Regulations
SEBI asks bourses to synchronise listing date, approval

SEBI has asked stock exchanges to synchronise their listing dates and trading approvals with each other for fresh shares to check transfer of shares before listing

Mumbai: With an aim to check transfer of shares and other securities issued through public offers and other issues even before listing, market regulator Securities and Exchange Board of India (SEBI) has asked the stock exchanges to synchronise their listing dates and trading approvals with each other for fresh shares, reports PTI.

 

The move follows a directive from SEBI last month barring the activation of International Securities Identification Number (ISIN) codes of additional securities being issued through follow on public offers (FPOs), rights issue, preferential allotment and bonus issues.

 

The ISIN is a 12-character alpha-numeric code that uniquely identifies equity, debt or other securities. The ISIN code serves the purpose of uniform identification of securities for their trading and settlement in the market.

 

In a circular issued on Tuesday, SEBI further widened the scope of such additional shares and said that the directive would apply to any shares or securities being issued through any means and said that such securities would remain frozen till the time final listing or trading permission is granted by the exchange.

 

"The stock exchanges are advised to provide the details to the depositories whenever final listing or trading permission is given to securities.

 

"Further, in case of issuance of equity shares by a company, listed on multiple stock exchanges, the concerned stock exchanges shall synchronise their effective dates of listing or trading approvals and intimate the same to depositories in advance," SEBI said.
 

After coming across fraudulent transfer of shares being allotted through IPOs even before the actual listing of the companies, SEBI in January 2006 had allowed activation of ISINs only after the commencement of trading on the stock exchanges in case of shares of the companies.

 

Through its circular last month, SEBI had decided that in case of public offers for debt securities as well, the ISINs shall be activated only on the date of commencement of trading on the stock exchange.

 

Further, in order to curtail the transfer of additional issue of shares and securities through FPO, rights issue, preferential allotment and bonus issue of the listed company, the depositories would have to keep such securities frozen till final listing or trading permission is granted.

 

For this, SEBI has asked the depositories to allot such additional securities under a temporary ISIN which shall be kept frozen.

 

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GB Tools files for IPO, plans to raise Rs40 crore

GB Tools, the manufacturer and exporter of drop forge hand tools and allied forging products plans to raise Rs40 crore through an IPO for expanding its facility at Jalandhar

Mumbai: GB Tools & Forgings has filed documents with market regulator Securities and Exchange Board of India (SEBI) to raise about Rs40 crore through the initial public offering (IPO) route, reports PTI.

 

GB Tools & Forgings has filed a draft red herring prospectus (DRHP) to garner an aggregate of Rs40 crore through IPO, SEBI said.

 

The company said proceeds of the issue would be used for expansion and modernisation of its existing hand tool manufacturing facility at Jalandhar that needs Rs32.17 crore funds, and general corporate purpose. It also proposes to consider a pre-IPO placement of up to Rs10 crore with certain investors.

 

The company is engaged in the business of manufacturing and export of drop forge hand tools and allied forging products.

 

SPA Capital Advisors is acting as the book running lead managers to the proposed issue.

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Kudankulam Nuke Project lacks transparency while NPCIL thwarts CIC decision

Despite orders from the CIC for making safety analysis, site evaluation and environmental impact assessment reports of the controversial Kudunkulam Nuclear Plant Project public, Nuclear Power Corp is refusing to do so. A story of an RTI applicant’s fight for transparency

The recent inspection conducted by the Atomic Energy Regulatory Board (AERB) clearing the commissioning of the first unit of the Kudankulam Nuclear Power Plant after which the government attempted to begin operations, led to protests by people. This time one person was killed in police firing.
 

A petition has now been filed in the Supreme Court against the green signal given to the plant to begin operation without ensuring the 17 crucial safety measures recommended by the Centre’s task force, being put in order.
 

It is also the lack of transparency and refusal by the government to share vital information in public interest of this nearly Rs4,000-crore Kudankulam Nuclear Plant in Trivunelveli district of Tamilnadu that has perhaps precipitated the crisis since early 2011.
 

In the last week of August 2012, a plea has been filed in the Delhi High Court by SP Udayakumar, leader of the People’s Movement Against Nuclear Energy (PANE) against the Department Of Atomic Energy (DAE) and the Nuclear Power Corporation of India (NPCIL) for refusing to divulge details under the Right To Information Act (RTI) despite the Central Information Commissioner ordering the PIO to make the information, public. CIC Shailesh Gandhi had ordered NPCIL to provide the required information by 25th May, but the latter did not provide it. Therefore, he has sought legal intervention.

