Companies & Sectors
SEBI bars Pan Asia Advisors and its promoter Arun Panchariya from markets for 10 years
Pan Asia Advisors and its promoter Panchariya and Indian companies created a scheme to mislead Indian investors about the inflow of foreign investment through GDRs
Market regulator Securities and Exchange Board of India (SEBI) has barred Pan Asia Advisors, now known as Global Finance and Capital and its promoter Arun Panchariya for 10 years for market manipulation using global depository receipt (GDR) issues. 
S Raman, whole-time member of SEBI passed final order on 20 June 2013, barring Panchariya and Pan Asia Advisors from dealing and accessing, directly or indirectly Indian markets for the next 10 years.
The probe by the market regulator found market manipulation using GDR issues involving several entities, including Panchariya and Pan Asia Advisors.
SEBI said, “It was inter-alia observed that Panchariya had entered into a fraudulent arrangement with the promoters of certain issuer companies like Asahi Infrastructure & Projects, IKF Technologies, Avon Corporation,  K Sera Sera, CAT Technologies and Maars Software International to issue GDRs.”
“The cross referenced agreements signed by entities of Panchariya and by the issuer the company with Austria-based European American Investment Bank AG led to GDR proceeds received by company being pledged against loans raised by entity of Panchariya. The names of the foreign investors disclosed to exchanges in India were found to be fictitious. Therefore, together, Panchariya and Indian companies have created a scheme to mislead the investors about the inflow of foreign investment through GDRs and that the companies were found as favourable investments by foreign investors. Thereafter these GDRs were converted through sub-accounts controlled by Panchariya and the shares so converted were dumped in the Indian securities markets to the detriment of the Indian investors,” SEBI said in its order. 




3 years ago

these brothers are criminals and should be sent to prison for there actions. and know are trying the same trick in dubai... please stop them as they try to rip off innocent investors...

Bosco Menezes

4 years ago

Good work ... these scamsters must be brought to book



In Reply to Bosco Menezes 3 years ago

very dishonest people. trying to scam good innocent people.. they should go to jail..

Laffans Petrochemicals: Something fishy happening?

Minority shareholders are once again at the receiving end after the company sells off its business to a multinational; auditors sign off on the accounts despite several glaring irregularities in the books. What is really going on?

Laffans Petrochemicals (Laffans) is an example where investors lose, even after taking care to invest in a profitable company with good prospects.  Laffans has never made a loss in all its years of existence, but the shareholders have still been left high and dry with no returns and a dodgy sell-off of its core business. Here is what happened.

The Bombay Stock Exchange (BSE) listed Laffans has had a nearly spotless record of profitability since 1994, barring two (1998 and 2012) years. But although it earned a profit, there is no record of dividends being ever distributed at all. Interestingly, it wasn’t until 2012, the year it made a loss, that some dubious accounting practices was discovered, but the auditor, Shekhar Gupta, of SM Kapoor & Co did not see fit to qualify the accounts.

On 2 April 2011, Laffans Petrochemicals sold off its manufacturing unit at Panoli to the Huntsman Performance Products (India) Pvt Ltd, a multinational corporation, following a court order of 11 March 2011 and discontinued operations since then. This bland disclosure in the 2012 annual report sealed the fate of the investment of hundreds of small shareholders. A corporate disclosure to the BSE merely says: “Under the terms of the sale, 140 people at the Ankleshwar site and 25 people from the Mumbai and other regional commercial sites will join Huntsman.” No talk about the value of the deal or the consideration that Laffans received.

That’s not all. While the business ceased to function, investors have written to Moneylife pointing out that a series of costs continued to be debited to the company.  For instance, Rs26.81 lakh was debited towards “carriage inwards” when there were no purchases. Another Rs94.11 lakh debited to “repairs and maintenance others” when there should have been nothing to repair—what is worse, when the factory was fully in operation in 2011, the spending on repairs was Rs9.19 lakh.

That’s not all. Out of the blue, the company acquired creditors to whom it owes Rs8.48 crore (up from just Rs5.19 lakh). Who are these people/entities? There is no explanation to shareholders.

Under “management discussion” in the 2012 annual report, it is mentioned that the company makes money through commissions and interest. It has Rs45.55 lakh in mutual fund investments, mostly in fixed maturity plans (FMP) of one year duration. These investments are classified as “non current investments” or short terms. One of these investments amounting to Rs1.25 crore was invested in a company called “California Pvt Ltd”. Shareholders have written to say that there is no record of this company on the MCA21 portal. The auditors have found nothing fishy about this too.

Laffans Petrochemicals is quoting at Rs9.81 in the Periodic Call Auction System (PCAS) window on the BSE. Yet, the value of its “non-current investments” alone is roughly Rs56.94 per share! In effect, its current market capitalisation is LESS than its “non current investments”! In other words, the company is sitting on a pile of cash while the minority shareholders are helplessly watching their wealth disappear via dubious accounting and can do nothing about it. Laffans made a loss in 2012 after selling off a key business- this is only the second time since 1994 that it has reported a loss.

