Wednesday, February 1, 2017

Budget will give Big Boost to Development, says PM

Arun Jaitley gets set to present Union Budget - 2017-18
NEW DELHI, Feb 1: Congratulating Finance Minister Arun Jaitley Jee for presenting an "excellent Budget", Prime Minister Narendra Modi expresses the hope that the various proposals will "empower the poor and live up to the expectations of all".

The Budget, PM said, "will provide an impetus to infrastructure, strength to the financial system and a big boost to the development. The budget has provisions to fulfill the expectations of everyone- from construction of highways to expansion of I-ways, from the cost of pulses to the data speed, from the modernization of railways to simple economic constructions, from education to health, from entrepreneurs to industry, from textile manufacturers to tax deduction. The Finance Minister and his entire team deserve praise for this historic budget.

"This Budget is a reflection of the development measures undertaken by the Government over the past two and a half years and the vision to carry forward the momentum in this direction. The merger of the Railway budget with the Union Budget is a major step. It will help in integrated planning of the transport sector. Railways can now contribute in a much better way in meeting the transport needs of the country, "Mr Modi said.

The focus of the budget is on agriculture, rural development and infrastructure which is also a reflection of the Government’s commitment to raise investment and create employment opportunities. The allocation for the schemes in these categories has been hiked substantially. The budgetary outlay for Railways and Road transport sector have also been substantially increased. Government’s aim is to double the farmers’ income by 2022 and the policies and schemes have been designed keeping this in mind. Maximum emphasis in this budget has been on the farmers, villages, poor, dalit and the underprivileged sections of the society. Agriculture, animal husbandry, dairy, fisheries, watershed development, Swachcha Bharat Mission are the areas which hold lots of potential to uplift the economic situation in rural India and also bring a sea change in the quality of life there, he said..

The Budget has laid emphasis on increasing the employment opportunities. Special allocation has been made for the sectors like Electronic manufacturing, Textiles which create new job opportunities. Provisions have been made to bring in the people working in the unorganized sector to the organized sector. Budget allocation for Skill development has been enhanced considerably keeping in mind the youth of our country and the need to gain the advantage from the demographic dividend. Record allocation –the highest ever has been made for Mahatma Gandhi National Guarantee Scheme. Women’s welfare is a priority for our Government. Budgetary outlay for the schemes related to women’s and children welfare has been enhanced. There has been a considerable hike in the allocation of budget for health and higher education.

Housing and Construction Sector plays a major role in the growth of economy and creating new employment opportunities. This budget will provide an impetus to the housing sector in rural as well as urban areas.

In the Railway budget, special emphasis has been on railway safety. Railway Safety Fund has been set up which will help in ensuring adequate expenditure of funds on rail safety. Capital expenditure on Railway and Road infrastructure has been hiked substantially in the budget.The Comprehensive package on digital economy will curb the tax evasion and check the circulation of black money. We have undertaken the exercise to launch Digital economy in a mission mode which will go a long way in achieving the target of 2500 crore digital transactions in 2017-18.

Mr Modi said: "The Finance Minister has brought in tax reforms and amendments which will provide relief to the Middle Class, result in setting up of industries, create job opportunities , will put an end to discrimination and will provide incentives for private investments. The move to reduce the personal income tax is significant as it touches the middle class most. Bringing down the rate from 10 to 5 percent is a bold move. Most of the taxpayers in India would be benefitted by this decision. You would have seen, my fight against black money and corruption is on. Political funding has always been a matter of discussion. Political parties are always under the scanner in this regard. The new scheme by the Finance Minister related to poll funding is along the lines of the hopes and aspirations of the people in our fight against the black money. "

He explained: "The small and medium industries across the country have been a major source of employment generation. These industries have been demanding that they are facing difficulties in competing at the global level and if the taxes are lowered, then around 90 percent of our small scale industries would be benefitted. Therefore, the Government has amended the definition of Small scale industries, widened their scope and reduced the tax rate from 30 to 25 percent. This implies that over 90 percent of our Small scale industries will be benefitted. I am hopeful that this decision will help a lot in making our SSIs globally competitive. "

This budget is an important step towards overall development of the nation. It will create new employment opportunities, help in overall economic growth and will be complementary in raising the income of the farmers. In order to ensure quality of life for the citizens, the best possible facilities of education, health and housing can be organized. It is an effort to raise the purchasing power of the middle class without increasing the fiscal deficit.

