Investor Issues
SEBI asks MPS Greenery to deposit Rs1,169 crore in escrow account

Despite orders from SEBI in the past, the MPS group company continued to collect money and publish ads in local newspapers

Capital market watchdog, Securities and Exchange Board of India (SEBI) has asked  controversial MPS Greenery Developers to deposit Rs1,169 crore in an escrow account of nationalized bank. SEBI also barred MPS Greenery from entering the capital market for violating the regulator's provision by collecting money under Collective Investment Scheme (CIS) without proper registration. The amount has to be deposited within 15 days of the order.
MPS is among many companies which had come under the regulator's scanner for accepting deposits under CIS. Earlier Moneylife had reported on how several dubious conglomerates are flourishing in West Bengal and Tripura, thanks to a combination of financial illiteracy and political protection, irrespective of the political parties in power. (Will Rose Valley’s clones, flourishing with CPM’s help, come under the lens now?)

SEBI in its order, dated 11th May, said that, "…MPS Greenery Developers Ltd to deposit with a nationalized bank in an interest bearing Escrow Account, an amount of Rs1,169.39 crore, which it has raised through its collective investment schemes, without obtaining certificate of Registration and in contravention of the conditions imposed by Securities and Exchange Board of India while granting provisional registration…"
MPS Greenery Developers, the flagship company of the MPS group, is based in Jhargram (West Bengal), and deals in agro-products and food processing. In 2000, it had applied for registration under SEBI's Collective Investment Schemes Regulations, 1999. However, in 2002, the regulator rejected MPS's application and ordered it to repay the deposits it had collected from the public after noticing that it raised the money in violation of SEBI circular (dated 24 February 1998) and Delhi High Court's order (dated 7 October 1998) which made it mandatory for all plantation companies to comply with the circular. It had also ordered the company to wind up its scheme.

Further, the company challenged the SEBI's decision in Calcutta High Court. According to the SEBI order, in June 2009, the High Court disposed off MPS's petition but asked SEBI to "reconsider the matter and revisit the issue as to whether the registration as sought by the petitioner company can be granted." However the court also, according to SEBI order, did not remove the restrictions imposed on the company by the SEBI.

In August 2009, SEBI granted MPS a provisional registration as a Collective Investment Management company in accordance with its CIS Regulations, 1999 with certain conditions. This included restrictions on launching any new scheme or on raising fresh money from the investors; even under the existing schemes, unless a certificate of registration is granted to them by SEBI. This provisional registration expired on 20 August 2011.

However, a press note from SEBI says that, "MPS not only failed to fulfil the conditions of Provisional Registration, it also raised money from the public in violation of the conditions of provisional registration and it appears to be still mobilizing money from public. As per information provided by ICRA Limited, the total outstanding balance of funds with the company stood at around Rs1,169.39 crore as on 25 January 2011. Moreover, MPS had issued a newspaper advertorial which wrongly stated that the company is allowed to carry out Collective Investment Scheme activities."

Interestingly, according to the details of the advertorial (published on 30 March 2012 in Kolkata's edition of Business Standard) given in the SEBI order, the company claimed to have 14 lakh of investors, 1.25 lakh marketing members, 4 thousand direct and indirect labourers and more than 6 thousand workers and officers associated with MPS Group. It also said that it was looking to investment Rs30,000 crore in a project, 80% of which will be raised through collective investment schemes.
Apart from ordering the company to return the deposits, SEBI has also directed MPS not to collect any money from investors or to launch any scheme.


Nifty make a staggered upmove: Tuesday closing report

The Nifty may strengthen if it manages making higher lows and closes above today’s high

All the Asian indices opened lower on the back of increasing concern over a Greek exit from the euro zone, despite the region's finance leaders declaring they weren't considering that possibility. Sensex and the Nifty opened lower but immediately entered into the positive region and stayed there for most of the trading session today. In our Monday's closing report we had mentioned that the Nifty next support lies at 4,860. We had also mentioned that if the benchmark manages to close above the previous day's high, we may see a possible change in direction. Today the index almost hit this level of support in the initial minutes. From here if the index manages to sustain above today's low and manages to close above today's high, we may see a bounce back. The National Stock Exchange  saw a volume lower of 59.45 crore shares   

The Sensex opened at 16,147 and the Nifty opened at 4,870. Soon they hit their respective intra days lows at 16,123 and 4,869. The indices hit a high closer to the yesterday high at 16,370 and 4,955 in the noon session. After five days of sequential fall the indices saw a positive closing. The Sensex rose 112 (0.69%) points to close at 16,328 while the Nifty closed 35 points higher (0.71%) to close at 4,943. The advance-decline ratio on the NSE was negative at 870:765.