Finally, according to a BSE disclosure, on 4th April 2011, it said: “Laffans Petrochemicals will continue as a supply chain partner for Huntsman and will also look for other complimentary opportunities in the chemical industry. Laffans is already evaluating setting up a fatty anime project, a basic raw material for the agro and FMCG industry. The project site is yet to be decided but this could be in Gujarat or Malaysia. The project would be fully funded by Laffans.”

If this is how companies treat their minority investors, is it any wonder that millions of retail investors shun the capital market today?



Bosco Menezes

4 years ago

What a sad reflection on the greed of some promoters - never distribute dividends, then sell the business (rather than the company, which would have resulted in an Open Offer) & then dont share the proceeds with shareholders. Terrible .

nagesh kini

4 years ago

1. Who are the Auditors?
2. A fit case for detailed investigations by
a. The Inst. Of CA Committee
c. MCA by SIFO.

It squarely does come under vanishing companies! It has simply vanished!

shanti Patel

4 years ago

Why in AGM the shareholders take up this issue?
If required a letter listing out various matters on which a clarifications are required should be send by shareholders.Even a letter can be send to Auditors if required.
If everybody wants to SLEEP, then nothing can be done.
My experience is that the result can be achieved if you right and peruse the matter.
I have fought against a very leading firm of chartered accountants and got the desired result.
Please send me the Annual Report.
I am a subscriber to MONEY LIFE.
Shantilal K. Patel
Chartered Accountant

Residential realty sector remained stagnant during Q4, says Liases Foras

The prices of new supply were 7% lower than the price of existing supply during the March quarter and yet the residential realty sector remained stagnant. Most of the demand during the fourth quarter was in the affordable and mid-segment, says the real estate rating and research agency

The fourth quarter of FY2012-13 saw the residential realty sector remain stagnant after some movement in the previous two quarters. “With FY12-13 not ending on a positive note, the spotlight now lies on the performance of first quarter of FY13-14. Market participants are looking forward to Q1 FY13-14 as this quarter is likely to give clues to the trends that will be followed in the year ahead,” non-brokerage real estate research firm Liases Foras said.


It said that National Capital Region (NCR) Delhi, Chennai and Kolkata have shown increased activity and Mumbai Metropolitan Region (MMR) is doing the fine balancing act with stability in sales and business turnover, while other markets such as Pune and Bengaluru are moving through a difficult phase.


“Much of it can be attributed to the slowdown in the IT sector, a point of overall saturation as well as other city specific issues. Additionally, it is known that these cities attract a lot of overseas funds which have dried up over the period due to concerns pertaining to the Indian economy. However, it is believed that these markets will emerge out of this scenario slowly and see a boost in momentum on the back of more infrastructural changes and revival in overall sentiment,” the report said.


According to Liases Foras, during the fourth quarter, most of the demand, in terms of cost range distribution, was skewed towards the affordable range (Rs25 lakh to Rs50 lakh) and the mid-segment (Rs50 lakh to Rs1 crore) range. “Now with the Union Budget 2013-14 giving a boost to the affordable segment through its policies such as additional interest benefit for first time buyers, formation of Urban Housing Fund and other policies to dissuade speculative tendencies, this trend is likely to continue,” it added.


Prices marching upwards

According to the report, during the fourth quarter, prices across the major markets on the whole showed an uptick over the past four quarters. While, Ahmedabad showed stability, other markets, especially Bengaluru, were on a rise. MMR continued to be at an elevated level with an upward bias.


The price correction in Mumbai city could not be sustained and it witnessed an increase of 3% during the fourth quarter. This follows a much required decline in third quarter of FY13. Thane witnessed a maximum price appreciation of 8%, followed by central and western suburbs with 6% and 4% rise, respectively. Panvel was the only region to see a marginal dip in the price level. It now remains to be seen whether the proposed 1% hike in stamp duty from October 2013 actually fructifies and affects the price level in the city, Liases Foras said.


In Hyderabad, the price saw a 3.5% rise compared with last quarter. According to the report, Hitech City seemed to be the most happening location with a 24% sequential price rise, while Chandanagar recorded a 28% increase. The North West suburb and the Central region recorded sequential rise of 6%, while prices in the North Eastern suburb plunged 10.3%.


For Kolkata, the prices were almost stable during Q4 of FY13. However, Central Kolkata and East Kolkata have registered a 9% and 7% sequential price rise followed by Howrah and South West Kolkata with 5%, each, the report said.