In a way, Mr Mdi said, " it is a reflection of our ongoing efforts to see to it that the speed with which our country is changing, gather momentum. This budget is associated with our aspirations, our dreams and in a way depicts our future. This is the future of our new generation, the future of our farmers. When I say future, it has a meaning in each of its letters. In FUTURE, the letter F stands for the farmer, U stands for Underprivileged which includes dalit, oppressed, women etc., T stands for Transparency, Technology Upgradation- the dream of a modern India, U stands for Urban Rejuvenation –the urban development, R stands for Rural Development and E stands for Employment for youth, Entrepreneurship, Enhancement to give a push to new employment and boost to young entrepreneurs. I congratulate the Finance Minister once again to present this FUTURE in the budget. It is my belief that the budget will carry forward the development agenda of the Government, generate a new climate of confidence and help the nation to scale new heights. Once again, my heartfelt congratulations to the Finance Minister and his team for the budget."


Friday, March 18, 2016

Misuse of law can dent Make in India, cautions UK bizman

·         Harassed and Hounded Nazir Mussa appeals to PM, 

      Maha CM to ensure his case is not repeated

NEW DELHI: At a time when the Union and various State governments are aggressively pushing the ‘Make in India’ drive, misuse of legal system and police machinery can severely impact the ambitious initiative, said UK-based businessman Nazir Mussa, who was jailed on the basis of, what he called,  a fictitious case.
Nazir Mussa

“I have been jailed for 28 days at Arthur Road prison in Mumbai under horrible conditions and without any charge on the basis of a fictitious case filed by influential Indian businessman Shobit Rajan who apparently had an axe to grind with my nephew Arnool Jamal in connection with a dispute over a 13-acre prime commercial plot worth thousands of crores of rupees,” said Mussa.

“I appeal to honourable Prime Minister Mr Narendra Modi and honourable Maharashtra Chief Minister Mr Devendra Fadnavis to ensure that such cases are not repeated as it will shake the global businessmen’s confidence in Indian legal system,” he said in a statement from London.

Mussa now stands vindicated as Justices Jagdish Singh Khehar and C Nagappan of Supreme Court heard the petition ruled: “No ground for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India.”

“The special leave petition is accordingly dismissed. As a sequel to the above, pending interlocutory applications also stand disposed of,” the order said.

Senior advocate Kapil Sibal and along with advocates Mahesh Agrawal appeared for Rajan, while Senior counsel Aryama Sundaram, Dr. A M Singhvi, Sajid Mohamed along with Aman Vachher appeared for Mussa.

On the basis of a complaint filed by Indian businessman Shobhit Rajan, Mumbai police had picked up Mussa from the CCI while he was playing cards with his friends on a late evening in June 2014 and detained him in jail without charge for 28 days.

The Bombay High Court had subsequently quashed the criminal case proceedings against Mussa and freed him on bail which Rajan challenged through his SLP.

My only fault appeared to be that Jamal is my nephew and I issued a bonafide net worth certificate to him to avail a bank loan. I am a UK certified CA and my stand has been vindicated by the Indian courts for which I am eternally grateful,” said Mussa.

“This is a clearcut case of misusing the police machinery to suit a businessman’s vested interest which we have told the courts,” he said.

Mussa had argued before the High Court that Rajan filed the case “with vengence against him apparently to hide his own acts of misdeeds and fraud to usurp control of the prime property.”  Jamal pointed out and filed cases with Saki Naka police in Mumbai.

