TOP-up
ICL
SEBI’s Interim Measure in an Insider Trading Case
Findings of SEBI’s investigation
BL
Vaneesa Agrawal
Decoding SEBI’s insider trading rules »
Moneylife
| SEBI under CBI Lens |
Will SEBI's draconian powers be curtailed now?
Looking back, ever since the exclusive regulator for
stock markets came into being, there have been quite many instances in which
its sporadic deeds/ impulsive actions, verging on not merely draconian but
dictatorial disposition, have become questionable. That has been so, not merely
in the larger public interests and health of the economic activity, but even on strictly legal grounds. One such
instance, as recalled, is when SEBI, blatantly acting in excess of its vested
powers, gone ahead in a cavalier fashion to mandate the requirement of PAN for
'demat accounts', going overboard. That was so done dogmatically assuming power
it did not have, single handed with no known consultation or deliberation; and
without even caring to take a conscious note of what the IT Act, of which PAN
is a special creature, itself provides.
Albeit that has now faded into past history, if itching
to know the critical viewpoints on that episode, a couple of articles published
in Taxmann journal may be read.
Citation
PAN' REQUIREMENT FOR DEMAT ACCOUNT HOLDERS (2006)
6 CAT 565
SEBI'S DIRECTIVES MANDATING ‘PAN’ REQUREMENT (2006) 7
CAT 64
Like critique on certain other
related aspects is
to be found on a search of the ICL Blogs, in public domain- TOPIC Sebi AND SAT
|
BL
Dec 24
Not unrealted THIS >
Flipping gains? Don’t bet on it
SEBI has learnt its lessons and plugged loopholes that were
exploited by fly-by-night operators to boost listing prices »
?!
< It was also found that in some companies, the IPO proceeds flowed through many layered transactions into accounts of stock market intermediaries. These intermediaries, in turn, used the funds to manipulate the stock price in the period after listing.>
Nov 21
ICL
SEBI Reforms – Part 1: Insider Trading
Overall, some of the
changes are indeed significant, given the mixed success of the present insider
trading regime. However, as is usually the case, a lot will lie in the wording
of the regulations and their interpretation.
Nov 6
BS
DLF gets tribunal nod to redeem MF investments
SAT allows realtor to do so for serving Rs 1,806-cr loans
< The realty major has moved SAT against market regulator Securities and Exchange Board of India (Sebi)’s order banning the company from accessing the securities market for three years.
“The Sebi order doesn’t stop the company from doing business. It is reasonable to allow the company to redeem mutual fund units as and when necessary,” said J P Devadhar, presiding officer, SAT, on Wednesday. >
Top-up< The realty major has moved SAT against market regulator Securities and Exchange Board of India (Sebi)’s order banning the company from accessing the securities market for three years.
“The Sebi order doesn’t stop the company from doing business. It is reasonable to allow the company to redeem mutual fund units as and when necessary,” said J P Devadhar, presiding officer, SAT, on Wednesday. >
Taxmann
| SEBI norms and clause 35 of listing agreement don't require promoters to make disclosure of encumbered shares | ||
|
Nov 1
*
Disclosure of “Encumbrances” on Shares - Indian Corporate ...
<......in another order involving Golden Tobacco Limited, the SAT ruled against any disclosure requirement on the company to disclose any “encumbrances” on its shares imposed on promoters through the restraint order of an arbitrator. Both these orders involved the interpret..In Quest of Jnana Vistara>>>>>>
itatonline.org » Hill Properties Ltd vs. Union Bank (Supreme ...
itatonline.org » Shantikumar D Majithia vs. DCIT (ITAT ...
itatonline.org » CIT vs. Devdas Naik (Bombay High Court ...
encumbrance - The Free Dictionary
Understanding the encumbrance certificate - The Hindu
DEFINITION of 'Encumbrance'
< A claim against a property by another party. Encumbrance usually impacts the transferability of the property and can restrict its free use until the encumbrance is removed. The most common instances of an encumbrance occurs in real estate such as an outstanding mortgage or unpaid property taxes. However, encumbrance can also be used in an accounting context to refer to restricted funds inside an account that are to be used only for a specific liability.>< Invocation of pledge by PFI requires disclosure under SEBI regulations....
AT
Oct 31
< NRI investors move SEBI against ICICI Venture
Clause 35 requires the
company to disclose to the stock exchange the details of “shares pledged or
otherwise encumbered”. On account of such failure, SEBI’s adjudicating officer
imposed penalties under section 23E of the Securities Contracts (Regulation)
Act, 1956 and section 15HA of the Securities and Exchange Board of India Act,
1992. It is against this order that the company preferred an appeal to SAT. ...
15.
… SEBI has created an anomalous situation, because, promoter/promoter group who
have details of shares that are ‘otherwise encumbered’ are not obliged to
disclose the same to the listed Company, whereas, listed Companies to whom such
details are not furnished by the promoter/promoter group are made to disclose
such details to the Stock Exchange. …
In any event, it would
be wholly unnecessary to require a disclosure of such matters to the stock
exchanges....
