Depositors Stunned by RBI’s Benevolence to Jaiprakash Associates
Fixed deposit (FD) investors of Jaiprakash Industries are shocked. On 21st April, The Economic Times reported that the Reserve Bank of India (RBI) had removed 20 companies from the list of 150 entities whose loans had to be provided for by banks against risk of default. One of these was the beleaguered Jaiprakash Associates which figures in Moneylife Foundation’s survey (1,596 complaints) among the top six companies that have the maximum complaints regarding failure to pay the principal or interest on FDs. 
 
While banks celebrate the fact that not providing for the loans will help their bottomlines, hapless depositors are in shock. Worse still, the company has selectively paid a few investors, especially those who had invested through agents who were large fund mobilisers. Media reports also indicate that the RBI breather has followed the Jaypee group’s effort to cut it massive outstanding debt of Rs75,000 crore and its intention to hire experts to restructure its business. Jaiprakash Associates alone has a debt of Rs21,731 crore, according to a Credit Suisse report. 
 
As a proportion of its outstanding, the FD component of Jaiprakash’s debt is bound to be really small and it would be a smart move, reputation-wise, if the company decided to pay them back. A little nudge from the ministry of corporate affairs (MCA) would have made a difference; but it has shown no interest. SD Israni, a well-known lawyer and company secretary and columnist, however, offers an interesting perspective. He says that although the Companies Act, 2013 had not included any provision to punish defaulting companies and their officials, the National Democratic Alliance (NDA) has, in fact, made amends. Section 76A, was inserted into the Companies Act on 29 May 2015 providing imposition of heavy fines and imprisonment for defaults. However, there is a catch. Mr Israni points out that the provision remains a paper tiger because the tribunal that can exercise the power has yet to be constituted and the CLB (company law board) cannot exercise these powers. 
 
Abhay Datar, consumer activist and former banker, points out that Section 76(1) requires companies to create a charge on fixed assets equivalent to the amount of FDs raised. Does this mean that FD-holders are secured creditors, he asks. But here, too, he points out that there is no clarity on whether this would be a first charge or a second charge on the assets. When it comes to small depositors, MCA clearly moves at snail’s pace. So what will push the MCA to give teeth to Section 76A and protect depositors? We are still looking for answers. Meanwhile Moneylife continues to advise savers to avoid investing in corporate FDs lured by a slightly higher interest rate and endangering the principal invested. 
 
NOTE: We at Moneylife request all readers not to share their mobile number/s here. This is a public platform and your mobile number/s may be misused. Kindly do not post your mobile number/s.
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    COMMENTS

    Udai Rai

    3 years ago

    pl include me also whatsapp no 7875398083.

    T V Sundaram

    3 years ago

    I am also one of the victims - a Super Senior Citizen having crossed 80 years - expecting a refund of a Fixed Deposit matured on the 1st of December 2015 from JAIPRAKASH Associates Limited. I hope someone will take a lead and proceed to reach to its logical end.

    George Williams

    4 years ago

    Natrajan sir.well said

    Rajan Mathikere

    4 years ago

    FD investor's join together & file case in NCLT & then for decree & see that investors should get thier hard earned money with interest M.Natarajan

    Rajan Mathikere

    4 years ago

    FD investor's join together & file case in NCLT & then for decree & see that investors should get thier hard earned money with interest M.Natarajan

    Mahesh Bansal

    4 years ago

    I am an agent for selling JP associates fd. I am mostly sold fdr's to the senior citizens some of them suffering illness due to old age i.e 65yrs +. The owner of JP associates are enjoying freely due to the regular relieve is being give why CLB extending time to stop FDR payment regulerly. so that petty investor not get any relief.Every investor will consider that why CLB extending the time regularly. I think there is something inside story of the decision of CLB 9412267436.

    Mahesh Bansal

    4 years ago

    I am an agent for selling JP associates fd. I am mostly sold fdr's to the senior citizens some of them suffering illness due to old age i.e 65yrs +. The owner of JP associates are enjoying freely due to the regular relieve is being give why CLB extending time to stop FDR payment regulerly. so that petty investor not get any relief.Every investor will consider that why CLB extending the time regularly. I think there is something inside story of the decision of CLB 9412267436.

