Regulations
SEBI Board may discuss on stricter rules for securitisation trustees
The proposal aimed at rationalising and making clear the roles and responsibilities of securitisation trustees, is likely to be discussed at SEBI's board meeting Thursday
 
Market regulator Securities and Exchange Board of India (SEBI) is planning to put in place stricter norms, including minimum net worth requirement, for trustees managing issuance of securitised debt instruments.
 
Besides, SEBI is looking to come out with a standardised term sheet for securitisation transactions that cover both public issues and private placements.
 
These proposal, aimed at rationalising and making clear the roles and responsibilities of securitisation trustees, is likely to be discussed at SEBI's board meeting Thursday, sources said.
 
Generally, securitisation refers to creating a financial instrument by pooling various debt instruments and then selling them to investors.
 
SEBI may specify a minimum net worth requirement of Rs2 crore for these trustees.
 
Further, the trustees would be required to have at least two persons and between them, they need to have a minimum experience of five years in activities related to securitisation.
 
Currently, any person registered as securitisation firm or a reconstruction company with Reserve Bank of India (RBI), NABARD, NHB can act as securitisation trustees.
 
Under the proposed norms, the trustee may call for periodic reports, supervise the implementation of conditions regarding creation of security for securitised debt instruments and take steps to ensure protection of investors as well as resolve their grievances.
 
Scheduled commercial banks and public finance institutions may be allowed to act as trustees for a securitisation transaction.
 
Besides, they may appoint a compliance officer for performing duties including monitoring compliance of the various rules and redress of investor grievances.
 
The trustees need to ensure on a continuous basis that the trust property is available and adequate at all times to pay the securitised debt instrument holders.
 
As per a code of conduct for the trustees, they are required to avoid possible conflict of interest.
 
As part of the new procedures, SEBI board would make necessary amendments to the SEBI (Public offer and Listing of Securitised Debt Instruments) Regulations.
 
Earlier in August, SEBI had issued a concept paper on securitisation transactions.
 

 

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No weakness in Nifty, Sensex rally yet – Wednesday closing report

Nifty may decline a bit but the uptrend is intact

 

In Tuesday’s closing report, we had mentioned that NSE’s CNX Nifty will continue to rise subject to dips. After a gap up opening, the index witnessed a volatile session on Wednesday. The 50-share index moved into the red for a few minutes but immediately recovered and then moved in a narrow range.
 
The S&P BSE Sensex opened at 28,843 while Nifty opened at 8,720. Within the first hour of the session, the benchmarks reached up to 28,958 and 8,742. This was followed with the index reaching a low of 28,793 and 8,690. Sensex closed at 28,889 (up 104 points or 0.36%) while Nifty closed at 8,730 (up 34 points or 0.39%). NSE recorded a volumes of 90.76 crore shares. India VIX rose 2.55% to close at 17.7125.
 
SEBI chairman UK Sinha has said the regulator has written to the government asking for access to recovery mechanisms to other investors beyond banks and financial institutions.
 
Coming back to stock markets, Tata Elxsi (8.56%) was among the top two gainers in ‘A’ group on the BSE. The stock rose and hit its 52-week high today after announcing December 2014 quarter result, which showed a quarter on quarter growth and a year on year growth in its top line and at the net profit level.
 
Natco Pharma (5.90%) was the top loser in ‘A’ group on the BSE. The stock gave up gains for the second consecutive session after hitting its 52-week high on Monday. The US Supreme Court on Tuesday ruled that Teva Pharmaceutical Industries Ltd can still benefit from patent protection for top-selling multiple sclerosis drug Copaxone, dealing a blow to generic drugmakers looking to market a cheaper rival product. Among other companies to be affected by this includes Natco Pharma.
 
HDFC (2.71%) was among the top three gainers in the Sensex 30 pack. The stock hit its 52-week high today. ITC (5.01%) was the top loser in the 30-stock index. Although the stock recorded a rise in it December 2014 quarter, it was pulled lower as its main product – cigarette – recorded no growth over December 2013 quarter.
 
US indices closed Tuesday flat with a positive bias. International Monetary Fund reduced its growth forecasts for 2015 and 2016, increasing speculation central banks would take more aggressive policy moves to spark economic improvement.
 
A gauge of confidence among home-builders ticked down this month by one point to 57, staying close to the highest level since late 2005, according to National Association of Home Builders/Wells Fargo data. Readings, which are above 50, signal that builders, generally, are optimistic about sales trends.
 
Except for Nikkei 225 (0.49%) all the other Asian indices closed in the green. Shanghai Composite (4.74%) was the top gainer .
 
