Supreme Court Ko Gussa Kyon Nahin Aata?

Published on Sat, Mar 01,2014 | 17:45, Updated at Sat, Mar 01 at 17:45Source : Moneycontrol.com 

By: Menaka Doshi, Executive Editor, CNBC TV18

Justice Robert H Jackson once famously said about the United States Supreme Court "We are not final because we are infallible, but we are infallible only because we are final."

For the longest time I thought the same applied to India's Supreme Court as well. But according to the Sahara Group and its chief Subrata Roy – India's Supreme Court is neither infallible nor final. Which is probably why for 18 months after it lost a landmark Rs 24000 crore case in the Supreme Court, the Sahara Group has refused to comply with the Court's order - to pay the money to market regulator SEBI so that it may be refunded to 3 crore investors.

That Sahara refuses to do as the Supreme Court ordered it to – is shocking. But not as shocking as the fact that the Supreme Court has sat by patiently, watching Sahara come up with random excuses for not obeying its orders. And in doing so the Supreme Court has sent out a horrible message to all Indians. Yes, we may not be infallible and no – we are not final!

Let's go back to the beginning… this is a Sahara Case timeline (borrowed from the Financial Express, with a minor modification)

* Nov 2010: Sebi restrains Sahara India Real Estate Corp and Sahara Housing Investment Corp from raising funds through optionally fully convertible debentures (OFCDs)

* Dec 2010: Sahara moves Allahabad HC; obtains stay on Sebi order

* Jan 2011: Sebi files petition in SC, which directs Sahara to give details of OFCD investors

* April 2011: Allahabad HC vacates stay; Sahara moves Supreme Court

* June 2011: Sebi directs the two Sahara companies to refund around Rs 24,000 cr to investors

* Oct 2011: SAT upholds Sebi order against Sahara entities

* Nov 2011: Sahara challenges SAT order at SC

* Jan 2012: SC admits Sahara appeal against SAT order

* Aug 2012: SC upholds SAT order; Sahara ordered to refund Rs 24,000 cr to nearly 30 mn investors through Sebi

Given the large amounts and number of investors involved, the Supreme Court was keen the case be heard and decided in a time bound manner. So it gave SAT 8 weeks to decide the matter. And the Supreme Court itself took just 8 months to admit the appeal, allocate the case to a bench, hear SEBI's, Sahara's and the Government's arguments and decide the matter.

In 8 months the Supreme Court decided the case. But for 18 months thereafter the Supreme Court has watched its decision being ignored!

Infact in a curious twist in the case – in December 2012, 3 months after the Sahara order was delivered, Chief Justice Kabir's bench decided to extend the deadline set out in the earlier order – in effect reviewing a decision made by another bench. The impropriety of this was criticised by many senior lawyers but the Supreme Court maintained silence. The second deadline gave Sahara up to February 2013 to pay SEBI the remaining Rs 17400 cr (Rs 5120 cr had been paid in December).

February came and went. SEBI filed a couple of contempt notices…the hearings dragged on. Sahara contended that most of the money had already been refunded to investors in 2011 itself. This even though most of the bonds had no early redemption clause. Nor were the Sahara companies able to explain how they raised close to Rs 19000 crore to make the refunds. The same refund argument did not pass muster even with the CJI's bench in December 2012 - yet Sahara kept beating the same drum. And somehow the Court was convinced to allow Sahara to submit property papers as guarantee for the money. Sahara first submitted papers for a single property in suburban Mumbai, that it claimed, when fully developed would be worth over Rs 20000 cr. SEBI discovered the land suffered development restrictions. Sahara tried every trick in the legal book to drag out what was in fact a concluded case. And the Supreme Court allowed it to do so. 

