Regulations
SEBI bars Gammon's Abhijit Rajan from markets

After prima-facie finding Rajan violating insider trading regulations in the company shares, SEBI has barred him from markets

Market regulator Securities and Exchange Board of India (SEBI) has barred Abhijit Rajan, former chairman and managing director (CMD) of Gammon Infrastructure Projects Ltd (GIPL) from markets for prima facie violating inside trading norms. This would be one of the few cases where CMD of a listed company has come under the scanner in an insider trading case.

 

In an order issued on 17 July 2014, Rajeev Kumar Agarwal, whole time member of SEBI, said, "I am of the prima facie view that this is a fit case where pending investigation, urgent action is required to be taken by way of an ad interim ex-parte order. Therefore, in order to protect the interest of investors and the integrity of the securities market, I, hereby restrain Abhijit Rajan from buying, selling or dealing in securities and accessing the securities markets, either directly or indirectly, in any manner whatsoever, till further directions."

 

The prohibitory orders would continue till further orders, as SEBI said it is still continuing its investigations into the matter involving trading in Gammon Infra shares on the basis of access to 'unpublished price sensitive information' during August-September 2013 period.

 

Rajan served as CMD of Gammon Infra till 20 September 2013 and continues to be on the company's board thereafter. Besides, Rajan remains CMD of another listed group firm Gammon India Ltd, where he also holds 5.99% direct and another 29% indirect stake.

 

In its ad-interim ex-parte order, SEBI also sought a reply, if any, within 21 days from Rajan, who was earlier in December 2006 also barred from capital markets for a period of one year for his alleged role in the rights issue of Gammon India.

 

In that case, the Securities Appellate Tribunal (SAT) had also dismissed his plea against the then SEBI order.

 

In the present case, the SEBI said it found that Rajan, being an 'insider', had access to the 'unpublished price sensitive information' and was in possession of the same and he dealt in the shares of GIPL on the basis of that.

 

"I find that it is imperative for SEBI to deal firmly with such instances of violation by persons in charge of affairs of listed companies in order to send a stern message to deter indulgence in such activities by others as such activities apart from being detrimental to the interests of investors endanger the integrity of the whole securities market," SEBI's whole-time member Rajeev Agarwal said in his order.

 

SEBI had begun its probe based on inputs from National Stock Exchange (NSE) that "there is a possibility that certain clients might have traded on the basis of unpublished price sensitive information" in shares of GIPL.

 

In its preliminary probe, SEBI observed that GIPL was an infrastructure project development company promoted by Gammon India holding 71.93% stake.

 

Another promoter of GIPL is Gactel Turnkey Projects Ltd and holds 3.05% stake. Gactel Turnkey is also the subsidiary of Gammon India.

User

KBC Multi Trade, another MLM, goes bust; three agents dead

Within four years, Nashik-based KBC Multi Trade was able to collect crores of rupees. Its promoters and directors are absconding and three agents are already dead. The question is, why nobody, including SEBI took action in time?

Even as several network marketing companies or multi-level marketing (MLM) companies are trying very hard to lobby with the union government, to legalise their 'direct selling' module, here comes a story of the tragic end of an agent of one such company. As it happens with almost all MLM or money circulations schemes, in the case of Nashik-based KBC Multi Trade Pvt Ltd, the promoters have vanished with the loot estimated to be about Rs2,000 crore. Also, as usual, despite registering a complaint and subsequent raids on KBC Multi Trade offices, the Police could not make any further progress. Even market regulator Securities and Exchange Board of India (SEBI), which is supposed to be regulating collective investment scheme (CIS) has so far not shown any interest in KBC Multi Trade's fund mobilisation. KBC Multi Trade's scheme was, if you invest Rs1 lakh today, the company would pay you Rs1 lakh in six months, Rs1 lakh in the next 18 months, and another Rs1 lakh after 30 months. Thus giving three-times return on investment in 30 months.

