Senior advocate Fali S Nariman, appearing for the Sahara group, said that Sahara was not a listed company and only the government has jurisdiction over it and not market regulator SEBI
New Delhi: The Supreme Court today declined the Sahara Group's plea to issue a notice to the government in connection to a dispute with market regulator Securities and Exchange Board of India (SEBI), which had directed the firm to return funds raised from investors under an OFCD scheme along with 15% interest, reports PTI.
"We do not want Union of India (government) to come at this stage. Let them (SEBI) come and clarify. We have our own query on it," said the bench headed by the Chief Justice SH Kapadia.
During today's proceedings, senior advocate Fali S Nariman, appearing for the Sahara group, said that Sahara was not a listed company and only the government has jurisdiction over it and not market regulator SEBI.
"We (Sahara) are not a listed company and the government (ministry of corporate affairs) has jurisdiction over us. If there is any listed company, then SEBI has jurisdiction," he said, asking the bench to issue a notice to the government seeking a clarification of its stance.
Nariman said that despite the matter was pending in the court, SEBI issued fresh cause notice to the group and passed the order.
On it, the bench said, "We have asked the SEBI to explain it. We wanted to know that from where you got this (concept of) OFCD."
The Supreme Court further said that it had asked SEBI as "We wanted investors to be protected."
The bench later the adjourned the matter for a week on the request made by SEBI's counsel P Venugopal. SEBI submitted that Sahara group has filed some documents before it and the regulator wanted to go through it.
In November, SEBI had indicated that two Sahara Group firms—Sahara India Real Estate Corporation and Sahara Housing Investment Corporation—were raising funds from the public through an optionally fully convertible debentures (OFCD) scheme without conforming to prudent disclosure and other investor protection norms.
Subsequently, Sahara Group had contested SEBI's authority to look into the issue in the Supreme Court, asserting that it was a privately held company and not listed and therefore, was under the jurisdiction of the ministry of corporate affairs.
Earlier, on 27th June, a vacation bench of the apex court, comprising justices P Sathasivam and AK Patnaik had declined to hear the plea of Sahara India Real Estate Corp and asked to list it before the chief justice which has been hearing the case.
Following the orders of the Supreme Court, SEBI had on 23rd June passed an order and directed the two Sahara group firms—Sahara India Real Estate Corporation and Sahara Housing Investment Corporation—to refund the money raised by them in OFCD citing violation of regulatory norms.
As per SEBI's order, the two companies and its promoter Subrata Roy Sahara, and the directors-Vandana Bhargava, Ravi Shankar Dubey and Ashok Roy Choudhary—jointly and severally, shall refund the money collected, the order said.
Besides, the regulator has also restrained the entities from accessing the securities market for raising funds, till the time payments are made to the satisfaction of the SEBI.
As per the order of the 12th May order of the apex court, the order of the SEBI order was not to take effect till its further order.
During the last hearing on 12th May, the apex court had asked SEBI to proceed with its probe into Sahara group's OFCD scheme by observing that investors may not have any knowledge about these products and might feel cheated like in the Harshad Mehta scam.
The court had also allowed Allahabad High Court to proceed with its hearing, where the Sahara group has challenged SEBI's direction to give details of its investors.
The court, during the proceeding, had also sought to know from Sahara the law under which it was running the OFCD schemes.
Though Sahara's counsel tried to explain the nuances of the OFCD scheme, the apex court was not satisfied and said: "Till today, I do not know what is OFCD. How can some investors know? We want SEBI to decide."
"We want to know on what basis you were calling for investment in OFCD," the bench asked.
The bench mentioned that the scheme is meant for rural people and they were not aware of it.
"Investors are not aware of OFCD. At the end of day, they would come and say that they were cheated... You know Harshad Mehta's case, same modus operandi was there. Investors were not aware of the scheme," the bench had said.
The court had repeatedly asked the Sahara Group to make available their brochure and other relevant information which they were giving to investors through their agents to find out the nature of the OFCD scheme.
The bench appeared unconvinced with the logic of the Sahara Group firms that OFCD schemes don't come under the purview of the SEBI Act.
OFCDs are a type of bond with the option to fully convert them into equity at a rate decided by the company.