The genesis of the requirement to disclose pledge and other encumbrances
arose after the Satyam scandal where promoter shares were pledged to financial
institutional unbeknownst to the remaining shareholders. The drastic fall of
the promoter shares upon invocation of the pledge adversely affected the
shareholders. Hence, if a pledge or other encumbrance is likely to result upon
invocation in a divestment of promoter share, then that is information worthy
of disclosure to the other shareholders. But, in a restraint order or negative
covenant, that objective does not even exist. To the contrary, the promoter is
unable to sell the shares and exit from the company, which ought to be of
additional comfort to shareholders rather than something that shakes the
foundations of their trust in the company and its promoters. Although the SAT
did not adopt the approach of analyzing these issues and objectives, they are
consistent with the ultimate conclusion it arrived at.....
However, the Adjudicating Officer, in the present case, has neither
found fault with the order passed in case of Dewan Housing Finance Corporation
Ltd. (Supra) nor assigned any reason for taking a view contrary to the view
taken therein. Such an attitude on part of the Adjudicating Officer of SEBI
deserves to be condemned. View taken by one Adjudicating Officer of SEBI cannot
be disregarded by another Adjudication order without assigning any reasons. It
is high time that SEBI takes remedial measures and ensure that its Adjudicating
Officers respect orders passed by each other. We make it clear, respecting each
others order does not mean that even an erroneously order, passed by the
Adjudicating Officer must be followed blindly. In such a case, contrary view
could be taken by recording reasons for taking such contrary view.
Tentative (leaving open to a detailed study):
On a first reading of the narrated episode, again reading in
between lines, more than one point of doubt requiring special attention or consideration
(or re- ) are noted to arise:
1.
From the viewpoint of corporate good governance,
which as per one’s understanding is after
all the ultimate objective/aim of all such regulations, does it not, by implication, compulsively mean that the faulted disclosure requirement , instead
of being vetoed, be mandated and made to apply, apart from the company, primarily to those creating a charge on the
shareholding as spoken of, as well?
2.
But for such
disclosure, why and how any charge created without the knowledge of the ‘company’
could be legally binding and enforceable/ serve as a defence against the company or the rest of the shareholders /stakeholders?
3.
WRT the para. which reads, - “However, the
Adjudicating Officer, in the present case, has neither found fault with the
order passed in case of Dewan Housing Finance Corporation Ltd. (Supra) nor
assigned any reason for taking a view contrary to the view taken therein.... “-
Is not the aspect of serious concern rightly touched upon something
which is all the time happening in tax cases, historically but dis- comfortingly ,
at every stage of assessment/appeal
proceedings, often to the chagrin of taxpayers,; more so, despite
the rules / principles of interpretation of ‘law’ enunciated by case law, but
remained to be taken a conscious note of and followed e.g. the concept of ‘PRECEDENT’,
the maxim “STARE DECISIS”, so on?
But then, there seems to be no effective or foolproof way even thought of ,so as to be in place, to ward off such ongoing systemic deficiencies/
failures !
BS
Sebi order to hit DLF's debt reduction plans
Does not SEBI's Order ostensibly lack in wisdom, just as underscored by the proverbial act sourced from "resentment in a way that can only cause injury to oneself". To put it in the familiar words, - "cut off one's nose to spite one's (own) face"?
SEBI, going by the subsequent developments, cannot be regarded to have duly considered the inherent potentials of its Order before passing it. Consequently, the investors ' rights and interests, which the Regulator was supposed to keep in focus and protect and safeguard, have come to be set at naught , and gravely jeopardized; and, it is not just the share holders , but the whole lot of others , being stakeholders in its comprehensive sense, have been brought to suffer and bear the brunt of it. The point of poser that begs for an upright answer is, whether the regulator could have avoided or obviated such unsavory consequences had it intelligently thought of and diligently resorted to any other possible alternative course of action, preferably open to it, so that its objective of disciplining only those individuals targeted by it, and only them none else, has been accomplished? Perhaps, expectantly, the answer, yes or no, from a competent and binding source (of authority) will not be forthcoming in the immediate future.
BL
The Securities and Exchange Board of India’s decision to
bar real estate giant DLF and its top ma... »
ICL
Foreign Direct Investment: Trusts as Investment Vehicles
OFFHAND (sharing own thoughts, simply to provoke more on any possible useful lines)
On a first reading, one is tempted to compliment the writer , as a law student in his advanced stage of studies, for the pains taken in embarking on an academic study in a singular way of his own and producing a write-up for the benefit of the lawyers community. The burden of the song is not quite clearly understood. Nonetheless, the main thrust , as understood (open to correction with an appropriate reasoning , if were considered materially wrong), is seen to be that for FDI, in order to be assured of protection, 'units', as opposed to 'equity' may prove , in comparison, a better (if not a safer) bet , as a 'trust vehicle'. In the ultimate analysis, however, what ought not to be forgotten is, whatever the law or regulations, be it extant or proposed, the expected fulfillment of trust, even partially, is wholly going to depend upon meeting the criteria, and in turn the attitude and behavior of each and everyone of the homo sapiens, independent of the size of the section of the people, involving self and thereby becoming a 'vested interest' - in its ideal or other sense.