At the end of a two-day monetary policy review, the Bank of Japan (BoJ), cut its near-term inflation outlook and left its key easing policy unchanged.
 
European indices were lower except FTSE while US Futures were in the red.
 
The market awaits the European Central Bank (ECB) to unveil a government-bond-buying program after a monetary policy review Thursday aimed at spurring Europe's ailing economy.
 

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Helios and Matheson’s defaults and silence of regulators
Several depositors and investors are sending letters, notices to H&M for bounced cheques, while the company is reporting ‘fabulous’ financial results and obtaining ‘fancy’ ratings 
 
Chennai-based Helios and Matheson Information Technology (H&M), an unfancied software company, continues to default on repayment to its depositors and investors. After filing several complaints to market regulator Securities and Exchange Board of India (SEBI), BSE, National Stock Exchange (NSE), Ministry of Corporate Affairs as well as Enforcement Directorate (ED), the shareholders and depositors have now approached Finance Minister Arun Jaitley.
 
"Despite the proclaimed strong financials disclosed to the Stock Exchanges, the company has been, since June 2014, defaulting in the repayment of fixed deposit / interest due thereon to its depositors. This in itself is irrefutable evidence of the company fudging, manipulating its financial results disclosed to BSE and NSE, which calls for a full and thorough investigation of the situation," a letter sent by a section of H&M shareholders and depositors says.
 
Some depositors, whose cheques given by H&M bounced, are sending legal notices to the company directors. All the cheques given by H&M have bounced citing 'insufficient funds'. One of the depositors, who deposited Rs5 lakh each in three fixed deposit receipts (FDRs) was promised an interest of 12.12% per annum, which was to be paid every quarter. H&M issued interest warrants in advance of Rs15,150 each for the three FDRs to be drawn on HDFC Bank as quarterly interest. The company promised to pay the quarterly interest on 16th of March, June, September and December.
 
However, when in December 2014, the depositor submitted three cheques in HDFC Bank all three bounced citing insufficient funds. After failing to get any response from H&M and its officials, the depositor finally sent a notice under Section 138 of the Negotiable Instruments Act to the company directors.
 
Investors and depositors of H&M have also demanded investigation into ratings given and its subsequent withdrawal by CRISIL on the company. They alleged that by its shoddy rating on H&M, the SEBI registered rating agency CRISIL has seriously eroded investor confidence in its rating process.
 
In September 2014, CRISIL assigned 3/5 fundamental grade (good fundamentals) on H&M, due to steady performance of the company. However, suddenly, next month, the ratings agency, downgraded H&M to 2/5 from 3/5 citing 'moderate' fundamentals of the company. "The revision in Helios’ fundamental grade is a result of its deteriorating liquidity. Two major factors are responsible for the liquidity crisis, the company’s working capital days have increased in the last couple of quarters and it could not secure sufficient funds to honour its payment obligations on time. The company needs fresh funds to tide over the tight liquidity position. The company has been delaying the payment of principal in several public deposits matured/getting matured during FY14," CRISIL had said in its October 2014 report.
 
CRISIL in the report said, "The company has been delaying the payment of principal in several public deposits matured/getting matured during FY14. As per Section 74 of the new Companies Act 2013, the company is required to repay all the outstanding deposits from the public either by their respective maturity date or by 31 March 2015, whichever is earlier. Accordingly, we expect additional liability of Rs400 million to mature by 31 March 2015 (as public deposits due in FY15-17 would get advanced). The inability to raise funds to service the due liabilities plus upcoming liabilities are expected to further tighten Helios' liquidity going ahead."
 
According to the report from the ratings agency released in October 2014, as on third quarter of FY2014, the receivables of H&M, including debtors and unbilled, increased by Rs44.8 crore resulting in 125 days of sales outstanding (DSO) compared with 106 in second quarter in the same fiscal year. "Revenues (of H&M) increased only by Rs3 crore q-o-q in Q3FY14. This resulted in tie-up of funds in working capital leading to an elongated cash conversion cycle. The management has indicated that the receivables may remain high in the coming quarters as well," CRISIL had said. 
 
Not just common investors deposited money in H&M to earn 1% or 2% more, there are several well-educated professionals, including bankers, who have put their hard-earned money in this Chennai-based company.
 
Earlier in February 2013, Moneylife had reported on how overlooking several reports about criminal case pending against H&M's chairman and managing director, the ratings agency had assigned 5/5, its highest grading on the company. According to CRISIL report, banking, finance and insurance companies (BFSI) and healthcare segment would drive future growth of IT services in India during 2013 and, H&M would get benefits from it as the company works with seven of the 20 largest global banks.
 
