Stock Manipulation
Stock manipulation: Anjani Foods
Anjani Foods Limited (formerly Raasi Enterprises Limited) has witnessed a sharp increase in its share price over the past eight quarters. The sales in the March 2017 quarter grew 11% year-on-year (y-o-y), from Rs5.41 crore in the March 2016 quarter to Rs6.01 crore in the March 2017 quarter. While sales have been positive in the past eight quarters, the company has consistently made losses. The net loss in the March 2017 quarter was Rs0.18 crore, compared to the net profit of Rs0.12 crore in the March 2016 quarter. WatchoutInvestor.com reported that that the company did not submit the corporate governance report to the Bombay Stock Exchange (BSE) for the quarter ended 30 June 2016. However, despite such negatives, the price of the stock rose 331%, from Rs4.36 in July 2015 to Rs18.8 in May 2017. Such brazen manipulation escapes the notice of the regulator. 

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COMMENTS

Satya Prakash

4 days ago

Website name is "http://www.watchoutinvestors.com/" but you have mentioned wrong website.

MCA issues yet another circular on IEPF, but still no clarity on transfer of shares
The Ministry of Corporate Affairs (MCA) has added yet another Circular to the flurry of circulars on Investor Education and Protection Fund (IEPF), on 5 June 2017. The circular provides that companies may follow the procedure as in the case of transmission for transferring the shares to IEPF.
 
The circular states that stakeholders have sought clarification from the IEPF Authority with respect to the issuance of duplicate share certificates under Rule 6 (3) (d) of the Investor Education and Protection Fund (Accounting, Audit,  Transfer and Refund) Rules, 2016 (‘IEPF Rules’). 
 
Since transfer of shares under the IEPF Rules takes place as a consequence of operation of law, it becomes similar to that of transmission which takes place as a result of operation of law. Therefore, companies may follow the transmission procedure while transferring shares to the IEPF demat account. While this stand of the IEPF has come after a long time, we have from the very beginning been of the view that transfer of shares under IEPF is a transfer inter-vivos and is a result of operation of law and not by consent of the parties.
 
In spite of the trail of circulars about IEPF, things are not fully clear and hence further clarification is expected from the Ministry, in the absence of which the matter is still left for interpretation, leaving room for confusion in the mind of stakeholders.  
 
Transmission v/s Transfer of shares to IEPF demat account
Transmission has not been defined under the Companies Act, 2013 (‘Act, 2013’). However, section 56 of the Act, 2013 provides that “Nothing in sub-section (1) shall prejudice the power of the company to register, on receipt of an intimation of transmission of any right to securities by operation of law from any person to whom such right has been transmitted.”
 
‘Transmission’ means that on the death of the last holder of shares, there is an instantaneous transfer of ownership to the heirs by operation of law. It may be necessary to obtain a succession certificate or letters of administration, but the property is deemed to vest not on the date of grant of the certificate, but on the date of the death.  
 
On the other hand, even though the transfer of shares under the IEPF Rules is taking place as a result of operation of law, i.e. under section 124 (6) of the Act, 2013,  the transferee in this case, the IEPF Authority, is a mere custodial holder of shares till  a legitimate claim is made by the original shareholder. This transfer is not in the nature of permanent vesting of property so as to make the IEPF a permanent owner of the shares but is only a custodial transfer. In fact, it is a transfer until it is reclaimed by the original shareholder.
 
Transmission does provide for permanent vesting of the property on the legal heirs unlike the transfer of shares to IEPF.
 
Clarification on the documents required
Even though the Circular has clarified that instead of issuing duplicate share certificates, companies may follow the transmission process, however, the documents required for such transfer has not been explicitly stated.
 
Generally transmission involves the following procedure:
Application by the legal heir to the company for requesting transmission of the shares along with certain documents, so which generally includes:
o Copy of the death certificate;
o Probate or succession certificate;
o Specimen signature; etc.
 
In our view, transfer of physical shares to IEPF should not require any of the above documents except for the application which is required under Rule 6 (3) (d) (i) of the IEPF Rules. The said application can now be made by the authorised person requesting the company to convert the physical shares into demat shares and thereafter transfer it to the IEPF demat account.
 
(Pammy Jaiswal works as an Associate at Vinod Kothari and Co)
 

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RBI keeps repo rate unchanged at 6.25%
The Monetary Policy Committee (MPC) in its second review for FY2017-18 on Wednesday kept all key policy rates unchanged while seeking to achieve consumer price index (CPI) inflation of 4%. The repo rate under the liquidity adjustment facility (LAF) will remain at 6.25%, while reverse repo rate will be at 6%. The marginal standing facility (MSF) rate and the bank rate will be steady at to 6.50%. 
 
In a statement, the Reserve Bank of India (RBI) says, "The current state of the economy underscores the need to revive private investment, restore banking sector health and remove infrastructural bottlenecks. Monetary policy can play a more effective role only when these factors are in place. Premature action at this stage risks disruptive policy reversals later and the loss of credibility. Accordingly, the MPC decided to keep the policy rate unchanged with a neutral stance and remain watchful of incoming data."
 
The Reserve Bank says it will continue to work in partnership with the government to address the stress in banks’ balance sheets. Better alignment of administered interest rates on small savings with market rates and stepped-up recapitalisation of banks to facilitate adequate flow of credit to productive sectors are important steps to follow through.
 
"The MPC noted that incoming data suggest that the transitory effects of demonetisation have lingered on in price formations relating to salient food items, entangled with excess supply conditions with respect to fruits and vegetables, pulses and cereals. At the same time, however, the latest release from the Central Statistics Office (CSO) on national income accounts and industrial production attest to the effects of demonetisation on the broader economy being sector specific and transient, as well as to the noteworthy resilience of private consumption. At this stage, it is difficult to isolate these factors or to judge the strength of their persistence. As the year progresses, underlying inflation pressures, especially input costs, wages and imported inflation, will have to be closely and continuously monitored," the central bank added.
 
On 31 May 2017, the CSO released quarterly estimates of national income accounts for Q4 of 2016-17, provisional estimates for 2016-17 and revisions for the preceding five years. The growth of real gross value added (GVA) for 2016-17 has been pegged at 6.6%, 0.1 percentage point lower than the second advance estimates released in February 2017. 
 
 
RBI says, "Underlying the revision is a downward adjustment in services sector growth in Q4 for the constituents of construction, financial and professional services, and real estate. Estimates of agriculture and allied activities have been upgraded to incorporate the all-time high production of foodgrains and horticulture in the year. GVA in industry has also been placed higher in the provisional estimates relative to the earlier reading to reflect the impact of new indices of industrial production (IIP) and wholesale prices (WPI) rebased to 2011-12. The new data reveal that a slowdown in activity in both industry and services set in as early as Q1 of 2016-17 and became pronounced in Q4. Moreover, the deceleration of activity coursing through the year has had underlying drivers that have been in operation since Q2. Components of aggregate demand reflect a contraction in gross fixed investment in Q4, reversing the turnaround evident in the second half of the year in the advance estimates. This is also reflected in the contraction  in  the  production  of  capital  goods  in  the  new  IIP.  However, private final consumption expenditure recorded robust year-on-year growth."
 
RBI says, five members of the Committee were in favour of the monetary policy decision, while Dr Ravindra H Dholakia was not in favour. The minutes of the MPC’s meeting will be published by 21 June 2017.
 
Here are the latest policy rates following MPC review… 
 
Repo Rate......................6.25%
Reverse Repo Rate.........6%
Bank Rate......................6.50%
 

 

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