 

According to local media reports, Pushpalata Popatrao Nikam and her son Sagar committed suicide due to mounting pressure from people seeking refund of their money invested in KBC Multi Trade. The mother-son duo had invested their own money in the MLM too, while Sagar was also working as agent for KBC Multi Trade and collected huge amounts from people. Balaji Gujjewar, another agent of KBC from Hingoli in Marathwada region, died due to a heart attack. Gujjewar too, had collected crores of rupees in and around Hingoli for investing in KBC Multi Trade and was under severe pressure from these investors.

 

Earlier in March, Nashik Police conducted raids on the offices of KBC Multi Trade and seized Rs4.66 crore, along with some computers and documents. They also arrested one Babu Chavan, but he was granted bail by a city court on the same day.

 

According to reports, the main promoters of KBC Multi Trade are Bhausaheb Chavan and his wife Aarti. Bhausaheb was reportedly working in a local bank and hence, had knowledge about the financial status of several of the bank's customers. In 2010, he floated KBC Multi Trade and promised to make his investors 'crorepatis' within few months if they invest lakhs of rupees. He also promised 20% to 30% commission to 'agents' who would lure more people into the 'get-rich-quick' scheme.

 

On Monday, several investors staged a rasta roko at Adgaon, near Nashik, demanding immediate arrest of the company's promoters and directors. After the rasta roko, the Police arrested Bapusaheb Chavan, managers, Pankaj and Nitin Shinde, both agents of KBC Multi Trade, as well as a driver of KBC's main promoter-Bhausaheb Chavan.

 

On 25 February 2013, the Economic Offences Wing (EOW) of Nashik Police even issued a public note, warning people about KBC Multi Trade. Following the raids and arrest of one person by Nashik Police in March this year, the EOW of Aurangabad Police also asked people to file complaints against KBC Multi Trade. The MLM company was active in several districts in Maharashtra, including Aurangabad.

 

However, besides issuing a public notice, the Police kept mum on the MLM. This probably helped the promoters of KBC Multi Trade to collect as much money as they could and vanish overnight. According to unconfirmed reports, Bhausaheb may have fled to Singapore along with his family.

 

There are thousands of people who are coming forward to lodge complaints against KBC Multi Trade and its promoters. While the exact number of people and the money they invested cannot be ascertained, it is estimated to be hundreds of crores.

 

Karan Gaikar, president of Chhava Sangathana, that organised the rasta roko, has demanded an inquiry by the Central Bureau of Investigation (CBI) in this money circulation fraud. “People were asked to invest in bands of Rs7,200, Rs17,200, Rs57,200 and Rs86,000; assuring a three-times return in less than three years," Gaikar was quoted as saying in a news report.

 

Bapurao Mate, a resident of Adgaon area, told the Times of India that he had invested Rs2.63 lakh with the hope that he would get an assured amount of Rs11.63 lakh in two to four years for his daughter's wedding. “I am from Marathwada and at least 300 people from the region have invested money with the company on my assurance," he told the newspaper.

User

COMMENTS

sudhakar

1 year ago

IS THERE ANY HOPE TO GET MONEY BACK,FOR THOSE PEOPLE WHOM INVESTED MONEY IN THIS COMPANY

jaideep shirali

3 years ago

We are like this only, sums up the situation. When banks offer 9% annually, how can somebody offer such ridiculous returns ? It's a bright red flag, a danger sign that fortunately most of us immediately notice. The carrot is the kickback the investor himself gets, because we are so addicted to seeing a short term kickback, rather than the long term return. No regulator, SEBI, RBI, etc. can be present everywhere to curtail such practices. The same person who cribs about the price rise in onions, will sell his shirt for such ridiculous schemes and then expect the taxpayer to bail him out. Investors must use their common sense, nothing else.

