SEBI slaps Rs50 lakh fine on HUL promoters

While Unilever is fined Rs8 lakh, others like Brooke Bond Group, Unilever Overseas Holdings, Unilever UK & CN Holdings, Brooke Bond South India Estates, Unilever Overseas Holdings and Brooke Bond Assam Estates are fined Rs7 lakh each

Market regulator Securities and Exchange Board of India (SEBI) has imposed a fine of Rs50 lakh on seven promoter entities of Hindustan Unilever Ltd (HUL) for delays in disclosures dating back to 2006.

 

In an order, SEBI said, the disclosures were periodic ones regarding shareholding and voting rights in the Indian unit of Unilever Plc. “Though it may not be possible to ascertain the monetary loss to the investors on account of default by the Noticees, the details of the shareholding of the Noticees and timely disclosure thereof, were of significant importance from the point of view of investors as that would have prompted them to buy or sell shares of the company,” SEBI said in its order.

 

While Unilever is fined Rs8 lakh, other six entities Brooke Bond Group Ltd, Unilever Overseas Holdings AG, Unilever UK & CN Holdings Ltd, Brooke Bond South India Estates Ltd, Unilever Overseas Holdings BV and Brooke Bond Assam Estates Ltd are fined Rs7 lakh each.

 

SEBI said, "The disclosures obligations under Substantial Acquisition of Shares and Takeovers (SAST) Regulations are critical and an important component of the legal regime governing substantial acquisition of shares and takeovers. In the absence of these timely disclosures, the investors will be deprived of important information at the relevant point of time. It is also evident that the Noticees have committed the defaults on more than one occasion and as such, the default on the part of the Noticees is repetitive in nature”.

 

The rules require every person holding over 15% in a company to make yearly disclosures of the stake they hold. Promoters are also required to make disclosures of shareholding and voting rights.

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Motherson Sumi Systems Q3 net profit jumps 142% on forex gains

During the December quarter, Motherson Sumi Systems’ net profit increased more than two times on robust performance by its automotive segment in overseas markets and forex gains

Motherson Sumi Systems Ltd (MSSL), an auto component maker, reported more than two times healthy net profit for the third quarter on good performance by its automotive sector in overseas market and forex gains.
 

For the quarter to end-December, the auto component maker, which is part of Moneylife’s Antelope Stockletter pick, posted 142% higher consolidated net profit of Rs249.60 crore compared with Rs103.02 crore a year ago period. MSSL said its total revenues, including sales, grew 20% to Rs7,988.7 crore compared with Rs6,662.6 crore a year ago period.
 

“The company has delivered its best ever results in revenues as well as operating margins for a quarter. This is exceptional performance both in domestic and overseas businesses in current market conditions,” said VC Sehgal, chairman of Motherson Sumi Systems, in a regulatory filing.
 

MSSL said during the December quarter, its profits from automotive segment grew 84% to Rs529.69 crore while, profits from non-automotive segment fell 15% to Rs14.69 crore, when compared with a year ago period.
 

MSSL’s domestic market sales in December quarter increased 2% to Rs1,146.10 crore from a year ago period, however its overseas sales grew 24% to Rs6,743.73 crore form a year ago period. Its forex gains during December quarter stood at Rs32.26 crore.
 

During one year period, between December 2012 and December 2013, promoter holding remained at 65.59%; foreign institutional investors (FIIs) share holding grew to 17.18% from 13.93%; domestic institutional investors (DIIs) shareholding fell to 7.80% from 9.51%; public shareholding fell to 9.43% from 10.97%.
 

Motherson Sumi Systems closed Friday 13% up at Rs203.75 on the BSE, while the 30-share S&P BSE benchmark ended the day flat at 20,513.
 

For more stock results, check out this page

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Why no action against Tulip Telecom?

Debt-ridden Tulip Telecom has not paid salaries to employees for nine months and has not deposited tax deducted and provident fund dues. These are serious offences. Yet, there seems to be little action against the promoter and directors

Tulip Telecom, an enterprise telecommunications services provider, hit its all-time low of Rs4.82 (face value of Rs2 per share) on the BSE on 30 January 2014, a decline of 98% from its all-time high of Rs250 it hit in August 2009.  Over the past couple of years, the debt-ridden company has been running into losses mainly on huge short term debts. Tulip Telecom collected debts to invest in data centres and fulfil its working capital requirements, but this failed to bring significant revenues for company. Due to repeated failures in payments, credit rating agency Fitch, on August 2012, downgraded Tulip Telecom from ‘junk’ to ‘default’ status.
 

