As per SEBI norms any person who holds more than 5% shares for voting rights in a company has to disclose the number of shares held and change in shareholding. The disclosures have to be made even if such change results in stake falling below 5%
Mumbai: Market regulator Securities and Exchange Board of India (SEBI) imposed a total penalty of Rs3 lakh on three entities for failing to make disclosures regarding change in their shareholding in Innovative Tech Pack (ITPL), reports PTI.
In three separate orders, SEBI slapped Rs1 lakh fine each on Sanjeev Reddy Chilumala, Ratna Ketineni and Kanaka Durga Ketineni for failing to make disclosures as required under the norms.
“...hereby impose a monetary penalty of Rs1 lakh...on the noticee (Chilumala),” SEBI said.
Similar worded orders were also passed against Ratna Ketineni and Kanaka Durga Ketineni.
As per SEBI norms any person who holds more than 5% shares for voting rights in a company has to disclose the number of shares held and change in shareholding. The disclosures have to be made even if such change results in stake falling below 5%.
It was alleged that all the three entities had reduced their respective stakes in ITPL between April-July, 2010 but did not make the required disclosures of change in their shareholding.
SEBI found that that Chilumala was holding 6.91% stake in ITPL as on April 2010 which got reduced to 2.21% in June 2010.
Similarly, the shareholding of Ratna Ketineni reduced to 2.92% in July 2010 from 9.68% in April 2010, while that of Kanaka Durga Ketineni declined to 4.18% in June from 6.8% stake held in April.
However, SEBI in its orders said that the available records did not indicate the amount of disproportionate gain or unfair advantage made by the three entities.
In its consent order, dated 1 November 2012, SEBI said its High Powered Advisory Committee has accepted the consent terms involving a payment of settlement charges of Rs37.5 lakh
Mumbai: Market regulator Securities and Exchange Board of India (SEBI) has agreed to settle charges against power sector private equity fund “Small is Beautiful” for alleged violation of venture capital investment rules, after payment of Rs37.5 lakh by the fund as settlement charges, reports PTI.
“Small is Beautiful” was established in 2004 as the country’s first private equity fund focussed on investments in power generation assets and is registered with SEBI as a venture capital fund.
SEBI had initiated an enquiry into alleged violation of its investment guidelines for venture capital entities by the Rs231-crore fund, which had garnered contributions from as many 21 public sector banks, financial institutions and insurance companies including Life Insurance Corporation of India (LIC).
However, the fund sought settlement of these proceedings through SEBI’s consent mechanism, wherein a case can be settled after payment of certain charges.
In its consent order, dated 1 November 2012, SEBI said its High Powered Advisory Committee has accepted the consent terms involving a payment of settlement charges of Rs37.5 lakh, which was later agreed upon by the regulator’s panel of whole-time members as well.
Accordingly, the “enquiry proceedings initiated against the appellant (Small is Beautiful) for the alleged violation” of SEBI’s venture capital regulations has been settled upon the payment of these charges, the SEBI order said.
The alleged violation by the private equity fund was brought to SEBI’s notice by the Income Tax Department.
The fund had a total committed corpus of Rs231 crore, out of which Rs226 crore was contributed by state-run banks, insurers and other financial institutions and the balance Rs5 crore by its investment manager KSK Energy Ventures.
Other contributors included IDBI Bank, Power Finance Corp, REC, Andhra Bank, SIDBI, PNB, Bank of Baroda, Oriental Bank of Commerce, Syndicate Bank, UCO Bank and Union Bank of India.
In its income tax returns for assessment year 2007-08, the fund had sought exemptions amounting to Rs11.84 crore. During assessment proceedings, the additional commissioner of Income Tax, Hyderabad observed the fund had violated SEBI's investment guidelines for venture capital funds.
Under these regulations, a venture capital fund is restricted from making investment in its associated companies.
However, it was noted that, during the period of 2005-07, the fund had made investment in its three associated companies, Arasmeta Captive Power Company, Sai Regency Power Corporation and KVK Energy Infrastructure.
The matter was brought to the notice of SEBI by the tax department in March 2011, after which the market regulator initiated enquiry proceedings by the issuance of show cause notice on 9 August 2011 into the affairs and dealings of the fund for alleged violation of these regulations.
In its 135th seminar, Debashis Basu, trustee Moneylife Foundation, gave the participants a detailed explanation—supported by historical facts—whether gold is good for investment and what are the safe options for an average saver
Gold is unlike any other financial asset, explained Debashis Basu, Moneylife Foundation trustee and editor of Moneylife magazine. Come Dhanteras the demand for gold as investment and jewellery goes up. But should gold be a significant part of your investment? In nominal terms the price of gold has more than tripled in the last 20 years, this makes it a very attractive asset class. “It has risen from $250 to $1,750 in 10 years. But that is not the reason to jump into it without analysing what causes a rally in gold,” cautioned Mr Basu.
Mr Basu gave the participants a detailed view of the history of gold, establishment of gold standard, explained why gold is such a unique commodity and then further explained how gold was used as money. But if you want to buy gold for large returns, be careful what you wish for. It does not pay interest or dividend. Besides, in inflation-adjusted terms gold has not been a great performer. When interest rates are higher than inflation, gold is not preferred because it pays no interest. So, the moment there is a reasonably safe asset class that seems to offer a stream of income—and does seem strong enough to withstand economic risks—money will flow into that asset, deserting gold. Investors embrace gold as an asset when they have no asset to turn to—a period of negative real interest rates. In inflation-adjusted terms gold has not been a great performer.
To read about other seminars held by the Foundation, click here.
There are many complex and global factors that are embedded in the price of gold. Most importantly, there is little transparency in the large physical demand and supply of gold involving central banks, hedgers and actual users. Gold rises on demand and supply factors such as central banks which hoard lots of gold decide to sell, thus depressing prices. But as a thumb rule, it is the expectation of higher inflation worldwide that pushes up the price of gold.
In India, the price of gold is mainly based on the movement of the dollar and the rupee. One of the two has always supported the price of gold. Therefore, a fall of 70% in 21 years between 1981 and 2001 did not affect us. The rupee had depreciated from Rs8 in 1980 to Rs46 in 2001. This more than negated the fall of gold. So, a weak rupee offers a natural support for gold.
Gold will only go up and down on inflation, interest rates, dollar and rupee, explained Mr Basu. And the movement of these is too complex to understand—leave alone predict. For those who want to buy gold, Mr Basu explained the pros and cons of the different modes of investing. For those who don’t believe in e-gold then physical gold is the best option for them. However, apart from ensuring the authenticity of gold there is a fear of theft and storage costs, etc.
To read more about investing in gold and also about gold loan companies, click here.
When it comes to gold ETFs (Exchange Traded Funds), it is easy to buy or sell only if there are high volumes. This would even draw a fee or expense ratio of 1%-1.5% per year apart from your demat account maintenance charge. In many of these schemes the liquidity is low. Even for gold mutual fund schemes investing in ETFs, there is a high liquidity, however, the charges are higher. Jeweller gold deposit schemes and purchasing gold in instalments from jewellers hold an element of risk as these schemes are not regulated. Before investing in such schemes one should read the fine print carefully.
Membership to Moneylife Foundation is free of cost where members get access to such informative seminars and can utilise the state-of-the-art facilities at the Moneylife Knowledge Centre, to empower themselves. If you are not a member of Moneylife Foundation yet, please visit the membership form here.