The case arises out of a long standing corporate war between Jamal, a Canadian businessman based out of Kenya, and Rajan over the prime land earlier owned by Parke Davis on which a massive commercial property development called Logitech Park has been built.
Realty analysts say the property is valued at over Rs 3,500 crores.

Jamal, through his fully owned Akkadian Housing Infrastructural Pvt. Ltd, had entered into a 50:50 JV partnership with Rajan to a float a company called Pantheon Infrastructure Pvt. Ltd for acquiring and developing the property back in 1999.

Jamal alleged that Rajan, after the acquisition of the land by the JV, coaxed him to dilute his 50% share holding in Pantheon to 28.33% in favour the latter’s own people on the pretext of bringing in expertise to develop the property.
Trouble started after the property was developed which housing many IT companies and MNCs.
In a retaliatory move, Rajan filed a criminal complaint with a metropolitan court alleging that Mussa issued a false certificate showing Jamal’s net worth to be USD 42.8444 million in 2001 to enable him to borrow from ICICI Bank to complete the transaction of the land purchase.
The magistrate directed the Mumbai police to investigate the complaint in August 2013. The case was later transferred to the Economic Offenses Wing of the Mumbai police which arrested Mussa in June 2014.
Mussa subsequently applied to the High Court with a criminal writ petition contesting the proceedings and the division bench of the HC set aside and quashed the FIR. Shobhit Rajan subsequently challenged the order before the Supreme Court, which was dismissed.
Earlier, the Bombay High Court had not found any substance in the allegations against Mussa and ordered that he be freed on bail and permitted him to travel aboard. The court upheld Mussa’s contention that the net worth certificate issued by him was genuine and that he is a professional CA.
Interestingly, the High Court division bench also observed, none of the banks involved in the financing of the project raised any complaint against the certificate's veracity.
Following the rejection of the case sought to be built against Mussa, Rajan – and not the Mumbai police - filed  an SLP at the apex court which dismissed the petition.
Pantheon, now controlled by Rajan, unceremoniously threw off Jamal from the Board in 2004.
Challenging this, Jamal moved the Company Law Board seeking redress against Rajan and the Pantheon Board’s actions. The CLB initially expressed surprise at the way Jamal was treated but subsequently directed him to exit the company with the compensation of 6.6% of the original land cost, and not of the value of his shares.
Jamal challenged this in the Bombay High Court but lost the case.

Recently, the Supreme Court admitted a SLP filed by Jamal, allowing him to return to the Board of Pantheon and reinstated his equity holding of 28.33%.

Friday, July 11, 2014

Indiabulls restructured: Gehlaut retains realty biz

To impart greater focus and accountability at the top leadership level and to rationalize operations of the diverse and disparate business verticals of the Indiabulls group, its three promoters, Sameer Gehlaut, Rajiv Rattan and Saurabh Mittal have mutually decided to reorganize management control of the different group companies, amongst themselves. Mr. Gehlaut will retain control over the flagship housing finance business – Indiabulls Housing Finance Limited (IBHFL); the real estate business – Indiabulls Real Estate Limited (IBREL); the securities business – Indiabulls Securities Limited (ISL) and the wholesale services business – Indiabulls Wholesale Services Limited (IBWSL). Mr. Rajiv Rattan and Mr. Saurabh Mittal will relinquish all control, management and oversight in these businesses.

This reorganization exercise is a part of the ongoing efforts to further institutionalize Indiabulls Housing Finance Limited (IBHFL), the flagship company of Indiabulls Group and India’s second largest housing finance company (HFC) in the private sector.  This reorganization is in addition to the proposed induction of Dr K. C. Chakrabarty, former Deputy Governor of the Reserve Bank of India and Mr. R. M. Malla, former Chairman of IDBI Bank. The two promoters Saurabh Mittal and Rajiv Rattan have decided to step down from the Board of Directors of IBHFL.

The Board of IBHFL wants to delink ownership from management and has decided to elevate the current CEO, Gagan Banga as the Vice Chairman and Managing Director of the company. This added responsibility is a step forward toward greater professionalism of the Board and indicates the strong intent of the promoters to empower, with accountability, the top echelons of the management team.

