Reliance MF pips HDFC MF on profits; slips on assets

The profit after tax of Reliance Assset Management Co, which runs Reliance MF stood at Rs261 crore, while that of HDFC AMC was Rs 242 crore at the end of March 2011

Reliance Mutual Fund has overtaken rival HDFC MF in terms of full-year profits, but has slipped below the latter to the second position in terms of their latest assets base.

The average asset under management (AUM) of Anil Ambani group firm Reliance Mutual Fund dipped by over Rs10,500 crore during the three-month period ending September 2011, making it the second-largest fund house after HDFC MF.

However in terms of profitability, Reliance MF clocked a higher profit after tax than HDFC MF in the latest financial year, becoming the most profitable fund house in the country, according to data released by mutual fund industry body AMFI.

The profit after tax (PAT) of Reliance Assset Management Co, which runs Reliance MF stood at Rs261 crore, while that of HDFC AMC was Rs242 crore at the end of March 2011. In the previous year, HDFC AMC was the country's most profitable fund house.

On year-on-year basis, Reliance Asset Management company's PAT rose by as much as 34% in the fiscal 2011, whereas that of HDFC AMC increased by 16.34%.

On the other hand, Reliance MF lost its top position as its asset base fell to Rs90,660.60 crore, according to the quarterly data compiled by AMFI. It was over Rs1.01 lakh crore at the end of June quarter.

Sundeep Sikka, CEO of Reliance Capital Asset Management Company, said that the fund house was mainly focusing on retail money and less on institutional money.

"Retail money though is expensive in the initial stage (for the fund house), it adds to the quality of the AUM and the profitability of the company in the long run," he added. "We have more than 21 lakh systematic investment plans for which we are getting Rs5,000 crore per annum and this money is majorly adding to our profitability," Sikka said.

HDFC Mutual Fund has now become the largest fund house in the country in terms of AUM. At the end of September, the AUM of HDFC MF stood at Rs91,827.11 crore.

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Indian M&A deals down by 56% to $5.91 billion in Q3

The mining sector accounted for the lion's share of M&A deals during the quarter in terms of value, primarily due to two large outbound transactions. The telecom industry was the second-most targeted sector, while the power and energy sector saw the third-highest transaction value

New Delhi: The value of merger and acquisition (M&A) deals involving Indian companies witnessed a 56% decline year-on-year to $5.91 billion in the third quarter of 2011, reports PTI quoting a report by global consultancy firm Grant Thornton.

Though the total value of merger and acquisition (M&A) deals in the third quarter this year dropped by 56.25%, there was an increase in the number of transactions, according to the latest issue of Grant Thornton's 'Dealtracker' report.

Commenting on the findings, Grant Thornton India partner and practice leader, valuations, Srividya CG said: "There has been a trend reversal, with a higher proportion coming from outbound deals, unlike the first half of the year."

During the third quarter of this calendar year, there was a significant increase in cross-border transactions, wherein 63 such deals worth $4.88 billion were announced, accounting for over 80% of the total value of M&A deals.

Meanwhile, there were 86 domestic deals worth $1.03 billion during the quarter.

The trend was exactly opposite last year, wherein domestic deals worth $11.69 billion were announced and cross-border deals were valued at just $1.82 billion.

"While cross-border transactions have shown growth, there is a considerable decline in domestic M&A. However, there is an increase in the overall activity, which is seen by an increase in the number of M&A transactions," Ms Srividya said.

An industry-wise analysis shows that the mining sector accounted for the lion's share of M&A deals during the quarter in terms of value, primarily due to two large outbound transactions. The telecom industry was the second-most targeted sector, while the power and energy sector saw the third-highest transaction value.

Out of $4.88 billion worth of cross-border deals in the third quarter of 2011, the total value of outbound deals-Indian companies acquiring or merging with businesses outside India-was $3.69 billion (via 29 deals), five times more than the year-ago period in terms of value, Grant Thornton said.

In the corresponding period last year, 39 outbound transactions worth $0.63 billion were announced.

Meanwhile, the total value of inbound deals-foreign companies or their subsidiaries acquiring or merging with Indian businesses-in the third quarter was $1.19 billion through 34 deals, Grant Thornton added.

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Can you ask for other students’ answer-sheets? No, that’s misuse of RTI

The Film & Television Institute of India recently received an RTI application demanding answer-sheets of other students, by a prospective student who failed to get admission to an Animation & Computer Graphics course in 2010. The appeal was eventually rejected as being ultra vires of the RTI Act

Here's some good news—more and more students are becoming aware of their right to access their answer-sheets and documents pertaining to transparency in the admission process. Educational institutes across the country are being questioned by students through RTI (Right to Information) which is welcome for the mission of transparency and good governance. The recent Supreme Court judgment (See: Results season: Thanks to RTI, students can now access their answer sheets ) ordering the right to access answer-sheets in every kind of examination is a big boost to students who can demand a copy of their answer-sheets, if they doubt the marks that they have obtained.

But sometimes, students may be crossing barriers of the amount of information they can access form their educational institutions.
 
In a recent case, the famous Film and Television Institute of India (FTII) conducted its first-ever First Appeal on 4th October under Director DJ Narain, who is designated as the First Appellate Authority (FAA). This was after a student was not satisfied with the answer provided by FTII's Public Information Officer (PIO). The student then appealed to the Central Information Commissioner (CIC) in Delhi, but the CIC ordered the FAA to conduct the hearing, thus sending the case back to FTII.

Here are the details: In 2010, Mohammed Musthafa BK had applied for a certificate course in Animation & Computer Graphics, with duration of
one-and-a-half years and was duly selected for the personal interview. He appeared for it, but was not selected for the course. A few months later, Mr Musthafa decided to investigate into the reason why he was denied admission.