This generosity is baffling and unprecedented – have you ever heard of a Supreme Court that allows its orders to be negotiated down? Sahara must have been emboldened by this patient leniency. No wonder the Sahara Chief thought it well within his right to ignore a Court summons. Unfortunately for him, the wind turned, and his nth act of disobedience turned out to be the proverbial last straw. His non-appearance in the Supreme Court on 26^th February, 2014 lead to the Court issuing a non-bailable arrest warrant against him. The Supreme Court refused to withdraw it when petitioned to do so.

 Mr Roy is now in police custody – not in a jail – but in a state government guesthouse. This after evading arrest for over 24 hours. The same man who claimed he could not attend Court as he had to be at the bedside of his ailing mother, was nowhere to be found the next day. Not even at his mother's bedside.

He will now be produced in the Supreme Court on March 4^th. On that day it will have been exactly 550 days since the Supreme Court first decided that Sahara had acted outside the law in raising Rs 24000 crores from 3 crore investors and hence must refund the money with interest. 550 days of disobedience by Sahara. How many more days of Sahara's non-compliance will it take the Supreme Court to be reminded of its own finality?

Here below are excerpts from the Supreme Court decision ( the individual orders and the combined order) on Sahara – August 31^st, 2012

But from Saharas' conduct and action, it is clear, that their intention was to issue securities to the public under the garb of private placement.

Facts indicate that, through this dubious method, that SIRECL had approached more than thirty million investors, out of which 22.1 million have invested in the OFCDs and it had raised nearly 20,000 crores, for which it had utilized the services of its staff in 2900 branches/service centers and utilized the services of more than one million agents/representatives. Court can, in such circumstances, lift the veil to examine the conduct and method adopted by Saharas to defeat the various provisions of the Companies Act, already discussed, read with the provisions of the SEBI Act.

I find that Saharas conveniently omitted the reference to SEBI in the declaration given in the prospectus. OFCDs were, therefore, issued by Saharas in contravention of the DIP Guidelines, ICDR 2009, notification dated 17.9.2002 and also overlooking the statutory requirements stipulated in Section 73(1) of the Companies Act.

I am, therefore, of the view that since Saharas had violated the listing provisions and collected huge amounts from the public in disobedience of law, SEBI is justified in directing refund of the amount with interest.

The procedure adopted by the appellant-companies is obviously topsy turvy and contrary to the recognized norms in company affairs. All this makes the entire approach of the appellant-companies calculated and crafty. It is clearly apparent, that the appellant-companies had clearly taken upon themselves to tread a path different from the mandate of law delineated under the Companies Act.

For the first time before this Court, in their challenge to the SAT order dated 26.8.2011 (whereby the SEBI (FTM) order dated 23.6.2011 was upheld), some details were disclosed by SIRECL. On an analysis the material placed before this Court, I have recorded hereinabove, that the same seemed to be unrealistic, and may well be, fictitious, concocted and made up.

it is essential to express, that there may be no real subscribers for the OFCDs issued by the SIRECL or SHICL. Or alternatively, there may be an intermix of real and fictitious subscribers.

Even though I hope that all the subscribers are genuine, and so also, the subscription amount, it would be necessary to modify the operative part of the order issued by the SEBI which came to be endorsed by the SAT, so that the purpose of law is not only satisfied but is also enforced.

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Rain continues in North, East and Central India

Weather in North and East India

 The Western Disturbance and its associated cyclonic circulation over northwest region of the country will continue to pull moisture from the Arabian Sea and keep the weather rainy in almost all the states in the region.

According to latest weather update by Skymet Meteorology Division in India, indicates that in the last 24 hours few places in West Bengal like Purulia, Bankura and Malda received light rain. Yesterday, Delhi recorded 17.2 mm while, Jaipur in Rajasthan received 15 mm of rain. The hill station of Dehradun in Uttarakhand also received 17 mm of rain. In Bihar, Patna and Gaya recorded 33.4 mm and 5.6 mm of rain, respectively in the last 24 hours. Yesterday, few places in Jharkhand received good amounts of rain. Jamshedpur and Ranchi recorded 35 mm and 33.8 mm of rain, respectively.

