Regulations
SEBI to take action against companies with no woman director
With just a fortnight left to meet the deadline, SEBI has written to more than 160 among the top 500 listed companies to ensure compliance
 
Market regulator Securities Exchange Board of India (SEBI) will take 'necessary' action against listed companies, which fail to appoint at least one woman director on their Boards by the end of this month.
 
Jayant Sinha, minister of state for finance, informed the Rajya Sabha in a written reply that "SEBI will take necessary action when the compliance position by companies is known after 31 March 2015".
 
The market regulator had issued guidelines in February last year asking companies to appoint at least one woman director on their boards by 1 October 2014 which was later relaxed to 1 April 2015.
 
According to an estimate, nearly one-third of the top-500 listed companies do not have any female representation on their respective Boards.
 
With just a fortnight left to meet the deadline, SEBI has written to more than 160 such companies to ensure compliance.
 
After SEBI's direction in February last year, many companies had stepped up efforts to have women directors on their Boards and nearly 500 female members were nominated to the Boards till December 2014, although many of them happen to be family members of the promoters.
 
Still, a large number of companies are yet to comply.
 
The norms were finalised by the regulator after detailed discussions were held between SEBI and concerned stakeholders for over a year and involve stronger regulations for listed companies than those prescribed under the Companies Act for non-listed entities.
 
These include clarifications on rules relating to the appointment and qualification of directors as well as independent directors, matters relating to related party transactions, and rules governing meetings of Board and its powers.
 

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COMMENTS

R Balakrishnan

2 years ago

lol And who will take action against SEBI? Jayant Sinha, those who live in glass houses, shouldn't.

Sugar mills facing closure due to disparity in prices
The price of sugar, both in the domestic market and the international market even with the export incentive, does not make the whole business viable. No wonder, several large sugar mills are seriously considering closure as an option due to this disparity in prices
 
According to Abinash Verma, Director General of Indian Sugar Mills Association (ISMA), the sugar mills are continuing to be under terrible stress due to the increasing burden of arrear dues to farmers, which has crossed Rs15,000 crore so far, and may go beyond Rs17,000 crore by the end of this month. The backlog of last year to cane growers is said to be over Rs2,600 crore.
 
In the meantime, the global sugar prices have also fallen, and, after many delays, petitions and protests, at last the government agreed to an export incentive of Rs4,000 per tonne for raw sugar.
By the time the Indian government announced this incentive, and permitted the export of 1.4 million tonnes, not only the international prices have fallen, but our competitors, like Brazil and Thailand, have now their own sugar to offer in the market.  
 
Because of this change in the international market, even the Rs4,000 per tonne incentive offered has become unworkable, and an additional Rs1,500 may help in making some exports. So far, in spite of the clearance for 1.4 million tonne exports, only 18,000 tonnes appear to have been committed, as per press reports.
 
No one, particularly in the government, seems to realise the irony of mills having to pay a mandated price for sugarcane purchase, accepting what is offered by the farmers, while the sugar prices are determined by the market forces. 
 
Sugar production is expected to be between 26.5 and 27 million tonnes (mt), as against the earlier estimate of 25 mt, thus leaving a surplus of 3 million. Domestic consumption is around 24.8 mt. This is in addition to the stock that has been carried forward from the last season.
Verma from ISMA echoes the feeling of being the most conversant with the sugar industry by saying that the problems faced by both cane growers and mills need a permanent, workable, long term solution. There is a need to link the cane price to sugar content. The "link-formula" recommended by the C Rangarajan Committee is collecting dust and not made applicable on a practical basis. This is likely to resolve many issues that have been plaguing the industry. The government should introduce this linkage-formula, and modify it later, if need be.
 
Most of the sugar mills are in a financial squeeze.  Banks are hesitant to give working capital, and by continuing to crush the cane, as they come to their door steps, the mills are taking the liability to pay, sooner or later!  The price of sugar, both in the domestic market and the international market even with the export incentive, does not make the whole business viable!
 
Press reports indicate that several large sugar mills are seriously considering closure as an option due to this disparity in prices. A reference can be made to Mawana Sugar Mills and Modi Sugar Mills in UP, who have informed their situation to Principal Secretary of State for Sugarcane Development, their plans to do so. Others seem to be sitting on the fence to see how the government reacts.
 
In a recent press conference, held by Indian Sugar Mills Association, they have made some serious suggestions and have reiterated that, prima facie, the difference between the Fair and Remunerative Price (FRP) and State Advised Price (SAP) should be met the relative state concerned. As reported, earlier in these very columns, ISMA has suggested that the government must create a buffer stock of say 2 million tonnes of sugar, so as to mop it up from the market, to make it available through the PDS - Public Distribution System.
 