    Mahesh Bansal

    4 years ago

    I am an agent for selling JP associates fd. I am mostly sold fdr's to the senior citizens some of them suffering illness due to old age i.e 65yrs +. The owner of JP associates are enjoying freely due to the regular relieve is being give why CLB extending time to stop FDR payment regulerly. so that petty investor not get any relief.Every investor will consider that why CLB extending the time regularly. I think there is something inside story of the decision of CLB 9412267436.

    Mahesh Bansal

    4 years ago

    I am an agent for selling JP associates fd. I am mostly sold fdr's to the senior citizens some of them suffering illness due to old age i.e 65yrs +. The owner of JP associates are enjoying freely due to the regular relieve is being give why CLB extending time to stop FDR payment regulerly. so that petty investor not get any relief.Every investor will consider that why CLB extending the time regularly. I think there is something inside story of the decision of CLB 9412267436.

    Mahesh Bansal

    4 years ago

    I am an agent for selling JP associates fd. I am mostly sold fdr's to the senior citizens some of them suffering illness due to old age i.e 65yrs +. The owner of JP associates are enjoying freely due to the regular relieve is being give why CLB extending time to stop FDR payment regulerly. so that petty investor not get any relief.Every investor will consider that why CLB extending the time regularly. I think there is something inside story of the decision of CLB 9412267436.

    MDT

    4 years ago

    We at Moneylife request all not to share their mobile numbers. This is a public platform and your mobile number/s may be misused. Kindly do not post your mobile number/s.

    Shankar Mazumder

    4 years ago

    https://www.change.org/p/can-narendra-modi-s-pro-business-government-save-the-ordinary-retail-investors-who-have-put-their-life-savings-into-jai-prakash-associates-company-fixed-deposits Click on the above link. Sign up to this online petition and share this petition on facebook, twitter & linkedin

    Shankar Mazumder

    4 years ago

    https://www.change.org/p/can-narendra-modi-s-pro-business-government-save-the-ordinary-retail-investors-who-have-put-their-life-savings-into-jai-prakash-associates-company-fixed-deposits Click on the above link. Sign up to this online petition and share this petition on facebook, twitter & linkedin

    Shankar Mazumder

    4 years ago

    Sign up this petition & ensure that JAYPEE Group pays investors & doesn't become next Sahara/Kingfisher/Unitech !!
    https://twitter.com/SM_RETIRERICH/status/850024822587351040

    REPLY

    Ketul Savla

    In Reply to Shankar Mazumder 4 years ago

    Signed the petition. Thanks. There are some messages to add in some whats app group. Can some one please add me to this group. - 9870545334

    Nifty, Sensex weak – Weekly closing report
    Nifty will have to stay above 7,800 for the bulls to gain strength
     
    We had mentioned in last week’s closing report that Sensex, Nifty were still on an uptrend but that bulls were tiring. We had also mentioned that Nifty should stay above 7,870 for the market to head higher. The markets ended flat on Friday, the closing day of the week indicating that interest rates and fundamentals of shares are likely to be the deciding factors of share price appreciation in the near future, apart from a favourable monsoon. The trends of the major indices during the week’s trading are given in the table below:
     
     
    Depressed by negative Asian markets, along with unwinding of long positions, key indices of the Indian equity markets traded in the red during the late-afternoon trade session on Monday. The BSE market breadth was heavily tilted in favour of the bears -- with 1,580 declines and 952 advances. The key Indian indices had ended on a flat-to-negative note during the previous trade session on April 22. Initially on Monday, the indices had opened on a flat note as they were dragged lower by negative Asian markets and a weak close of the US exchanges on Friday. Besides, investors were seen cautious ahead of the US FOMC (US federal open market committee) meet slated for April 27-28. The US FOMC meet assumes significance as it will decide the future course of the US interest rates. 
     
    Foreign direct investment (FDI) inflow to India touched a record level of $51 billion during the April-February period of the last financial year, the government said on Monday. "We have had a record inflow of FDI in this country, more than $51 billion from April to February, and that is the highest ever," the Department of Industrial Policy and Promotion (DIPP) Secretary Ramesh Abhishek said here at an event hosted by industry chamber Ficci on intellectual property rights (IPR). Credit rating agency Moody's Investors Service said earlier this month that India's rising FDI inflows help reduce the current account deficit and also the external financing needs.
     