 

SP Udaykumar, an academician-turned-activist who is spearheading the Kudankulam protests, had invoked the Right to Information Act demanding copies of Safety Analysis Report for Reactor I & II; Site Evaluation Report for Reactor I & II; and; Environment Impact Assessment report for Reactor I & II from the DAE and NPCIL.

 

The Public Information Officer (PIO) of NPCIL provided the 339-page Environment Impact Assessment Report on a demand draft of Rs678 (charges of Rs2 per page of the RTI Act). The PIO, however, denied information on the Safety Analysis Report and the Site Evaluation Study Report stating they were not public documents and contained design details that are proprietary in nature. Therefore, he argued, the information was exempt under Sections 8(1)(a) and (d) of the RTI Act.

 

Mr Udaykumar filed a first appeal with the First Appellate Authority (FAA) on grounds of incomplete information furnished by the PIO. However, the FAA upheld the PIO’s decision stating that the Safety Analysis Report and the Site Evaluation Study Report were ‘classified’ documents. The applicant then filed a second appeal with the Central Information Commissioner (CIC) Shailesh Gandhi.

 

Representing Mr Udaykumar, RTI activist and scholar, Venkatesh Nayak was present for the hearing in the CIC office on 23 April 2012. S K Srivastava, PIO and deputy chief engineer (projects) appeared via video conference from Mumbai.

 

The Commission asked the PIO for specific reasons why Safety Analysis Report and Site Evaluation Report of both reactors of the Kudunkulam Nuclear Reactor Plant were not being provided to the RTI applicant. As per the CIC order, “The PIO argued that the reports were classified information and the concerned public authority had not taken a decision to release it into the public domain. He submitted that the reports were protected from disclosure under Sections 8(1)(a) and (d) of the RTI Act.”

 

CIC Shailesh Gandhi ‘repeatedly’ asked the PIO the specific reasons for claiming the said exemptions. The PIO replied that as per Section 8 (1)(a), “the security, strategic and scientific interests of the State would be affected on disclosure of the information.” However, he did not give any explanations as to how the security, strategic and scientific interests of the State would be affected on disclosure of the said reports.

 

Regarding Section 8(1)(d) of the RTI Act, the PIO claimed that the reports comprised commercial confidence. However, he did not explain how disclosure of the said reports could be considered “commercial confidence” and how it could harm the competitive position of a third party.

 

Mr Gandhi observed that the PIO’s denial of information holds no water because “as per Section 19(5) of the RTI Act, in any appeal proceedings, the onus to prove that a denial of request was justified shall be on the PIO who denied the request.”

 

Mr Gandhi thus stated in his order, that, “it is legally well-established that information under the RTI Act can be denied only on the basis of Sections 8 and 9 of the RTI Act. The fact that a record has been termed as ‘classified’ or that it shall be disclosed subject only to an executive decision to that effect—have not been stipulated as exemptions under the RTI Act. Therefore, the PIO cannot use such grounds for denying the information sought under the RTI Act; denial of information shall be on the basis of Sections 8 and 9 of the RTI Act only.”

 

Venkatesh Nayak on his part argued that, “the exemptions under Sections 8(1)(a) and (d) of the RTI Act were not applicable to the present matter.” He said that a larger public interest would certainly be served on disclosure of the reports. He brought to the notice of the CIC, the agreement between India and the International Atomic Energy Agency (IAEA) which lays down the safety and maintenance standards for nuclear activities.  He also submitted that reports of the same nature were classified as public documents in countries such as USA, UK and Canada in order to ensure public debate. For proof, he gave written submissions along with a CD detailing his arguments.

 

Why revealing this information does not relate to national security matters

Venkatesh Nayak referred to the Vienna Convention on Nuclear Safety, 1994 (Convention), to which India is a signatory. On basis of Mr Nayak’s argument, the CIC made the following observations:

 

“Article 5 of the Convention requires India to submit for review a report on the measures it has taken to implement each of its obligations under the Convention including evaluation of safeguards and safety standards in place for nuclear power plants... The appellant has cited the report of 2010 for India and referred to certain parts therein. It has been submitted that the report is required to be made in accordance with each Article listed in the Convention. Reporting in relation to Article 17—which refers to ‘Siting’ makes it clear that site evaluation does not relate to national security matters under Section 8(1)(a) or anything protected under Section 8(1)(d) of the RTI Act. It purely relates to geography, environment, meteorology, geology, etc. These are all connected with the environment directly and inextricably and have a huge bearing on public health and safety…”

 

“The Kudankulam Reactors I & II are included in the list of nuclear power facilities and installations annexed to the agreement for application of the safeguards prescribed by IAEA.

