Money & Banking
Stress Test for Banks
Non-performing assets (NPAs) and restructured assets are galloping. Over the years many patchwork solutions have been tried. Last year, the Reserve Bank of India introduced a structure for rehabilitating "specified infrastructure and core industry projects" for tenures up to 80%-85% of the projects’ economic life. Is this a sham? Rajendra Ganatra, a banker and expert in stressed assets, rips apart this new structure and the earlier Corporate Debt Restructuring scheme. He finds  it will only encourage promoters to play with lenders’ money. In fact, it is our money since it is government-controlled banks that are laden with bad loans. Mr Ganatra gives proof of ‘ever-greening’ of bad loans of three infrastructure companies, which raised debt ranging from 47.6% to 167% of their debt-servicing requirement. Don’t miss this eye-opening analysis on page 30.
 
Senior citizens, who invest their hard-earned money in private retirement homes, usually do not get what is promised by developers of such properties. Unfortunately, at present, there are no norms for this sector. Sucheta, in her Different Strokes, highlights the need of proper government advocacy for senior citizens, based on S Krishnamoorthy’s (an 80-year-old air-force veteran) plea, asking the Madras High Court to direct the state government to set up a specific regulatory authority for retirement homes.
 
The Aadhaar number is based on the social security number (SSN) concept used in the US. But did the US SSN simplify government administration? In Crosshairs, Sucheta writes that this may be far from the truth. In 2014, improper payments cost the US government a whopping $124.7 billion. Clearly, a national identity number has not prevented massive leakage of government funds. Why will it be any different in India, where governance standards are worse?
 
Moneylife Foundation will be coming to Chennai on 7 November 2015, with its flagship seminar on “How to Be Safe & Smart with Your Money”. Register online here - goo.gl/z3UoPA. Hope to see you there!
 

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Motorcyles in Slow Lane
Is the continued weak demand indicative of market saturation?
 
Both Bajaj Auto and...
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Stock manipulation: Aviva Industries
Aviva Industries company has no business, no income; yet its share price has shot up 194%
 

Aviva Industries (earlier known as Ankush Synthetic) was trading in chemicals. Over the past few years, Aviva has not done any business; hence, there is no income. With no income, Aviva reported a net loss of Rs4 lakh for the year ended June 2015. 
 
Over the past 15 months, trading in Aviva has been highly suspicious. From its low of Rs8.68 in February 2014, in just about seven months, the stock price shot up 343% to Rs38.45 on 19 September 2014. In the seven months that followed, the stock price crashed by 67.85% to Rs12.36 on 23 April 2015. This was not the end. The stock staged another steep rally, of 144%, before dipping by 30%. The price is up by 194%, at Rs25.50, on 7 October 2015 from Rs8.68 on 17 February 2014.
 
In 2010, the Security and Exchange Board of India (SEBI) had imposed a penalty of only Rs2 lakh on Aviva Industries for trading while in possession of unpublished price sensitive information in the scrip of Nova Petrochemicals in 2006. Will SEBI investigate this suspicious trading activity in a company which has only 626 shareholders and which has been involved in insider trading in the past?

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COMMENTS

Joginder Pal Kanaujia

1 year ago

There are many such scrips which are shooting up without any business e.g Dynacons Technologies CMP Rs 22.40 trading at PE ratio of whopping 2240. There is no end to list of such scrips.

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