According to Liases Foras, Bengaluru has been witnessing persistent price appreciation for the past four quarters. During Q4, Bengaluru registered a 7% sequential price appreciation. Locations like Haralur Hebbal, Yelahanka, Kanakapura Road and Banashankari saw quarter-on-quarter (Q-o-Q) price rise in the range of 14% to 21%.


The price level in Pune continued to appreciate during the March quarter due to influx of overseas funds in the city. “About 15% annual price rise has been registered in Q4 FY12-13. All the suburbs, with an exception of Karve Road and Yerwada, have logged in a price rise. Sangamwadi saw a 9% Q-o-Q price appreciation, while Aundh, Pimpri–Chinchwad and Warje registered about 5% to 6% price increase,” the report said.


Sales performance across the cities

In terms of sales, on a sequential basis, the situation has improved in the NCR market. The region saw a major boost during the second quarter as the Noida extension property corridor resumed its development activity post the resolution of the land row problem. The second quarter or the festive season saw a sudden spurt in sales due to the festive season but the same could not be sustained for the subsequent quarter and sales declined. However, Q4 FY12-13 again saw the market displaying an astounding performance as bookings have opened for major residential projects in the Noida extension corridor. Small pockets like Bhiwadi and Raj Nagar Extension continue to be the focus for end user purchases.


Liases Foras said, “It can thus be observed that the contribution of NCR in the overall sales has increased, followed by Chennai. The region constituted 40% of the total sales of the country in Q4 FY12-13, compared to 33% in the prior quarter. Other markets like MMR, Hyderabad, Pune and Bengaluru have witnessed contraction in their chunk of sales in the past three quarters.”

MMR once again witnessed increased activity in the peripheral regions. The highest volume sales were recorded in Thane (W) with 856 units followed by Virar (W) and Ulwe. Kandivali (E) was the only location in the western suburbs with a substantial sale of 796 units. These locations also registered tremendous quarterly improvement in sales, it added.


Bengaluru has seen a persistent decline in sales largely because of price increases. In the last quarter prices surged 10%, while during the March quarter, prices rose 6%, the maximum across the nation. However, the decline in area sales can also be attributed to the shrinkage in average sizes of each unit on the peripheral regions. Significant drop was recorded in locations such as Kanankpura Road, Whitefield and Hosur Road, while Hennur Road and Electronic City saw sudden rise. Thanisandra, an offbeat location saw a substantial surge in sales from 39 units in the previous quarter to 518 units in Q4 FY12-13, on the back of Bhartiya City by Bhartiya Group.


Hyderabad, which has the most talked about residential market, saw a cyclical movement throughout the year on the back of a series of political developments in the state. In Q2 FY12-13, the Hyderabad market entered the positive territory. It had started evolving after prolonged sluggishness due to improvement in construction activity and easing of the political turmoil surrounding the Telangana issue. Gachibowli, Kondhapur, Madhapur, Kukutpally, Manikonda in the north-west region have emerged as the organised real estate corridor and the region contributes 71% of the total city sales. The brisk pace of progress of the Hyderabad Metro Rail phase-I further boosted the region's market in the previous quarter. However, the situation again turned grim in the final quarter. The prevailing uncertainty over the Telangana issue re-surged and sales plunged 46% on a quarterly basis and inventory shot up as high as 49 months in Q4 FY2012-13.


Decline in sales was also the order of the day in Pune. While persistent appreciation in prices is one of the prime reasons for slowdown in sales, a languishing IT sector has also cast a gloom on the pace of demand. The unit sales dropped 4.5% in Q4 FY12-13. Sales were fragmented across the city, however, four main pockets viz, Talegaon, Wagholi, Kondhwa and Chakan garnered about 30% of the city's sales. Hinjewadi and Wakad have seen major declines while Talegaon saw a sudden spurt in sales with 745 units in Q4 FY2012-13 compared to 373 units in the previous quarter.


East Kolkata saw the maximum sales on account of its connectivity to VIP Road, Arterial Road, Kaikhali Road and quality social infrastructure. Locations like Rajarhat, Barasat, Ruby Crossing and Maheshtala contributed 53% of the sales wherein Rajarhat in East Kolkata and Barasat in North Kolkata together grossed 40% of the entire city's sales.


Decline in new launches

According to Liases Foras, things on the new launch parameter also seemed dismal with the launches in terms of area dropping to the lowest level in two quarters. Q3 FY2012-13 saw the highest amount of new supply in the last 10 quarters, but the same trend did not rollover in the final quarter. However, the price trend remained the same wherein the prices of new launches were below that of existing supply. The price of new supply is 7% lower than the price of existing supply as of Q4 12-13.

NCR ruled the roost in terms of number of new launches, however, on a sequential basis the additions declined. MMR contributed 23% of the total supply in the country as compared to 12% in the previous quarter, followed by Chennai, which also saw increased new launches. Pune and Bengaluru remained stable while Hyderabad has shown significant shrinkage in new launches.


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