The series of events have meant that shareholders interests are at risk. Tulip Telecom has not paid to its stakeholders; it defaulted on redemption of $140-million worth of Foreign Currency Convertible Bonds (FCCBs); it has not paid interest to its non-convertible debenture (NCDs) holders and also not paid salaries to its employees; it has not repaid its lenders as well. As a result, the company has had to sign a massive Rs3,000 crore of corporate debt restructuring (CDR) plan with its 13 lenders.
 

An ex-employee and shareholder of Tulip Telecom told Moneylife that Tulip Telecom has not paid salaries to their employees from for the last nine months. “Additionally, it has not deposited income tax (I-T) and provident fund (PF) amount for last two years, even after deducting the same from employee salaries. Tulip Telecom allegedly has also not paid vendors for last two years.”
 

The Ministry of Corporate Affairs (MCA) website shows that there are charges against Tulip Telecom from financial institutions and banks. Following is the table of charges filed against Tulip Telecom as per MCA site.
 

INDEX OF CHARGES ON TULIP TELECOM

Charge Creation/ Modification Date*

Charge Amount Secured in Rs crore

Charge Holder

01/09/2012 *

940

BANK OF INDIA (LEAD BANK)

13/07/2012 *

940

BANK OF INDIA (LEAD BANK)

30/03/2013

691

BANK OF INDIA

12/11/2011 *

376

BANK OF INDIA

09/06/2010

290

ICICI BANK LTD

27/02/2012

250

IDBI TRUSTEESHIP SERVICES

17/03/2011

200

BANK OF INDIA

07/01/2010 *

200

AXIS TRUSTEE SERVICES LTD

12/01/2009

200

STANDARD CHARTERED BANK

22/08/2008 *

170

STANDARD CHARTERED BANK

30/03/2012

150

PUNJAB NATIONAL BANK

02/01/2012

150

IL&FS TRUST CO LTD

11/11/2010

150

ICICI BANK LTD

14/12/2010 *

150

AXIS TRUSTEE SERVICES LTD

03/04/2010

140

AXIS TRUSTEE SERVICES LTD

07/02/2012

100

IDFC LTD

27/07/2012

92

DBS BANK LTD.

31/08/2006

80

BANK OF INDIA

25/04/2011

80

AXIS BANK LTD

19/01/2012

76

BARCLAYS BANK PLC

01/03/2011

69

DBS BANK LTD

15/12/2010

66

STANDARD CHARTERED BANK

15/12/2010

65

ICICI BANK LTD

09/06/2011

50

IDBI BANK LTD

14/12/2006

26

INDIAN OVERSEAS BANK

18/01/2007

21

ICICI BANK LTD

14/12/2006

18

INDIAN OVERSEAS BANK

24/07/2009 *

09

CANARA BANK

11/04/2007

06

CANARA BANK

Source: www.mca.gov.in
 

The above table shows charges filed against Tulip Telecom from the lenders which include five public sector banks (PSBs).
 

In July 2012, BSE & National Stock Exchange (NSE), in consultation with Securities and Exchange Board of India (SEBI), reduced the company’s price band from 20% to 5% of Tulip Telecom due to “surveillance concerns”.
 

Earlier in August 2012, SEBI has barred 19 entities, including Tulip Telecom, from the securities market after an initial probe into the share price plunge in few mid-cap stocks.

Tulip Telecom has not submitted its financial results to the stock exchanges. Its official website seems to be down. As per its last submitted balance sheet, Tulip Telecom reported standalone net loss of Rs154.34 crore in its June 2013 quarter, despite sales of Rs253 crore.
 

During last few years, Tulip Telecom had taken short term debts of more than Rs3,000 crore from 13 lenders to invest in data centres and to finance its working capital requirements. However, these investments did not bring in significant revenues for the company.
 

In May 2013, Tulip Telecom received the formal nod on its proposal for debt re-jigging from the Empowered Group of the CDR (corporate debt restructuring) cell. The consortium of 13 banks and financial institutions which provided loans to Tulip Telecom approved its CDR package, covering its debts of more than Rs3,000 crore. As per CDR plan, Tulip Telecom will pay its debts over a period of 12 years and it also includes a 30-month moratorium on principal and 18-month moratorium on interest.
 