Tomorrow, rain will decrease significantly over the northern plains including Bihar but light rain is likely to continue over Jharkahnd and Gangetic West Bengal. For the next 24 hours, no significant change in day temperatures is expected in the northern and eastern plains, except for Rajasthan. Here the maximums could witness a rise.

Weather in Central India

The main cyclonic circulation which has brought good amounts of rain at several places in Central India will continue to fetch moisture from the Bay of Bengal. In the last 24 hours, significant amounts of rain were recorded in parts of Chhattisgarh and Madhya Pradesh.

In Chhattisgarg, Ambikapur recorded 17.10 mm of rain, Bilaspur 18.9 mm, Durg 13.2 mm, Pendra 12.9 and Raipur 2.3 mm of rain. Khajurao and Jabalpur in Madhya Pradesh received 10 mm and 2.3 mm of rain, respectively. Tomorrow, light rain is likely to continue north Odisha and Chhattisgarh. Our latest weather update indicates that day temperatures are likely to rise marginally over north Chhattisgarh, Madhya Pradesh and Maharashtra while, the minimums could see a drop in the next 24 hours.

Weather in South India

In peninsular India, Telangana and coastal areas of Maharashtra, Karnataka and Kerala received light rain in the last 24 hours. Nagpur recorded 14 mm of rain yesterday. According to latest weather update by Skymet Meteorology Division in India, scattered is likely over Andhra Pradesh, Tamil Nadu, south Karnataka and Kerala in the next 24 hours. Rayalseema region continues to be hottest region in the country with Salem recorded 35.3°C as the maximum temperature on Friday.

By: Skymetweather.com

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Forbes India Conversations in Excellence

From the sidelines of the 12th Auto Expo in New Delhi, Forbes India Conversations in Excellence, presented by Mercedes Benz powered by CNBC-TV18, brings together eminent speakers to find out their view on how they have achieved excellence.

From the sidelines of the 12th Auto Expo in New Delhi, Forbes India Conversations in Excellence, presented by Mercedes Benz powered by CNBC-TV18, brings together eminent speakers to find out their view on how they have achieved excellence.

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India goes beyond generics; innovation on steroids

India is no longer a laggard when it comes to the race of bio-innovation. It's an area every top player in the pharma space agrees upon. CNBC-TV18'S Archana Shukla reports that the pharma top-bosses in attendance at the BioAsia summit believe India's focus on relevant solutions remains its biggest advantage.

So what if India has been a slow starter in the race to churn out blockbuster new molecules? But they're also quick to point out that a lot of this innovation stems from necessity -- the necessity to come up with affordable drugs.

"We have developed many drugs that suit Indian requirements. We recently developed novel Rotavirus vaccine that is relevant to Indian disease profile" says Krishna Ella, MD, Bharat Biotech.

Also read: Dipan Mehta positive on pharma stocks

On curing India and other EMs, Sanjiv Navangul, MD, Janssen India comments, "Invested a lot in clinical trials and the understanding of science has improved."

On trying to understand what is stopping India from taking the next big plunge, Maninder Hora, Sr VP - Pharma Devpt and Manu Ops, Nektar Therapeutics says India needs an appetite for risk taking. On the other hand, Rogerio Riberio, Sr VP - Emerging Markets, GSK says, "Need to think of portfolio, because investments are huge. Need to assess where Indian companies want to be."

But every expert felt this growth spurt is sustainable only if the policy environment remains supportive. And then, there's the need to differentiate strategy from making generic drugs to taking a risk with new molecules.

"If generic is a 100 metre sprint, innovative drug is a marathon" comments Hora.

GV Prasad, CEO,  Dr Reddy's Labs says, "As a public company, I have to look at earnings growth too. Now I invest 12% in Research and Development, anything beyond that will start hurting my business. This is a delicate game of balance."

Meanwhile, experts caution that so far, on a global scale, very few generic companies like Israel-based Teva have made this transition. But it's still too early to gauge Teva's long-term success and what's good for the goose, may not always be good for the gander.

