Regulations
RBI examining option for exit by businesses facing bankruptcy

While there is a talk of providing legal provision in the Companies Act, the RBI would like to work on examining regulatory framework for voluntary withdrawal by the entrepreneur, says B Mahapatra

 

In the absence of a good bankruptcy code in India, Reserve Bank of India (RBI) is working on a system to enable entrepreneurs seeking to exit insolvent business, a senior official from the central bank said.

Speaking at a seminar "Managing Stressed Assets" organised by Assocham, RBI's executive director B Mahapatra, said, "We have a tendency in India that we do not like failures. We think everybody should pass and have distinction. We do not have a culture to accept failures. How to create that? There is a thinking in Reserve Bank, we have been thinking how to create a system so that people should voluntarily withdraw from an unattractive business."

He said it is felt there has to be a good bankruptcy system in India.

Mahapatra said RBI has started working on an enabling system for banks that will help those entrepreneurs seeking an honourable exit from unattractive ventures.

He said here in India the bankruptcy has a stigma attached as, "Nobody wants to be called a bankrupt person... Indian philosophy is that we do not like failures".

Mahapatra said RBI has just begun working on such a framework to enable companies a voluntary withdrawal.

While there is a talk of providing legal provision in the Companies Act in this regard, but the RBI would like to work on examining the regulatory framework for the voluntary withdrawal by the entrepreneur, he added.

Pointing to the problem of bad loans, he said, it is a known fact that the problem of stressed asset is there. And particularly in the cases of public sector banks, the problem is more worrisome, though the private sector lender have fared much better.

"Reserve Bank has now provided a system of incentives and disincentives for following rules of the game for corporate debt restructuring (CDRs)."

The problem of stressed assets earlier was in traditional sectors such as iron and steel and fertilisers but of late it is in infrastructure, he said.
 

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TCS market cap crosses Rs5 lakh crore

The market cap of the Tata group IT company stood at Rs5.07 lakh crore. TCS is followed by state-run ONGC at Rs3.48 lakh crore, RIL at Rs3.31 lakh crore, ITC at Rs2.78 lakh crore and Coal India at Rs2.43 lakh crore

 

Tata Consultancy Services (TCS) on Wednesday attained a market valuation of over Rs5 lakh crore for the first time, helped by a rally in the stock. The market capitalisation (m-cap) of TCS surged to Rs5.07 lakh crore, the highest for the company since its listing in 2004.

In dollar terms, TCS’ market valuation rose to $83 billion.

Interestingly, TCS’s current market capitalisation is higher than the combined valuation of Infosys (Rs1.90 lakh crore), HCL Technologies (Rs1.08 lakh crore), Wipro (Rs1.40 lakh crore) and Tech Mahindra (Rs50,416.95 crore).

TCS rose 2.21% to close Wednesday at Rs2,586.90 on the BSE, after touching a  a new 52-week high at Rs2,595 during the day.

The Tata group company's share has been in strong position, rallying more than 8% in five consecutive sessions from last Thursday, after the company posted a 45% jump in June quarter net profit.

TCS is also currently the country’s most valued company in terms of market valuation.

The IT major was followed by State-run ONGC whose m-cap stood at Rs3.48 lakh crore, Reliance Industries Ltd (RIL) Rs3.31 lakh crore, ITC (Rs2.78 lakh crore) and Coal India (Rs2.43 lakh crore).

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SEBI bars Sai Prasad Corp, directors from raising funds through schemes

The latest order against the company is the third such ruling by SEBI against a Sai Prasad group firm. In 2013, SEBI had issued similar directions against two other Sai group firms — Sai Prasad Properties and Sai Prasad Foods

 

In another crackdown on an unauthorised money pooling scheme promising high returns, market regulator Securities and Exchange Board of India (SEBI) has barred Sai Prasad Corp and its directors from raising funds from the public and from launching any new investment plans.