Moneylife earlier wrote a story earlier titled: Will investors sue Tulip Telecom? Tulip Telecom had defaulted on its $140-million worth FCCB on August 2012. There was a funding shortfall of $20 million by Tulip Telecom. Just after four months, in December 2012, Tulip Telecom defaulted on interest payments to its non convertible debenture holders (NCDs of Rs 125 crore), which were due on 31 December 2012.Earlier this year, in October 2013, Telecom Disputes Settlement and Appellate Tribunal (TDSAT) asked Tulip Telecom to pay Rs81 lakh to Tata Teleservices Ltd.
 

Moneylife earlier wrote many articles on non-performing assets (NPAs) of PSBs, Tulip Telecom is one of them:
 

Will investors sue Tulip Telecom?

RBI needs to come out clean on NPAs

Public sector banks - Loans turning bad

Glodyne, Radico, Pipavav, Parsvnath, Tulip and Era Infra under scanner

Midcap crash: SEBI bars 19 entities from markets

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COMMENTS

yogesh

10 months ago

Any official liquidator appointed by high court for recovery from Tulip Telecom ltd

Sandeep Shewale

3 years ago

I think suman you don't have proper update and facts about employee. Employee never stop the work till date. Collected amount has not paid to vendors, Service provider and Pop owners as well as Banks and employee.how the pop owner and vendors allow to work on premises, at Month of november all the main hubs are down due to the non payment of MSEB bill, Vendor Bill,Pop owner Rent, Service provider Bills. What employee can do at this stage if you dont have proper update please shut the mouth dont blame on employee. also the promises of CMD, He has not full fill the singel payment of employee. How CMD and his son get the salary if company condition is worst. why the other members are not getting salary. Where is the money which are collected.

Gopalakrishnan T V

3 years ago

Anybody can get away with any damn thing is what these sorts of instances indicate.There is nothing called Governance in this country and those who loot public money with ease are smart guys enjoying all luxuries at others' cost. Even the media watching and reporting does not scare such unscrupulous persons in the society. What a degeneration during the last few years in our society?

sms

3 years ago

Being an investor only doesn't mean everything. One should feel the pain of being an employee. Writing blogs and putting comments in your office are much more easier things than facing the practical issues which employees face to survive. I'm not agreed that employees are responsible for the downfall of Tulip. Will MR. Suman answer my questions below?

# What power employees had to take administrative decisions?

# What is the fault of employees if the sales team and Accounts team are misguiding the management?

# What is the fault of employees if management is appointing managers and directors with high salaries.

# What action employees will take if the order values and collection figures are manipulated by some of the top most employees in every region.

# What power employees have if the figures for collection and pending dues are put wrongly in front of others?

# What will employees do if the management will not pay salaries for months?

# What will the employees do if the CMD himself fails in his commitments several times?

# What will employees do if Management will fear to face them and answer the queries.

# What will employees do if everything will come to a stand still position there is no one to listen respond or communicate?

# What will employees do if the management will take initiative to block the blogs and sites for discussion through Internet rather than trying to solve them.

During this period will any one justify why management had not addressed the company, why they have not discussed with the team, why they only prefer to discuss with only RSOMs. Because they wanted to escape from all. All that they wanted is to collect as much money they can from market and fly away from Market. And Bedi did it so cunningly.

One thing is clear to all that CMD is not capable of his JOB and should resign much earlier. If you can not solve their issues, fail in your commitments and fear to face them YOU SHOULD RESIGN.

Gopalakrishnan T V

3 years ago

Money life should also come out with the details of Persons behind this Company and their background. The Company's connections and their dealings with various banks also need to be brought out. The directors of banks and their links with company's Directors will reveal many details and it may be another scam perpetrated with tax payers money.

Suman Mukherjee

3 years ago

The above report says:

//Yet, there seems to be little action against the promoter and directors//


But, the question remains why a manager cannot also be pulled up for the negligence of the duties?

according to THE COMPANIES ACT, 2013, says: “manager” means an individual who, subject to the superintendence, control
and direction of the Board of Directors, has the management of the whole, or substantially the whole, of the affairs of a company, and includes a director or any other person occupying the position of a manager, by whatever name called, whether
under a contract of service or not.

Therefore, only blaming Mr.Bedi or his son, will not help when a bunch of dishonest and lack-of-foresight employees, were actually behind the ruin of this magnificent temple created from by Mr.Bedi.