 

“IAEA has, in its Safety Standards Series, issued a set of standards to be adhered to while undertaking a site evaluation for nuclear installations. Factors relevant in determining the suitability of a site for a nuclear installation are—effects of external events occurring in the site, characteristics of the site and its environment that could influence the transfer to persons and the environment of radioactive material that has been released, and population density and distribution that may affect the possibility of implementing emergency measures.

 

“IAEA has issued standards for the safety of nuclear power plants vis-à-vis design, operation and mitigating circumstances that could jeopardize safety. It prescribes safety assessment which is carried out in order to identify the potential hazards that may arise from the operation of the plant. IAEA standards also address events that are unlikely to occur, such as severe accidents and external natural factors, that may lead to major radioactive releases and for which it may be appropriate and practicable to provide preventive and mitigatory measures in the design.

 

“The Kudankulam -Reactors I & II are included in the list of nuclear power facilities and installations annexed to the agreement for application of the safeguards prescribed by IAEA. IAEA has, in its Safety Standards Series, issued a set of standards to be adhered to while undertaking a site evaluation for nuclear installations. Factors relevant in determining the suitability of a site for a nuclear installation are—effects of external events occurring in the site, characteristics of the site and its environment that could influence the transfer to persons and the environment of radioactive material that has been released, and population density and distribution that may affect the possibility of implementing emergency measures.”

 

Shailesh Gandhi’s order:

“The RTI Act recognises the above mandate and in Section 4 contains a statutory direction to all public authorities ‘to provide as much information suo moto to the public at regular intervals through various means of communications, including internet, so that the public have minimum resort to the use of this Act to obtain information’. More specifically, Section 4(1)(c) of the RTI Act mandates that all public authorities shall ‘publish all relevant facts while formulating important policies or announcing the decisions which affect public’. It follows from the above that citizens have a right to know about the Safety Analysis Report and the Site Evaluation Study Report report, which has been prepared with public money.

 

“The appellant has mentioned that in USA, UK and Canada, safety evaluation reports are uploaded on the government websites for citizens to access. Where worldwide, site evaluation and safety analysis reports of nuclear power plants and installations are being put in public domain to elicit public views, India can have no reason to treat its citizens differently. International best practices have been geared towards disclosure of information that has a bearing on public safety, health and the environment, and India must strive to follow the same. The disclosure of the reports would provide a comprehensive perspective to the citizens about holistic understanding of the Kudankulam Nuclear Power Plant Project including environment, health and safety concerns.

 

“The preceding arguments lead to the conclusion that all Safety Analysis Reports and Site Evaluation Reports and Environmental Impact Assessment reports prepared by the Department before setting up nuclear plants  must be displayed suo moto as per the mandate of Section 4 (1)(c ) & (d) read with 4(2). If parts of such report are exempt as per the RTI Act, this should be stated and the exempt parts could be severed, after providing the reasons for such severance. Such a practice would be in accordance with the provisions of Section 4 of the RTI Act and would result in greater trust in the government and its actions.

 

“The PIO is directed to provide an attested photocopy of the Safety Analysis Report and Site Evaluation Report after severing any proprietary details of designs provided by the suppliers to the appellant before 25 May 2012. Further, the PIO will also ensure that the complete Safety Analysis Report and Site Evaluation Report and the Environmental Impact report are placed on website before 30 May 2012.

 

“The Commission directs that the Nuclear Power Corporation Of India shall publish all Safety Analysis Reports and Site Evaluation Reports and Environmental Impact Assessment reports prepared by the Department before setting up nuclear plants within 30 days of receiving them, unless it feels that any part of such report is exempt under the provisions of Section 8(1) or 9 of the RTI Act. If it concludes that any part is exempt, the reasons for claiming exemptions should be recorded and the report displayed on the website within 45 days of receipt, after severing the parts claimed to be exempt. There should be a declaration on the website about the parts that have been severed, and the reasons for claiming exemptions as per the provisions of the RTI Act.”

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