Citizens' Issues
SC bars Italian envoy from leaving India till further orders

The apex court had on 14th March asked the Italian ambassador not to leave the country without its permission, taking exception to his government’s refusal to send back the two marines, Massimiliano Lattore and Salvatore Girone

 
The Supreme Court on Monday extended till further orders its direction restraining Italian envoy Daniele Mancini from leaving the country after Italy reneged on its undertaking that the two marines accused of killing two fishermen off Kerala 
 
The apex court had on 14th March asked the Italian ambassador not to leave the country without its permission, taking exception to his government’s refusal to send back the two marines, Massimiliano Lattore and Salvatore Girone.
 
“Having heard senior advocate Mukul Rohatgi appearing for Italian Ambassador Daniele Mancini and the Republic of Italy, we direct to list the matter on 2 April 2013 for further orders.
 
“The interim order passed on 14th March directing Mancini not to leave India without the permission of this court is extended till further orders,” a bench headed by Chief Justice Altamas Kabir said.
 
The bench, also comprising justices AR Dave and Ranjana Prakash Desai, directed that “all authorities in the country shall take appropriate steps” relating to the order restraining Mancini from leaving India.
 
Before passing the order, the bench said the period of four weeks for which the marines were allowed to go to Italy to cast their vote was yet to be over and still they have time to return.
 
“We respected the undertaking (given by the ambassador) and we allowed them (marines) to go for four weeks which will end on 22nd March. There is still time for them to come. Strictly speaking they have not still violated our order. It is a case where one government is communicating to another government and we have nothing to do,” the bench observed.
 
The two marines were on board an Italian vessel “Enrica Lexie” when they allegedly shot dead two fishermen off the Kerala coast on 15th February, last year. Attorney general GE Vahanvati brought to the court’s notice the latest note verbale sent to the government by the Italian authorities in which it spoke about the issues concerning diplomatic relations contained in the Vienna Convention of 1961.
 
Vahanvati said it was intriguing that the note verbale mentions that no Indian authority will restrict the freedom of movement of the Italian Ambassador.
 
He said, “The ministry of external affairs is fully mindful of its international obligations.”  
 
After Rohatgi said he was appearing for Republic of Italy and the ambassador, the bench told him, “We are concerned with Daniele Mancini. What is your intention about Mr Daniele Mancini?  
 
“We are concerned with the intention. Are you going to comply with this order? We are not concerned with anything else,” the bench said.
 
After the order extending the 14th March direction was passed, Rohatgi again raised the issue of diplomatic immunity enjoyed by the Italian ambassador.
 
His submission anguished the bench which said, “We don’t go by anything. He has given the undertaking. We are not so naive.
 
“He has no immunity. What do you think of our judicial system,” the bench said and added that so many things are being written about the incident.
 
“You went to Italy after giving an undertaking. We never expected and we never believed that the Italian ambassador will renege like this,” the bench observed.
 
As Rohatgi pressed on the issue of immunity, the bench reminded him once again about the undertaking given by the Italian envoy.
 
“We don't accept his statement. We don't believe his statement. He has lost trust,” it said.
 
The court said, “The person who has come to this court as petitioner, we don’t think he has any immunity.”
 

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Axis Dynamic Balanced Fund: Using hedging strategies could be risky

The new scheme from Axis Mutual Fund will use hedging strategies to ‘manage’ risk

Axis Mutual Fund plans to launch a new scheme—Axis Dynamic Balanced Fund. This scheme will follow a new approach to dynamic investing. The new scheme will maintain its allocation to cash equity within the range of 65%-100% of the portfolio (similar to other balanced schemes). But, around 0%-65% will be invested in equity derivatives as a hedging strategy. Therefore, the net allocation towards equity will be around 0%-100%. The debt portion of the scheme will vary from 0%-30%. Similar to other balanced schemes, this scheme will seek capital appreciation by investing in a portfolio of equity or equity-linked securities while the secondary objective is to generate income through investments in debt and money market instruments. The difference here is that the scheme will ‘manage’ its risk by using hedging strategies.
 

