Companies & Sectors
Raghav Bahl of CNBC, Sameer Manchanda, Den Networks & others pay up Rs4.93 crore as settlement fee

The cable distributor along with 24 other entities including its CMD Sameer Manchanda and Network18 founder Raghav Bahl paid Rs4.93 crore to SEBI for settling various alleged violations committed by Den Networks during its IPO

 
Den Networks, along with 24 other entities, including its chairman and managing director (CMD), Sameer Manchanda and Raghav Bahl, founder and managing director of Network18, has paid Rs4.93 crore to settle a case of alleged violations with market regulator Securities and Exchange Board of India (SEBI). Thus, it appears that these entities have taken advantage of SEBI’s consent order mechanism by collectively paying a huge fine in order to escape possible punishment, public shame and possible debarment from the securities market.

Typically, SEBI has helped hide the true nature of the offences by these persons and entities by using vague and obfuscatory terms in its consent order. The SEBI consent order hence suggests that the company, its promoters, board of directors and several other entities were charged with violating various regulations, including prohibition of certain dealings in securities, prohibition of manipulative, fraudulent and unfair trade practices. The company is also alleged to have flouted the code of internal procedures and conduct for listed companies and other entities. In fact, the order ought to have explained in detail the specific nature of the charges, even if they entities were allowed to get away without confirming or denying guilt. The massive size of the settlement however indicates that the charges were pretty serious. 
 
Den Network’s CMD Sameer Manchanda played an important role in launching CNN-IBN, a 24-hour English language news and current affairs channel, and has been integral to the Network18 Group, an Indian media house. Incidentally, Bahl, one of the founders of the Network18 group and the TV18 Group, found mention in the consent order. He paid Rs2 lakh as fine. Bahl, a prominent media personality, quit directorship of Den Networks in October 2010.
 
Den Networks’ board of directors includes Robindra Sharma, Atul Sharma, Shahzaad Siraj Dalal, Raghav Bahl, Ajaya Chand and Krishna Kumar PT. Incidentally, Shahzaad Siraj Dalal used to be a director of TV18 until he quit last year. He too paid Rs2 lakh as fine.
 
Hemant Narang, who is linked to Lucid Systems Pvt Ltd (one of the entities accused and co-promoters of Den Networks at time of violation) was asked to pay Rs5.86 lakh as consent fine to SEBI.
 
Earlier on 18 May 2012, the market regulator issued a show-cause notice to Den Networks and 24 entities for alleged violation of SEBI regulations. It was alleged that Den Networks had directly or indirectly provided funds to certain entities for buying the company’s shares in its initial public offering (IPO), without making any disclosures.  
 
While adjudication proceedings were on, Den Networks and other entities moved a consent application to SEBI to settle the adjudication proceedings and the proposed prosecution proceedings on payment of Rs 4.93 crore as settlement charges.
 
SEBI in its press release said, “A panel consisting of whole-time members, SEBI, Rajeev Kumar Agarwal and Prashant Saran has passed a consent order on 11 March 2013 on the application submitted by Den Networks on behalf of itself and 24 other entities, in accordance with SEBI Circular dated 20 April 2007 read with the circular dated 25 May 2012. The applicants have remitted a sum of Rs4.93 crore towards consent terms in the matter without admitting or denying the guilt on their part.”
 
Robindra Sharma, Atul Sharma, Shahzaad Siraj Dalal, Raghav Bahl, Ajaya Chand and Krishna Kumar PT paid a fine of Rs2 lakh each. Meerut Cable Network Pvt Ltd, Den Entertainment Network Pvt Ltd, Den Satellite Networks Pvt Ltd, Convergence Consultants Pvt Ltd, Puja Arora, Gagan Arora, Romi Shiv, MD Cable Network, Rashmeet Kaur, Piyush Goyal, Amit Grover, Vikas Bali, Summit Grover and Harvinder Singh together paid Rs47.60 lakh or Rs3.40 lakh each. 
 
Sameer Manchanda and Lucid Systems Pvt Ltd, both promoters of Den Networks at the time of alleged violations paid Rs4 lakh together, while Hemant Narang and Anuj Gandhi paid Rs5.86 lakh each.
 
