Companies & Sectors
TDSAT asks government to return half of Loop's bank guarantee

Partly allowing the plea of Loop Telecom, which has closed down operation after a Supreme Court order, the TDSAT said that its licence was valid till January 2013, hence only half of the FBG would be returned

 
New Delhi: The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has asked the union government to return 50% amount of the financial bank guarantee (FBG) submitted by Loop Telecom at the time of allotment of spectrum in 2008, reports PTI.
 
Loop had deposited Rs555 crore as FBG in January 2008 for earmarking of spectrum for 21 circles to the Department of Telecom (DoT) in January 2008. Later, it renewed FBG of Rs540 crore in January 2011.
 
Partly allowing the plea of Loop Telecom, which has closed down operation after a Supreme Court order, the TDSAT said that its licence was valid till January 2013, hence only half of the FBG would be returned.
 
The company stopped operations after the 2 February 2012 order of Supreme Court cancelling 122 telecom licences, including those of Loop, in the 2G spectrum allocation case.
 
Loop contended that DoT had not issued any direction to it to continue its operation and no further demand has been raised by them.
 
"We are of the opinion that as in terms of the direction of the Supreme Court of India the licences issued to the Petitioner prima facie would remain valid till 10 January 2013, the Respondent (DoT) should be directed to return fifty percent of the FBG for each of the circles at this stage," said the TDSAT bench headed by Chairman Justice SB Sinha.
 
Loop had approached the TDSAT seeking release of the Rs540 crore FBG, contending that DoT has not reviewed the issue.
 
It further said the firm has provided to DoT its tax returns from 2007-2008 to 2010-2011 for the purpose of payment of Annual Gross Revenue as licence fee and will be soon give the same for the 2011-2012 financial year.
 

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Government defers RINL IPO; says committed to divestment programme

Steel Ministry was unwilling to sell shares at lower than the present book value of Rs22.50 a share while merchant bankers UBS Securities and Deutsche Equities have proposed a price band of Rs15-17

 
New Delhi: The initial public offer (IPO) of state-run Rashtriya Ispat Nigam Ltd (RINL) has been deferred for the third time as the Steel Ministry and merchant bankers could not arrive at a consensus on the price band, reports PTI.
 
The Government in a statement, however, said it "remains committed to the disinvestment programme..." 
 
RINL issue was supposed to kick start the divestment programme through which the government aims to garner Rs30,000 crore. The issue was slated to hit the markets on 15th October. Its deferment comes a day after Finance Minister P Chidambaram asserted that divestment process would kick start with RINL issue.
 
"We have lined up all the cases for the next six months. The first case (RINL) is coming up sometime this month," Chidambaram had said on Monday.
 
"The issue has been deferred," RINL Chairman and Managing Director AP Choudhary told PTI earlier in the day.
 
Sources close to the development said the Steel Ministry was unwilling to sell shares at lower than the present book value of Rs22.50 a share. Merchant bankers UBS Securities and Deutsche Equities (India) have proposed Rs15-17 as the price band.
 
According to the official statement, "...it is hereby informed that the Government has decided not to proceed with the (RINL) offer programme currently." 
 
Differences had emerged in yesterday's meeting of the high level committee which was supposed to suggest the price band.
 
Subsequently, the matter was referred to the EGoM to fix the price.
 
Sources said the Empowered Group of Ministers, headed by Finance Minister P Chidambaram, did not meet today.
 
"As per the offer programme, mentioned in the Red Herring Prospectus, the offer was proposed to open on 15th October and close on 18 October 2012. In this regard, it is hereby informed that the Government has decided not to proceed with the offer programme currently," the statement said.
 
"(The government) will evaluate the decision (regarding the IPO timing) in due course keeping in view all the relevant factors," it added.
 
RINL had proposed to make an initial public offer of 48.90 crore equity shares of Rs10 each by way of an offer for sale.
 
The issue was previously deferred twice since the filing of the draft prospectus with market regulator SEBI on May 18 due to reasons as varied as volatile market conditions and fire at the company's Vizag steel-making facility.
 
In order to meet the disinvestment target of Rs30,000 crore, the Department of Disinvestment (DoD), the nodal point for conducting PSU stake sale, has already got Cabinet approval for stake sale in seven companies, including RINL, Hindustan Copper, Oil India, MMTC, NALCO.
 
An official source said that government has identified four more PSUs -- NMDC, NTPC, Power Grid Corporation (PGCIL) and Engineers India (EIL) -- for divesting its minority stake.
 

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SEBI bars Polaris' Arun Jain from securities markets for two years

SEBI said Jain dealt in 15,080 shares of the company on behalf of Polaris Holding on the basis of 'unpublished price sensitive information' held by him and made unfair gains of Rs27.26 lakh

 
Mumbai: Market regulator Securities and Exchange Board of India (SEBI) has barred Polaris Software Labs's chairman and managing director Arun Jain from securities market for two years for alleged insider trading in the company's shares, reports PTI.
 
"... restrains Arun Jain from accessing the securities market and further prohibit him from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner for a period of two years from the date of this order," SEBI said.
 
After a probe into the dealings of shares during August- September 2000, SEBI said it found Jain, CMD and promoter of the company, guilty of norms related to insider trading, as it charged him of trading in the stock on the basis of 'unpublished price sensitive information' relating to a proposed acquisition by the firm.
 
SEBI said it found that Polaris Software Lab had called off the proposed acquisition of Data Inc, after due diligence, in the second week of September 2000 but had informed the concerned stock exchanges on 30 September 2000.
 
"During the investigations, it was observed that the company had deliberately withheld this (proposed acquisition) price sensitive information from the public domain," SEBI.
 
SEBI said Jain dealt in 15,080 shares of the company on behalf of Polaris Holding Pvt Ltd (PHPL) on the basis of 'unpublished price sensitive information' held by him and had made unfair gains to the tune of Rs27.26 lakh.
 
During the relevant time, PHPL was one of the promoter entity of Polaris Software Labs and Jain was one of the directors of PHPL.
 

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