SEBI had summoned Mehta, the CA, to examine his link to Sangeeta Jayram Sawant, director of 30 companies that were connected to the promoters which were buying and selling shares of BoR, but he did not comply with the order
New Delhi: Market regulator Securities and Exchange Board of India (SEBI) imposed a penalty of Rs6 lakh on Dilip S Mehta, owner of a chartered accountancy firm, for failing to respond to summons issued by it in relation to a probe into the affairs of erstwhile Bank of Rajasthan (BoR), reports PTI.
The matter pertains to alleged irregularities committed by former promoters of Bank of Rajasthan (BoR).
Imposing a "penalty of Rs6 lakh", SEBI in its order said Mehta's failure indicates that the default is repetitive in nature.
SEBI had summoned Mehta to examine his link to Sangeeta Jayram Sawant, director of 30 companies that were connected to the promoters which were buying and selling shares of BoR.
It had issued two summons to Mehta. Both were received by him but did not comply with them.
The market regulator observed that the information sought from Mehta was critical and imperative to the investigation and failure on his part to comply with the summons had hampered the probe.
SEBI noted that the "information provided by the noticee now is of no relevance and cannot be accepted as the same was required by the Investigating Authority before the completion of the investigation. Hence the submissions made by the noticee are not accepted".
The matter relates to SEBI's investigation into the affairs of BoR for a period between June 2007 and December 2009. Since then, BoR has been acquired by ICICI Bank.
The probe revealed that BoR's then promoters, led by Pravin Kumar Tayal, along with some companies that were connected to him and his relatives, by way of their continuous disclosure publicly announced that their stake had come down from 44.2% as on quarter ending June 2007 to 28.6% as on quarter ending December 2009.
However, it was alleged, though as per disclosure their holding seemed to have reduced, but in reality the holding of the promoters actually increased with the active collusion of front entities.
Thus, the shareholding of the promoters of BoR with person acting in concert (PACs) had increased from 46.8% in June 2007 to 63.15% in December 2009.
Insurance lines, which are making some kind of losses, will see some hike in premium rates says a top official from United India Insurance
Mumbai: Premiums in various segments like fire, group health insurance plan and third-party motor insurance are likely to go up in the wake of losses being incurred by insurers, reports PTI quoting a top executive from United India Insurance.
"There are certain lines of business like fire insurance, group health insurance and motor third party insurance where premium rates will go up. Insurance lines, which are making some kind of losses will see some hike in premium rates," G Srinivasan, Chairman-cum-Managing Director of United India Insurance told reporters.
He, however, said the extent of hike would be consumer specific than across the board.
Reacting to proposed rise of foreign direct investment (FDI) cap in insurance sector, Srinivasan said it would help in bringing more capital into the insurance industry.
He informed that the company was comfortable with recent guidelines for initial public offerings (IPOs) released for non-life insurers.
"We are quite comfortable with the guidelines (for IPO). We have profits in last five years," he said, adding the government will take the call on listing of the public sector general insurer.
About product launch, Srinivasan said the company is putting emphasis on upcoming new products in retail segment.
"We have sought IRDA's approval for one health insurance product recently," he said.
On the third party motor insurance where insurers are incurring losses, Srinivasan said a hike in the premium, especially in commercial vehicle segment, is necessary.
"Pricing in the motor third party, especially for commercial vehicle, needs to be increased by 30-40%," he said.
United India Insurance posted a 21% rise in net profit at Rs192 crore in the first quarter of FY13 against Rs159 crore in the same period last fiscal.
The premium income has grown by 20% to Rs2,428 crore from Rs2,022 crore in the year ago-period against the industry growth rate of 18%.
It is evident that if at all the oil companies are incurring notional losses vis-a-vis the “trade parity” price they would have got; it is largely a result of the heavy taxes levied more or less equally by the Centre and the states on diesel. In other words, both the Centre and the states are actually fleecing oil companies and therefore consumers
In the first part of the "Raise Your Voice" series (Taxes are root cause for under-recovery of oil companies: Raise Your Voice -Part 1), we saw how taxes are the root cause of under-recovery for oil companies in India. While prime minister Dr Manmohan Singh, in his televised address tried to convince for increasing diesel prices, he failed to take the people into confidence on the circumstances that caused losses to the oil companies.
For the benefit of the people, I have enclosed below a copy of a highly educative report that the National Institute of Public Finance and Policy (NIPFP) recently prepared on the structure of diesel pricing. In particular, I invite your attention to Table 5 at pages 23-24 of the report which provides at a glance the retail price of diesel in Delhi and the way it is built up from the ex-refinery price.
I have summarised the essential price elements below in a tabular form for easy reference.
It is evident that, if at all the oil companies are incurring notional losses vis-a-vis the “trade parity” price they would have got; it is largely as a result of the heavy taxes levied more or less equally by the Centre and the states on Diesel. In other words, both the Centre and the states are actually fleecing the oil companies and, therefore, fleecing the consumers by as much as Rs7.57 per litre. Now, they have increased the price further by Rs5 per litre, thereby allowing the oil companies to offset their notional losses to that extent, but not giving up the Centre's own tax share in the price build up. Since taxes are levied ad valorem, the tax element of Rs7.57 per litre will marginally go up, placing more public money in the hands of the Centre and the states at the cost of the consumer. Instead of passing on this latest burden, the Centre could have been more generous by giving up its own tax revenue from diesel and saving the citizen of this undue burden. No such generosity is visible.
I may also place before the people the following break up of diesel use in the country.
In other words, the use of diesel is in essential sectors of the economy. A diesel price hike will therefore not only burden citizens but also trigger inflationary trends.
Any responsible government ought to have placed these facts in the public domain before abruptly announcing the price hike. Apparently, public accountability is the last thing on its agenda.
These are the questions that we should all raise in one voice. I hope this article will generate a public debate on this issue.
Here is the report of National Institute of Public Finance and Policy…
(Dr EAS Sarma, IAS, is a post-graduate in Nuclear Physics (Andhra University) and in Public Administration (Harvard University) and a PhD from IIT, Delhi. As a Union Secretary he has held the portfolios of power, economic affairs and expenditure. He quit the government in 2000 over differences regarding policy issues with the National Democratic Alliance government. He is the convener of Forum for Better Visakha (FBV), a civil society group set up in 2004. Dr Sarma was also a member of Godbole Committee appointed by the then Maharashtra government.)