SEBI’s consent order mechanism allows indicted companies, who have supposedly flouted regulations, to pay up a big fine to the market regulator and get away virtually scot-free, without admitting guilt. The so called High Powered Advisory Committee examined the application submitted by Den Networks and agreed that the case was ripe for settlement. The consent  order said, “The High-Powered Advisory Committee constituted by SEBI, in its meeting held on 21 December 2012, after considering the consent terms proposed by the applicants and all the relevant factors, recommended the case for settlement on payment”.
 
According to the SEBI website, the High-Powered Advisory Committee on consent orders and compounding of offences includes: Justice (Rtd) SM Jhunjhunwala—former judge of the Bombay High Court, Dr B Samal—former member of Securities Appellate Tribunal, V Leeladhar—former deputy governor of Reserve Bank of India and Dolphy D’Souza—Partner, E&Y. The High Powered Advisory Committee’s recommendations were accepted by SEBI. 
 
Den Networks is one of India's leading cable TV distribution companies reaching an estimated 11 million households. According to the website, Den Networks has a 50-50 joint venture with News Corp’s Star TV Group called Star DEN which was formed in 2008. In May 2011, Star DEN formed a 50-50 joint venture with Zee Turner combining the distribution assets of the Star, Zee and Turner groups in India.
 

User

COMMENTS

Emerging Voice

3 years ago

DEN NWs service is poor. It serves itc customer through a Network of cable oprators. In Powai, Mumbai, Den's Cable franchise is Jai AMbe. Jai ambe cable NW is very old & gives very poor quality of signal. Post digitization, channels are very noisy and frequent blackouts are norm. Jai Ambe helpdesk at Hiranandani Powai doesn't take any remedial action but directs subscriber to call the field engr on a mobile. Needless to say, the guy- Sudhakar's phone is always switched off. Numerous complaints to DEN NW about poor quality of service failed to evoke a response.
About DEN - Try calling DEN Toll free on weekends or post 9pm. You will never get to speak to an operator. You can hold endlessly. DEN only has a web based complaint system which doesn't work. Post lodging a complaint, you NEVER get a Complaint no which is reqd for tracking. The website says, Tracking number will only be given when you call Toll free no. So You call Toll free which no one picks & webbased compliant doesn't give Tracking no.
Also Web system ask for DEN VC/MAC id. But STB has DEN SN, MDS SN & Smart Card SN. No VC/MAC ID. SO how does a subscriber complaints.
TRAI should be appraised of this & a notice should be issued to DEN to get all these customer facing issues sorted out.

Bharti Airtel is a complex business and volatility is likely to persist

According to Nomura, domestic pricing trends, regulations, and performance in Africa will be the key drivers for Bharti Airtel. In addition, 'newsflow’, which has become a key driver of the company’s share, price far more than fundamentals even, is likely to continue and the stock would remain range-bound, the research report said  

 
There are many different views for Bharti Airtel on competition, license auctions, Africa, Reliance Industries’ launch of 4G and data outlook. Nomura Research said expectations (from Bharti Airtel) are high, but confidence has taken a beating after two years of disappointing results and it should turn some time. 
 
“However, Bharti is a complex business to model and analyse, so volatility will likely persist. This may present trading opportunities into the results (including good 4Q13 results) and ‘newsflow’ will likely continue to be a key share price driver, but fundamentally we don’t think the stock is inexpensive, hence neutral (rating),” Nomura said in a research report. 
 
Nomura had maintained its ‘neutral’ rating on Bharti Airtel with a target price of Rs310 as against a closing price of Rs307 as on 25 February 2013. “Our target price is 10% below consensus due to operational and regulatory concerns. Domestic pricing trends, regulations, and performance in Africa will be the key drivers of Bharti Airtel, in our view,” it said.
 
Nomura said its analysts met with the management of the company as well as various domestic investors in India. Bharti Airtel management expects some increase in revenues per minute (RPM) during the March quarter, but was not sure how long it can be sustained.
 
Bharti Airtel also stated that most of its major renewals are between 2014 and 2016 and there is enough existing spectrum now—more supply than demand; hence pricing should be controlled going forward.
 