The firm and its three directors were allegedly running ’collective investment scheme (CIS)’ in the name of its ‘joint venture participation business for the development of land’, SEBI said.

SEBI said that Sai Prasad Corp had raised Rs137.12 crore from the public in 2012-2013, which increased to Rs478.35 crore during 2013-2014.

In its order, the market regulator said that Sai Prasad Corp was "prima facie engaged in fund mobilising activity from the public" through a CIS "without obtaining a certificate of registration from SEBI".

Citing safety of investors, the regulator said steps were required to prevent the company and its directors — Balasaheb K Bhapkar, Shashank B Bhapkar and Vandana B Bhapkar — from further carrying on with the fund mobilising activity.

As per the order, the firm and its directors have been asked "not to collect any money from investors from its existing JV Participation Structure/ scheme" and "not to launch any new schemes or plans or float any new companies to raise fresh money".

The entities have also been ordered to immediately submit the full inventory of the assets owned by Sai Prasad Corporation out of the amounts collected from the investors.

Besides, the company and its directors have been asked not to dispose any of the properties or alienate the assets of the existing scheme as well as not to divert any funds mobilised from the public.

The company and its directors would have to furnish all the information sought by SEBI with regard to scheme-wise list of investors alongwith the details of amount mobilised.

The order against the company is the third such ruling by SEBI against a Sai Prasad group firm. In 2013, SEBI had issued similar directions against two other Sai group firms — Sai Prasad Properties and Sai Prasad Foods.

The three directors of Sai Prasad Corporation were also found to be directors of these other two group firms.

In its latest ruling the market regulator observed that schemes of Sai Prasad Corporation were akin to plans offered by the two other group firms.

SEBI also noted that despite being ordered not to mobilise money from public, the three directors had continued to collect funds.

SEBI had begun a probe in the case after it had received certain complaints last year alleging that Sai Prasad group of companies were raising funds from public.

In another crackdown on an unauthorised money pooling scheme promising high returns, market regulator Securities and Exchange Board of India (SEBI) has barred Sai Prasad Corp and its directors from raising funds from the public and from launching any new investment plans.

The firm and its three directors were allegedly running ’collective investment scheme (CIS)’ in the name of its ‘joint venture participation business for the development of land’, SEBI said.

SEBI said that Sai Prasad Corp had raised Rs137.12 crore from the public in 2012-2013, which increased to Rs478.35 crore during 2013-2014.

In its order, the market regulator said that Sai Prasad Corp was "prima facie engaged in fund mobilising activity from the public" through a CIS "without obtaining a certificate of registration from SEBI".

Citing safety of investors, the regulator said steps were required to prevent the company and its directors — Balasaheb K Bhapkar, Shashank B Bhapkar and Vandana B Bhapkar — from further carrying on with the fund mobilising activity.

As per the order, the firm and its directors have been asked "not to collect any money from investors from its existing JV Participation Structure/ scheme" and "not to launch any new schemes or plans or float any new companies to raise fresh moneys".

The entities have also been ordered to immediately submit the full inventory of the assets owned by Sai Prasad Corporation out of the amounts collected from the investors.

Besides, the company and its directors have been asked not to dispose any of the properties or alienate the assets of the existing scheme as well as not to divert any funds mobilised from the public.

The company and its directors would have to furnish all the information sought by SEBI with regard to scheme-wise list of investors along with the details of amount mobilised.

The order against the company is the third such ruling by SEBI against a Sai Prasad group firm. In 2013, SEBI had issued similar directions against two other Sai group firms — Sai Prasad Properties and Sai Prasad Foods.

The three directors of Sai Prasad Corporation were also found to be directors of these other two group firms.

In its latest ruling the market regulator observed that schemes of Sai Prasad Corporation were akin to plans offered by the two other group firms.

SEBI also noted that despite being ordered not to mobilise money from public, the three directors had continued to collect funds.

SEBI had begun a probe in the case after it had received certain complaints last year alleging that Sai Prasad group of companies were raising funds from public.
 

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