RBI imposes penalty on Muthoot Finance, Manappuram Finance
The Reserve Bank of India (RBI) on Thursday imposed penalties of Rs 10 lakh and Rs 5 lakh on Muthoot Finance and Manappuram Finance respectively for norm violations.
 
The central bank has penalised Muthoot Finance Limited for non-compliance with directions issued by RBI on maintenance of loan-to-value ratio in gold loans and on obtaining copy of PAN card of the borrower while granting gold loans in excess of Rs 5 lakh, contravening RBI norms.
 
An RBI statement said that a statutory inspection of Muthoot Finance with reference to its financial position as on March 31, 2018 and March 31, 2019, revealed non-compliance with the above-mentioned directions issued by RBI.
 
Further, a notice was issued to the company advising it to show cause as to why penalty should not be imposed for failure to comply with the directions issued by RBI.
 
"After considering the company's reply to the notice, oral submissions made during the personal hearings and examination of additional submissions made by it, RBI concluded that the aforesaid charges of non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty," it said.
 
Manappuram Finance has been fined for non-compliance with directions issued by RBI on verification of ownership of gold jewellery. An inspection of Manappuram Finance with reference to its financial position as on March 31, 2019, showed that it has not complied with the directions issued by RBI, said another statement in reference to Manappuram Finance.
 
"This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers," RBI said in separate statements.
 
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.
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    COMMENTS

    Newme

    1 week ago

    How can ownership be proved for inherited jewels.

    Harsh Vardhan Lodha Ousted from Directorship of 5 MP Birla Cos; Ministry Okays Admin Panel Move
    Harsh Vardhan Lodha has been ousted from the Boards of five investment companies of MP Birla group after an order by the Calcutta High Court restrained him from holding offices.
     
    The Union corporate affairs ministry had on Wednesday approved and accepted the cessation of directorship of Lodha as recorded by the Board of Directors of these companies headed by the judicial member of the court-appointed APL Committee.
     
    The decision to remove Lodha from the Boards of East India Investment, Gwalior Webbing, Baroda Agents and Trading Co, The Punjab Produce & Trading Co, and Punjab Produce Holdings, the oldest of which was founded in 1937, was based on the decision of the single bench of the Calcutta High Court dated 18 September 2020 which was approved by the division bench of the said high court on 1 October 2020. The ministry website, which lists directors of companies, no longer shows Lodha's name as Board member of these companies.
     
    On November 5, Lodha had chaired the Board meeting of Birla Corporation and thereafter other three cable companies on 9th and 10th November  as self-appointed Chairman, sidestepping the decisions of the High Court and the APL Committee, the panel overseeing the administration of the estate which holds majority stake and controlling interest in the group companies, which had barred him from acting as such following the High Court order.
     
    The extended Birla family, which is contesting a will of late Priyamvada Devi Birla produced by a former auditor of the group companies naming him as the sole inheritor of the Rs5,000 crore business empire (presently claimed to be valued at over Rs25,000 crore), said it will initiate contempt of court proceedings against Mr Lodha, the concerned companies and their Directors.
     
    "Lodha has continuously misinterpreted court orders and flouted the APL Committee decisions to cling on to the Boards of MP Birla Group companies wrongfully. We will move the court to restrain him from further action in contravention of the decisions of the court as well as the APL Committee," said a spokesperson for the Birlas.
     
    On September 18, 2020, Justice Sahidullah Munshi of Calcutta High Court had ordered Lodha be restrained from holding office in any of the MP Birla Group entities during the pendency of the suit involving the contested will of Priyamvada Birla. This judgement by the single judge was challenged by Lodhas before the division bench which not only declined to stay the ouster of Lodha from the entities of the MP Birla Group, but also held that the order of the single bench was neither a perverse decision nor it was not in the best interest of the estate.
     
    Sources said that Lodha's attorney deliberately interpreted the order to limit the purview of the court order only to alleged miniscule shareholding of the estate, ignoring the well-established corporate practice and commonly prevailing structure of control through holding of shares directly and indirectly by way of cross, chain and interlinked shareholding among the promoter group constituents.
     