    Key Indian stock market indices, which opened lower on Tuesday, surged in the afternoon session following strong global cues. Good buying was observed in metal, auto, realty and banking sectors. There was underlying caution among the investors before the meetings of the central banks of the US and Japan this week. The Fed is expected to keep interest rates unchanged but investors will keep a close eye on the Fed Chair's comments regarding future outlook.
     
    Aditya Birla-led aluminium manufacturer Hindalco said on Tuesday it will accept the Australian company Metal X's improved takeover offer for its Australian subsidiary Aditya Birla Minerals Ltd. Metal X has announced its "intention to improve its ongoing takeover offer for acquiring the shares of ABML under the relevant laws of Australia", Hindalco said in a stock exchange filing. Metal X has offered one fully paid ordinary share in Metals X Ltd for 4.5 ABML shares and Australian $0.08 in cash for every ABML share held, it said. "Further, the company (ABML) has informed that Hindalco has communicated to ABML its intention to accept the aforesaid offer subject to receiving the approval of RBI and no bona fide superior proposal being announced by a third party within five business days of Metals X announcing its intention to make the aforesaid offer," the filing added. "Aditya Birla is an underperforming company and its shareholders have seen substantial loss of wealth over the last few years," said Metals X chief executive and managing director Peter Cook. "However, Metals X believes its underground mining experience, technical capability, financial capacity and experience in operating Western Australian mines make Metals X almost uniquely placed to take on the Nifty challenge," he said. Hindalco shares closed at Rs103.25, up 4.93% on the NSE.
     
    The logjam in parliament, coupled with caution ahead of US monetary policy review and mixed Asian indices, depressed the Indian equity markets on Wednesday. Consequently, the key indices of the Indian equity markets traded flat on Wednesday. The BSE market breadth was slightly tilted in favour of the bears -- with 1,308 declines and 1,220 advances. Investors were seen cautious ahead of the US FOMC (US Federal Open Market Committee) meet and the Bank of Japan (BoJ) monetary policy review. The US FOMC meet assumes significance as it will decide the future course of the US interest rates. A hike in interest rates is expected to lead away Foreign Portfolio Investors (FPIs) from emerging markets such as India. Besides, the unwinding of long positions ahead of the futures and options (F&O) expiry and the ongoing logjam in parliament dampened sentiments. Investors are worried that the logjam might postpone key economic legislation from getting passed.
     
    American credit rating agency Moody's on Wednesday retained India's outlook at 'positive' saying the country's history of double-digit inflation, high government debt levels, weak infrastructure and a complex regulatory regime have constrained its credit profile.
     
    Profit booking, coupled with the logjam in parliament and negative global cues, subdued the Indian equity markets on Thursday. The sell-off was accelerated by the decision by the Bank of Japan (BoJ) to maintain the status quo in its monetary policy. This led to key indices of the Indian equity markets closing the day's trade in the red. The BSE market breadth was tilted in favour of the bears -- with 1,672 declines and 854 advances. 
     
    The US Federal Reserve said that it will maintain the target range for the federal funds rate at 0.25%-0.5%, but gave little clue on the timing of its next rate hike. The US Labour market conditions "have improved further" even as growth in economic activity "appears to have slowed", the Fed said in a statement on Wednesday after wrapping up a two-day policy meeting, noting that it will continue to "closely monitor" inflation indicators and global economic and financial developments. The Fed currently expects that the US economy will expand "at a moderate pace" and the labour market indicators will "continue to strengthen," according to the statement. The Fed raised its benchmark interest rate by 25 basis points to 0.25%-0.5% in December, the first rate hike in nearly a decade, marking the end of an era of extraordinary easing monetary policy. But the turmoil in financial markets and a slowdown in global economy since the start of the year have raised increasing concerns about the strength of the US economy, forcing Fed policymakers to hold off on any further rate hikes since then.
     