Nifty to remain range-bound between 5,600 and 5,800
Reports about the approval of a draft mining regulations bill that would required miners to share profits with local communities resulted in mining and metal stocks topping the losers list today. The market ended lower, erasing over half of the gains from yesterday's trade, despite positive global cues.
The market opened in the positive today. The Nifty and the Sensex both opened six points higher at 5,735 and 19,084, respectively. The indices touched their intra-day highs in the initial session, with the Nifty rising to 5,740 and the Sensex touching 19,132. However, the gains were short-lived as the benchmarks soon drifted lower on profit booking.
The indices slipped below their psychological levels in the late morning session, after which select buying resulted in a minor recovery. The market was range-bound in the post-noon session, but a sharp sell-off pushed the indices to the day's lows in the last half hour. At the intra-day low, the Nifty fell to 5,651 and the Sensex to 18,818. However, the indices closed off the day's lows, the Nifty at 5,661, down 68 points, and the Sensex at 18,858, a loss of 220 points.
The Nifty took a step back today, after yesterday's gains, and is expected to be volatile till it reaches 5,800. During the entire trading session today, the index was above the 5,600 level. It is expected to move in the range of 5,600 to 5,800 for a few days.
The advance-decline ratio on the National Stock Exchange (NSE) was a negative 437:975.
Among the broader indices, the BSE Mid-cap index was down 0.61% and the BSE Small-cap index declined 0.86%.
The BSE Realty (up 2.08%) was the only sectoral gauge that gained today. BSE Metal (down 2.99%), BSE PSU (down 1.72%), BSE Fast Moving Consumer Goods (down 1.14%), BSE Oil & Gas (down 1.13%) and BSE Bankex (down 1.11%) were losers.
The top Nifty gainers were Siemens (up 2.60%), Ranbaxy (up 1.43%), ONGC (up 0.69%), Cairn India (up 0.61%) and Bharti Airtel (up 0.50%). The top laggards on the index were Sesa Goa (down 4.40%), SAIL (down 4.08%), Grasim (down 4.04%), Hindalco (down 3.91%) and Sterlite (down 3.85%).
The top Sensex gainers were DLF (up 1.22%), Hero Honda (up 1.01%) and ONGC (up 0.42%). The major losers were Sterlite Industries (down 3.94%), Hindalco Industries (down 3.73%), Jaiprakash Associates (down 3.04%), ICICI Bank (down 2.71%) and Jindal Steel (down 2.54%).
The markets in Asia settled mostly higher on positive economic news from the US, which gave indications that the economic recovery is still on track. Speculation about a rise in Chinese inflation data for June, to be announced on Saturday, put a cap on Chinese stocks. A rise in construction stocks, following a brokerage upgrade, boosted the Nikkei 225.
The Shanghai Composite gained 0.13%, the Hang Seng rose 0.87%, the Jakarta Composite jumped 1.63%, the KLSE Composite rose 0.28%, the Nikkei 225 climbed 0.66% and the Straits Times advanced 0.81%. On the other hand, the Seoul Composite shed 0.01% and the Taiwan Weighted fell 0.27%.
Back home, foreign institutional investors were net buyers of shares worth Rs868.71 crore on Thursday. On the other hand, domestic institutional investors were net sellers of stocks worth Rs161.03 crore.
Housing mortgage lender HDFC has reported a 22% y-o-y growth in net profit at Rs844.53 crore for the April-June quarter of the current fiscal, against Rs694.59 crore in the June quarter of 2010-11 fiscal. The company's total income rose to Rs3,821.60 crore from Rs2,801.95 crore in the corresponding period last fiscal. Loan disbursements during the quarter grew by 20%, while the loan book increased to Rs1,24,168 crore from Rs1,01,625 crore.
The HDFC stock declined 1.62% to Rs712.65 on the National Stock Exchange (NSE) today.
A group of ministers on Thursday approved a new Bill calling for coal miners to share a maximum 26% of their profits with local communities. According to the mining ministry, the draft law also calls for other miners to give to local communities an amount equivalent to royalties.
The Bill, which now goes to the Union Cabinet for approval, proposes the profit sharing formula in a bid to smooth land acquisition, a touchy issue in the countryside, where many oppose natural resources being carted away by outsiders.
