The manipulation in shares of Murli Industries was initially discovered by the I-T Department, which was referred to SEBI. I-T Department had found that 10 firms incorporated by MIL were "dummy" companies and they had cornered a large part of the MIL shareholding
Mumbai: Market regulator Securities and Exchange Board of India (SEBI) has imposed a total penalty of Rs17 lakh on five entities for not providing information regarding a probe into alleged manipulation in trading of shares of Murli Industries Ltd (MIL), reports PTI.
The information was sought by the Investigation Authority (IA) of the market regulator.
In five separate orders, SEBI has slapped a fine of Rs2 lakh on Dhanesh Capital Services, Rs4 lakh on Fortune Commodeal and Rs5 lakh on Namokar Consultants. Besides, a penalty of Rs3 lakh each has been imposed on two entities -- Sunayana Commercial and Sanskar Trade-Link.
SEBI, on various occasions, had served summons to the five entities seeking information related to alleged manipulation in shares of MIL.
The market regulator, in its orders on 31st December, observed that by not submitting complete details despite having the same, "appears to be a deliberate action/strategy on the part of the noticee (five entities) to not cooperate with the regulatory mechanism".
The manipulation in MIL shares was initially discovered by the Income Tax Department, which was referred to SEBI.
IT Department had found that 10 firms incorporated by MIL were "dummy" companies and they had cornered a large part of the MIL shareholding.
In this regard, the regulator had asked the them to furnish details that could help in the probe. In their submissions, the entities have admitted to trading in shares of the dummy firms.
The IA (SEBI) was conducting detailed investigations in respect of dealings in the scrip of MIL in the wake of prima facie findings that certain dummy companies were incorporated to deal in MIL shares as well as reference from the IT Department indicating possible manipulation in FCCB pricing by Dangi/Ashika group entities.
The clearing of Patel's name comes a few weeks ahead of the third quarter review of the monetary policy, scheduled to be announced on 29th January
New Delhi: Renowned economist Urjit Patel's name has been cleared for appointment as the new Deputy Governor of the Reserve Bank of India (RBI), said a senior Finance Ministry official, reports PTI.
"Urjit Patel's name has been finalised," Department of Financial Services Secretary DK Mittal said.
Patel is at present a non-resident senior fellow at the Brookings Institution, a US-based think-tank. He is also a consultant to the Boston Consulting Group.
Patel has also been an executive director at IDFC, a private finance company.
He will take the place of Subir Gokarn, who was in-charge of the monetary policy department, has retired.
Gokarn's three-year term had ended in November 2012, but the government had given him one-month extension which expired on 31 December 2012.
According to an RBI statement yesterday, the monetary policy department will now be directly under Governor D Subbarao himself.
There are four deputy governors in RBI, of which two are from the central bank itself, one is from the banking sector and the fourth is an economist.
The clearing of Patel's name comes a few weeks ahead of the third quarter review of the monetary policy, scheduled to be announced on 29th January.
RBI Governor in the last policy review had indicated that there could be softening of policy rate in the January policy.
Dr KC Chakrabarty, Anand Sinha and HR Khan are Deputy Governors with RBI.
Credit Sudhaar, a non-specified user entity, is accessing confidential credit records from CIBIL while claiming to help individuals improve and maintain their credit health. Why is the financial regulator, RBI, silent?
Credit Sudhaar, a firm set up by former bankers Gaurav Wadhwani and Arun Ramamurthy, says it has a tie-up with CIBIL for offering credit advisory services and will help individuals in improving their credit health which will in turn enable customers to get better offers from lenders at the CIBIL Market Place. What it does not say is it is neither registered with the Reserve Bank of India (RBI) as a non-banking finance company (NBFC) nor it is a specified user entity of CIBIL but will access credit records of crores of individuals.
While there is no word from CIBIL on this strange partnership, what is surprising is how the credit bureau may have allowed a non-specified user entity to access its database. In a press release, Credit Sudhaar said it is associated with Dipran Finance Pvt Ltd. However, on its website it mentions affiliation with Safe Capital, an NBFC. In an email reply, the firm said, “Credit Sudhaar is associated with both Safe Capital and Dipran. Both Safe Capital and Dipran are members of CIBIL”.
Even on its website under the FAQ section, replying to a question “Are you approved by the RBI?” it says “Yes. We are affiliated with Safe Capital which is an approved institution as per RBI charter”.
Earlier, Credit Sudhaar used to mention itself as an NBFC registered with the RBI, which was changed later.
This also means, Credit Sudhaar may be using either Safe Capital or Dipran’s login credentials to access the CIBIL database, especially the portfolio review which gives complete details of an individual. Since Credit Sudhaar is not a specified member entity of CIBIL, this violates Section 22 of the Credit Information Companies (Regulation) Act, 2005 (CIRCA), which says...
22. Unauthorised access to credit information.—
(1) No person shall have access to credit information in the possession or control of a credit information company or a credit institution or a specified user unless the access is authorised by this Act or any other law for the time being in force or directed to do so by any court or tribunal and any such access to credit information without such authorisation or direction shall be considered as an unauthorised access to credit information.
In addition, the CIRCA clearly defines a specified user who can register with a credit bureau as member entity. Section 2 (l) states “specified user” means any credit institution, credit information company being a member under sub-section (3) of Section 15, and includes such other person or institution as may be specified by regulations made, from time to time, by the RBI for the purpose of obtaining credit information from a credit information company.
Besides credit institutions, insurance companies, telephone services providers, credit rating agencies registered with Securities and Exchange Board of India (SEBI), a stock broker or sub-broker registered with SEBI, a trading member of recognised commodity exchange, SEBI and Insurance Regulatory and Development Authority (IRDA) are regarded as specified users under Regulation 3 of the CIRCA.
Let’s put it in simple words. Credit Sudhaar is just a specific services provider. CIBIL is allowing credit institutions and others to sell their loan products or other services on its Market Place. Credit Sudhaar is only registered on Market Place to offer “credit advisory” service for which the charges are Rs10,000 (it is mentioned as processing fees).
Both Mr Wadhwani and Mr Ramamurthy, the promoters of Credit Sudhaar had worked with Standard Chartered Bank and Citi. Both were also directors of SHAHA Finlease Pvt Ltd, an NBFC formed to buy bad assets from StanChart. On several occasions, the RBI, StanChart and the banking ombudsman had reprimanded SHAHA Finlease for its unprofessional conduct and unruly collection agents. Even on the Internet, there are number of complaints against SHAHA Finlease.
Our mails to CIBIL and the RBI remained unanswered till writing the story. We would incorporate their replies as and when we receive it.
NOTE: If you are facing similar issue, you may want to get help from Moneylife Foundation's free Credit Helpline http://www.freecredithelp.in/