The employees who are crying hoarse for salaries, should first explain why should the Shareholders pay them, when they were the persons responsible for looting of their wealth?

Where were these voices, when the things went sour? Now someone posts a lists and talks of collection of money...Huh!! Nice joke? Could this employee not take up this issue earlier?

I believe Tulip Telecom Ltd did not land up in this condition suddenly in 2013, but happened slowly, while many employees (some of them left, in the fear of persecution), looked at the other side.

I believe all those who are responsible for the downfall of Tulip Ltd should be sacked and their salaries confiscated and distributed to the shareholders.

Moreover, this story is not limited to Tulip Telecom Ltd alone, but there are a host of them, including, SEL Manufacturing Company Ltd, Alok Industries Ltd, Glodyne Technoserve Ltd, JHS Svendgaard Labs, XL Energy Ltd, Pyramid Saimira Theatres Ltd, Kavveri Telecom Ltd, Prajay Engineers Syndicate Ltd, Country Club (I) Ltd, Allied Digital Services Ltd, etc etc, where the normal shareholders have little idea what is going inside the company. Though it might sound tyrannical and is against the company or labour laws, but I feel those, sucker-employees should also get the winds of the pains of the general shareholders.

It is time regulars act on those who are responsible for the depletion of the shareholders' wealth.

Sandeep Shewale

3 years ago

Tulip Telecom collected 262 cr only from west region but Mr Bedi not paying salary of 11 Months also he is not paying our PF contribution also not given the F&F details to employee. Also he is paying his Agent Manoj Bindra and his Brother. Also some of the Mumbai staff getting salary. Please find the below collection details.

Apr-12 100,856,033.00
May-12 242,224,225.00
Jun-12 147,346,250.00
Jul-12 216,671,320.00
Aug-12 168,780,942.00
Sep-12 121,267,494.00
Oct-12 199,964,441.00
Nov-12 137,855,506.00
Dec-12 191,725,989.00
Jan-13 140,669,551.00
Feb-13 106,288,545.00
Mar-13 111,795,984.00
Apr-13 139,299,594.00
May-13 95,210,440.00
Jun-13 145,716,299.00
Jul-13 176,831,889.00
Aug-13 79,220,324.00
Sep-13 45,531,349.00
Oct-13 43,420,100.00
Nov-13 12,216,419.00

Total 2,622,892,694.00

Sandeep Shewale

MOHAN SIROYA

3 years ago

Tulip Telecom company is not only one company against whom No ACTION IS taken by the Regulator or the Authorities. There are many other companies who are guilty of dereliction in their duties day in and day out, fleecing consumers, depriving employees their dues and defying the Govt. Regulator rules with impunity and no action is taken against them. The biggest culprit is King Fisher Airlines. Not only the employees, but the Banks ,other creditors and even the consumers at large are suffering . Lakhs of passengers had booked in advance, the airline stopped operations abruptly and the common man who had paid in advance is duped as the Airline has no money to refund and all functioning is stopped. And the Regulator or the Ministry of Civil Aviation or the Ministry of Company Affairs are all sitting pretty over the mess. None has moved the court even for winding up proceedings or liquidating the assets of co-guaranters like United Breweries who are rolling in liquor money.
Another PSU Telecom company MTNL Mumbai is openly flouting the Consumer Protection guidelines of Telecom consumers as laid down by TRAI. But when violations are reported TRAI or the DOT, both keep silence.
That is the factual situation prevailing in our country.

sathyacumaran

3 years ago

sathyacumaran
as an shareholder of Tulip Telecom what ever the allegations we levy on the company the company would say that they would take on records and they say that it had been recorded in the minutes of the meeting when we ask for the meeting niether the company secretary nor CFO would answer any calls or mail that is case of all the shareholders of all the company because because they grease the palms of sebi bse nse and also RBI officials and also their banks and as such the innocent shareholder and person who raised the issue is an fool and it would be never heard that the indian administration even if raise this issue to MCA we would not get any reply even though we had sent many mails to MCA for various allegations no reply this shows that the citizen of india doesnot have right to question any govt organisation unless and until he or she has pull and push in the minsiterial level or top officials of MCA or Govt of india and as such we all say democracy but that is only in paper not for ordinary citizen like me even though we have international as an solid platform we are hesitant to raise this issue because the goondaism culture in all walks of administration which is common in form of unions and as such we cannot get any justice its only like organisation like money life should take up and that to cost of their life may the GOD shower their long life for their madam and be careful

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