Hero MotoCorp stops production for 4 days
Hero MotoCorp, the country's largest two-wheeler manufacturer, on Friday said that their manufacturing facilities will be closed for four days (August 15 to 18) owing to "demand scenario".
 
Hero MotoCorp indicated it is undergoing a stressful period as it said: "While this has been part of the annual holiday calendar on account of Independence Day, Raksha Bandhan and the weekend, it also partly reflects the prevailing market demand scenario."
 
Auto sector is one of the worst hit sectors in India due to the lack of consumption. The sectors has seen massive loss of jobs in just the last few quarters.
 
Morover, industry data recently showed that sales across all segments have declined for 9 consecutive month, creating recession like scenario in the sector.
 
Hero MotoCorp is not the first auto maker to shut manufacturing. Earlier Tata Motors, Ashok Leyland and few others made such announcements.
 
The company further said that production planning is a matter of advance monitoring of the market dynamics and prudent demand forecasting.
 
"This helps us to plan our production well in advance, thereby enabling us to stay flexible both in terms of volumes and production schedules, " the company said in a regulatory filing.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
  • User

    Key committees in IL&FS did not meet for years: RBI
    As the liquidity crunch in the non-banking finance company (NBFC) sector, which came to light with the IL&FS crisis, continues to drag the economy down, fresh revelations of blatant misgovernance by the erstwhile IL&FS mangement have been revealed by the RBI's investigation in the matter.
     
    The Reserve Bank of India (RBI) report said some of the key committees in the crisis-ridden Infrastructure Leasing & Financial Services (IL&FS) did not convene any meetings at all in the last few years.
     
    According to the RBI report, the Risk Management Committee (RMC) and the Investment Review Committee of IL&FS did not meet for around three years.
     
    "The Risk Management Committee did not meet for about three years. There was no risk management measures in vogue," it said. 
     
    "Credit risk and linkage with liquidity risk was never identified in credit and investment decisions. Business strategies of the group were never deliberated from the risk perspective," it added.
     
    The central bank's report also said that no meeting of the Investment Review Committtee (IRC) was held since October 5, 2015. 
     
    "In the absence of the meeting of IRC, the investment related proposals were continued to be approved by the Committee of Directors (COD). There was no system of monitoring and reviewing the investment at periodical intervals," it said. 
     
    In another major revelation, the RBI report said that the company did not disclose any non-performing assets (NPAs or bad loans) for the last four years and wide divergences were observed between the reported and assessed positions of assets' classification and provisions.
     
    It noted that the erstwhile IL&FS Board failed to exercise oversight over the functions of the entity and did not monitor the affairs of downstream entities in which investments were made.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
  • Like this story? Get our top stories by email.

    User

    COMMENTS

    Dr Benoy Kumar Chattapadhyaya

    1 week ago

    I have been Frauded by RBI Official in huge amounts, which has given to to them for transferred of my Fund which is under Custody of RBI but not yet transferred of my Fund , matter has been reported to Governor RBI with all documents. No action has been taken still to day. Please matter to be enquired immediately.

    IL&FS Securities: Has GT Forensic Audit Missed the Key Issues Leading to the Allied Securities Fraud?
    The fifth status report, filed by the government-appointed board of Infrastructure Leasing& Financial Services (IL&FS) today, includes a rather disappointing report from Grant Thornton (GT) which completely misses the core issues with regard to what happened between Allied Financial Services Ltd (Allied), the brokerage firm which had a clearing account with IL&FS Securities Services Ltd (ISSL), and its relationship with the three complainants.
     
    In this case, three entities headed by Puneet Dalmia–OCL India Ltd (OCL), Dalmia Cement East Ltd and Novjoy Emporium—have alleged that their broker, Allied Financial, has stolen Rs344 crore of securities from their demat accounts. The complaint has snowballed into a much bigger, systemic issue when Allied’s accounts were frozen and, consequently, ISSL, as the clearing member, defaulted on payments to National Clearing Corporation Ltd (NCCL). 
     
    NCCL, in turn, disabled IL&FS Securities, triggering chaos among all stock brokers empanelled with it. Their trading terminals were put in square-off mode, for no fault of theirs. This is a monumental development because counter-party guarantee is the bedrock of the modern, screen-based, anonymous trading system, ushered in by the National Stock Exchange (NSE). 
     
