At an event in Mumbai on Wednesday, SEBI chief UK Sinha indirectly pointed out the games Sahara has been playing about repaying the money as per a Supreme Court order. Today, in an open attack on SEBI chairman, Sahara put out a press release saying that “rich men’s SEBI do not understand, recognise poor Investors”.
Yesterday at an event at Indian Merchants’ Chamber of Commerce in Mumbai, SEBI chairman UK Sinha pointed out the menace of Collective Investment Schemes which are thumbing their nose at the market regulator. In a veiled attacked on Sahara, he pointed out: “There is a famous instance where a company has claimed that it has refunded more than Rs20,000 crore in the last three to four months to so-called investors out of which more than 90% cent has been returned in cash. How feasible and credible can this story be?” Sinha wondered.
While Sinha did not name Sahara (neither did most newspapers who are large beneficiaries of Sahara advertisements), in a strongly worded press release issued today, Sahara attacked the SEBI chief.
Here is the text of the unedited press release in all its glory. Please savour it.
“Sahara complained that SEBI Chairman Sri U.K. Sinha neither gave time to meet our Chairman since last one year nor he accepted the invitation for appearing with our Chairman in T.V. Channel for informing people the truth and torture given to Sahara. Such a big responsible person should not give irresponsible statements that how and why Rs.20,000 crores repayments were made in 4 months and 90% was paid in cash. Well, he should have asked these questions to Sahara first.
Repeatedly we have written to SEBI and everywhere that our investors are very small and mostly living in small townships and rural areas. These investors do not go to Banks and Banks do not come to them.
Our investors profile on the basis of principal amount.
Upto Rs. 5, 000/- = 1.33 crores, upto Rs.10,000/- another 0.88 crores, upto Rs.15,000/- another 0.42 crores, upto Rs.20,000/- another 0.36 crores. This totals to 2.99 crores out of total investors of 3.07 crores. We genuinely hope that the SEBI Chairman should kindly send an amended statement to Media with realisation and apologies that why cash repayments to around 90% investors have been made and the 90% cash payments are totally justified.
Upto Rs. 20,000 repayments (including interest) it is cash payments only as per country’s law.
It should also be clear that 90% amount of investors in both the companies have come from investors upto Rs.20, 000 that is 2.99 Crores. So any logical but unbiased mind shall be convinced, accept and understand our challenge in the past also that there cannot be any case of fictitious, fake investors in Sahara.
He has also mentioned about paying Rs. 20,000 crores in 4 months. But majority payments are in 5 months plus time.
SEBI knows the reason very well that upto April 2012, esteemed investors through our committed and highly concerned field workers in Lakhs, knew that Hon’ble Supreme Court is likely to give 5 – 6 years against security of properties. We have submitted the valuation reports of properties to Hon’ble Supreme Court.
In fact in case of RNBC under regulation of Reserve Bank in 2008, RBI had given 7 years time to repay. This 7 years time was given within 10 days from the date of Prohibitory Order. So there was no chance, no reason of big rush demands of any nature.
Again the same profile of investors in RNBC also that is deposit of around Rs.20,000 crores with 3 crores plus investors. Important to note that we had almost repaid all liabilities 3 years in advance in RNBC.
But all of sudden in May 2012, 1st Week, Hon’ble Supreme Court ordered for continuous hearing in June 2012 and decision had to be given the same time.
During April 2012, one news was probably infected by some interested party which spread like wild fire in our field, Countrywide that in case of Golden Forest Company which was exactly similarly initiated and fought by SEBI. After Hon’ble Supreme Court’s decision in 2004 in this Golden Forest Company for repayment, not a single rupee has been paid to any investors till today that is in 8 – 9 years. Workers and Investors also knew that there were dozens of other Companies where, SEBI’s had taken action but not a single investor have received one rupee till now.
Also, company as sole custodian of Investors money from last 34 years got concerned about Esteemed very small investors.
