Citizens' Issues
SC puts on hold privilege notice to Shobhaa De

While stalling the privilege notice to Shobhaa De, the apex court bench headed by Chief Justice HL Dattu also issued notice to the Maharashtra legislature secretariat

 

The Supreme Court on Tuesday put on hold the privilege notice issued to author Shobhaa De for criticising the Maharashtra government's decision to screen Marathi films at multiplexes during prime time.
 
While stalling the privilege notice to Shobhaa De, the apex court bench headed by Chief Justice H.L. Dattu also issued notice to the Maharashtra legislature secretariat. 
 
The Maharashtra state assembly issued a privilege notice to Shobhaa De on April 10 and she was required to reply to it by Tuesday.
 
While criticising the Maharashtra government for its decision on screening Marathi films without consulting the stakeholders, Shobhaa De in a tweet had said that during the show at multiplexes now one could expect vada-pao and misal-pao instead of popcorn.

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MLF seminar on safe and smart with your money
Moneylife Foundation continues its successful series on financial literacy 
 
The two basic aspects of managing your financial life are: avoid losses by staying away from scams; and invest smartly and steadily to generate wealth from your savings. This is encapsulated in the educative and highly interactive seminar—“Be Safe and Smart with Your Money”, the flagship seminar of Moneylife Foundation (MLF). MLF has taken this message across the country. Most recently, we were Pune, for the fourth time with this seminar.
 
Sucheta Dalal, managing editor of Moneylife and founder trustee of Moneylife Foundation, in the session titled “How to Be Safe with Your Money”, spoke on the several ways an unsuspecting saver can be made to part with his hard-earned money.
 
In the second session on “Be Smart with Your Money”, Debashis Basu, editor & publisher of Moneylife and founder trustee of MLF, took the audience through simple steps for investing smartly. The event, which had a packed audience, was held at the Mahratta Chamber of Commerce Industries & Agriculture (MCCIA).
 
Ms Dalal started by pointing out that financial products are fundamentally different from consumer products. You can test-drive a car but you cannot test-drive a mutual fund; the fate of your investment becomes clear only later. Moreover, in consumer durables, brand names mean something. Not so in financial world. However, people translate their experience of buying consumer products into financial world and regret their decision.
 
The six mantras, articulated by Ms Dalal, include: protect your money, insure for securing future, avoid credit & investment traps, focus on a few safe products, avoid emotional traps and maintain financial hygiene. “Smart people are easier to cheat,” she noted, adding, “high-achieving professionals are often defrauded.” 
 
Ms Dalal explained that credit history and credit score reports have become increasingly important.
 
While Indians save a lot, they keep their money safe in bank deposits. Majority of savers are left confused about how much to invest and in which financial products. Left with confusing choices, majority of savers opt for bank fixed deposits which is a safe and easy option. In the second session, Mr Basu highlighted that this is just the wrong thing to do, especially for those who are in the highest tax bracket. 
 
Usually, we have different financial goals, such as saving on taxes, buying a house, child’s education etc. Mr Basu explained that there are specific products for each goal and one should invest only in these.
 
Further, he explained the risk and returns associated with each financial investment. He took the audience through the pluses and minuses of different asset classes, such as fixed-income, gold, real estate, stocks/equity mutual funds and insurance. He also repeatedly emphasised that most people don’t see the huge risk of inflation eating away their wealth.
 
Mr Basu asked the audience to calculate everything on a post-tax and post-inflation basis. If you really want to gain from the enormous wealth that stocks and mutual funds (MFs) can create, you have to understand this and stay patiently invested in good MF schemes or a bunch of good stocks, advised Mr Basu. The three and a half hour seminar concluded with a lively question & answer session.

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SEBI Acts under Pressure To Protect Investors

Companies listed exclusively on closed regional exchanges to re-list

 

Virendra Jain of Midas Touch Investors Association may have won yet another battle for marginalised retail investors, without even having to file a public interest litigation (PIL) this time.
 
In June 2014, we had reported how Mr Jain had sent a strongly worded letter to UK Sinha, chairman of the Securities & Exchange Board of India (SEBI) on behalf of investors of companies that were listed exclusively on regional stock exchanges (RSEs) that were being derecognised by the regulator. He claimed that the exit option for such investors, mandated by SEBI, was not being implemented. Among the 17 regional exchanges to be shut down, many, such as Pune, Kochi, Delhi, Vadodara and Ahmedabad, have already been de-notified. SEBI’s circulars in 2008, 2012 and 2014, which spelt out the de-notification process, had said that companies listed exclusively on RSEs should either get listed on national bourses or go for mandatory de-listing by giving an exit price to investors.

However, Mr Jain alleges that SEBI had not bothered to ensure that the re-listing process was properly instituted and completed before permitting the exchanges to close. His letter pointed out that most RSEs had significant assets (property) and valuable reserves built through tax concessions granted by the government; these should be equitably distributed among all stakeholders including investors. This meant that, although companies that would be de-listed may not want to offer an exit to investors, this should not stop the stock exchanges from doing so. This would, however, be a difficult exercise, since many companies listed only on RSEs have already vanished; but there are some profitable companies as well.
 
Data going back to 2002 suggest that there are 4,644 companies listed exclusively on RSEs. For the past two decades, Mr Jain has been doggedly fighting the apathy of SEBI and the ministry of corporate affairs in tracing companies which vanished with investors’ money in the primary market mania of the early 1990s. He believes that the investment bankers and chartered accountants of such companies should, at least, be held accountable for helping to cheat investors. But regulators are reluctant to act.
 
Midas Touch followed up its letter to SEBI with a final legal notice indicating that it planned legal action. On 17th April, SEBI finally issued a circular to bourses to protect investors of RSE-listed companies. According to SEBI, RSE-listed companies have pleaded that “although they are interested and eligible to migrate to the main boards of nationwide stock exchanges, they are not in a position to opt for the same due to paucity of time.” SEBI has now given them 18 months to complete the formalities and compliances involved in listing on national stock exchanges. 
 
SEBI’s de-listing circulars of 2012 and 2014 had said that companies that were exclusively listed on RSEs would be moved to ‘dissemination boards’ of national exchanges. It then went ahead and de-notified some exchanges. But, now that it has granted the companies 18 months to get listed on national bourses, it needed to relax some compliance rules as well. There are 274 companies on the dissemination boards of national exchanges. The dissemination board is like a transition point allowing some form of direct sale and purchase of shares until the companies are formally listed on the national bourses. 
 
If companies on the board have filed returns with the RoC (registrar of companies) for the past two financial years, they would be treated as compliant, based on a certificate from an independent professional, and be given direct listing without the need for a ‘no objection certificate’. The national exchanges would conduct an independent verification. SEBI further says that if such RSE-listed companies do not make an effort to get listed, or provide a proper exit option to retail investors in 18 months, their promoters and directors will face stricter scrutiny with regard to their future association with the securities market. SEBI may also initiate action against them. However, companies on the dissemination board, whose promoters cannot be traced, will be removed from the list after the RoC declares them as ‘vanishing companies’. This detailed re-listing process probably makes Mr Jain’s PIL redundant, but he and other investors and activists may want to keep an eye open to see if SEBI’s orders are actually complied with in the specified time.

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COMMENTS

lalit

2 years ago

I think SEBI should seek details from all the RSE towards listed companies on this exchanges,and the list of investors so that investors holding shares in physical form should also be given a chance to exit....

secondly what about those companies whose shares have been demateralised or demat is pending...why SEBI does not get the same tranferred in their account and liquidate the same on investors behalf...so at least some money can be recovered.since companies to have vanished.

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