Among the broader markets, the BSE Mid-cap index rose 0.63% and the BSE Small-cap index rose 0.33%. The top sectoral gainers were BSE Capital Goods (up 3.07%); BSE Metal (up 2.21%); BSE IT (up 1.56%); BSE TecK (up 1.09%); BSE Healthcare (up 0.97%). The lone loser was BSE Fast Moving Consumer Goods (down 0.64%)  

Larsen & Toubro (up 5.41%); Sun Pharma (up 3.20%); Sterlite Industries (up 3.16%); Infosys (up 3.13%) and Hero MotoCorp (up 2.65%) were the key gainers on the Sensex. The major losers among the Sensex 30 stocks were NTPC ( fell 2.94%); Maruti Suzuki (fell 2.57%); ITC (fell 1.35%); Bharti Airtel (fell 1.28%)  and GAIL (fell 1.27%)

The Nifty was led by Sesa Goa (up 5.19%); Larsen & Toubro (up 5.18%); Cairn India (up 3.94%); Sun Pharma (up 3.64%) and Sterlite Industries (up 2.96%). The top laggards were NTPC (fell 3.02%); Maruti Suzuki (fell 2.89%); IDFC (fell 1.98%); ITC (fell 1.60%); ONGC (fell 1.17%)

In the international news, the Greek President Karolos Papoulias late Monday proposed a technocrat government but that plan drew weak support from bickering parties, according to reports, as global discussion about the country's removal from the currency bloc mounted. Meanwhile, euro zone finance ministers reportedly dismissed talk of Greece leaving the euro zone as "propaganda and nonsense" on Monday, and signalled that they might be prepared to soften some of the targets of its bailout program.

After the European market opened, the domestic indices went to hit their respective intra-day highs. Most European indices were trading in the green with the German gross domestic product figures came in significantly better than expected. The data showed that Germany's economy grew much more than expected in the first quarter, driven by a surge in net exports. GDP rose by 0.5% from the fourth quarter of last year, and was up 1.2% from the corresponding period last year. At the time of writing the most of the American stock futures were pointing to a sharply higher open.


e-Postal order to help Indian diaspora file RTI applications

The Department of Personnel has agreed in principle with the Department of Posts to launch e-IPO which can be easily purchased by the applicant living abroad using their credit or debit cards

New Delhi: Making it easy for the Indian diaspora to seek information under the RTI Act, the Centre has decided to float electronic Indian Postal Order (IPO) for paying RTI fee, which can be purchased using debit and credit cards, reports PTI.

The Indians settled abroad were finding it difficult to seek information under the transparency law as IPO or Demand Draft of Rs10 was not easily available.

The Department of Personnel has now agreed in principle with the Department of Posts to launch e-IPO which can be easily purchased by the applicant living abroad using their credit or debit cards.

Under the proposed scheme, once applicant purchases e-IPO using credit or debit card physical postal order will not be generated, only a number would be generated which could be mentioned on the application by the applicant.

"Information seeker will write this number on his RTI application and send to public authority. Service of e-IPO along with RTI application will be applicable to Central Public authorities", a Personnel Ministry circular said.

The details provided by the applicant will be matched with those on the Department of Posts web site and once transaction details are matched, fee will be accepted.

"Money will not be received physically by the PIO but will be transferred to a consolidated fund of India. This will be on the patten of the payment received by the Department of Posts in the scheme of CAPIOs", it said.

The Ministry directed all Ministries and departments to appoint nodal officers for handling e-RTI applications.

It said the nodal officers will be given training to handling these applications once the modalities are worked out.


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