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Sahara takes co-op route
to beat Sebi, RBI bans
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Terms it financial inclusion, says
top execs not members.
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After being barred by the
country’s central bank, the capital market regulator and the Allahabad High Court
from raising money from the public, the Sahara group has moved to a new
regulatory territory — the co-operative society.
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Sahara agents will now peddle several
new investment schemes to raise money under the name Sahara Credit Co-Operative
Society. The society has its headquarters and registered office in Sahara India
Bhawan, Lucknow, where most Sahara group entities are based.
In an emailed response, Sahara group
spokesperson Abhijit Sarkar said, “The cooperative has been developed by around
3,800 workers of the company. Our Managing Worker and three Deputy Managing
Workers are not members of the cooperative, which is running some schemes
towards financial inclusion of un-bankable people in rural and semi-urban areas
who do not go to the bank or are visited by the bank.”
According to two people involved in
the operations of the group, the application forms for these new schemes are
being circulated and the money raised, beginning last week, will be accounted
under the new schemes. These schemes surfaced after the Allahabad High Court
restricted Sahara from raising money on April 7.
An Uttar Pradesh-based agent said a
meeting was called at Sahara’s district offices today to explain the features
of these schemes and the procedures to be followed. Existing investors would
continue in the old schemes, he added.
According to soft copies of the
application forms reviewed by Business Standard, the new schemes are mirror
images of the optionally fully convertible debentures (OFCDs) issued by the two
Sahara entities banned by the capital market regulator, the Securities and
Exchange Board of India (Sebi).
Sahara.A.Select is a four-year
scheme which promises a return of “more than 141 per cent of the principal
amount in four years.” Premature withdrawals are allowed at the end of 24
months, according to the application forms. This is similar to the Nirman bonds
banned by Sebi.
Sahara.E.Shine is an eight-year
scheme which promises a return of “more than 226 per cent of the principal”.
This corresponds to the Abode bonds.
Sahara.U.golden is a 15-year scheme
offering a return of five times the principal. All these schemes offer a loan
against deposit facility and child welfare plans. Under the latter, the
children of the deposit-holders are offered “brilliancy” certificates.
In November, Sebi banned two group
entities, Sahara India Real Estate Corporation and Sahara Housing Investment
Corporation, from raising money from public through optionally fully
convertible debentures-- under Nirmaan, Abode and Housing bond schemes.
Following the April 7 order of the
Allahabad High Court, the ban, which covers all Sahara group entities,
including Managing Worker Subrata Roy Sahara, came into effect.
In addition, the society offers
three other schemes, namely Sahara.M.Benefit, a five-year recurring deposit
scheme, Sahara S Bhavishya, a 15-year recurring deposit scheme, and Sahara K
Money, a 10-year plan with monthly interest payments.
These would enable Sahara to
continue its recurring deposits, banned by the Reserve Bank of India (RBI).
“At the consumer end, there will be
minimum changes. Even old account numbers will continue. The agents have been
asked to get a membership form (for the cooperative) signed by the investors,”
said the agent.
On June 17, 2008, RBI directed
Sahara India Financial Corp Ltd, a residual non-banking company, not to accept
new deposits maturing beyond June 30, 2011. It was also told to stop accepting
instalments of existing deposit accounts with effect from that date.
It was also asked to repay the
deposits as and when they matured and bring the aggregate liability towards
depositors to zero on or before June 30, 2015.
According to legal experts,
co-operative societies are governed by severe end-use restrictions prescribed
by various government bodies, including RBI. “They will not get a free hand as
in a limited company registered under the Companies Act,” said a finance
industry veteran.
According to the application forms
for the schemes, Sahara Credit Co-operative Society is registered under and any
disputes are to be settled under The Multi-State Cooperative Societies Act,
2002. An amendment Bill was introduced in the winter session 2010 to update the
Act. Societies registered under it are governed by the Central Registrar of
Co-operative Societies. Being a credit cooperative society, the entity will
also be governed by RBI rules, say lawyers.
Suresh Surana, director, Astute
Consulting, said the entity would be subject to both the central government and
RBI rules. “As a cooperative society, the entity cannot invite subscription.
The subscription to a society’s capital has to be voluntary. What constitutes
an invitation is clearly described in law,” Surana said.
Sebi has clearly ruled schemes by
co-operative societies out of its purview. Sebi rules on collective investment
schemes do not include “any scheme or arrangement made or offered by a
co-operative society or a society being a society registered or deemed to be
registered under any law relating to co-operative societies for the time being
in force in any State”.