IBHFL is the country’s second largest housing finance company in the private sector and the Board felt that the induction of experienced financial markets experts will enable the Board to better handle the complexities which come with size, and also enable effective risk management as the company strives to continue to grow at 25%.  IBHFL reported profits of Rs. 1,569 Cr in FY 2013-14. IBHFL has been growing at CAGR of 26% over the last 6 years and closed FY 2013-14 with a balance sheet size of Rs. 44,418 Crs. Indiabulls Group paid out Rs. 1,200 Crores as dividends last year and was ranked 10th amongst all Indian Private Corporate Houses for dividend payouts in FY14.

The reorganization exercise amongst the promoters will also allow IBHFL to be completely ring-fenced from the Power Business. Mr. Rajiv Rattan and Mr. Saurabh Mittal will control and supervise the Power business and Mr. Gehlaut will relinquish all control, management and supervisions rights of the Power Business. The businesses not controlled by Mr. Gehlaut viz. Indiabulls Power Limited (IPL) and Indiabulls Infrastructure and Power Limited (IIPL), will change their names and delete reference of ‘Indiabulls’ within their names.

This reorganization will bear very positive results for IBHFL as it strives to grow in size and stature and will empower the board to effectively govern through the presence of four executive and four knowledgeable independent directors. The reorganization will also enable the group to continue with its efforts of ring-fencing IBHFL from contagion risks of any other business besides bringing in specialized focus towards the real estate business and power business.

This amicable reorganization exercise will enable all three young entrepreneurs to focus on their areas of expertise, consolidate their shareholding of the companies they want to run on a long-term basis and continue to maximize shareholder value.

For IBHFL this is a key development, as a large and systemically important financial institution it is vital that the company maintains the highest standards of corporate governance. It is important that the board is comprised of people with demonstrated skill sets and relevant experience that actively involve themselves in risk management and strategic planning. Over the course of the last few years, large financial services companies are de-linking the role of their owners, who are the Non-Executive Directors of the Company from management and control of the operations of the Company. It is toward this end that IBHFL has  inducted eminent bankers such as former Deputy Governor of RBI, Dr. K. C. Chakrabarty and former Chairman and MD of IDBI Bank, MR. R. M. Malla as independent directors subject to shareholders’ approval in the ninth AGM to be held in August. With coming on board of such distinguished stalwarts, not only will IBHFL benefit from their intellectual leadership, but it will also strengthen corporate governance befitting an institution of IBHFL’s size and scale.

With the steady growth of IBHFL across all business parameters, the balance sheet of the company has expanded to amongst the largest in the Housing Finance business. The realignment of promoter control, the induction of independent directors and the empowerment of the company’s management have set the company firmly on the path to be a large financial institution that is independently managed and run with the highest standards of corporate governance.

Thursday, April 17, 2014

Diageo makes irresistible open offer to United Spirits share holders

MUMBAI: Diageo plc  has launched a tender offer to the public shareholders of United Spirits Limited (“USL”) to acquire up to 37,785,214 shares in USL, which represents 26% of USL's fully diluted issued share capital as at 15 April 2014 (the “Tender Offer”).  The Tender Offer will be at a price of INR 3,030 per share and the total consideration for the increased stake (assuming take-up in full at the announced price) will be INR 114,489,198,420 (approximately £1,132,458,720).Diageo has launched the Tender Offer through Relay B.V. (“Relay”), a wholly-owned indirect subsidiary of Diageo.Relaycurrently holds 28.78% of the issued share capital of USL,acquired for a total investment of INR 65,742,163,642(£726,550,972). On completion of the Tender Offer (assuming full take-up), Relay will hold 54.78% of USL’s issued share capital and will have paid approximately INR 180,231,362,062(£1,859,009,692) for its total shareholding in USL.
In the event the Tender Offer is subscribed in full, the total consideration payable at the announced price for Diageo’s increased stake will represent a 38x multiple of USL’s EBITDA on a consolidated basis for the year ended 31 March 2013 andDiageo's total investment, of INR 180,231,362,062 (£1,859,009,692), in USL is expected to be EP positive in FY2022, the 7th full financial year after completion(assuming a12 % WACC) and EPSaccretive in the year ended 30 June 2016.