Moneylife had previously reported about the bruising battle between H&M and Rajeev Sawhney, chairman of Vmoksha Technologies Pvt Ltd and a US-based non-resident Indian (NRI). The battle started in 2005 when H&M announced a $19 million buyout of Vmoksha, co-founded by Rajeev Sawhney and Pawan Kumar (former CEO of the controversial DSQ Software), with the former putting in the money and the latter running the operations. Mr Sawhney soon realised that he had been kept in the dark about many aspects of the deal. 
 
On 11 May 2005, both the companies signed a share purchase agreement under which V Ramachandran, chairman of H&M, was to pay $19 million for the three units, out of which $4 million was to be paid to Pawan Kumar, the then chief executive of Vmoksha and also former CEO of the controversial DSQ Software, as earn out. Although, Pawan Kumar and his family members were also stakeholders in Vmoksha, Mr Sawhney later bought out their stake as well. 
 
Mr Ramachandran was supposed to pay $13.4 million to Mr Sawhney, after paying some amount to Tapan Garg and Madhuri Garg, son and wife of Pawan Kumar for their holding. Mr Sawhney soon realised that he had been kept in the dark about many aspects of the deal. For instance, he found that instead of receiving $19 million, a bank account had been ‘fraudulently’ opened in the State Bank of Mauritius in Vmoksha’s name and used to borrow $13.5 million, using a fake board sanction and false entries. That money was remitted to H&M ostensibly for subscription of redeemable preference shares on 28 June 2005.  
 
Earlier in December 2011, the Supreme Court dismissed special leave petitions (SLPs) filed by H&M and Pawan Kumar, the then chief executive officer of Vmoksha Technologies. Both have challenged the Bombay High Court (HC) order, which allowed the revision application of Vmoksha’s co-founder Rajiv Sawhney against H&M. The question is when it is known to all that H&M is defaulting on repayments, why the stock exchanges, the first line of regulators and SEBI has kept quite. Why there is no action against the company and its top executives till date? Will Finance Minister Jaitley take cognisance of the complaint and make sure that the investors are at least repaid their hard earned money?
 
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COMMENTS

Venkataraman Ramakrishnan

6 months ago

i also suffered the same fate. i was infd. that Company had given
undertaking to Courts on repayment. Any further devpt.?

anitha

1 year ago

Please sign our petition as Helios & Matheson is not paying our full & final settlement salaries and also PF amount.

https://http://www.change.org/p/helios-matheson-managem...

Arun M Purohit

2 years ago

IN SUCH SITUATIONS PLEASE JOIN MY GROUP ON FACE BOOK , FOR MORE INFORMATIONS YOU MUST JOIN MY FACEBOOK GROUP ALONGWITH COMPLETE DETAILS i.e. MAIL ID , CELL NO. , ETC.... , I WILL SEND A LINK TO YOUR MAIL ID ENABLE YOU TO JOIN MY GROUP WHERE CAN RAISE YOUR QUERRIES / ASK A QUESTION WHICH FINALISE TO ADVISE/GUIDE IN A BETTER WAY

shrushti ajit sharma

2 years ago

MY NAME IS AJIT DINDAYAL SHARMA AND I HAVE INVESTED RS.100000/= IN helions and matheson information technology limited ON 27th NOVEMBER 2013 FOR THE PERIOD OF 36 MONTHS @ 12% AND MY MY TDR NO.IS FDB030632 AND MATURITY DATE IS 27th NOVEMBER 2016 BUT SINCE 16th FEBRUARY 2015 THE COMPANY'S MONTHLY INTEREST CHEQUES ARE RETURNED DUE TO INSUFFICIENT FUNDS YOUR PROMPT ACTION WILL BE HIGHLY APPRECIATED

THANKS AND REGARDS

AJIT DINDAYAL SHARMA
MOBILE 9004468206
9322835183
9619385823

REPLY

Arun M Purohit

In Reply to shrushti ajit sharma 2 years ago

AFTER TRYING MANY TIMES LINK IS NOT WORKING , MAY I HAVE YOUR MAIL ID ENABLE TO SEND IT

Arun M Purohit

In Reply to shrushti ajit sharma 2 years ago

http://www.facebook.com/groupinvite/ATV0Nf9psvy...