    "Thus, the way paved for him to chair the Board meetings of the group companies is illegal and violative of the court orders. The profitability of the MP Birla Group companies has eroded steadily, and in no way is comparable to their peers," sources said.
     
    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.
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    SAT Quashes SEBI Order Directing Prabhat Dairy To Deposit Rs1,292 Crore; Asks for a Deposit of Rs500 Crore
    Last week, the Securities Appellate Tribunal (SAT) quashed an order issued by Securities and Exchange Board of India (SEBI) directing Prabhat Dairy to deposit over Rs1,292 crore. SEBI has also been asked to process the delisting application of Prabhat Dairy and pass appropriate orders within six weeks.
     
    The SAT order states "The direction of the WTM to deposit a sum of Rs1,292.46 crore is wholly arbitrary and has been passed without any application of mind". WTM is a whole-time member of SEBI, in this case Prabhat Dairy Ltd.
     
    In an ex-parte order on 20th October, SEBI had directed Prabhat Dairy to deposit Rs1292 crore proceeds from the sale of its key business in an escrow account of a nationalised bank pending a forensic audit. It had also hauled up the company’s management for not cooperating with the forensic auditor Grant Thornton. The SEBI interim order came after reports which accused the company of misuse and wrongful diversion of funds raised through the sale of its core dairy business for Rs1,700 crore to French multinational Groupe Lactalis in April 2019.
     
    Earlier in July, SEBI had appointed Grant Thornton LLP as forensic auditor to check facts and the financials of the firm and the financial statements for the financial years FY18-19 and FY19-20.
     
    In January 2019, Prabhat Dairy said that its board has approved the sale of the firm's shareholding in its wholly-owned subsidiary Sunfresh Agro Industries Pvt. Ltd to Tirumala Milk Products Pvt Ltd for a total consideration of almost Rs1,227 crore. It also approved the sale and transfer of its dairy product business for about Rs473 crore. The company shared its intention to distribute the net proceeds of the sale transactions (around Rs1,200 crore) with shareholders and even set up a committee to advise on this.
     
    Subsequently in September 2019, Prabhat Dairy stated that promoters intend to acquire 49.9% stake (currently being held by public shareholders) and delist the company from the Exchanges. 
     
    Prabhat Dairy appealed to the SAT after the market regulator’s interim order to deposit the money. Prabhat argued that the amount left to be distributed after meeting tax liabilities, indemnity, transaction cost, debt outstanding was about Rs854.40 crore. Of this, 50% (Rs427 crore) will go to the promoters and roughly Rs427 crore would go to minority shareholders comprising 49.9%. 
     
    SAT said SEBI’s order “would cripple the company and bring it to down to its knees which is neither in the interest of the company nor in the interest of its shareholders.” The tribunal added that the SEBI order was “not just as there was no specific finding on diversion of funds.”
     
    Instead, SAT asked Prabhat Dairy to deposit Rs500 crore in an escrow account within 10 days. Simultaneously the firm has been directed to share all the required information with the forensic auditor Grant Thornton. The forensic auditor will have to submit its findings within one month.
     
    The counsel for SEBI submitted that the directions SEBI had passed were “solely to protect the interest of the shareholders of the company.” He added the company had indicated that it would distribute substantial portion of the sale proceeds to shareholders but was yet to do so. The firm had even failed to declare its March quarter results before the stipulated time which led to the inference that there was something fishy. The counsel also said that it needs to be noted that the distribution of the sale consideration to shareholders should not be mixed with the consideration of payment to be made under the delisting application. The sale proceeds have to be distributed by the company, while the promoter is required to pay separately for delisting. 
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    COMMENTS

    ssbh.dceo

    1 week ago

    EVERYBODY IS LEGALLY CORRECT EXCEPT THE CUSTOMER/DEPOSITOR/SHAREHOLDER. ULTIMATE SUFFERER.

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