Additionally, ISMA feels that it is time some serious thought is given to this industry in regard to financial restructuring, conversion of working capital to term loans, rescheduling of payments besides offering interest free loans to the industry. These would help revive the industry which is in dire straits with huge arrears to farmers and banks. Though the export market is dull at the moment, the incentive of Rs4,000 per tonne needs to be increased by Rs1,500 and also extended to white sugar. They have sought an incentive of Rs7/8 per litre of ethanol or removal of central excise duty on fuel grade ethanol, which, they feel would absorb 1 to 2 million tonnes of sugar in the market.
 
Also, sugar mills having ethanol production capacity will need to supply 25% of their alcohol production as ethanol for blending programme to be eligible for the export incentives. The tender for supply of ethanol by OMCs is likely to come out soon. Why not bring this supply also as a product that can be brought under the umbrella of DGS&D contract and eliminate the need to go for tenders every now and then?
 
On the whole, it is time the government organised a workshop on this industry to sort out the various issues that have been a hindrance in growth!  
 
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)

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COMMENTS

Veeresh Malik

2 years ago

Sugar is sociologically a very destructive crop. Farmers who grow sugar are unable to grow anything else for their own consumption or for cash crops thus placing themselves in debt as sugar mills delay payments for one reason or the other.

It is good to observe that some parts of India known as "sugar belt" are moving away to less water intensive crops, especially and also because of climate change, which have shorter growth-cycles.

In any case, much of the white sugar goes into the terrible soft drink industry, which does not need any subsidy for sure.

SuchindranathAiyerS

2 years ago

It is not just the Sugar Industry. No Indian industry can bear the burden of Indian taxation and the overheads of India governance from reservations and extortion (corruption)to education fostered incompetence and legally fomented non-accountability and remain internationally competitive. The only things that can survive in India in the present state of inefficiency and ineffectiveness are monopolies that have been created by Government regulation or India's many boundaries such as education, hospitals, services that must be locally availed such as restaurants, DRDO, PSUs like Air India, HAL, HMT, ITI, BEL, BHEL, BGML, BEML and of course, "Government" and "Courts".

Dena Bank refuses to vacate property; harasses owners

Dena Bank is trying every trick to avoid vacating its branch office near Mumbai whose lease has expired over 32 months ago. This is a lesson to property owners who believe that it is ‘safe’ to rent their premises to government organisations

 

Property owners usually believe that leasing their premises to a nationalised bank or a government organisation is a safe bet and will give them rental income without any headache. Abhay and Sanjay Acharekar, who leased a property to Dena Bank, are learning otherwise. The bank’s lease expired in 2012, but 32 months later, Dena Bank has not only refused to vacate the property, but its legal department is trying to extort a “compensation” from the property owners.
 
The case becomes interesting when put in perspective. Dena Bank have bad loans to the tune of Rs4,229.92 crore as on December 2014, a jump of 5.61% compared with same quarter last year. The powerful nationalised bank, which cannot seem to recover legitimate loans, however has a legal department that is not averse to flexing its muscle to extract compensation from property owners who innocently leased their valuable asset to the bank. 
 
Abhay and Sanjay Acharekar leased their property at Govandi in Mumbai to Dena Bank. The lease expired in 2012. In June 2013, the Acharekar brothers decided to sell their property and requested all tenants to give them vacant possession of their rented premises. "All the tenants except Dena Bank willingly vacated the property and gave us possession of their respective premises. Dena Bank, however, has not vacated the occupied premises despite the lease expiry almost 32 months ago," Abhay Acharekar said.
 
The Acharekar brothers have been meeting, writing to Dena Bank officials repeatedly but have made no headway as yet. On 6 October 2012 and on 11 July 2014, they received an ‘unconditional' written commitment from the Bank (a copy of which is with Moneylife) stating that it would vacate the premises within 2 to 3 months and that it was a matter of completing necessary formalities. 
 
Moneylife wrote to the Dena Bank chairman, its independent directors and other top executives, including its PR firm AD Factors to find out what the bank had to say about its attempt to arm-twist property owners, refusing to vacate their property. This was on 18 February 2015. The PR agency, initially sought more time, but is clearly helpless. The agency has now responded to quote Bank officials as, "We acknowledge receipt of your mail. The matter of Govandi branch premises is under our consideration and will be resolved shortly.”
 
However, former police DGP, Dr PS Pasricha has been the only one to send a pro-active response almost immediately. On 18th February, in his prompt email response Dr Pasricha, a shareholder director on Dena Bank Board, said, “I have taken a note. I shall personally pursue this matter till its logical conclusion”.
 