    On Friday, the markets ended flat. The markets will be guided by interest rates and corporate earnings and weakness, if any, in the global markets.
  • User 

    Nifty, Sensex headed lower – Thursday closing report
    Bulls need to reclaim 7,900 and bears need to push Nifty below 7,800
     
    We had mentioned in Wednesday’s closing report that Nifty, Sensex are in the hands of bulls and that Nifty has to remain above 7,943 for the market to remain bullish. The major indices of the Indian stock markets suffered a sharp correction and the losses over Wednesday’s close were over 1.65%. The trends of the major indices in Thursday’s trading are given in the table below:
     
     
    Profit booking, coupled with the logjam in parliament and negative global cues, subdued the Indian equity markets on Thursday. The sell-off was accelerated by the decision by the Bank of Japan (BoJ) to maintain the status quo in its monetary policy. This led to key indices of the Indian equity markets closing the day's trade in the red. The BSE market breadth was tilted in favour of the bears -- with 1,672 declines and 854 advances. 
     
    The US Federal Reserve said that it will maintain the target range for the federal funds rate at 0.25%-0.5%, but gave little clue on the timing of its next rate hike. The US Labour market conditions "have improved further" even as growth in economic activity "appears to have slowed", the Fed said in a statement on Wednesday after wrapping up a two-day policy meeting, noting that it will continue to "closely monitor" inflation indicators and global economic and financial developments. The Fed currently expects that the US economy will expand "at a moderate pace" and the labour market indicators will "continue to strengthen," according to the statement. The Fed raised its benchmark interest rate by 25 basis points to 0.25%-0.5% in December, the first rate hike in nearly a decade, marking the end of an era of extraordinary easing monetary policy. But the turmoil in financial markets and a slowdown in global economy since the start of the year have raised increasing concerns about the strength of the US economy, forcing Fed policymakers to hold off on any further rate hikes since then.
     
    US stocks closed mixed as Wall Street assessed the Federal Reserve's decision to leave interest rates unchanged and weak earnings report from tech-giant Apple. The Dow Jones Industrial Average rose 51.23 points on Wednesday, or 0.28%, to 18,041.55. The S&P 500 added 3.45 points, or 0.16%, to 2,095.15. The Nasdaq Composite Index lost 25.14 points, or 0.51, to 4,863.14. Oil prices jumped as the US Federal Reserve decided to keep the target range for the federal funds rate unchanged. 
     
    IT services company HCL Technologies on Thursday said it posted a rise of 7.07% in its standalone net profit for the quarter ending 31 March 2016, at Rs1,675.45 crore against Rs1,564.74 crore in the same period of 2015. According to the financial results posted on the Bombay Stock Exchange (BSE), the company's total income in the quarter under review at Rs4,612.21 crore compared to Rs4,385.95 crore clocked in the year ago quarter. Total expenses rose from Rs2,711.55 crore to Rs2,848.88 crore for the quarter. 
     
    Bharti Airtel's net profit rose by 2.8% in the fourth quarter (January-March) of 2015-16, a company statement said on Wednesday. The consolidated net profit of the company increased to Rs.1,290 crore in the fourth quarter of 2015-16 compared to Rs1,255 crore posted during the corresponding period in 2014-15. The total revenue of the company for the quarter stood at Rs24,960 crore, which is a growth of 8.4%. Till 31 March 2016, the company had 251.2 million mobile customers in India as compared to 226 million the previous year, an increase of 11.2%. 
     
    Global software major Infosys Ltd. on Wednesday announced investing an unspecified amount in US-based data software firm Trifacta which enables non-technical users to transform data for analysis. "The investment will enable Trifacta provide a data wrangling solution to our information platform and other offers," Infosys said in a statement. With the San Francisco-headquartered Trifacta, a broad range of users from business analysts to data scientists will be empowered to discover, cleanse and blend information. "We see huge potential in self-service data preparation solutions like Trifacta to help clients unlock business value of their big data assets," Infosys vice president for corporate development Ritika Suri said in the statement. Trifacta software will also enable Infosys' global clients to introduce a stack of data management solutions, complementing its data management and automation platforms. "Partnership with Infosys will play a key role in our global expansion, bringing the power and value of data wrangling to customers the world over," Trifacta chief executive Adam Wilson said in the statement. Infosys shares closed at Rs1,211.45, down 2.30% on the BSE.
     
    The top gainers and top losers of the major indices are given in the table below:
     
     
    The closing values of the major Asian indices are given in the table below:
     
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