Posted by neelam at 22:55 0 comments 
Govt pre-empts SIT, sets
up panel to track black money
In an attempt to pre-empt a proposal
to form a Special Investigation Team (SIT), the Centre informed the Supreme Court on Monday that it would set up a
10-member high-powered supervisory committee to track black money and their linkage to terror funding
and drug syndicates.
The revenue secretary will head the committee which will include directors of CBI, Enforcement Directorate (ED), Intelligence Bureau (IB), Directorate of Revenue Intelligence and chiefs of Central Board of Direct Taxes (CBDT), Narcotics Control Bureau (NCB), Financial Intelligence Bureau (FIU), Foreign Trade and Tax division as well as deputy governor of Reserve Bank of India (RBI).
"This committee will start work immediately. Every time any of the investigating agencies comes across some information about black money -- both abroad and domestic -- it will be shared with other agencies and investigation will be coordinated. The revenue secretary will submit periodic status reports to the court," solicitor general Gopal Subramaniam said.
During the last hearing, the Bench of Justices B Sudershan Reddy and S S Nijjar had asked the Centre to respond to why an SIT not be set up to track black money as the government appeared to have done nothing concrete and why names of foreign bank account holders who had stashed black money there not be disclosed.
The Centre's pre-emptive measure of announcing a special committee did not cut ice with petitioner Ram Jethmalani, whose counsel and senior advocate Anil Divan said, "It is just old wine in a new bottle. All these agencies were already party to the petition and nothing concrete was done on this issue. The government wants to exclude an independent eye on the probe into black money for obvious reasons."
Subramaniam said the revenue secretary-headed special committee would be more effective than SIT. "The committee will not only supervise ongoing probe against suspected hawala dealer Hasan Ali Khan and Liechtenstein's LGT Bank account holders but all future black money cases," he said.
He said because the government did not disclose the names of foreign account holders in compliance with the Double Taxation Avoidance Treaty (DTAA), there was a steady flow of information about such accounts held by others.
"The Foreign Intelligence Unit and other agencies are already looking into 37 such cases, both foreign and domestic black money accounts held by Indians. This is in addition to Hasan Ali Khan and the 16 LGT Bank account holders who are already under the scanner," he said.
Subramaniam opposed SIT on the ground that the members would not be able to proceed fruitfully against the offenders because the Prevention of Money Laundering Act provisions specify that statements given only to officials of ED were admissible in court. "If such statements were recorded by SIT members who are not part of ED, then it would not be admissible in court," he said. The arguments will continue on Thursday.
The revenue secretary will head the committee which will include directors of CBI, Enforcement Directorate (ED), Intelligence Bureau (IB), Directorate of Revenue Intelligence and chiefs of Central Board of Direct Taxes (CBDT), Narcotics Control Bureau (NCB), Financial Intelligence Bureau (FIU), Foreign Trade and Tax division as well as deputy governor of Reserve Bank of India (RBI).
"This committee will start work immediately. Every time any of the investigating agencies comes across some information about black money -- both abroad and domestic -- it will be shared with other agencies and investigation will be coordinated. The revenue secretary will submit periodic status reports to the court," solicitor general Gopal Subramaniam said.
During the last hearing, the Bench of Justices B Sudershan Reddy and S S Nijjar had asked the Centre to respond to why an SIT not be set up to track black money as the government appeared to have done nothing concrete and why names of foreign bank account holders who had stashed black money there not be disclosed.
The Centre's pre-emptive measure of announcing a special committee did not cut ice with petitioner Ram Jethmalani, whose counsel and senior advocate Anil Divan said, "It is just old wine in a new bottle. All these agencies were already party to the petition and nothing concrete was done on this issue. The government wants to exclude an independent eye on the probe into black money for obvious reasons."
Subramaniam said the revenue secretary-headed special committee would be more effective than SIT. "The committee will not only supervise ongoing probe against suspected hawala dealer Hasan Ali Khan and Liechtenstein's LGT Bank account holders but all future black money cases," he said.
He said because the government did not disclose the names of foreign account holders in compliance with the Double Taxation Avoidance Treaty (DTAA), there was a steady flow of information about such accounts held by others.
"The Foreign Intelligence Unit and other agencies are already looking into 37 such cases, both foreign and domestic black money accounts held by Indians. This is in addition to Hasan Ali Khan and the 16 LGT Bank account holders who are already under the scanner," he said.