Meanwhile, the Acharekars received a communication from Dena Bank's Govandi branch office, which contained observations from the Bank's Zonal Office Executive Committee. It says, "The landlords of Govandi branch premises had sold the property and want the Bank to vacant the premises. The Committee advised that the ZOPC, Mumbai Suburban to explore the possibility of obtaining compensation from landlords for surrendering premises, as per the Premises Policy 2014-15 , and resubmit the proposal at the earliest. Hence, we once again advise to you to discuss with the existing landlord and inform us accordingly.” 
 
Unfortunately, for the Bank, especially public sector undertaking (PSUs) there is no provision to seek compensation from the property owner in Maharashtra. The Maharashtra State Rent Act 1999, clearly mentions that banks, public sector undertakings, and public limited companies (with paid up share capital of Rs1 crore or more) are not protected under the Act. Moreover, Dena Bank's own guidelines state that the Bank should abide by Rent Acts applicable in each region as and when required.
 
Dena Bank had already exceeded its stay in the rented premises by about 32 months after expiration of the lease and instead of vacating the premises, it is now trying to extract compensation from the landlord, without even checking its unconditional undertaking and the provisions of laws applicable in the state.
 
The Bank officials are reluctant to say anything on the issue. When we again contacted the PR agency for Dena Bank, we received a reply that the Bank's legal department is perusing the matter and it would be resolved. However, there was no time frame given by the agency to resolve the issue.
 
This delaying tactics used by Dena Bank will only make property owners think twice before renting their premises to other banks. This in turn may give headaches to banks themselves, especially in a land-starved city like Mumbai. 
 

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COMMENTS

TIHARwale

2 years ago

Why Dena Bank alone. other Public Sector Banks like SBI, BOB, United Bank, UCO Bank, Central Bank Union Bank even cheat their own staff members. The following is a well documented issue.
Scam on bank employees pension fund in the name of Amortization of the pension cost.

Proof of not deposited even 10% in pension fund

(a) SBI CMD transferred Rs 7927.41 crs from General reserve to Pension Fund as on 31.03.2011. Central Statutory Auditors clearly certified that this amount arisen because inadequate funds were transferred in the previous years. Hence previous year balance sheet was falsified to this extent.

(b) Bank of Baroda Chairman not deposited 10% statutory contribution every month as on 31.03.2010. See their annual report from the website. In fact he withdrew Rs 57 cr from pension fund to boost the profit to 3058 crore in March 2010. The bank has deposited Rs 472 crore during 2008-09 and 365 crore during 2007-08 but during 2009-10 employer contribution to pension fund is NIL . How the employer contribution can be Nil during 2009-10.?



(c) The list of PSB not deposited the statutory share in pension fund is very long which includes PSB, United Bank, UCO Bank, Central Bank Union Bank. Central Bank sponsored Common wealth game (Rs 50cr) by employees pension fund and showed their inability to deposit their 10% statutory due in pension fund.

(d) It is diversion / loot of employees retirement funds to boost the profits and claim incentive of Rs 8 lacs from the Bank on the basis of falsified balance sheet. The amount involved is more than one lac crores which has been laundered since 01.11.1997.



RBI circular No DBOD.No.BP.BC:80/21.04.018/2010-11 dated 09.02.2011 permitted amortization of enhanced expenditure of pension liability on account of new pension option under 9th BPS and amendment of Payment of Gratuity Act 1972 to banks, at the request of IBA vide guidelines on Prudential Regulatory Treatment.
Accordingly -19- PSB amortized Rs 19611.57 crore as on March 2011. This amount of Rs 19611.57 will be deposited in -5- yearly installments ending 2015 in the pension fund trust.
When existing employees have deposited their 2.8 times of basic pay and retired employees have refunded 100% of provident fund and addition 56% cost in one installment, why the banks have not deposited this 19611.57 cr in one installment.
Is it not a loss to the pension fund?. The 9% average return on amortised pension cost of Rs 19611.57 will add to pension kitty by 1765.04 cr per year.
When our Annual wage rise was Rs. 4816 (Rs. 2239 crores for officers and Rs. 2,577 crores for award staff) w.e.f. 1-11-2007 agreed as per 9th BPS (CIRCULAR NO. 85 dated 29 / 11 / 2009 of AIBOC). Loss of interest of Rs 1765.04 cr to pension fund is equal to 40% of wage rise offered in 9th BPS. Will you allow such crime/loot on your pension fund to continue?.
Can RBI allow amortization of pension cost to boost the banks profit and falsify the balance sheet?.
Can RBI allow Banks to amortize interest payable on FDR of customers and deny them the quarterly/ annual interest in the name of amortization and allow banks to boost their profit.?
Can RBI allow amortization of depreciation to boost the profits?. Is it not a fraud on the pension fund? Is it not a fraud on the balance sheet of banks?

manoharlalsharma

2 years ago

A case of legal lease expired and not vacating the premises is a lesson , but if u have purchased from a builder and then a housing society do not RECOGNIZE u as a member on the UNDEMOCRATIC BYLAWS matter pending for final hearing since last 2003 in the matter wp- 8508/2003 by the time society may apply for REDEVELOPMENT.