As per Nomura’s discussions with domestic investors, there was not much disagreement that Indian telcos would remain difficult to call on a short-term or a long-term view. “Amongst key concerns/questions (expressed by investors), it was largely on ‘views’ on regulations, domestic RPM outlook, spectrum pricing, data examples, capex and landscape post RIL launch,” Nomura said.
 

User

COMMENTS

gopalanjanaki

4 years ago

So far as Mobiles&broad bands service is pretty good

gopalanjanaki

4 years ago

So far as Mobiles&broad bands service is pretty good

IRDA guidelines impact commission and surrender value of traditional products

The insurance regulator’s guidelines will see a push for selling policies with a term of 12 years or more as it keeps the intermediary commission intact. Surrender value is improved, but it may not be enough considering the gap with ULIP surrender value. Nothing much to cheer for consumers

The Insurance Regulatory and Development Authority (IRDA) has issued guidelines, effective October 2013, for life insurance policies which will have an impact on the commission and surrender value of traditional products (endowment, money-back, whole-life and term plans). Short-term policies will have a lower commission than traditional products with a policy term of 12 years or more. There was no such differentiation till now with agents getting 35%-40% of the first year premium as commission. Life Insurance Corporation of India (LIC) agents will hold protest demonstrations in front of LIC branches across India on 20th March against the reduced commission in IRDA guidelines.

 

In case of regular premium insurance policies, a policy with a premium paying term (PPT) of five years will not pay more than 15% in the first year, 7.5% in the second and third year and 5% subsequently. Products with PPT of 12 years or more will have first year commissions up to 35% in case the company has completed 10 years of existence and 40% for the company in business for less than 10 years. Don’t be surprised if intermediaries are only interested in selling long-term life insurance products espousing benefits for disciplined savers.

 

Online policy sales and other direct sales of products will have no commissions and that benefit will be passed on to the policyholder. It is not clear how the benefit is passed to policyholder, if the same product is sold through agent versus direct sales. Will the policyholder buying the product through direct sales get higher bonus due to the saved commission? Otherwise, the customer will still go through agent route due to the prevalent custom of “commission sharing”.

 

The minimum guaranteed surrender value for traditional plans has been pathetic. The existing guaranteed surrender value is 30% of all the premiums paid minus the first-year premium and is paid only if premiums have been paid for three years. This has been improved to some extent by the guidelines. For traditional plans with PPT of less than 10 years, the guaranteed surrender value will accrue after the second year. For PPT of 10 years or more, there will be a guaranteed surrender value after three years. This guaranteed surrender value will be 30% of total premiums paid. The surrender value becomes 50% between the fourth and the seventh years. The surrender value after seven years will have to be cleared by the regulator.

 

While the improved guaranteed surrender value is a welcome move, its impact on the returns to the policyholders will have to be seen. This is because if there is higher number of surrenders, the insurance company’s performance will be impacted and hence returns in terms of bonus will be affected. But, if you are buying a traditional product with a thought of surrendering it during the policy term, then you should not be buying it at all. Moneylife does not recommend buying traditional products, as even after the guidelines, it will remain opaque and fetch low returns. While the industry trend has been to move from ULIP to traditional products, it is like jumping from the frying pan into the fire.

 

The minimum death benefit for single premium policies will be higher of 125% of the single premium, or minimum guaranteed sum assured on maturity, or any absolute amount to be paid on death. For those with age more than 45 years, it will be 110% of the single premium. For regular premium products purchased by policyholder of age less than 45 years, it will be higher of 10 times the annualised premium or 105% of all premiums paid on date on death or minimum guaranteed sum assured on maturity, or any absolute amount to be paid on death. For those with age more than 45 years it will be seven times the annualised premium.

User

COMMENTS

shantipriya sen

4 years ago


Insured must have the right to get back of at least the premiums paid by him. Cost of service including agency commission can not exceed the growth on the funds invested by an insured

SANJAY SINVHAL

4 years ago

I have experienced that when one directly contacts the Insurance company for Policy, the DO assigns an agent. This is specially true when the policy is not avialble online due to Age/Medical test reqts.

REPLY

Abdul Muktadir

In Reply to SANJAY SINVHAL 3 years ago

Insured must have the right to get back of at least the premiums paid by him. Cost of service including agency commission can not exceed the growth on the funds invested by an insured

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