Important information:
The important information set out below comprises information regarding:
•             USL
•             The Tender Offer, including its timing
•             The Shareholders’ Agreement
•             Other important information
•             Status of proceedings in respect of the earlier USL Transaction
USL
USL is the leading spirits producer in India.On a consolidated basis, in the financial year ended 31 March 2013, USL earned net revenue of INR 105,980 million (£1,048.3 million) from operations, EBITDA of INR 13,548 million (£134.0 million) and losses after tax of INR 1,050 million(£10.4 million). USL had INR 163,849 million (£1,621 million) of total assets on a consolidated basis as at 31 March 2013.
Tender Offer
The Tender Offer will be governed by the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations 2011 (the "Regulations") and applicable law. The applicable Indian takeover regulator is the Securities and Exchange Board of India ("SEBI").
The Tender Offer will be made in accordance with the Regulations and on the terms and conditions set out in the public announcement made today in India and the detailed public statement and letter of offer that are to be released by Diageo and Relay in India.Diageoand Relayhave obtained the required competition approvals, and the completion of the Tender Offer is not conditional on receipt of any competition approvals in India or elsewhere.
The Tender Offer has been announced at the following price:
for each USL Share
INR 3,030 in cash
That price represents a premium of:
·         22.5% to the price at which Diageo last acquired USL shares on 31 January 2014; and
·         20.0% to the 60 day VWAP for USL (SEBI regulatory floor price).
Diageo will fund the consideration payable under the Tender Offer through existing cash resources and debt.
The Tender Offer is not subject to any condition regarding levels of acceptance.  Accordingly, if the Tender Offer is not subscribed in full, all USL shares tendered would, subject to the terms and conditions of the Tender Offer, be acquired by Relay. If the Tender Offer is over-subscribed, the tenderingUSL shareholders will be scaled back and entitled to sell such number of shares calculated on a pro rata basis to the shares tendered in the Tender Offer.
Further important information relating to the Tender Offer, and certain implications of the SEBI review process required to confirm its terms and conditions (including price), are set out in the “Other Important Information” section below.
Indicative Abridged Tender Offer Timetable (see note)
Public announcement
15 April 2014
Expected publication of the detailed public statement
By 23 April 2014
Expected dispatch of the letter of offer
On or around 4 June 2014
Commencement of tendering period
On or around 11 June 2014
Expiry of tendering period
On or around 24 June 2014
Settlement of consideration for accepting USL shareholders
On or around 8 July 2014
Note: The times and dates set out in the indicative abridged timetable above and mentioned throughout this announcement may be subject to adjustment, being dependent on the timing of the completion of the review process of the draft letter of offer by SEBI, regulatory approvals in India if required, and other permitted conditions to the Tender Offer. Details of any such adjustment and the new times and dates will be notified to USL shareholders by publication in relevant newspapers and will be announced on relevant stock exchanges. The times and dates are subject to the satisfaction or waiver of all applicable conditions to the Tender Offer and completion of the SEBI review process.

Wednesday, January 15, 2014

QNET dismisses charges of scam, says India operation is perfectly legal

·         Gross misrepresentation of facts, says spokesperson
·         Consumer complaint withdrawn, case closed by Oshiwara police
·         No purchase done by Gurupreet’s wife, she bounced her cheque
·         Product in question is e-learning item, not Biodisc
·         Business model is direct selling, NOT pyramid