Dhema Mahan

2 years ago

Dena Bank is a frequent committer of such illegal activities. It is a shame that government organizations like Dena Bank themselves can't abide by their own government's laws. Instead, they use such situations for their own benefit to extort money from landlords. Today they are cheating the landlords, tomorrow they will cheat their own customers! How can we trust banks to follow proper financial and economic regulations when they can't even follow simple laws like these.
Rampant corruption and fraud like this is ruining the image of not just Dena Bank but other banks and the government as a whole. RBI should get involved in this matter and put an end to this kind of nonsense.

Suketu Shah

2 years ago

Lets us not blame respected CM or FM (current) into this.This is 32 month old issue meaning the previous FM is to be blamed.BJP has inherited the mess as Mr Amit Shah rightly said.I am sure this wl see a quick logical conclusion now that this has been highlighted,much less than 32 months of Congress rule(part of BJP who have recently taken over Maharashtra 4 months ago)

REPLY

Mogra Fernandes

In Reply to Suketu Shah 2 years ago

It doesn't matter which party is in charge. The rent control act was passed more than a decade ago. Dena Bank should abide by the act and vacate the property.

Suketu Shah

In Reply to Mogra Fernandes 2 years ago

Agree.What I am saying is donot blame BJP.They are ruling the state only since 4 months.This is a 32 month old problem for which Congress (ruling in Maharashtra) is responsible.

shivkumar

In Reply to Suketu Shah 2 years ago

It is obvious Suketu is a BJP faithful and nothing wrong in that. He somehow believes that automatically things will change just because now BJP is in power. Wait for sometime and than you will see the effect of office on the new Ministers.

Mr. Suketu you are so confident of BJP; in case you don't know or have forgotten, remember the mess in Mumbai that has been created by the endemic corruption in MCGB (BMC)which is being jointly ruled by BJP & SS for the last so many years.

If you are an independent voice you will see things in the right perspective, else you will keep on parroting the lines given to you.

K. M. Rao

2 years ago

Is it not similar to having to go round the Forest department for permission in case one grows trees in his backyard and later on wants to cut them for any legitimate use of land !

R Balakrishnan

2 years ago

We have an antiquated legal system that protects the tenants and treats owners with suspicion. Maybe the landlord should choke off water supply and electricity to the building. And create enough harassment for bank customers. Take away parking facilities- create blockade at the entrance. Throw garbage in the premises.. Lodge criminal complaints against local manager, etc Wonder if one gent named Raghuram Rajan will have anything to say on this matter

REPLY

Ash Chatwani

In Reply to R Balakrishnan 2 years ago

Such actions of harassment on the part of owners will only complicate matters rather than expediting them. RBI should look into the matter as it is the one that provides guidelines to all banks on such issues and then stays hands-off when there is no conformance or enforcement.

The local bank managers are generally accessible. It is the ones who make the actual decisions that hide behind and never give a chance to meet face-to-face. Let's help resolve such cases rather than further complicate them.

Dhema Mahan

In Reply to Ash Chatwani 2 years ago

It is a shame that the RBI is taking a hands-off approach to this situation. As the body in charge of all Banks in India, the RBI is obligated to look into this matter and to ask Dena Bank to relocate.

How can a government body just
shamelessly break the law for 32 months! If the common man doesn't pay the government the taxes he legally owes them, the government has the right to come and collect it from him. It should work the other way around too! These landlords have every right to collect the rent they have been losing for 3 whole years. 3 YEARS! Collect the rent at the market rate! Inflation in this country is very high. This Dena Bank issue is a prime example of our nation heading in the wrong direction.

sunil

2 years ago

This is the result of having incompetent legal cell by our psu banks.The owners should file criminal case against management and bring them to sense.IS OUR FM, WHO IS A LAWYER AWARE OF COMPETENCY OF LEGAL CELLS OF PSU BANKS?

Abhay Kumar Pradhan

2 years ago

very bad loosing reliability due to bank's bad attitude.

Vaibhav Dhoka

2 years ago

Here we are following British rule as far as RENT is concerned.The routine should be increase of rent every three years in conformity with inflation.Here in India landlords are treated as Children of Lessor God.Due to this attitude housing could not developed as industry.And at present due to escalation of prices of real estate DONS are coming.

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