Companies & Sectors
Tata-Unitech deal: SFIO to submit final report in next few days

According to SFIO Mumbai report, it is suspected that a Rs1,700 crore realty deal between Tata group and Unitech in 2007 could have been meant for funding the real estate company's telecom licence issued in January 2008

The Serious Fraud Investigation Office (SFIO) is expected to submit its final report in a few days on the alleged ‘dubious’ transactions between the Tata group and realty company Unitech, which the two companies had denied. Sachin Pilot, the corporate affairs minister had already met concerned officials with regard to the report.


“They (SFIO) are still working on the report and in the next few days I will receive the (final) report,” Pilot told reporters in the capital on the sidelines of an event organised by industry body CII.


Last year, the ministry of corporate affairs (MCA) had ordered a probe by SFIO into the affairs of Niira Radia-led PR firm Vaishnavi Corporate Communications, which used to handle media relations of various Tata group companies and Unitech.


SFIO's Mumbai office is said to have communicated to its head office in Delhi that certain ‘dubious’ transactions disguised as realty transactions took place between Tatas and Unitech.


Among others, the report is also said to have suggested prosecution of five senior management personnel at Tatas, as also against four top Unitech executives and one at Vaishnavi.


As per the SFIO Mumbai report, it is suspected that a Rs1,700 crore realty deal between Tatas and Unitech in 2007 could have been meant for funding Unitech’s telecom licence issued in January 2008.


Tata group’s dealings with Vaishnavi entities are also reportedly under scanner. All companies have denied any wrongdoing.


SEBI bars DSQ Software, Dalmia for seven years

During January-December 1998 percentage increase in other scrips varied from 140-340%, whereas DSQ shares zoomed 750% due to misleading statements from the company and its managing director, SEBI said

Market regulator Securities and Exchange Board of India (SEBI) has barred DSQ Software and its promoter Dinesh Dalmia from capital markets for seven years on charges of fraudulent trading in 1998 that had led to a sharp rise the company's stock price.


SEBI found that DSQ and Dalmia made misleading statements which had the effect of inducing purchase of securities by public that in turn increased the market price of the shares of the company.


"The percentage rise in the price of the shares of DSQ was considerably higher as compared to that of other companies in the same industry. Percentage increase in other scrips varied from 140-340%, whereas increase in the price of the shares of DSQ was around 750% during January-December1998," the market regulator said.


In its order dated 3rd October, SEBI said it observed that Dalmia, being the promoter and managing director of DSQ, was responsible for reducing the free float of shares by purchasing shares through his wife (Radha Dalmia) and filing cases in the court directly and indirectly through his affiliated entities which resulted in the stay of transferability of a substantial number of shares (28% of the equity capital).


SEBI found that three cases including one against UTI Bank, Kolkata brach were filed by Dalmia and other entities related to him to create an artificial scarcity of floating stock.


Further, it was observed that price sensitive statements were made by the company to "create a positive sentiment" for the shares of the company in the secondary market to influence the price of the shares of the company.


These statements were found to be misleading in nature and had induced public to purchase the shares of DSQ which led to an increase in price of its scrip, the order said.


It added that the company had made misleading statement of bagging a certain contract with Japanese firm Unisia Jecs Corp and related to future opportunities for DSQ.


SEBI had conducted a probe into the trading of the shares of DSQ for the year 1998 when a sharp rise in the price of the scrip was observed.


DSQ (formerly known as Square D Software) was mainly promoted by Dalmia and his group entities -- Ganapati Commerce, Ganapati Combines, Lexus Exports, and Square D Exports. These firms were wholly owned by Dalmia, his friends and family members.


Dalmia was the managing director of DSQ Software when the Central Bureau of Investigation (CBI) arrested him for his involvement in a stock scam. He made money by transferring DSQ shares in the name of UK-based New Vision Investment Ltd and un-allotted shares in the name of Dinesh Dalmia Technology Trust. However, according to investigation reports, about 1.3 crore DSQ shares were not listed on any exchange.


Until 2000, Dalmia's DSQ Software was just another company whose management cooked its books, hid audit trails through frenetic name changes and exploited every bull-run to make a killing for the promoter group.




3 years ago

SEBI has fined the Company & its promoters and/or put restrictions on them. But, how does this help investors, who must have lost money.
SEBI's job is to protect investors, but it has miserably failed in this. Actually, many of its actions have punished or are punishing investors.
e.g. presently lot many shares are put by SEBI under "periodical call auction" category or PCA : this has completely dried up the volumes in these shares.The sufferers are present investors, prospective buyers and also respective companies as their shares are made ill-liquid in spite of they paying FULL listing fees.


3 years ago

Real Fast Job. Congrats

Lending at subsidised rate: Inconsistency in public policy approach, says Nomura

The government is prodding public sector banks to lend at a subsidised rate at a time when the RBI has just hiked the repo rate - a signal to banks to hike their lending rate

The government is prodding public sector banks to lend at a subsidised rate. The government's objective is to stimulate consumer durable demand ahead of the festival season. Consumer demand, particularly in the discretionary segment, has been flagging for many months now. Income growth remains muted and the rise in lending rates over the last quarter has further hurt demand. In fact, the RBI had recently banned banks from offering 0% EMI schemes on purchase of consumer goods, which many feared would hit demand during the festive period (October-November 2013).


But how sensible is this policy at a time when the RBI has just hiked the repo rate - a signal to banks to hike their lending rate. According to a First Insights research note from Nomura Financial Advisory this is not a sustainable strategy to kickstart consumption. This is because the job market and income growth - the key drivers of consumption - remain lacklustre. This suggests an inconsistency in public policy approach, criticises Nomura.


The government has decided to increase the amount of capital to be infused into public sector banks over and above the budgeted amount of Rs140 billion for FY14 (year ending March 2014). The additional amount is being provided to enable banks to lend to borrowers in selected sectors such as two wheelers, consumer durables, etc, at lower rates in order to stimulate demand.


Nomura points out that fiscal finances are under pressure and the government will have to further cut spending in order to meet its budgeted fiscal deficit target (of 4.8% of GDP). As both fiscal and monetary policies are tightening during a slowing economy (pro-cyclical), Nomura expects domestic demand, including consumer demand, to remain weak.


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