MUMBAI, January 15, 2014: Pointing out a series of misrepresentation of facts against it, Hong Kong-based direct selling company QNET stressed that its operations across the globe, including in India, are perfectly within the parameters of law and any allegations of scam are entirely baseless.
“As a business interested in sustainability, we respect the laws of the land in any country that we operate in and ensure compliance accordingly. Wherever necessary, we even adjust our business model to suit local requirements. India is one such place where we conducted our due diligence and made the necessary adjustments so that our business model does not violate any legal provisions,” Mr Zaheer Merchant, Director of Corporate Affairs from QNET’s international headquarters in Hong Kong, said dismissing allegations of conducting an illegal business in India.
“QNet has no shell companies in India as has been alleged. We operate through a fully Indian company that has the franchisee rights to the QNet brand.” He clarified.
“QNet prides itself in having a wide range of life-enhancing products and services with a strong consumer proposition. We offer more than 30 different brands of products under nine different product categories globally. Products are sourced from international suppliers in Germany, Switzerland, Australia, South Korea, France, USA, India and many other countries, under strict guidelines and the highest quality control standards.  Wherever applicable, our products have all the necessary certifications by credible agencies from around the world,” Mr. Merchant explained.
QNet is an international direct selling company with a proud Asian heritage that was established in 1998. Today it has more than 60 lakh distributors and customers around the world with product sales in 100+ countries, 25 worldwide offices and agencies and more than 50 stockists.
In India, QNET through its franchisee Vihaan, has approximately 50,000 distributors and customers.
Commenting on the business model, Merchant explained that QNet's grass-roots business model enables ordinary people from all walks of life to start their own business with minimal overhead. With hard work and dedication, QNET distributors, known as Independent Representatives (IRs) have the opportunity to become economically self-sufficient, raising the standard of life for their families and communities.
“Internationally, direct selling is a popular business model that has generated more than USD 160 billion in revenues in 2012. With no clear legislation in India to govern this industry, we are constantly getting lumped under the Prize Chits and Money Circulation Act.  The Act bans all illegal money circulation schemes. It does not regulate the direct selling or MLM industry in any way,” he said.

QNet operates internationally to the highest possible standards.  Strict codes of conduct exist and policies and procedures are reinforced by training so that each of our many thousand Independent Representatives [IRs] understands the rules governing product sales and abide by the ethical codes of practice we follow.  Whenever we are informed that any of our regulations have been broken we investigate these thoroughly.  In appropriate cases, stern action is taken.” He said.  

Referring to the ongoing case against it, Merchant explains: “This situation appears to be some form of orchestrated sustained attack on the company to undermine our reputation and prevent us from competing fairly and openly in India.  The manner in which an alleged unmerited claim of fraud, which itself has not and cannot be substantiated, has been used to arrest IRs and freeze assets  and simply does not bear up to scrutiny.  We are confident that as true facts emerge authorities will also see this clearly – as a calculated attack on QNet and take appropriate action against those responsible for scheming this at the first place.”

“First of all, the complaint involving one Gurupreet Singh Anand was officially closed on May 18, 2013. The complainant Gurupreet’s wife Parmeet Kaur withdrew the complaint vide a letter dated 18th May 2013 and submitted a letter to the Police Sub-Inspector of Oshiwara Police Station (in Northwest Mumbai) giving an undertaking in writing that the matter has been resolved.,”
Mr. Merchant pointed out: “Strangely, Gurpreet Singh Anand filed the same complaint, three months after the case has been closed and the complaint withdrawn, in the same police station. In an even stranger development, this matter, a consumer complaint involving an alleged transaction of Rs 30,000, was transferred to the Mumbai EOW!”  
“There are so many misrepresentations about this entire case. Gurupreet Singh claims his wife bought a biodisc, where as our records show that she ordered an e-learning course, for which no money ever was paid to the company. The cheque was stopped before it could be realized and hence the transaction was nullified. All these allegations of QNet having sold his wife a ‘cancer-curing’ product are completely false.”
Mr Merchant wondered:  “We fail to understand how Gurupreet brandishes a Biodisc on TV that he claims was bought by his wife!”.
He described as yet another gross misrepresentation, the reference to the case as a “Rs 425 crore scam”.
“QNet’s Indian franchisee, Vihaan is clearly registered with the RoC, as a direct selling / MLM / network marketing company that will promote its business in India through a network of Independent Representatives (IRs). The company has been paying all its taxes and complying with all the regulations of the government of India. In fact, all commissions payable to the IRs for product sales are paid only after TDS. All documentation has been provided to the investigators and the management of Vihaan are fully cooperating with them in this investigation. So where does the question of a ‘scam’ arise?