Subramaniam opposed SIT on the ground that the members would not be able to proceed fruitfully against the offenders because the Prevention of Money Laundering Act provisions specify that statements given only to officials of ED were admissible in court. "If such statements were recorded by SIT members who are not part of ED, then it would not be admissible in court," he said. The arguments will continue on Thursday.
Black money comes mainly
from India: Assange
At a stage where governments around
the world have tried to hide away from the embarrassment caused by WikiLeaks
expose on black money, founder Julian Assange speaks exclusively to Times Now's
editor-in-chief Arnab Goswami on the Swiss bank data and Indian names features
in the same.
Julian Assange, made a stunning disclosure, that there could be Indian names in the data that WikiLeaks would publish. In the course of the interview, Assange appealed to Indians to absolutely not lose hope that the names of those with secret Swiss accounts will come out at one point in the future. Hinting that Wikileaks might work with specialized agencies before releasing the Swiss bank data he pulled up the Indian government for not being aggressive like Germany in going after the list of Indian account holders. In fact he said India should be more aggressive because India seems like it is losing per capita more tax money than Germany
This is the first time Assange has spoken about Indian accounts in these Swiss banks, and comes at a time when the national debate over Swiss Bank accounts has sharpened.
Arnab Goswami: You have strong views on it. And I completely appreciate that you can't talk about it in detail. But let me ask you more generically, that is your heart, you would like to reveal the details...in your heart. I am not asking you when and under what circumstances, but having known about it, you would like to reveal details of how the system operates, wouldn't you?
Julian Assange: Well, we have various types of information about different banking operations in the world. Over time, we have revealed those. In fact, most of the legal attacks on us have been from banks. Banks in Scotland...banks in Dubai...banks in Iceland. We all received legal attacks from these banks. And we will continue publishing data on these banks as soon as we are able to do so.
Arnab Goswami: Have you encountered any Indian names? I am not asking you to tell me where, which banks...
Julian Assange: Yes there are Indian names in the data we have already published or going to publish. I can't remember specifically whether there are Indian names in the upcoming publication. But I have read Indian names. Similarly, in these private Swiss banking concerns, where you need at least a million dollars...which is a significant amount of money...Not an average Indian.
Arnab Goswami: And it is difficult to identify those names. Anything else you can tell us?
Julian Assange: I can't tell you anything more at this stage. As we go through the process of releasing data, as always we have to do extra research. And once we understand which media organizations are best placed to help us with that research, then we operate with them. But we are not at that stage yet that I know all the research that is going on.
Arnab Goswami: To all our Indian viewers, just one point. Should they lose hope that the names will come out at one point.
Julian Assange: No
Arnab Goswami: What would you say to them?
Julian Assange: That you should absolutely not lose hope. It is quite interesting. There is a...There are different forces at play here. The German government in particular has been very strong. There needs to be transparency in banking operations. It has gone so far as to buy CDs off...in Liechtenstein and so on...To reveal this information. Very, very aggressive approach by the German government and the German government is the dominant power within Europe. So, those German attitudes are seeping into Europe as a whole. The US has also been applying pressure in relation to UBS and tax evaders. So the problem is, as Swiss bank accounts are opened up there are simply other ways to deal with the situation. So you go and register a trust, in say Charles and then the trust then goes and opens a Swiss account while you might (?) a Swiss bank account, but what is there is a trust in Charles..Then you have to break that trust in Charles. That is the problem throughout the offshore sector. That is quite hard to deal with. In case you get this through regulation, investigation...you kind of get this at a level that although people can hide their assets in this way, the amount of expense and effort and risk involved in the asset hiding doesn't make it worthwhile.
Arnab Goswami: Given the economic and political clout that India wields, any reason that India should not be as aggressive?
Julian Assange: No. There is no reason why India should not be aggressive. In fact maybe, it should be more aggressive because India seems like it is losing per capita much more tax money than Germany.
Julian Assange, made a stunning disclosure, that there could be Indian names in the data that WikiLeaks would publish. In the course of the interview, Assange appealed to Indians to absolutely not lose hope that the names of those with secret Swiss accounts will come out at one point in the future. Hinting that Wikileaks might work with specialized agencies before releasing the Swiss bank data he pulled up the Indian government for not being aggressive like Germany in going after the list of Indian account holders. In fact he said India should be more aggressive because India seems like it is losing per capita more tax money than Germany
This is the first time Assange has spoken about Indian accounts in these Swiss banks, and comes at a time when the national debate over Swiss Bank accounts has sharpened.
