Regulations
SEBI fines 3 entities for violating disclosure norms

In three separate orders, SEBI said it has imposed a fine Rs50,000 on JMD Telefilms Industries, another Rs75,000 on a Avishek Bose and slapped a penalty of Rs45,000 on Gulistan Vanijya Pvt Ltd

Mumbai: SEBI has imposed a total penalty of Rs1.70 lakh on three entities for not making requisite disclosures related to shares of Livingroom Lifestyle.

 

In three separate orders, Securities and Exchange Board of India (SEBI) said it has imposed a fine Rs50,000 on JMD Telefilms Industries, another Rs75,000 on Avishek Bose and slapped a penalty of Rs45,000 on Gulistan Vanijya Pvt Ltd.

 

SEBI in the orders dated 31 October 2012 said that considering the facts and circumstances of the case the penalty “shall be commensurate with the violations committed by the noticee.”

 

Pursuant to receiving a complaint, SEBI initiated an probe in the scrip of Livingroom Lifestyle (now known as Chisel & Hammer Mobel Ltd) for the period 11th February to 25th November 2010.

 

The regulator said Avishek Bose was the top client who contributed 9.95% to the gross market buy. Bose had 8.27% stake in the Livingroom Lifestyle which were purchased from the two of the company’s promoters.

 

SEBI alleged that Bose transferred his stake to Gulistan Vanijya which subsequently gave them to JMD Telefilms Industries.

 

None of the three entities, however, made any disclosure regarding their shareholdings as required under the norms.

 

SEBI said failure on the part of the entities to make the necessary disclosures on time had deprived the investors of the important information at the “relevant point of time.”

 

The regulator said it observed that the entities had “concealed the vital information which was detrimental to the interest of investors in securities market.”

 

In an another order, the market regulator has slapped a Rs1 lakh fine on Abhigam Consultants for failing to disclose the share acquisition in formations to the stock exchanges in the prescribed time period of four days.

 

The matter relates to acquisition of shares/voting rights of Transpek Finance by Abhigam Consultants in December last year.

 

“...impose a consolidated penalty of Rs1 lakh...on the noticee (Abhigam Consultants)...penalty is commensurate with the violations committed by the noticee,” SEBI said in its order.

 

SEBI said Abhigam Consultants on 5 December 2011 acquired 5.59 lakh shares/voting rights amounting to 15.66% stake in Transpek Finance through inter-se transfer of the shares on 5 December 2011.

 

The regulator said the entity failed to inform the same to the stock exchanges within the prescribed period of four working days and informed the information only on 31 January 2012—a delay of 36 working days.

 

SEBI said it had granted an exemption to the company from making public offer on account of inter-se transfer of the shares among the qualifying persons.

 

In addition, as per SEBI’s regulation, the entity was required to intimate the stock exchange where the shares of the target company are listed, about the details of the proposed acquisition at least four working days prior to the purchase.

 

“However, it is observed that the noticee undisputedly failed to intimate the same within the prescribed period, and intimated only on 31 January 2012 i.e. a delay of 44 working days,” SEBI said.

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GSB Securities settles SEBI charges for Rs28 lakh

"SEBI in its consent order dated 31 October 2012 said that “enquiry proceedings initiated against the applicant (GSB Securities) for the non-compliance of provisions...stand settled and SEBI shall not initiate any enforcement action against the applicant for the same”

 
Mumbai: Market regulator Securities and Exchange Board of India (SEBI) disposed of a case against GSB Securities after the entity made a payment of Rs28 lakh to settle charges related to violations of broker regulations, reports PTI.
 
SEBI in its consent order dated 31 October 2012 said that “enquiry proceedings initiated against the applicant (GSB Securities) for the non-compliance of provisions...stand settled and SEBI shall not initiate any enforcement action against the applicant for the same.”
 
A probe conducted by SEBI had found that GSB Securities had acted as an unregistered portfolio manager on behalf of two individuals Praveen Daga HUF and Chitra Vishwanath.
 
SEBI had alleged that the broker could not produce letter of authorisation from the two clients.
 
The broker proposed settlement under SEBI’s consent order mechanism on 27 February 2012.
 
Thereafter, a High Powered Advisory Committee (HPAC) considered the consent terms and recommended the case for settlement on payment of Rs28 lakh. The same was approved by a panel of whole time members of SEBI.
 
SEBI noted that enforcement actions, including commencing or reopening of the proceedings, could be initiated if any representation made by GSB Securities is found to be untrue.
 

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SBI not to cut lending rates

Pratip Chaudhuri, SBI Chairman, said the bank will lose Rs300 crore because of the additional provisioning requirement while gain from the CRR cut is only Rs225 crore

Mumbai: State Bank of India (SBI) has ruled out any cut in its lending rates due to steep hike in the provisioning for restructured standard assets, a senior bank official said, reports PTI.

 

“The 75 bps (0.75%) hike in provisioning has closed the room for any lending rate cuts. Therefore, our asset liability committee, which met yesterday, decided to leave the lending rates unchanged,” an SBI official told PTI.

 

The only measure which may have prompted a look at the rate cut was the 0.25% reduction in the cash reserve ratio by RBI in its second quarter policy announcement on Tuesday.

 

After the credit policy announcement, bank chairman Pratip Chaudhuri had hinted at a rate cut saying the Alco will be meeting in a day or two and the bank will prefer a ‘secular cut’ in the base rate.

 

The RBI, as part of its gradual move towards higher provisioning for standard restructured assets, as mooted by the B Mahapatra committee, has increased the same to 2.75% from 2%. The committee has proposed it to be raised to 5%.

 

Mr Chaudhuri said the bank will lose Rs300 crore because of the additional provisioning requirement while gain from the CRR cut is only Rs225 crore.

 

However, he had said the Rs75 crore shortfall will not deter the bank from cutting rates as it has already budgeted Rs10,000 crore towards provisions for the fiscal and the asset quality is improving.

 

With a base rate of 9.75%—the last cut was in mid-September by 0.25% following the CRR cut in the mid-quarter policy review, SBI’s base rate is one of the most aggressive in the banking system at present.

 

Already the bank has cut lending rates to a low of 10.25% on home loans and 10.50% for auto loans as part of a festive offer valid till the end of December. The offer also includes a 50% reduction in the processing fee.

 

Bankers have been maintaining that changes in the base rate are directly aligned with the movement of their cost of funds and the broader drop in deposit rates observed in the recent past is being seen by many optimists as a pre-cursor to a lower rates regime.

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