Arun M Purohit

In Reply to shrushti ajit sharma 2 years ago

https://http://www.facebook.com/groups/1660879314144812...#

FOR MORE INFORMATIONS JOIN MY ABOVE GROUP ALONGWITH COMPLETE DETAILS i.e. MAIL ID , CELL NO. , ETC.... , FB GROUP LINK IS MENTIONED ABOVE

Arun M Purohit

In Reply to shrushti ajit sharma 2 years ago

FOR MORE INFORMATIONS JOIN MY GROUP ALONGWITH COMPLETE DETAILS i.e. MAIL ID , CELL NO. , ETC.... , FB GROUP LINK IS

https://http://www.facebook.com/groups/1660879314144812...#

Arun M Purohit

In Reply to shrushti ajit sharma 2 years ago

FOR MORE INFORMATIONS JOIN MY GROUP ALONGWITH COMPLETE DETAILS i.e. MAIL ID , CELL NO. , ETC.... , FB GROUP LINK IS

EXTREMELY SORRY MY PREVIOUS LINK NOT WORKING , HENCE SENDING HEREWTITH NEW ONE

https://http://www.facebook.com/groupinvite/ATV0Nf9psvy...

Arun M Purohit

In Reply to shrushti ajit sharma 2 years ago

FOR MORE INFORMATIONS JOIN MY GROUP ALONGWITH COMPLETE DETAILS i.e. MAIL ID , CELL NO. , ETC.... , FB GROUP LINK IS

https://http://www.facebook.com/groups/1660879314144812...

Satish Bilgi

2 years ago

I too have monies due from Helios & Matheson since Jan 2015 and have more monies invested in this Company which will be due in the next 1 year. pl let me know whom I should approach to get the money back. Satishchandra Bilgi , Mumbai ( 98210 47513 ) . pl note : any help given now will save my life long savings deposited in this company post my retirement .

REPLY

Arun M Purohit

In Reply to Satish Bilgi 2 years ago

AFTER TRYING MANY TIMES LINK IS NOT WORKING , MAY I HAVE YOUR MAIL ID ENABLE TO SEND IT

Arun M Purohit

In Reply to Satish Bilgi 2 years ago

FOR MORE INFORMATIONS JOIN MY GROUP ALONGWITH COMPLETE DETAILS i.e. MAIL ID , CELL NO. , ETC.... , FB GROUP LINK IS

https://http://www.facebook.com/groupinvite/ATV0Nf9psvy...

shishir sinha

In Reply to Satish Bilgi 2 years ago

I have also deposited my life savings of 23 lacs. My husband is no more, contrary to his advise, I have gone ahead and lured by the higher interest rate of 2 % more. I also dont know what to do, anyone who is kind to help me, an old lady (75 years) please call on 7738100627 and advise remidial action that I should take.

Arun M Purohit

In Reply to shishir sinha 2 years ago

FEELING VERY SAD TO KNOW , FOR MORE INFORMATIONS YOU MUST JOIN MY FACEBOOK GROUP ALONGWITH COMPLETE DETAILS i.e. MAIL ID , CELL NO. , ETC.... , I WILL SEND A LINK TO YOUR MAIL ID ENABLE YOU TO JOIN MY GROUP WHERE CAN RAISE YOUR QUERRIES / ASK A QUESTION WHICH FINALISE TO ADVISE/GUIDE IN A BETTER WAY

Dayananda Kamath k

2 years ago

Authorities are busy in taking action on companies where there are no complaints. so if you make a complaints they will ignore it as you are asking them to do their duty. and they want to do the duty which suits them. they will initiate action only when it reaches thousands of crores, and some interested powers that be is effected. in india every regulatory action is also determined by connections for the issue.

Saumil Mehta

2 years ago

Plethico Pharma is one more such company that has defaulted. The MD draws a remuneration of 4 crores

manoharlalsharma

2 years ago

INFECTED BY POLITICS so no need of thinking as done with SAHARA or MALLYA or SHAH,as per Indian legal formalities and ethics LAW WILL TAKE IT'S own course.as we have seen at the times of last President's note in the matter of JAN-LOKPAL SENSE OF THE HOUSE.No one still understood.

R S Murthy

2 years ago

Almost 4 decades ago, that is during my early days of banking career, one elderly north indian business man (not even a graduate) advised me that, if any one pays more than the reasonable rate of interest say 9%, we have to assume and pressume that either our principal is at stake or the payer may be engaged in an unlawful trade.Several happenings are prooving that the advise is wise.
Just like fish that are lured by the bait, public are lured with high returns.Even senior and learned people are unable to control the temptation and land up in problem. There is no use of blaming any one including regulators. Blame our own weakness for being cheated or looted.

Shashibhushan Vidyadhar Gokhale

2 years ago

Moneylife Foundation is doing a great job by exposing and highlighting such frauds. Hats off to you.

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