Arnab Goswami: You have strong views on it. And I completely appreciate that you can't talk about it in detail. But let me ask you more generically, that is your heart, you would like to reveal the details...in your heart. I am not asking you when and under what circumstances, but having known about it, you would like to reveal details of how the system operates, wouldn't you?
Julian Assange: Well, we have various types of information about different banking operations in the world. Over time, we have revealed those. In fact, most of the legal attacks on us have been from banks. Banks in Scotland...banks in Dubai...banks in Iceland. We all received legal attacks from these banks. And we will continue publishing data on these banks as soon as we are able to do so.
Arnab Goswami: Have you encountered any Indian names? I am not asking you to tell me where, which banks...
Julian Assange: Yes there are Indian names in the data we have already published or going to publish. I can't remember specifically whether there are Indian names in the upcoming publication. But I have read Indian names. Similarly, in these private Swiss banking concerns, where you need at least a million dollars...which is a significant amount of money...Not an average Indian.
Arnab Goswami: And it is difficult to identify those names. Anything else you can tell us?
Julian Assange: I can't tell you anything more at this stage. As we go through the process of releasing data, as always we have to do extra research. And once we understand which media organizations are best placed to help us with that research, then we operate with them. But we are not at that stage yet that I know all the research that is going on.
Arnab Goswami: To all our Indian viewers, just one point. Should they lose hope that the names will come out at one point.
Julian Assange: No
Arnab Goswami: What would you say to them?
Julian Assange: That you should absolutely not lose hope. It is quite interesting. There is a...There are different forces at play here. The German government in particular has been very strong. There needs to be transparency in banking operations. It has gone so far as to buy CDs off...in Liechtenstein and so on...To reveal this information. Very, very aggressive approach by the German government and the German government is the dominant power within Europe. So, those German attitudes are seeping into Europe as a whole. The US has also been applying pressure in relation to UBS and tax evaders. So the problem is, as Swiss bank accounts are opened up there are simply other ways to deal with the situation. So you go and register a trust, in say Charles and then the trust then goes and opens a Swiss account while you might (?) a Swiss bank account, but what is there is a trust in Charles..Then you have to break that trust in Charles. That is the problem throughout the offshore sector. That is quite hard to deal with. In case you get this through regulation, investigation...you kind of get this at a level that although people can hide their assets in this way, the amount of expense and effort and risk involved in the asset hiding doesn't make it worthwhile.
Arnab Goswami: Given the economic and political clout that India wields, any reason that India should not be as aggressive?
Julian Assange: No. There is no reason why India should not be aggressive. In fact maybe, it should be more aggressive because India seems like it is losing per capita much more tax money than Germany.
Daimler gets RBI nod to
set up NBFC
German automaker Daimler on Monday said
it has received RBI's nod to set up a non-banking financial services firm in
India with an initial investment of over $50 million (around Rs 222 crore) for
financing vehicles to consumers.
Daimler Financial Services India (DFSI), a fully-owned subsidiary of Daimler AG, is expected to be operational by Q3 of this year. "DFSI will support the sales of Mercedes-Benz cars and Daimler trucks as we see a large demand for financing solutions in the market . We will initially invest upwards of $50 million as part of market entry," Daimler Financial Services AG Member of the Board Richard Howard said.
Daimler Financial Services India (DFSI), a fully-owned subsidiary of Daimler AG, is expected to be operational by Q3 of this year. "DFSI will support the sales of Mercedes-Benz cars and Daimler trucks as we see a large demand for financing solutions in the market . We will initially invest upwards of $50 million as part of market entry," Daimler Financial Services AG Member of the Board Richard Howard said.
India needs 10% growth to
be developed'
Industry chamber CII on Monday suggested a 5-pronged strategy to
spur economic growth to 10% over the next few years.
CII new President B Muthuraman said this includes fast-tracking 100 mega projects while doubling the contribution of manufacturing sector in GDP to 25% from the existing 12%.
" India , with its large population , and many living in rural areas, needs a growth rate of 10% for many years to become a developed country," Muthuraman said.
CII new President B Muthuraman said this includes fast-tracking 100 mega projects while doubling the contribution of manufacturing sector in GDP to 25% from the existing 12%.
" India , with its large population , and many living in rural areas, needs a growth rate of 10% for many years to become a developed country," Muthuraman said.
Citing uniformity, Sebi asks CCI to
adopt its buyout norms
Taking note of conflicts in
takeover laws, capital markets watchdog Sebi has sought alignment of norms set
by the competition regulator with its own regulations. It has written to the
corporate affairs ministry and Competition Commission of India, or CCI, to
address the issue and prevent chaos. "Different norms create unnecessary
confusion and also make it difficult for stakeholders to adhere (to rules).We
have taken up the issue," a Sebi official told ET.
