SEBI allows Howard Hotels, Shree Nath Exports to get away with small fines

The Securities and Exchange Board of India (SEBI) has allowed Howard Hotels Ltd and Shree Nath Exports to get away with a small fine for serious compliance offences.

Howard Hotels violated various compliances issues during the period from 1997 to 2004 and after filing a consent proposal was allowed to get away by paying a settlement charge of Rs12.25 lakh.

In an order dated 29 November 2010, KM Abraham and Prashant Saran, both whole-time members of SEBI said, "The applicant (Howard Hotels) has voluntarily filed consent application proposing the settlement, through a consent order, of non-compliance of the provisions of regulations 6(4), 7(3) and 8(3) of the SEBI (Substantial Acquisitions of Shares and Takeovers) Regulation 1997 (the Takeover Regulations) for the year 1997 to 2004 which came to its knowledge during the course of secretarial audit. Vide letter dated June 19, 2010, the applicant has proposed revised consent terms to settle the said non-compliances on payment of Rs12,25,000 (Rupees twelve lakh twenty-five thousand only) towards settlement charges."

SEBI's high-power advisory Committee considered the application and recommended the case for settlement.

In a separate but related matter, the market regulator fined Shree Nath Exports Rs1 lakh and Rs30,000 in two cases of non-compliance.

On 17 August 2009, Shree Nath Exports bought 4.7 lakh shares, or 6.42% stake, in Howard Hotels in off-market deals. However, the company did not inform the exchanges about the deal, as is required under regulation 13(1) of the SEBI Regulations. The company filed a consent application to settle the issue. SEBI in an order dated 29 November 2010, cleared Shree Nath Exports after accepting Rs1 lakh as settlement charges.

When it made the Howard Hotels shares purchase, Shree Nath Exports did not inform the exchanges about the deal, thus violating regulation 7(1) of the takeover regulations. In this case also, after the company filed a consent application, SEBI settled the issue with a charge of just Rs30,000 for non-compliance.

On Friday, Howard Hotels closed 1.7% higher at Rs12.30 on the Bombay Stock Exchange, while the Sensex ended 0.1% down at 19,966 points.


Cap on cotton exports will bring down prices at home: Industry

New Delhi: The Indian apparel industry says the government's decision to cap cotton yarn exports at 72 crore kg in 2010-11 is likely to bring down prices in the domestic market, reports PTI.

"The cap is expected to bring some stability to high cotton yarn prices, thus increasing the availability of yarn for domestic apparel manufacturers and exporters," Apparel Export Promotion Council (AEPC) Chairman Premal Udani said in a statement.

According to industry experts, prices of cotton yarn have increased by about 85% over the last nine months.

The move has brought major relief to the apparel sector and will help create more jobs, the AEPC said.

Total cotton yarn production in 2010-11 is projected at 346 crore kg, whereas domestic demand is pegged at 265 crore kg.

Earlier, the government had fixed a ceiling of 55 lakh bales (weighing 170 kg each) on raw cotton exports in the current crop year to help domestic textiles companies, which were rapidly losing ground in international markets on account of the cascading effect of high prices of the natural fibre.

The cotton season runs from October to September.

The apparel exports industry has been strongly advocating the need to convert the raw material into value-added products within the country by disincentivising raw material exports.

Besides a quantitative cap on exports, the council has been seeking the imposition of export duty on cotton yarn.

The AEPC said that given the seasonal nature of demand from the industry, cotton yarn exports should be allowed in a calibrated and phased manner to ensure adequate supply in the domestic market throughout the year.

Apparel exports during the April-September period stood at just $5.02 billion, 7% less than in the corresponding period last year, on account of a slowdown in demand from Western markets like the US and Europe in the wake of the global economic crisis.

The apparel industry employs about seven million people in the country and almost half of them are engaged in export-oriented activities.


HDFC raises benchmark lending rate by 75 basis points

New Delhi: Leading housing finance firm Housing Development Finance Corporation (HDFC) today announced a hike in its benchmark lending rate by 75 basis points, making home loan dearer for both existing and new borrowers, reports PTI.

HDFC has raised its retail prime lending rate (RPLR) by 0.75% with effect from 1 December, 2010, it said in a statement.

With this revision the RPLR goes up from 14.25% to 15%.

“This is in line with the current rates of interest in the economy, which have hardened due to rising inflation and shrinking liquidity in the domestic market,” it said.

While HDFC has increased its benchmark by 75 basis points since its last hike in September, the overall interest rates in the economy have moved up as much as 125 basis points during this period, it said.

Faced with tight liquidity, many banks, including Punjab National Bank, Allahabad Bank and Syndicate Bank recently raised their deposit rates.

For new borrowers, it said, the home loans up to Rs30 lakh are priced at 9.5% while loans up to Rs75 lakh will cost 9.75%.

Earlier this week, HDFC also decided to discontinue the teaser rate scheme that entails cheaper home loans to new borrowers.

HDFC's scheme of dual rate home loan, which expired last month, was not extended.

Teaser rate is a special loan scheme under which a concessional rate is offered for a limited period to attract customers.

Under this offer, HDFC offered home loans at a fixed rate of 8.5% up to 31 March, 2011, 9.5% for a period between 1 April, 2011 and 31 March, 2012 and the applicable floating rate for the balance term.


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