Following the development, coal mining companies—Coal India and Sesa Goa— plunged 8.13% to Rs362.20 and 4.40% to Rs281.60, respectively. Among metal stocks Sterlite (down 3.85%), Hindalco (down 3.91%), Jindal Steel (down 2.39%) and Tata Steel (down 2%) ended lower on the NSE.
Private sector lender IndusInd Bank reported a first quarter net profit of Rs180 crore, a 52.5% jump from Rs118 crore in the previous corresponding quarter. Net interest income was up by 31.4% to Rs389 crore from Rs296 crore on a year-on-year basis. The stock rose 0.81% to Rs286.90 on the NSE.
A Mumbai activist says international protocol recommends washing hands for 20 seconds. Hindustan Unilever, which makes the liquid hand wash, insists that its claim “is backed by robust scientific data”
It's a typical classroom scene. Kids are enjoying their tiffins. One of them, named Bunty, with his handkerchief tucked neatly in his shirt, is eating a sandwich and suspiciously looking around. Suddenly he says, "You know what you all are eating?" There is pin-drop silence as Bunty answers his own question, saying, "Germs!"
After that shocking announcement, he tells the class: "My mother tells me to wash my hand for one minute with soap. Otherwise the germs won't die." The class bursts into laughter. Another student mocks him, inquiring, "Aye Bunty, tera sabun slow hai kya?" ("Bunty, is your soap slow?"). The scene is then cut to a person who makes claims about Lifebouy Liquid Hand wash giving 99% germ protection and the resultant security from germs in just 15 seconds. "Sabse tez hand wash - Lifebuoy, koi dar nahi" ("Lifebuoy- the fastest hand washing liquid"). Another version of the advertisement claims protection in only 10 seconds.
Little do these kids know that the television commercial they are acting in, is sending out an incorrect message. Yes, you read it right. Experts point out that no hand washing soap can guarantee killing germs by just 15 seconds of washing hands. Even internationally, the hand washing protocols clearly state that at least 20 seconds should be devoted to this activity.
"Such a claim," said AR Shenoy, Mumbai-based activist and consumer product researcher, "is incorrect, and it is teaching people incorrect hand washing methods. It is not in line with internationally designated and specified protocols on washing of hands and sanitation." Mr Shenoy has been researching the claims made in the advertisement.
The US-based Centre for Disease Control (CDC), in its protocol for hand washing, mentions that while washing hands, liquid, bar or powder soap should be applied on wet hands. This must be rubbed vigorously to make lather. This activity should continue for 20 seconds. CDC is regarded as the premier institute in the area of disease control and its protocols are widely accepted.
Another non-governmental organisation, "Global Hand Washing", which is a public-private partnership, echoes this view. It says that the correct way to wash hands is to cover wet hands with soap, scrub all surfaces, including palms, the back of the hand, the spaces between the fingers, and especially the spaces under the fingernails, for about 20 seconds, before rinsing well with running water rather than still water. The hands should then be dried with a clean cloth or by waving them in the air. An easy way to gauge the required 20 seconds period is to sing the "Happy Birthday" song twice.
It is important to note that the 20 seconds spent on washing hands does not include the time spent on rinsing.
In India, there are no such protocols for hand washing. Experts feel that generally spending 20 seconds on washing hands is good enough. "The Indian Medical Association (IMA) also recommends washing hands for at least 20 seconds," says Mr Shenoy, who had contacted IMA during the course of his research on the matter.
Speaking to Moneylife, a spokesperson for Hindustan Unilever (HUL) which makes the Lifebuoy liquid soap wash said, "The claim in the Lifebuoy hand wash television commercial is fully supported by an advanced formulation that actually delivers hygiene benefits to consumers. The claim is backed by very robust scientific data generated in Indian and international labs, through standard testing protocols and as per industry norms and practice. It is also pertinent to mention that this brand proposition is advertised in other countries as well and is reflective of the relevance of this benefit to consumers at large. The claim is in line with the industry advertising norms."
The company also pointed out that global bodies such as the US-FDA, the Canadian CDC and the New Zealand Food Authority recommend that a time of 10 seconds is adequate for lathering and washing of hands. "Our claim is backed by robust technical support, through studies conducted at independent accredited national and international laboratories/universities, and globally reputed institutes using standard industry-accepted protocols. Our claims have been scrutinised by some eminent independent experts in the field of hygiene and skin and they have strongly supported both our claims and the robustness of our data," the spokesperson said.