The Sebi takeover norms for listed companies make it mandatory for an acquirer, who has triggered an open offer under Sebi rules, to inform the regulator within four days the timeline of the offer. Under the rules prescribed by the CCI, the acquirer has up to 30 days to announce the details of the offer. The regulator has also flagged the need for reconciling the time given to the acquirer to make an open offer.
Under the competition law, the commission can take up to 210 days to clear an acquisition, which would mean that open offer can happen only after the clearance. Sebi's regulations give an acquirer 55 days to complete the open offer once it is announced. A recent takeover open offer announcement to the shareholders of Bombay Rayon Fashions by the acquirer AAA United B.V. does mention about the competition rules impacting the open offer. It says that the offer may become subject to the approval of the Competition Commission of India once the regulations are framed. "The two regulators should sort out the differences in the norms as it could create unnecessary uncertainty and confusion," said Somasekhar Sundaresan, partner, J Sagar Associates.
Industry has also sought redress of some other divergence such as absence of asset transaction threshold in the competition law. "Concerns remain over what would appear to be an unduly long 210-day period which is statutorily available to the Competition Commission to review mergers, even though it would endeavour to do so in 180 days," Industry body CII had said.
Market regulator is, whoever, hopeful of suitable changes in the norms before they come into effect. The corporate affairs ministry has said the new norms will come into effect from June 1. In absence of an asset transaction thresholds every asset - current assets or fixed asset - that is acquired after 1 June 2011, would have to be notified to the Competition Commission and it could also include issue of bonus, rights shares or even stock or stock-in trade.
The CCI norms also require every deal to be intimated to it even if controlling stake is not being acquired. "Some sort of alignment in different rules dealing with same subject is very crucial to prevent chaos," the official said adding that the market regulator is hopeful of a positive resolution.
The Sebi takeover norms for listed companies make it mandatory for an acquirer, who has triggered an open offer under Sebi rules, to inform the regulator within four days the timeline of the offer. Under the rules prescribed by the CCI, the acquirer has up to 30 days to announce the details of the offer. The regulator has also flagged the need for reconciling the time given to the acquirer to make an open offer.
Under the competition law, the commission can take up to 210 days to clear an acquisition, which would mean that open offer can happen only after the clearance. Sebi's regulations give an acquirer 55 days to complete the open offer once it is announced. A recent takeover open offer announcement to the shareholders of Bombay Rayon Fashions by the acquirer AAA United B.V. does mention about the competition rules impacting the open offer. It says that the offer may become subject to the approval of the Competition Commission of India once the regulations are framed. "The two regulators should sort out the differences in the norms as it could create unnecessary uncertainty and confusion," said Somasekhar Sundaresan, partner, J Sagar Associates.
Industry has also sought redress of some other divergence such as absence of asset transaction threshold in the competition law. "Concerns remain over what would appear to be an unduly long 210-day period which is statutorily available to the Competition Commission to review mergers, even though it would endeavour to do so in 180 days," Industry body CII had said.
Market regulator is, whoever, hopeful of suitable changes in the norms before they come into effect. The corporate affairs ministry has said the new norms will come into effect from June 1. In absence of an asset transaction thresholds every asset - current assets or fixed asset - that is acquired after 1 June 2011, would have to be notified to the Competition Commission and it could also include issue of bonus, rights shares or even stock or stock-in trade.
The CCI norms also require every deal to be intimated to it even if controlling stake is not being acquired. "Some sort of alignment in different rules dealing with same subject is very crucial to prevent chaos," the official said adding that the market regulator is hopeful of a positive resolution.
New CII Chief favours
one-time amnesty plan to bring out black money
The government should introduce a
one-time amnesty scheme to bring out black money and enhance transparency in
pricing and allocation of natural resources to accelerate economic growth, the
new president of industry body CII said.
B Muthuraman, who has taken over the reins of CII, said an amnesty scheme will allow people to make correct declaration of assets and the government should punish those who do not opt for it. "But it(amnesty scheme) should be introduced once and not over and over again," he said.
B Muthuraman, who has taken over the reins of CII, said an amnesty scheme will allow people to make correct declaration of assets and the government should punish those who do not opt for it. "But it(amnesty scheme) should be introduced once and not over and over again," he said.
China's economy to surpass
that of US by 2016: IMF
UAE, India business groups
discuss trade ties
US firm signs up DRDO for
explosives detection kit technology
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