While on the academic discussion, those really interested may wish and care to look up, among others, a clarification noted to have been lately issued by a 'competent authority' on a connected point (for ready reference- HERE Trust/trustee as a partner in Limited Liability Partnerships (LLPS) - Clarification on TaxGuru (which , as commented, appears to be incomplete and lacking in clarity).
Back to the writer, besides the rest, for a further study, with the hope of more light being thrown on his chosen topic; and if possible, with suggestions for any practical solutions.
Back to the writer, besides the rest, for a further study, with the hope of more light being thrown on his chosen topic; and if possible, with suggestions for any practical solutions.
ET
Oct 14
Sebi's decision in DLF case is unusually harsh because of the collateral fallout and possible disproportionately large cost to other stakeholders,
Vinay Pandey
TOI
| click here. | |
Hit hard by Sebi order, DLF loses Rs 7,500 crore market value
That SEBI ‘s severe blow against DLF, without bothering to go into
right or wrong of it, has come 7 years
after DLF ‘s IPO and filing of the
complaint does not reflect well on the ‘speed’
of the functioning of the regulator. The prolonging of the entire process, whatever
be the reasons, is far too long to be lightly taken.
Going by simplistic common sense, the regulator cannot be said to have acted diligently, for due diligence, after fully weighing the pros and cons of the action, and its inherent harmful potentials; and , after considering and weighing the other related options preferably open. For, while the promoters have been barred from raising money via the bourse, not only the faulted company but also its public investors who have been made to suffer. As such, the regulator’s role in the episode eventually resulting in a marked market gloom cannot be commended; if at all, from the viewpoint of the investors, besides the other stake holders, deserve to be only ridiculed and condemned.
Going by simplistic common sense, the regulator cannot be said to have acted diligently, for due diligence, after fully weighing the pros and cons of the action, and its inherent harmful potentials; and , after considering and weighing the other related options preferably open. For, while the promoters have been barred from raising money via the bourse, not only the faulted company but also its public investors who have been made to suffer. As such, the regulator’s role in the episode eventually resulting in a marked market gloom cannot be commended; if at all, from the viewpoint of the investors, besides the other stake holders, deserve to be only ridiculed and condemned.
PREV.
BS
Front Page |
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“...the case of active and deliberate suppression of material information to mislead and defraud securities market investors in connection with the issue of shares of DLF in its IPO is clearly made out in this case,” said the Sebi order, dated October 10.
"DLF wishes to reassure its investors and all stakeholders that it has not acted in contravention of law, either during its IPO or otherwise. DLF and its board were guided by and acted on the advise of eminent legal advisors, merchant bankers and audit firms while formulating the offer documents. DLF will defend itself fully against any adverse findings and measures contained in the order passed by Sebi. DLF has full faith in the judicial process and is confident of vindication of its stand in the near future,” the company said.
< BL
SEBI bars DLF, 6 directors from market for three years
As reported elsewhere in the
media, while reassuring its investors and all stakeholders that it has not
acted in contravention of law, either during its IPO or otherwise, in defense,
it has been claimed that DLF and its board were guided by and acted on the advice
of eminent legal advisers, merchant bankers and audit firms while formulating
the offer documents.
Should that be , and eventually
proved to be, so, then the most intriguing but reprehensible common sense question
that consequently arises is this :- Do not anyone or more of those,- under
whose expert and eminent advice /guidance the company says to have acted, if
established,- are, jointly and severally,
answerable, hence have to share and bear the brunt of it all.
Tail piece:
http://www.goodreturns.in/company/dlf/auditor-report.html
Sebi order on DLF: 10 things to know
ET
BL (selected ) ON CORPORATE AUDIT (mrl)
Inspection of audit quality | Business Line
Companies Bill needs a relook | Business Line
From moderator to regulator? | Business Line
The Hindu Business Line : Thursday, December 25, 2003
Corruption audit direly needed | Business Line
Tail piece:
http://www.goodreturns.in/company/dlf/auditor-report.html
Sebi order on DLF: 10 things to know
ET
Financial Planning
Unless financial experts prove, in measurable terms,
the ‘value’ of their advice to investors, and are ready to be held
accountable for it, they stand to lose their relevance.
BL (selected ) ON CORPORATE AUDIT (mrl)
Inspection of audit quality | Business Line
Companies Bill needs a relook | Business Line
From moderator to regulator? | Business Line
The Hindu Business Line : Thursday, December 25, 2003
Corruption audit direly needed | Business Line
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