"It is unfortunate that the dispute involving Rs 30,000 in a nullified deal has been painted as a Rs 425 crore scam and we sincerely hope that all concerned will appreciate this factual position. Truth shall prevail," Mr Merchant added.

Sunday, October 27, 2013

Builder Chandru Raheja, sons in land scam

EOW files charge-sheet on industrialist Wadia complaint

MUMBAI: In a sensational case, the Economic Offences Wing of Mumbai Police has filed a charge sheet against well known builder Chandru Raheja along with his sons in a cheating case involving a land development deal.

The Economic Offences wing of the Police said they filed the case against Chandru Lachmandas Raheja, Neil Chandru Raheja and Ravi Chandru Raheja  in connection with alleged cheating and breach of trust.

The facts of the case as listed in the charge-sheet are: Mr. Nusli N. Wadia, the Administrator of “The Estate and Effects of The Late Eduljee Framroze Dinshaw in India” executed Development Agreement & Power of Attorney dated 02/01/1995 with Chandru Lachmandas Raheja’s “Ivory Properties and Hotels Pvt. Ltd. for development of properties under his possession.

As per the said Development Agreement, the Administrator had handed over possession of land admeasuring 1,70,656 sq ft to the accused as Agent for development of the land.

The Accused were to construct building called as Ivory Tower and give 12% of sale proceeds from the sale of the building to the Administrator. Further, as per the Development Agreement, the accused were to pay sum of Rs. 3.75 crores to the Administrator as minimum guarantee during the year 1997 and sell the units to “third parties”.

The accused, however, misrepresented that the administrator relinquished his rights over the land and prepared 9 release deeds. Thereafter, during the year 2005-2006, the accused constructed Hypercity Mall on the said land and did not disclose with malafide intentions the same to the Administrator.

Thereafter, under a “conducting agreement”, the accused gave the contract for running the Hypercity mall to their own company – Hypercity Retail India Pvt. Ltd. for monthly rental of Rs. 45 lakhs thereby cheating the Administrator for a sum of Rs. 6,87,06,835.


Hence, the accused i.e. Chandru Lachmandas Raheja, Neil Chandru Raheja and Ravi Chandru Raheja have been charged for crimes conducted under sections 406, 409, 420, 120(B) of Indian Penal Code, the charge sheet said.