    The current system of trading assures everyone that there will be no counter-party risk in a modern trading system which has large trade guarantee funds to protect against such an eventuality. The Allied-Dalmia dispute has demolished this. The bigger irony is that the securities in dispute remain frozen and there is no real loss—at least that is what Allied contends.
     
    Unfortunately, the Securities and Exchange Board of India (SEBI), NCCL and everybody involved have been shirking responsibility of decisive action. And, so, the case is being bounced back and forth between NCCL, SEBI, the Securities Appellate Tribunal (SAT) and has, for a second time, landed up before the Supreme Court of India (SC). It came up for hearing on 13th August and has been adjourned to 26th August.  
     
    Keeping aside the main case for the moment, let’s cut to what GT has found on ISSL. Since this is a forensic audit with access to emails and WhatsApp messages of top functionaries of ISSL, the report has dug up some issues, including a few cases where the officials apparently allowed unnecessary leeway to the broker such as collateral. But none of them even begins to explain what led to the alleged ‘fraud’ of Rs344 crore. 
     
    It does not even explore the loud protestations and allegations by Dr Awanish Mishra, founder of Allied, that everything he did was known to Puneet Dalmia. Mr Dalmia, equally vehemently, denies allegations and accuses the broker of fabrication of all evidence and also raises some pertinent questions about how he was permitted to do a massive options trade that allowed him to collect Rs380 crore upfront as a premium. “Where has that money gone?” asks Mr Dalmia. The flip side to this is that Awanish Mishra has documented his allegations, in an affidavit that he claims to have submitted in the SC as well. 
     
    Here’s what the GT’s review has found after Novojoy, OCL and Dalmia Cement filed three separate complaints between 28th and 30 January 2019 alleging fraudulent transfer of mutual fund (MF) units pledged with Allied. 
     
    1. Problems with KYC procedures: According to GT, Allied’s financial statements for 31 March 2018, submitted to ISSL under KYC (know your customer) requirements had a different shareholding structure as well as chartered accountant (CA) from the statements uploaded on the website of the ministry of corporate affairs (MCA). 
     
    2. Allied declared a much lower income of Rs1-5 lakh for 2016-17 in the KYC documents, when its actual income for that year was Rs17.04 lakh. Further, it hid a regulatory order from SEBI, where it has settled a synchronised trading charge by paying Rs3.5 lakh.
     
    3. Financial statements submitted for KYC were apparently audited by CA Navin Kumar Garg, while the financial statements uploaded on the MCA website were audited by Anil Kumar Jain. GT says that ISSL’s on-boarding processes ought to have had a mechanism to cross-check filings. 
     
    4. On 7 February 2019, Allied’s promoter Awanish Mishra sent an email to V Hansprakash and two others at ISSL seeking seven days’ time to bring in additional collateral worth Rs500 crore and planned to return the collateral of the three original complainants OCL, Dalmia and Novjoy. According to GT, this is an admission that the collateral, in fact, belonged to the three Dalmia entities. 
     
    5. Allied had been withdrawing and bringing back large sums, running into several hundred crore rupees, deposited as collateral very quickly. It notes that in one instance, Allied withdrew Rs736 crore of collateral on a Saturday and brought it back on a Monday; on two other occasions, it withdrew Rs243 crore and Rs102 crore of collateral and brought it back the same day. 
     
    6. There were instances when ISSL executives extended intra-day benefits (without collateral) amounting to Rs2,417.87 crore to Allied. It was also allowed to trade based on ‘collaterals that were not deployable at the exchange’, and was ‘provided with intra-day benefit to trade without collateral’. 
     
    7. Sometimes, margin limits were increased without corresponding inflow collateral, which is against the Exchange rules. 
     
    8. One of the biggest findings is that, even after Allied’s dissociation order, ISSL executives opened its terminals and allowed it to roll over open positions which had an expiry of January 2019. GT has not gone into details about this except to add some emails from perturbed ISSL executives.
     
    9. Finally, ISSL’s employees may have been providing incorrect data to HDFC Bank and the Exchange in violation of rules, says GT’s audit.
     
    All these are largely procedural issues and indicate some problems; but, despite an examination of emails and telephone messages, it doesn’t come up with any serious allegation of collusion that adds up to the theft of Rs344 crore of securities. This is significant when you consider the hard-hitting reports on two other IL&FS companies. 
     
    The problem may not lie with the findings but the overall brief to GT. As clearly articulated by Deepak Shenoy, founder of Capitalmind, ‘there seems to be more to the story’. 
     
