SAT upholds unfair dealing charges against broker, halves fine

SEBI in its order had slapped a fine to the tune of Rs4 lakh on Jani for circular trading in the scrip of Flawless Diamond during June 2006 to February 2007

Mumbai: The Securities Appellate Tribunal (SAT) has upheld charges of fraudulent and unfair stock market dealings against broker, Jagdish R Jani, but lowered the penalty imposed by Securities and Exchange Board of India (SEBI) to Rs2 lakh, reports PTI.


The SAT reduced the monetary penalty from Rs4 lakh to Rs2 lakh saying Jani's involvement during the investigation period between June 2006 and February 2007 did not lead to an "abnormally high" price in the scrip of Flawless Diamond (India) Ltd (FDIL).


"Taking into account the facts of the case and having regard to the role of the appellant (Jani) in the overall scheme of manipulation. We hold that a penalty of Rs2 lakh would meet the ends of justice. Accordingly, the penalty is reduced to Rs2 lakh and the appeal partly allowed," the Tribunal said.


The Tribunal further said, "…Appellant’s (Jani) contribution to the price rise was confined to only a portion of the investigation period and the price rise during that period was not abnormally high."


Market regulator SEBI in its order had slapped a fine to the tune of Rs4 lakh on Jani for circular trading in the scrip of Flawless Diamond (India) Ltd during the investigation period.


SEBI had found that Jani "created false and misleading appearance of trading by indulging in collusive activities with a few entities that traded in the scrip along with the appellant (him). During the investigation period, the price of the scrip registered an increase from Rs13.55 to Rs129.80."


While imposing a penalty for violation of regulations regarding fraudulent and unfair stock practices, SAT said it is necessary to take into account the volume of trades, period of trades and the extent of the violators' participation in the manipulation.


The SAT said the appellant had traded in 2.02 lakh shares translating to 3.52% of the total market volume during the investigation period and the circular transactions amounted to 1.51 lakh scrips.


India Inc mops up Rs64,250 crore in private debt in Q1, up 29%

According to a report by Prime Database, during the first quarter about 86 institutions and corporates raised funding of Rs64250 crore from private placement market

Mumbai: As bank credit remained costly given the high interest rate, corporates turned to private placement market to mobilise funds which jumped 29% in the first quarter to Rs64,250 crore, while bank credit grew just about 20% to the industry as a whole, driven largely by the oil sector, reports PTI.


"The fund-raising in the April-June period touched Rs64,250 crore, an increase of 29% or Rs49,859 crore mobilised in the same period previous year," says a report by Prime Database.


This amount was mobilised by 86 institutions and corporates, according to a report by Prime Database which claims to operate the only database on debt private placements in the country, according to the agency chairman and managing director Prithvi Haldea.


The highest mobilisation was by PFC (Rs8,398 crore), followed by HDFC (Rs4,790 crore), Hindalco (Rs4,500 crore) and Nabard (Rs4,379 crore), he said adding his agency tracks only those deals, which have a tenor and put/call option of over a year.


According to the data released by Prime Database, on an industry-wise basis, the financial services sector continued to dominate the private debt market, collectively raising Rs41,816 crore or 65% of the total amount, followed by the power sector with a 9% share at Rs5,474 crore.


Against this, according to banks, during the period, non-food credit grew a poor 19.5%, down from 23.8% a year ago. Had it not been for a good 400 basis points increase farm credit, to 16.8% from 12.8% a year go, growth would have even lower.


During Q1, the bank credit to the oil sector nearly doubled to 25.2%, up from 14.2%, taking the overall credit flow to the industrial sector up by 20.3%, show banking data.


As per the Prime report, the biggest mop-up was again carried out by financial institutions/banks which together raised Rs32,980 crore, a tad over 50% of the entire mop-up. But this was down from the comparable period last year when it stood at Rs35,299 crore, representing a decline of 7%, says Haldea.


Exim Bank raises SGD250 million; sets new record pricing at 3.375%

The bond issue was priced at 3.375% given the huge demand and the 100% sovereign guarantee Exim offers

Mumbai: The Exim Bank has mopped up 250 million in Singapore dollars (SGD) at a coupon of 3.375%, the cheapest five-year money raised by any domestic institution so far, reports PTI quoting sources.


This is the second overseas debt raising by the bank in 40 days. On 1st August, it had sold $500 million bonds at a coupon of 4%, which were just 348 basis points above the US treasury's. The issue was over-subscribed by five times.


According to sources at the merchant bankers, the issue had a guidance pricing between 3.375% and 3.350%.


"But the issue was finally priced at 3.375% given the huge demand and the 100% sovereign guarantee Exim offers," a merchant banking source told PTI.


TCA Ranganathan, Chairman and Managing Director of Exim Bank could not be reached to independently confirm the bond sale.


"This was an excellent issuance by a sophisticated issuer like Exim Bank. Their inaugural five-year SGD 250 million bond was strongly subscribed by several regional asset managers and private banks resulting in tight pricing of 3.375% per annum, which, on a swapped basis is circa 5 bps per annum, tighter than trading levels of their recently issued five-year $bonds," Citi India head for capital markets origination Rajiv Nayar told PTI commenting on bond sale.


Over 50 investors participated in the programme with around 82% coming in from Singapore, around 14% from Hong Kong and around 4% from Europe, the source said.


Out of this, around 42% are banks, around 30% AMCs with private banks constituting around 28%, sources added.


The issue had a rating of Baa3 from Moody's and BBB- from S&P.


It can be noted that domestic banks have been on a fund raising spree since July, which was kicked by the nation's largest lender SBI mopping up $1.25-billion through a bond sale at 4.125% coupon or 375 bps over the US government bonds.


Since then, ICICI Bank, Axis Bank, IDBI Bank, IOB, Union Bank among others together raised over $3 billion from overseas bond sale.


Corporates waiting to mop up dollar funds are Jindal Steel & Power, and Power Finance Corp among others.


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