SEBI fines one shareholder of Raj Packaging for non-disclosure

SEBI imposed a penalty of Rs10 lakh on a shareholder of Raj Packaging for failing to disclose around 5% rise in his shareholding in the company

Market regulator Securities and Exchange Board of India (SEBI) fined Rs10 lakh penalty on one shareholder of Raj Packaging Industries Ltd (RPIL) for failing to disclose the increased in his stake in the company within the stipulated time.

SEBI in its investigation found irregularities in the trading of RPIL shares, and noticed that one Madanchand Prasanchand has acquired more than 5% shares of issued share capital of RPIL on two occasions.

The shareholder has not filed disclosure within two working days about the substantial increase in his shareholding in RPIL, thus violating the provisions of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

In its order SEBI said, the shareholder admitted about the delay in complying with the norms. SEBI also noted that he had had not made any submissions with respect to the change in his holding by more than 2% on two occasions.

Madanchand Prasanchand in his submission to SEBI said, “I have acquired 2.04 lakh shares of RPIL representing 5% of total paid up capital of the company from 1 January 2013 to 17 September 2013. For the period under consideration, due to ignorance of regulations, lack of knowledge and oversight, there was delay in filing the information under the SEBI SAST Regulations, 2011. The delay was totally unintentional and without any malafide intention. As soon as it came to my knowledge, I have filed the reports under Regulation 29(2) read along with Regulation 29(3) of Regulations to the stock exchange. Delay reporting has neither resulted in any gain to me.”

SEBI imposed a penalty of Rs10 lakh on Madanchand Prasanchand. SEBI said Prasanchand's stake in Raj Packaging increased to 15.78% from 13.59% and he should have disclosed the change to the company as required under the norms.

Raj Packaging closed Friday flat at Rs21.15 on BSE, while the 30-share Sensex too ended the day flat at 21,753.


Tulip Telecom’s CMD arrested for service tax evasion

Tulip Telecom’s chairman and managing director HS Bedi was arrested for allegedly evading service tax of Rs32.16 crore

HS Bedi, chairman and managing director (CMD) of Tulip Telecom Ltd is arrested for allegedly evading service tax of Rs32.16 crore. A case has been registered against Tulip Telecom for non-payment of service tax.

Delhi Service Tax Commissionerate in its investigations found the company engaged in providing internet services among others, was not filing its mandatory returns of the central levy from 2012-13. Commissionerate official arrested lieutenant colonel (retired) Bedi, on charges of non-payment of tax even after collecting it from its consumers.

Patiala House Court has sent Bedi to judicial custody for 14 days. An evasion of service tax of Rs50 lakh and above has been made a cognizable offence after the passage of 2013-14 Finance Bill on 10th May last year.

Finance Minister P Chidambaram had proposed provisions of Criminal Procedure Code (CrPC) to arrest such offenders in 2013-14 budget, in line with customs and central excise laws. Earlier, the officials did not have any power to arrest a person for service tax evasion. The service tax officials are taking strict action against all evaders after a first-of-its-kind amnesty scheme for such defaulters ended in December last year.

Earlier Moneylife wrote; Why no action against Tulip Telecom? Mentioning about debt-ridden Tulip Telecom has failed to pay salaries to employees for nine months and has not deposited tax deducted and provident fund dues.

Tulip Telecom closed Friday 4.96% down at Rs4.02 on BSE, while the 30-share Sensex ended the day flat at 21,753.


Left Brain, Right Stuff by Phil Rosenzweig: Book Review

Why real-world decisions require a combination of left-brain analysis and right-brain ambition

As we know, individuals are prone to various biases, such as looking for information that will confirm what they believe (confirmation bias) or have the illusion of control and imagine that they have more influence on events than they actually do. They also tend to suffer from hindsight bias. That’s the domain of behavioural science. But while several lessons can be learnt from various experiments in human behaviour, many of these lessons may not be applicable to business decisions.

Phil Rosenzweig, a professor at IMD (Institute of Management Development) in Lausanne, Switzerland, focuses his attention on business thinking and managerial decision-making. He points out that apart from behavioural biases, many other factors are at play in business, such as competition, ambition, etc. While research experiments have been effective in isolating the processes of judgement and choice, they occur in a context far removed from the realities that strategic decision-makers face, the author states.

He argues that academic researchers may not be asking the right questions to judge decision-making. Often, researchers give a series of questions (such as the length of the Nile, the year Mozart was born and so on), asking participants to state a range, that they were confident, contained the correct answer. If the range is too narrow, the researcher concludes that the person is overconfident. However, when it comes to making managerial decisions, some level of confidence is required; it may appear excessive to some while others may feel it’s necessary.

People are said to be normally overconfident, too sure about themselves and unrealistically optimistic about the future. But while making business decisions, it may be essential to be confident. As mentioned earlier, many studies of judgements and choice avoid competition. However, in the corporate world, there is a competitive dimension, when we have to do better than others and how to think strategically is crucial. In competitive situations, not only is a high level of confidence useful, it can be essential. The author dedicates an entire chapter to dealing with confidence.

The standard advice for making better decisions is to be aware of the tendency for common biases and find ways to avoid them. The left brain is used for a deliberate and analytical approach to problem-solving. However, problem-solving isn’t entirely a left brain activity. Also, it does not mean either that artists rely exclusively on their right brain. But the left brain is strongly associated with logical reasoning.Therefore, great decisions call for clear analysis and dispassionate reasoning.

The left brain helps in identifying the difference in what we can control and what we can’t, whether to act or not to act, and also to recognise models. Along with the left brain analytical abilities, the ‘right stuff’ is also required such as going beyond past performance and seeking higher levels. The right stuff is about the intelligent management of risk. Real-world decisions require a combination of left brain analysis and rightbrain ambition, he says.

As many as eight chapters of this book cover elements associated with the left brain. These enumerate how to make a fundamental distinction between decisions whose outcomes we cannot control and those which we can. In the chapter on when are winners cursed, he explains that, while taking part in an auction, the apparent winner often ends up the loser by bidding more than the value of the product. The same goes for buying companies. Most acquisitions fail to deliver value and the reason is that excessive bids stem from overconfidence. Some managers do overestimate their ability to drive revenue growth and cost savings.

Winning decisions call for a combination of skills as well as overcoming behavioural biases. Though success is never assured when a decision is made, it is essential to know that the role of analysis and the process of implementation can influence the odds of success. Phil Rosenzweig gets an approving nod from Nassim Taleb who is a merciless critic. Taleb holds the author in high esteem


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