    Both sides are trading serious charges and neither of their allegations really adds up. Puneet Dalmia, in response to my queries, accused Dr Awanish Mishra of Allied of forging documents, forging signatures of DIS slips that were never issued and also forging KYC and false statements about depository statements. Mr Dalmia alleges that the National Securities Depository Ltd (NSDL) has confirmed that the statements are false. He also indicates that ISSL as well as NSDL failed in its job and has told him that Awanish Mishra submitted forged slips to get access to securities.
     
    Dr Mishra, in turn, is unfazed. He produces a fat folder of documents and submissions to SC which are very interesting. He openly admits to colluding with Puneet Dalmia to use MF holdings of the listed entities (Odisha Cement’s market-cap is Rs24,000 crore) to pass on huge personal benefits to Mr Dalmia. In fact, he avers that he has passed on Rs101.5 crore of benefits to Mr Dalmia’s companies (some of this is documented by the SEBI ex-parte order) to several of Mr Dalmia’s private investment companies such as Cointribe and Primarc. 
     
    Remember, the original complaint from Odisha Cement Ltd (OCL) which sent shock waves among traders said: "…certain mutual fund units, valued at approximately Rs344 crore, have been illegally and unauthorisedly transferred by the depository participant (DP) from the demat account(s) held by our erstwhile subsidiaries, OCL India Limited (OCL) and Dalmia Cement East Limited (DCEL).”
     
    Dr Mishra, in a SC filing that he sent to us, provides a very detailed account of his relationship with Puneet Dalmia and how he wanted to use “dead assets/promoter shares of Dalmia group companies as collateral to get a high margin in order to do trading in derivative market and receive premium on such trading by way of advance income to be deposited in the account of his own third-party start-up companies.” Mr Dalmia flatly denies all of this and claims he is making it all up. 
     
    While going into great details about how he opened accounts for various investment entities of Puneet Dalmia, Dr Mishra makes the startling allegation that, based on an elaborate game-plan that he has outlined in his filing, an account was first opened in Axis Securities Ltd as the clearing member where OCL’s shares were offered as collateral for the margin trades. 
     
    However, when Axis Securities refused to provide margin on the basis of these promoter shares of OCL ‘due to liquidity constraints’, that account was quickly closed and an account in ISSL was opened. Mr Dalmia denies this as well.
     
    Awanish Mishra alleges that it is Puneet Dalmia who had the relationship with ISSL and all the accommodation and concessions were on that account. It is curious that GT, ISSL and the new board at IL&FS have made no attempt to talk to the parties concerned, despite a fraud of this magnitude and multiple court cases. Why wasn’t GT’s forensic audit asked to investigate this angle? After all, Dr Mishra, who is ISSL’s client, is very emphatic about the fraud and the Dalmia connections. At the very least, his allegations could have been investigated by an independent forensic audit. 
     
    Mr Dalmia tells me that he plans to file an intervention and will counter these allegations; but the GT audit could have been helpful in having some of these charges and counter-charges independently verified. 
     

     

  • Like this story? Get our top stories by email.

    User

    COMMENTS

    Rajneesh Agarwal

    1 week ago

    Fantastic piece so well written. Obviously everyone has been colluding and are now trying to blame each other

    Sreepathid

    1 week ago

    When the cases are filed in Supreme Court can GT be assigned the work ?

    Murali Ratnam

    1 week ago

    Sir
    Blame game owning no responsibility it is the order of the day
    All authorities &;regulations are farce
    It is post mortem
    क्या हुआ कब हुआ कैसे हुआ किसे को बड़ी नहीं
    किस बाप का है दीवाली

    We are listening!

    Solve the equation and enter in the Captcha field.
      Loading...
    Close

    To continue


    Please
    Sign Up or Sign In
    with

    Email
    Close

    To continue


    Please
    Sign Up or Sign In
    with

    Email

    BUY NOW

    online financial advisory
    Pathbreakers
    Pathbreakers 1 & Pathbreakers 2 contain deep insights, unknown facts and captivating events in the life of 51 top achievers, in their own words.
    online financia advisory
    The Scam
    24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
    Moneylife Online Magazine
    Fiercely independent and pro-consumer information on personal finance
    financial magazines online
    Stockletters in 3 Flavours
    Outstanding research that beats mutual funds year after year
    financial magazines in india
    MAS: Complete Online Financial Advisory
    (Includes Moneylife Online Magazine)