Hence, on 21 December 2010, he filed an RTI application under Section (6) of the Act and sought the following information:

  •  Marklist of both written and personal interview of the certificate course in Animation & Computer Graphics of all students (FTII's response: His marks for interview and written test were provided. With a remark that the marks of the other candidates are confidential and unless they permit, it won't be possible to provide it to you).
  •  Name, designation, department of faculty of answer-sheet evaluators and their remarks, specific notes on answer-sheets of each and every candidate (FTII: Name, designation, department of faculty of answer-sheet evaluator of the animation course was provided with a remark 'only marks are given on the answer-sheet without any remarks or specific notes').
  •  Interview Board Members/Panel details and their remarks, special notes given, marks etc. about each candidate and their opinion, suggestions based on the interview performance (FTII: Details about interview board panel members were provided with a remark 'only marks are given on the answer sheet without any remarks or specific notes'. Regarding other candidates, it was remarked-the information is confidential and can be given only when the other candidates give permission). 
  • Same as above of film & TV and (only) TV courses also for 2007, 2008, 2009 and 2010.
  •  Footage of video records of each candidate inside the interview hall, (complete footage from beginning to end) (FTIINo such footage of voice, video recording is done in the interview hall).

 Not satisfied with the information given by FTII, Mr Musthafa lodged a complaint directly to the Central Information Commission stating that the information provided to him was not adequate.
 
With reference to his complaint, Shailesh Gandhi, Central Information Commissioner sent a letter back to FTII with a copy to the ministry of information & broadcasting (I&B Ministry), stating, "It must be noted that there is an alternate and efficacious remedy of First Appeal available under Section 19(1) of the RTI Act. It appears that the Complainant has failed to avail the same in the instant case. Consequently, the First Appellate Authority (FAA) has not had the chance to review the PIO's decision as envisaged under the RTI Act."  

Mr Gandhi added, "The Commission hereby directs the FAA to treat the copy of the Complaint as the First Appeal and decide the matter in accordance with the provisions of the RTI Act after giving all concerned parties an opportunity to be heard. The FAA is directed to peruse all the relevant documents during the hearing and examine whether the information provided by the PIO is complete, relevant and correct. Where the FAA is satisfied that the information provided by the PIO is as per the records, the First Appeal shall be disposed of. In the event if there are any deficiencies in the information provided by the PIO, the FAA shall direct the PIO to provide the complete information in reply to the RTI application dated 21.12.2010 to the Complainant. The Complaint is disposed of."
 
The Under-Secretary, I&B Ministry, sent a letter to FTII stating that "it is requested to provide the requisite information directly to the applicant, Central Information Commission and a copy to Section Officer, IFC, ministry of I&B under intimation to Desk."
 
Accordingly, FTII asked Mr Musthafa to come in person for the hearing of the First Appeal on 4th October. Mr Narain, FTII's director, held the hearing.
What was the information that Mr Musthafa could not be provided? Mainly, the answer-sheets of all other students as it comes under "fiduciary relationship'' under Section (8) of the RTI Act, which enlists a list of information items that can be denied. The High Court of Punjab & Haryana has termed it as "misuse of the RTI Act" in a judgement.

 The High Court order is as follows:
 
In the case of Rajan Verma vs. Union of India (UOI), Ministry Of Finance, Banking Divisions & Ors, Mr Verma had stood guarantor for the repayment of a loan taken by SR Rajan & Company from Canara Bank. However, the borrower account of Rajan & Co became an NPA (Non-Performing Asset) and so Mr Verma took up the issue with the bank. He applied under the RTI Act, demanding details of the compromise made by the bank during the last five years with the different parties' accounts which subsequently became NPAs. When the bank did not provide information, he complained to the CIC but when the CIC too rejected this information, he filed a writ petition.

The court judgment also went against Mr Verma. It reads as follows: "On perusal of facts and relevant provisions under the RTI Act, the High Court observed that the Central Information Commission has reached the conclusion that the petitioner is seeking information in respect of details of customers and the same falls under the exempted category under sections 8(1) (d), 8(1) (e) and 8(1) (i) of the RTI Act." It was also observed that information sought by the petitioner was not only from Canara Bank but also from the banking division of the Government of India and from the Department of Economic Affairs, Ministry of Finance.
 
"Both parties have transferred the RTI Applications to Canara Bank which is a Public Authority holding the information. Thus the petitioner was unnecessarily approaching multiple authorities for the same set of information knowing it fully well that the Information requested is held by Canara Bank and not by other authorities mentioned above. The competitive position of the third party including information relating to commercial confidence, trade secrets or intellectual property cannot be sought as the same is barred under Section 8(1) (d) of the RTI Act. The personal information and the information between the person in fiduciary relationship is exempted from disclosure under the RTI Act."

The High Court observed that the "petitioner was seeking the details of accounts of other private individuals and concerns, and on that account, the same has been rightly declined. Instead of making the payment of the loan amount, for which he is legally bound, the petitioner has resorted to rush the hierarchy of the bank by filing application under the RTI Act in respect of information for which the bank is exempted under Section (8) of the RTI Act.

"Thus the petitioner has misused the provisions of the RTI Act." Holding this, the High Court dismissed the writ petition on merits.

This case is similar to the various public interest litigations which have been dismissed by the judiciary from time to time, when such appeals are deemed to be frivolous—and in no way concerned with upholding public interest.
 
 (Vinita Deshmukh is consulting editor of Moneylife. She is also an RTI activist and convener of the Pune Metro Jagruti Abhiyaan. She can be reached at [email protected]).

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