In a recent issue of Moneylife magazine (Issue dated: 21 March 2013), we wrote how dynamic equity schemes try and time the market. These schemes vary their allocation to equity depending on either a proprietary method or on the price to equity ratio (P/E) of the Nifty index. Recently ING Mutual Fund filed an offer document to launch a scheme— ING Forward P/E Ratio Fund—which would vary its allocation based on the forward P/E of the index (Read: ING Forward P/E Ratio Fund: Another dynamic scheme with a new concept).
 

Fund managers try and lure investors with strategies that try and deliver superior returns by trying to predict the movement of the market. Unlike other equity schemes that invest a fixed proportion to equity, in dynamic schemes, the percentage allocated to equity is decided by the fund management. Therefore, if the fund management makes a wrong call, it would negatively impact returns. This scheme from Axis Mutual Fund will use derivative hedging strategies which involve high level of risk. Therefore, investing in this scheme may involve a higher risk compared to other balanced schemes.
 

Another aspect of dynamic schemes that we have covered in the past is that apart from getting the asset allocation right, the fund managers have to pick the right stocks as well. In this new scheme the fund manager would have to decide the right hedging strategy as well.

Axis Mutual Fund has a track record of just of three years in managing equity schemes. This is too short a period to comment on the fund management performance of the fund house. This new scheme will be managed by R Sivakumar and Jinesh Gopani, both of whom have an experience of over ten years in the industry.

 

Other details of the scheme:
 

Benchmark
 

50% S&P CNX Nifty + 50% CRISIL Composite Bond Fund Index
 

Minimum Application Amount
 

Rs5,000 and in multiples of Re1 thereafter
 

Minimum Additional Purchase Amount
 

Rs100 and in multiples of Re1 thereafter
 

Exit Load:
 

3% if redeemed/switched out up to 6 months from the date of allotment
 

2% if redeemed/switched out after 6 months & up to 12 months from the date of allotment
 

1% if redeemed/switched out after 12 months & up to 24 months from the date of allotment.

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COMMENTS

Ramesh Poapt

4 years ago

If the benchmark is 50%CNX Nifty,then will it be a 'eqty oriented fund'? Axis schemes performance so far is ok, Tax plan is good performer. Triple Adv. and Midcap has performed satisfactorily.Butit will be very challenging to manage the new scheme for Axis.

Government says not issued any guidelines on CSR spending yet

The ministry of corporate affairs has not yet issued any guidelines for reporting of corporate social responsibility spending by companies

 
The Union government on Monday said it has not issued any guidelines for reporting of spending by companies on social welfare activities. It said suitable norms for reporting of the corporate social responsibility (CSR) would be in place after the new Companies Bill comes into force.
 
In a written reply in the Rajya Sabha, corporate affairs minister Sachin Pilot said, “The ministry has not issued any guidelines for reporting of CSR spending by companies”.
 
“However, after the Companies Bill, passed by the Lok Sabha and under consideration of the Rajya Sabha, comes into force, suitable rules/guidelines will be issued to give effect to the provision of CSR contained in Clause 135 of the Bill,” he added.
 

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COMMENTS

M G WARRIER

4 years ago

Commonly, ‘Corporate Social Responsibility’ is understood as another name for charity. The government’s and Corporates’ hesitant approach to CSR can turn out to be harmful to the country and in the process to corporates also, in the long run. Spending for supporting social causes, by and large, has remained at the bottom end of the priorities for government and corporates so far. Those rich individuals from certain corporate empires who have started recognizing CSR as part of their way of life have done so either late in life or because of ‘certain compelling circumstances in life’ which they had not bargained for. Without struggling to put together a legal definition for CSR, or waiting for a diktat from government via legislation, those who are lucky to govern and manage resources which ultimately belong to the society should take on themselves the responsibility to eradicate hunger and poverty, provide shelter and potable water, promote literacy at least to the school level, ensure reasonably affordable healthcare for those in the ‘command area’ of their governance or business/industry. Fixing a percentage or routing money through PM’s Relief Fund are all niceties which may cover shame but will hardly ensure acceptable quick results.

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