Then there was big rush with demands for repayments. There were big – big queues in front of offices throughout the country. We had to repay big sum but could contain to a great extent the rush by around middle of June. So almost 60% repayments had to be done in around 45 days only. Really a very difficult time for Sahara for no fault of ours.
No fault of ours since we did this OFCD business after we got all valid permissions in writing from Central Government through Ministry of Corporate affairs as our regulator who continuously used to inspect and investigate, all Balance Sheets etc. were regularly to be submitted to them etc. etc. for last 10 – 11 years as our regulator but we faced and are facing very difficult days with retrospective effect punishments. Government departments who gave us written permission are not accused at all. Had they not given these permissions we would not have collected even one rupee and we would not have faced any problem. Well we are Prajas and they are Rajas.
One thing SEBI should understand that, had there been any hanky – panky by Sahara as accused by Chairman SEBI, then why we could not manage 5000 Crore which we have paid to SEBI.
Humble request to SEBI to act Judiciously like a very responsible and very big Regulator as big brother of society.
With exports languishing, higher oil prices, a weakening trend in invisibles and continued supply-side constraints, India’s current account deficit is expected to remain at around 5% of GDP in FY14, says Nomura in its Asia Chart Alert
In Q1 2013, India’s trade deficit is set to improve to $47 billion from $59 billion in Q4 2012. This improvement is, however, largely seasonal, as exports improve during the final month of the financial year. On a seasonally adjusted basis, the trade deficit is estimated at $53 billion in Q1 versus $57 billion in Q4, suggesting that around 70% of the expected improvement is due to seasonal factors, according to Nomura in its Asia Chart Alert.
Nomura believes that the true test of whether the trade deficit is sustainably improving will be the trend beyond March 2013, rather than in the month of March. With exports languishing, higher oil prices, a weakening trend in invisibles and continued supply-side constraints, Nomura remains sceptical and expects the current account deficit to remain at around 5% of gross domestic product in FY14 (year ending March 2014) from an estimated 5.2% in FY13.
The trade balance is expected to improve in March (data due 10-15 April 2013). This is shown in the figure below:
According to the Commerce Minister, the trade deficit in FY13 may be around $192-196 billion. This implies a deficit of $10-14 billion in March 2-13, much smaller than the deficit of $15 billion in February 2013 and $20 billion in January 2013.
Nifty may drop further to reach a level of 5,505
US stocks fell on Wednesday, following lower-than-expected readings on the US non-manufacturing sector and poor private-sector jobs growth. Back home, both the Sensex and the Nifty opened lower, at 18,731 and 5,641, respectively. Yesterday, we mentioned that the Nifty has to make a higher high and stay above yesterday’s low or else, it may move to the level of 5,545. Today, the Nifty made a lower high and a lower low and almost reached the level of 5,545. From here we may see the index declining further and may reach a level of 5,505. The National Stock Exchange (NSE) saw a volume of 58.66 crore shares.
Throughout the morning session, the indices were in a range after the sharp opening decline. With the beginning of the noon session, the indices started falling rapidly.
At the close of the session, the indices crashed to hit a low of 18,474 and 5,566. This low on the Sensex is the lowest since 26 November 2012, while that on the Nifty is the lowest since 22 November 2012. Both the Sensex and the Nifty closed near the day’s low and which is also below the 200-day moving average, which many investors see as a level that separates the bull from the bear market. Sensex closed lower, at 18,510 (down 292 points; 1.55%) while Nifty closed lower at 5,575 (down 98 points; 1.73%).
Among the broader indices, the BSE Mid-cap index dropped 1.84% and the BSE Small-cap index fell 2.08%.
All the sectoral indices closed in the negative. The top losers were BSE Realty (down 3.39%); BSE IT (down 2.45%); BSE Teck (down 2.44%); BSE Consumer Durables (down 2.05%) and BSE Bankex (down 1.89%).