Thursday, September 19, 2013

Inflation on mind, RBI ups repo rate by 25 bps

The Reserve Bank of India has decided to increase the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 7.25 per cent to 7.5 per cent with immediate effect.
In its monetary policy review, the first since new Governor Raghuram Rajan assumed office, RBI has also decided to reduce the marginal standing facility (MSF) rate by 75 basis points from 10.25 per cent to 9.5 per cent with immediate effect and to reduce the minimum daily maintenance of the cash reserve ratio (CRR) from 99 per cent of the requirement to 95 per cent effective from the fortnight beginning September 21, 2013, while keeping the CRR unchanged at 4.0 per cent; and  
Consequently, the reverse repo rate under the LAF stands adjusted to 6.5 per cent and the Bank Rate stands reduced to 9.5 per cent with immediate effect. With these changes, the MSF rate and the Bank Rate are recalibrated to 200 basis points above the repo rate.
In its assessment of the monetary situation, RBI said since the First Quarter Review (FQR) in July, a weak recovery has been taking hold in advanced economies, with growth picking up in Japan and the UK and the euro area exiting recession. However, activity has slowed in several emerging economies, buffeted by heightened financial market turbulence on the prospect of tapering of quantitative easing (QE) in the US. The decision by the US Federal Reserve to hold off tapering has buoyed financial markets but tapering is inevitable.
On the domestic front, RBI pointed out, growth has weakened with continuing sluggishness in industrial activity and services. The pace of infrastructure project completion is subdued and new project starts remain muted. Consumption, while relatively firm so far, is starting to weaken even in rural areas, with durable goods consumption hit hard. Consequently, growth is trailing below potential and the output gap is widening. Some pick-up is expected on account of the brightening prospects for agriculture due to kharifoutput and the upturn in exports. Also, as infrastructure investments are expedited, and as projects cleared by the Cabinet Committee on Investment come on stream, growth could pick up in the second half of the year.
Sounding a note of caution on WPI inflation, which had eased in Q1 of 2013-14, RBI said it has started rising again as the pass-through of fuel price increases has been compounded by the sharp depreciation of the rupee and rising international commodity prices.
The negative output gap will exercise downward pressure on inflation, and the process will be aided as supply side constraints, especially relating to food and infrastructure, ease. However, the current assessment is that in the absence of an appropriate policy response, WPI inflation will be higher than initially projected over the rest of the year. What is equally worrisome is that inflation at the retail level, measured by the CPI, has been high for a number of years, entrenching inflation expectations at elevated levels and eroding consumer and business confidence. Although better prospects of a robust kharif harvest will lead to some moderation in CPI inflation, there is no room for complacency, RBI said.
Turning to the external sector, the central bank said, weakening domestic saving, subdued export demand and the rising value of oil imports - most recently due to geopolitical risks emanating from the Middle East - have led to a larger current account deficit (CAD). Concerns about funding the CAD, amplified by capital outflows precipitated by anticipated tapering of asset purchases by the US Federal Reserve, increased volatility in the foreign exchange market. More recently, as these concerns have been mitigated after steps taken by the Government and the Reserve Bank to contain the CAD and improve the environment for external financing, the focus has turned to internal determinants of the value of the rupee, primarily the fiscal deficit and domestic inflation.
Policy Stance and Rationale
Since mid-July, the Reserve Bank has put in place a number of exceptional measures to tighten liquidity with a view to dampening volatility in the foreign exchange market. These measures have raised the effective policy rate for monetary policy operations to 10.25 per cent, aligned to the re-calibrated MSF rate. The intent has been to maintain tight liquidity conditions at the short end of the term structure until the measures designed to alter the path of the CAD and improve prospects for its stable funding take effect. As a number of these measures are now in place and because the external environment has improved, it is now possible for the Reserve Bank to contemplate easing these exceptional measures in a calibrated manner. As a first step, therefore, the MSF rate is reduced by 75 basis points. Furthermore, the minimum daily maintenance of the CRR prescribed by the Reserve Bank is brought down from 99 per cent of the requirement to 95 per cent. The timing and direction of further actions on exceptional measures will be contingent upon exchange market stability, and can be two-way. Further actions need not be announced only on policy dates. However, any further change in the minimum daily maintenance of the CRR is not contemplated.
As the measures are unwound, the objective is to normalise the conduct and operations of monetary policy so as to allow the LAF repo rate to resume its role as the operational policy interest rate. However, inflation is high and household financial saving is lower than desirable. As the inflationary consequences of exchange rate depreciation and hitherto suppressed inflation play out, they will offset some of the disinflationary effects of a better harvest and the negative output gap. The need to anchor inflation and inflation expectations has to be set against the fragile state of the industrial sector and urban demand. Keeping all this in view, bringing down inflation to more tolerable levels warrants raising the LAF repo rate by 25 basis points immediately.
The Reserve Bank will closely and continuously monitor the evolving growth-inflation dynamics with a readiness to act pre-emptively, as necessary. The policy stance and measures set out in this review begins the process of cautious unwinding of the exceptional measures, which will restore normalcy to financial flows. They are also intended to address inflationary pressures so as to provide a stable nominal anchor for the economy, thereby mitigating exchange market pressures and creating a conducive environment for the revitalisation of sustainable growth, RBI explained.