalal. Governance reforms, as the writer has rightly addressed, are the key to action. But which are these areas? 
 
First, agriculture. Sustained technology interventions with amendment to the APMC Act that should provide for the farmers to have direct market access in the place of brokers and politicians do not brook delay.
 
Second, education. Right from primary to technical and higher education should come under one umbrella and one ministry. Institutional reforms hold the key. Budgetary allocations appropriate to the task would be also extremely important. 
 
Third, manufacturing sector. Ease of doing business is getting the attention that is due, no doubt. 
 
Land laws are a sore point. This has to be addressed with a sense of proportion. Among services, finance and insurance sectors need a thorough review. Responsible and responsive public sector requires good governance code and effective monitoring. Capital refurbishment has to be done with accountability. 
B Yerram Raju, by email
 

High Profile Jailbirds

This is with regard to “Billionaire Subrata Roy strangely can’t raise money to get out of jail” by Sucheta Dalal. A close unofficial watch on many of these high-profile jailbirds may be illuminating about the actual life enjoyed by them ‘in jail’ and ‘on record in jail’. Why give Rs10,000 crore when there are jail staff who can be persuaded and some of this money lavished on them for ‘better returns’?
Leslie Menezes, online comment
 

Government Should Provide Relief

This is with regard to “Budget and Senior Citizens” by SD Israni in Moneylife (11 February 2015). I wholeheartedly agree with the article. I would even go one step ahead and suggest that health-related expenditure on senior citizens should be exempted, or deducted, even when such expenditure is borne by their children. I say this from my own experience. My parents, both senior citizens, are dependent on me, since they have no source of income.  While I consider it my duty to take care of them, perhaps I can also expect the government to provide relief on such expenditure via exemptions/ deductions.
Sreenidhi, online comment
 

Wrongs On Unknowing Customer!

This is with regard to “The Fad of Financial Literacy” by Sucheta Dalal. The regulators have most often been caught unawares or have chosen to look the other way, when there were anti-consumer products / services/ policies of insurance companies and AMCs (asset management companies). While it is good to inculcate financial literacy among the masses, it does not absolve those who offer financial products and their respective regulators from the wrongs being perpetrated on the unknowing customer.
Subba Rao, online comment
 

Poor Recommendations?

This is with regard to “16 Features of Stocks To Avoid” by R Balakrishnan. If you see the stocks wealth management companies recommend, they have at least a few of these 16 features. About two years ago, one Naresh Rever working in HDFC Securities (Mumbai) confidently boasted that IDFC share price will be Rs1,000/- in one year’s time. After getting the banking licence, the share price is still stuck in Rs140-Rs 150/- range. It is important to blacklist all wealth management companies, like HDFC Securities, who will contact you and stalk you continuously to sell shares having any of these 16 features. In October-December 2012, HDFC Securities suggested stocks which included Praj, KEC International, MTNL, United Breweries Holdings, Sintex, Escorts, Piramal Enterprise, JSW Holdings, etc. It would be interesting to compare the share price of these companies then and now; the comparison would speak for itself.
Suketu Shah, online comment
 
Limited Target
This is with regard to “Searching for ‘Sickness’” by Prof BM Hegde. It is time the author thought about writing a book which creates awareness among the people. These online articles appear for a week or two and have limited readership. But a book can be gifted to elders to read.
Sreekanth Yelicherla, online comment
 

Strange Indeed!

This  is with regard to “Fortnightly Market View: Budget Run-up?” by Debashis Basu. Why are just the Nifty and the Sensex rallying ? People are only chasing expensive stocks. Why is the Small-caps Index not rallying? Strange indeed!
Vinayak Bhimrao Mudholkar
 

Transparency In Political Funding

This is with regard to “Delhi elections bring to the fore governance issues again” by Sucheta Dalal. Very well articulated. In spite of my apprehensions, I wish that AAP (Aam Admi Party) succeeds. If they can, at least, force transparency in the system of political funding, it will be a great contribution. I am sure, many of their promises are difficult to deliver; but, if they can control corruption that impacts men on the street, it will be a huge success.
Anil Agashe
 

Deterrent For Future Scamsters

This is with regard to “Billionaire Subrata Roy strangely can’t raise money to get out of jail” by Sucheta Dalal. Everybody knows that all these groups—Sahara, Kuber, Saradha, etc—are/were shady businesses. For long, these were enjoying political involvement and patronage. They cared the least about law and ethics. All of these scamsters should meet an outcome that serves as a deterrent.
Amit Mittal 
 

Safeguarding Bogus Companies?