Sristi

3 years ago

KBC is caught and DAVIS CLUB will be the next. DAVIS CLUB Fraudsters have duped me of 12 Lakhs over the last 18 months and I'm trying my best to send these fraudsters behind the jails. It's our faulty system which has many loopholes in it and allows such such companies to flourish beneath it.

SUNIL

3 years ago

NO ACTION SHOULD BE TAKEN AGAINST KBC COMPANY ,, AS PEOPLE WHO INVESTED ARE THE MOST FOOL PEOPLE IN THIS WORLD .WHY PEOPLE INVESTED ? THEY DIDNT KNOW THEY WILL BE DUPED

Ganesh Rathod

3 years ago

Sir, I will support you,

Ganesh Rathod

3 years ago

KBCL compny made hajaro lokani jase amishala, lalase la lok bali padhle ahet tyapramanech mi ani maze mitra mandali WEALTH GOA FCS LLP ya compaymade swatache & mazya mitranche paise invest karun aaj mala khup khup maran-yatna sahan karavya lagtyat......!

Tar mitrano velich savadh raha, ani asha bhoolthapana bali padun aaj mazyat je divas aalet tech divas swatavar aanu naka......!

M KATHIRAVAN

3 years ago

Why all these scams are happens,We every one wants to become millionaire soon with out taking any hard ship, because of this these culprits using our weakness and coming with new concepts.When we loose our hard earned money, then only we are realizing. Even though these concepts are growing more and more everyday,because Indian financial laws and rules are having many loop holes.Now it's a time to wake up by government and citizen of India to eradicate such scams and save poor people's money.

Rohidas

3 years ago

Still there are more companies like KBC Multitrade in Maharashtra. One of them is Soil Properties and Investment India Ltd. This company's business like same like KBC Multitrade.

Is government waiting for Promoters of Soil Properties & Investment India Ltd. to be vanish and afterward take actions.

There is need to bann all such MLM companies with immediate effect.

M KATHIRAVAN

3 years ago

Another company from Mumbai,maharastra Wealth goa Fc LLP run by Chadrakant sopanrao dongre resident of pune, He looted multi crores and not paying our money,giving false promises. Now he started with new concept of wealth goa group of companies, office located in Pune. He should also be behind the bars and his further activities to be stopped.

REPLY

rajesh

In Reply to M KATHIRAVAN 3 years ago

wealthgoa is not this type of like mlm company

M KATHIRAVAN

In Reply to rajesh 3 years ago

why didn't reply my anonymous,how much u earned from wealth goa.Are u became multi millionaire by this company,all looser wants to interact with u,pl.provide ur contact details,otherwise cyber crime will dealt with u.

M KATHIRAVAN

In Reply to rajesh 3 years ago

Are you chandrakant sopanrao dongre's partner, please give your details, we are proceeding to EOW, cyber crime,SFIO,please come forwrad, he looted many crores. Now this is the time to highlight the blach sheeps.

TS Rao

3 years ago

In the South it is chit funds; in every town, there is one or more scams reported on daily basis. An umbrealla law is needed to nab the fraudsters and police are sensitised to handle these cases as seriously as murder or rape.

Gurudutt Mundkur

3 years ago

When will people learn that that there is no short cut to wealth? Only two safe routes --- either you inherit it or you work yourself to the bone! There is no other legitimate way.

REPLY

bhaskar

In Reply to Gurudutt Mundkur 3 years ago

Very true sir. Financial literacy, respect for women, morality and ethics should be taught in all schools/colleges so that we have a good next generation.

Combination of Abenomics and Modinomics can be big

Japan can play an important role in developing India’s infrastructure and in bringing India’s manufacturing sector into Asia’s cross-country supply chain, while India offers low costs, burgeoning markets and soon, the world’s largest population, says Nomura

There is a growing symbiotic relationship between India and Japan as both countries share large comparative advantages and are embarking upon significant market-opening reforms under Abenomics and Modinomics. "Japan, being a wealthy net creditor nation can be an important investor in India's much-needed infrastructure. Japan, by outsourcing production, can also play an instrumental role in bringing India into Asia's elaborate cross -country manufacturing supply chain, as it has done for so many other Asian countries over the decades," says Nomura in a research report.

