SEBI to announce new consent settlement norms

The Securities and Exchange Board of India has decided to revise the existing consent procedure, after it found lack of uniformity and necessary details in the prevailing system, which is in place since 2007, a senior official said

New Delhi: Market regulator Securities and Exchange Board of India (SEBI) is set to put in place a new and detailed mechanism for its ‘consent’ procedure—an out-of-court-like settlement through which it settles cases of suspected irregularities by listed companies and various market entities, reports PTI.

SEBI has decided to revise the existing consent procedure, after it found lack of uniformity and necessary details in the prevailing system, which is in place since 2007, a senior official said.

The new consent mechanism, which could be announced soon by the regulator, has been finalised after months of deliberations that began around middle of 2011 and involved consultations within SEBI and with the government officials and outside experts, he added.

In the consent process, the entity facing a probe by SEBI is subjected to certain fees and restrictions without admission or denial of alleged irregularities and the regulator thereafter drops its charges and the investigations.

As per the existing consent norms, SEBI can impose a penalty higher between Rs25 crore and an amount equivalent to three times the profit allegedly made by the suspected entity through insider trading or other manipulative activity.

SEBI decided to revise the process after an internal study found that different yardsticks might have been applied in different consent cases and there was no consistency or any clear-cut uniformity in the way such cases were being handled.

Besides, it also came across cases being settled with entities from same group on more than one occasion, although a consent order is broadly considered as a warning to the related party for not repeating similar offences.

Another point of contention was certain discretionary powers given to SEBI officials settling the probe.

The revised norms would also aim to remove the perceptions about consent orders being mostly subjective, not being adequately transparent in nature, and providing an escape route to the alleged offenders.

Sources said future consent orders could be framed in such a way so that they can be taken as a warning from the regulator and could work as a 'name and shame' directive for those alleged to have erred in market dealings.

Besides, the new norms would bring in more clarity on how such orders should be framed, as also at what time and in which cases consent orders should be passed.

SEBI introduced consent settlement system in April 2007 with a view to cut down on its costs, time and efforts in taking up the enforcement actions. So far, the regulator has passed more than 1,000 consent orders.

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70% of capital market complaints redressed by SEBI in 3 years

“SEBI has reported that 70% of the complaints with regard to capital market retail participation have been resolved,” minister of state for finance Namo Narain Meena said in a written reply to the Lok Sabha

New Delhi:  Securities and Exchange Board of India (SEBI) has redressed 70% of capital markets related complaints received in the last three years, reports PTI.

“SEBI has reported that 70% of the complaints with regard to capital market retail participation have been resolved,” minister of state for finance Namo Narain Meena said in a written reply to the Lok Sabha.

The capital markets regulator redressed 53,841 complaints during 2011-12, 66,552 during 2010-11 and 42,742 during 2009-10, he said.

However, cumulative pending grievances during 2011-12 stood at 24,292 complaints as against 28,653 in 2010-11 and 37,880 in 2009-10, he added.

“SEBI takes various measures to redress investor grievances. These include sending reminders... If SEBI finds that the progress on the redressal of any investor’s grievance is not satisfactory, it could take enforcement measures,” Mr Meena said.

He said to improve the efficiency in its complaints handling mechanism, SEBI has introduced a new web-based centralised grievance redressal system called SCORES (SEBI Complaints Redress System) in 2011.

“Under the new system, all the activities of the complaint redressal mechanism beginning with the lodging of complaint to its closure by SEBI can be monitored online,” the minister said.

In addition, the regulator has also launched a toll-free number service number (1800 22 7575) in December 2011 to provide replies to various queries on matters relating to securities market, he said.

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Maruti India FY11-12 profit dips 28% to Rs1,635 crore

Maruti Suzuki India managing director and CEO Shinzo Nakanishi told reporters, “The year 2011-12 was a very challenging year for the auto industry. High inflation and interest rates along with high petrol prices impacted sales”

New Delhi: Hit by high commodity prices, sluggish sales and labour issues, the country’s largest car maker Maruti Suzuki India (MSI) reported 28.55% decline in net profit at Rs1,635.10 crore for the year ended 31 March 2012, the steepest decline in three years, reports PTI.

The company had posted a net profit of Rs2,288.70 crore in the previous financial year.

Commenting on the results, Maruti Suzuki India managing director and CEO Shinzo Nakanishi told reporters, “The year 2011-12 was a very challenging year for the auto industry. High inflation and interest rates along with high petrol prices impacted sales.”
 
The small car segment was particularly hit as the customers are very cost sensitive, Mr Nakanishi added.

He said the company suffered majorly due to its inability to supply more diesel cars and the market has shifted away from petrol cars, which is the main stay of MSI.

The biggest fall in profit before this was 29.6% decline to Rs1,218 crore in 2008-09.

“We also had labour unrest in Manesar which impacted sales,” Mr Nakanishi said.

On the cost side, a steep rise in yen along with fall in rupee also had an impact on performance, Mr Nakanishi added.

The company sold 11,33,695 units during the year, down 10.8% from 12,71,005 units in 2010-11.

With the company struggling to sell petrol cars, last year it gave discount on an average of about Rs13,250 on each model. And for its best selling model Alto, it was between Rs22,000 and Rs25,000.

“There is a huge pressure to sell petrol cars and we had increased discount by about 12% in the fourth quarter of this fiscal compared to the third,” MSI managing executive officer (marketing and sales) Mayank Pareek said.

 The company's board recommended a dividend of 150% (Rs7.50 per share of face value Rs5 each) for 2011-12.

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