Six of the 30 stocks on the Sensex closed in the positive. The gainers were Dr Reddy's Lab (up 3.03%); Coal India (up 2.56%); HUL (up 1.91%); Maruti Suzuki (up 1.06%) and Mahindra & Mahindra (up 0.26%). The chief losers were Jindal Steel (down 4.32%); Tata Steel (down 3.97%); Sterlite Industries (down 3.09%); Infosys (down 2.74%) and Hero MotoCorp (down 2.67%).
The top two A Group gainers on the BSE were Dr Reddy's Lab (up 3.03%) and MMTC (up 2.60%).
The top two A Group losers on the BSE were Jain Irrigation (down 6.94%) and Jaiprakash Associates (down 6.45%).
The top two B Group gainers on the BSE were Kirloskar Brothers Investments (up 20%) and Indian Terrain (up 19.95%).
The top two B Group losers on the BSE were Ram Informatics (down 19.83%) and Oswal Spinning (down 15.17%).
Of the 50 stocks on the Nifty, seven ended in the green. The key gainers were Dr Reddy's Lab (up 3%); Coal India (up 2.70%); HUL (up 1.82%); Maruti Suzuki (up 1.27%) and Tata Motors (up 0.49%). The major losers were UltraTech Cement (down 6.45%); Jaiprakash Associates (down 6.37%); Jindal Steel (down 5.12%); HCL Technologies (down 4.49%) and Reliance Infrastructure (down 4.12%).
The big news of the day was the Bank of Japan announcement of additional easing measures at the first meeting under newly appointed Gov. Haruhiko Kuroda. The central bank pledged to achieve a 2% inflation target in about two years, while increasing Japanese government bond (JGB) holdings at an annual pace of ¥50 trillion ($530 billion), with JGB holdings to double in two years. The bank will terminate its asset-purchase programme, with asset purchases to be absorbed with JGB purchases, under its new easing scheme called ’Quantitative and Qualitative Monetary Easing.’ Nikkei, which was down by 286 points at one time during the day, rose 558 points intraday and closed 272 points or 2.2% higher. Seoul Composite was the worst performer today apart from the Indian markets, down 1.20%.
Economic news continues to be negative. The euro-zone service sector contracted at its fastest pace since late last year in March, the Markit purchasing managers' index for the sector confirmed Thursday. Services PMI fell to 46.4 from 47.9 in February and came in slightly below a preliminary reading of 46.5. A figure below 50 indicates a contraction in activity. The composite PMI, which combines services and manufacturing data, came in at 46.5, matching a preliminary estimate and down from 47.9 in February for the weakest reading since November.
However, the HSBC Emerging Market Index survey, which collects data from purchasing managers at about 7,500 firms in 16 emerging markets, showed on Thursday that strong manufacturing output from China helped boost growth in neighboring south-east Asian economies including Korea, Taiwan, Indonesia and Vietnam. HSBC's composite manufacturing and services PMI for the world's second-largest economy increased in March to 53.7 from 51.4 the previous month. That helped lift the HSBC EMI index to 52.6, from 52.4 the previous month.
The European indices were mostly in the green while the US Futures were trading higher.
Mahindra Lifespace has allotted 5,000 secured, listed, rated, redeemable 10.78% yield to maturity (YTM), non-convertible debentures (NCDs) with a face value of Rs.10 lakh each for cash at par, aggregating Rs.500 crore vide series I, series II, and series III on private placement basis. The stock rose 0.24% to close at Rs392.90 on the NSE.
Dr Reddy's Laboratories has announced that it has launched Zoledronic Acid Injection in the strength of 5mg/100 mL, a therapeutic equivalent generic version of Reclast (Zoledronic Acid) Injection 5mg/100 ml in the US market, following the approval by the United States Food & Drug Administration of the company's ANDA for the product. As per IMS Health data, the Reclast brand had total US sales of around $355 million for the most recent twelve months ended February 2013. The stock rose 3% to close at Rs1,893 on the NSE.