 

Nomura said it believes that landslide victory by Prime Minister Narendra Modi, combined with Governor Raghuram Rajan at the helm of Reserve Bank of India (RBI), is a potential game changer for India, the world’s third-largest economy in terms of purchasing power parity. It says, "The current landscape offers the best opportunity India has had in decades to implement bold economic reforms and to put the inflation genie back in the lamp. India has so much untapped growth potential: from a young population and a budding middle class, to how much easier business would become if investment bottlenecks can be unclogged. It is not an exaggeration to say that India is set to be Asia's biggest turnaround story. We expect GDP growth to rise to about 6.5% in 2015 and to over 7% in 2016, marking a watershed year when India's economy likely starts to outpace that of China. Growth in India is largely domestic driven, which offers a huge pool of opportunity for investors."

 

About 1,000 Japanese companies operate in India – some have for many decades – and some brands command immense respect for being synonymous with high quality – for example, Honda and Suzuki in automobiles; Sony and Panasonic in electronic goods; Cannon, Ricoh and Nikon in optical instruments; Hitachi and Mitsubishi in capital goods.

 

Talking about India, the research note says, the RBI's inflation fight will go hand in hand with the proactive, business orientated Modi government’s strong mandate to cut red tape and jump-start supply-side reforms. "In our base case, we expect reforms to revitalise real investment growth to 10% per annum (pa), lifting potential output growth to around 7% in the next five years; if reforms are fast tracked, real investment could hit 15% pa, raising potential growth to above 8%. It is not an exaggeration to expect India to stand out as the biggest EM turnaround story in the next five years," Nomura said.

 

Japan and India signed a Comprehensive Economic Partnership Agreement (CEPA) which went into force in 2011, and to illuminate the potential, India’s accounts for only 1.2% of Japan’s total foreign direct investment (FDI) and 1.0% of Japan’s total trade.

 

The overseas production ratio for Japanese manufacturers was 20.6% in FY12, much higher than FY11’s 17.2%, but the FY18 forecast for the ratio is 25.5% –which would be the highest on record. Surveys of Japanese MNCs show that China is losing its attractiveness as an investment destination due to its rising labour costs, whereas India has moved up the rankings to now be Japan’s most attractive destination over the next decade, Nomura said.

 

Perhaps serendipitously, much of what India needs, Japan can offer. Engineering and construction companies can help with massive infrastructure projects such as the Delhi-Mumbai Industrial Corridor – the poster project of its sort. High-speed railway networks, roads, power generation and renewable energy are all areas where Japan can offer its cutting-edge technological know-how and expertise. Japan can bring India into Asia’s vertical manufacturing supply chain, as it has done for so many other Asian countries. As it happens, infrastructure-system exports are a key plank of Abenomics, looking to target 30 trillion yen of infrastructure-system orders in 2020 (a tripling from 10 trillion yen today).

 

A recent Nomura survey of Japanese institutional investors revealed that they too have a positive outlook on India’s financial markets, ranking India No1 among key EMs for investment potential. India offers opportunities for Japan to diversify its enormous financial assets (both public and private); Japanese households are have 1,630 trillion yen of funds, with just over half held in investable cash holdings and deposits, Nomura added.

 

Talking about India equities, Nomura said, despite its strong 25% gain over the past four months, it expect the Sensex to continue to outperform Asia ex-Japan and Global indexes in the quarters ahead. "We remain Overweight India in both contexts. Over the next five years, we expect the market to provide about 15% CAGR, driven initially by multiple expansion and then by earnings growth as economic growth picks up. Sector-wise, conditions favour those leveraged to a secular rebound in growth, such as financials, industrials and infrastructure," it added.

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