This is with regard to “The Fad of Financial Literacy” by Sucheta Dalal. If an individual were to get into the trap of a dishonoured cheque, he can be put behind bars for a petty amount under the Negotiable Instruments Act. What about companies issuing cheques that bounce? The regulators are more prone to safeguarding bogus companies rather than investors.
Vishal
 

Doctor With A Hammer?

This is with regard to “When doctors assume that they know what a patient wants” by Prof BM Hegde. This reminds me of what Charlie Munger has said: “To a man with a hammer, everything looks like a nail!” Doctor, would love some suggestions on the possible short-term solutions for this problem. A doctor helpline by Moneylife? Not to complain, but to recommend people to doctors who specialise in holistic care and wellness rather than prescribing medicines and surgery. In the long term, this requires a major jolt from the government which we can all hope and pray for.
Charles Carvalho

 

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Fortnightly Market View: Reflation Is Here
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SEBI bars AM Fund Managers from collecting money from investors
Odisha-based AM Fund Managers was collecting money from investors through issue of preference shares
 
Market regulator Securities and Exchange Board of India (SEBI) asked AM Fund Managers Ltd not to mobilise funds from investors. SEBI also barred the company and its directors from issuing prospectus or any offer document or issue advertisement for soliciting money from investors for issue of securities.
 
The company was engaged in fund mobilising activity through issue of Preference Shares to more than 49 persons without complying with the provisions of the Companies Act, 1956, according to the SEBI Order.
 
SEBI had received complaints dated 3rd November and 10 November 2014 from investors alleging non-payment of their invested money by AM Fund Managers. The complainants also enclosed copies of application forms and preference share certificates.
 
SEBI started an investigation and wrote to AMF and Registrar of Companies (RoC), Cuttack, Odisha. RoC, Cuttack in its letter dated 31 December  2014 stated that the company has filed Form-2 with their office for issue of 36% Redeemable Preference Shares (RPS). The RoC also provided copies of Form-2 and list of allottees filed by the company with their office.
 
For ascertaining whether the Offer of RPS is in the nature of a public issue in accordance with Section 67 of the Companies Act, 1956, the number of subscribers is of utmost importance.  SEBI after investigation found it to be a public issue without following appropriate procedures for safeguarding the interests of investors.
 
Once it is found to be a public issue, it follows that such securities shall also have to be listed on a recognized stock exchange, as mandated under Section 73 of the Companies Act, 1956. In this regard, reference is made to Sections 73 of the Companies Act, 1956, of which sub-Sections (1), (2) and (3) are relevant for the instant case. No listing was made by the company.
 
The SEBI Order hence inferred that it prima facie appears that AMF had violated the provisions of Section 73 of the Companies Act, 1956, in respect of the Offer of RPS.
 
Since no prospectus was issued for the public issue, the SEBI Order inferred that prima facie, AMF had not complied with the provisions of Section 60 of Companies Act, 1956.
 
The SEBI member hence made it clear in his Order, “I am of the view that AMF is prima facie engaged in fund mobilising activity from the public, through the offer of RPS and as a result of the aforesaid activity has violated the aforementioned provisions of the Companies Act, 1956 (Section 56, Section 60 read with Section 2(36), Section 73).”
 
Hence the SEBI Order goes on to direct the company and its directors as follows:
(a) AMF shall not mobilize any fresh funds from investors through the offer of RPS or through the issuance of equity shares or any other securities, to the public and/or invite subscription, in any manner whatsoever, either directly or indirectly till further directions;
 
AMF, its Directors and Promoters are restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in the securities market, either directly or indirectly, till further directions;
 
(b) AMF shall provide a full inventory of all its assets and properties;
 
(c) AMF 's Directors and Promoters shall provide a full inventory of all their assets and properties;
 
(d) AMF and its promoters shall not dispose of any of the properties or alienate or encumber any of the assets owned/acquired by that company through the offer of RPS, without prior permission from SEBI;
 
(e) AMF, its Directors and Promoters shall not divert any funds raised from public at large through the offer of RPS, which are kept in bank account(s) and/or in the custody of AMF;

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