Dr Reddys Labs stock price

On February 28, 2014, Dr Reddys Laboratories closed at Rs 2901.55, up Rs 67.60, or 2.39 percent. The 52-week high of the share was Rs 2939.80 and the 52-week low was Rs 1720.50.

The company's trailing 12-month (TTM) EPS was at Rs 108.14 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 26.83. The latest book value of the company is Rs 457.56 per share. At current value, the price-to-book value of the company is 6.34.

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U.S. stocks gain on Yellen weather comments; Dow up 0.46%

Investing.com - Investing.com - U.S. stocks climbed higher on Thursday after Federal Reserve Chair Janet Yellen suggested harsh winter weather may have been the reason behind a string of disappointing economic indicators this year.

At the close of U.S. trading, the Dow Jones Industrial Average rose 0.46%, the S&P 500 index rose 0.49%, while the Nasdaq Composite index rose 0.63%.

Recent manufacturing, unemployment and other economic indicators have come in short of Wall Street expectations, leaving investors unclear if recovery has hit a soft patch or if a string of winter storms has put commerce temporarily on hold.

Speaking before the Senate banking committee, Yellen told lawmakers it was hard to say how much the recent soft data was due to rough winter weather and added that the bank would remain attentive to signals on whether the recovery is progressing in line with expectations.

Stock market investors concluded that monetary authorities do believe winter storms have bruised economic indicators somewhat, and that when spring arrives in a matter of weeks, recovery will pick up and improve corporate fundamentals in the process.

Elsewhere, the Labor Department said the number of people filing for initial jobless benefits rose by 14,000 to 348,000 from the previous week's total of 334,000. Analysts had expected an increase of just 1,000.

Also on Thursday, the Commerce Department reported that U.S. durable goods orders declined by a seasonally adjusted 1% last month, less than expectations for a 1.5% drop.

Core durable goods orders, excluding volatile transportation items, rose 1.1% in January, the largest increase since May, confounding forecasts for a 0.3% decline.

Leading Dow Jones Industrial Average performers included Verizon, up 2.51%, Goldman Sachs, up 1.48%, and Boeing, up 1.44%.

The Dow Jones Industrial Average's worst performers included McDonald's, down 0.86%, Nike, down 0.52%, and Caterpillar, down 0.51%.

European indices, meanwhile, finished largely lower.

After the close of European trade, the EURO STOXX 50 fell 0.28%, France's CAC 40 fell 0.01%, while Germany's DAX 30 fell 0.76%. Meanwhile, in the U.K. the FTSE 100 rose 0.16%.

On Friday, the U.S. is to released revised data on fourth-quarter growth, a report on manufacturing activity in the Chicago region, revised data on consumer sentiment and private-sector data on pending home sales.

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Natural gas rebounds on demand from bargain hunters

Investing.com - Investing.com - Natural gas futures plunged on a bearish supply report earlier Thursday, though bottom fishers swept in and brought prices back into positive territory on the view the asset was oversold.

On the New York Mercantile Exchange, natural gas futures for delivery in April traded at $4.550 per million British thermal units during U.S. trading, up 0.19%. The commodity hit session high of $4.565 and a low of $4.447.

The April contract settled down 3.20% on Wednesday to end at $4.541 per million British thermal units.

Natural gas futures were likely to find support at $4.205 per million British thermal units, the low from Jan. 19, and resistance at $5.207, Monday's high.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ending Feb. 21 fell by 95 billion cubic feet, short of market expectations for a decline of 107 billion cubic feet.

Total U.S. natural gas storage stood at 1.348 trillion cubic feet. Stocks were 905 billion cubic feet less than last year at this time and 711 billion cubic feet below the five-year average of 2.059 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 361 billion cubic feet below the five-year average, following net withdrawals of 78 billion cubic feet.

Stocks in the Producing Region were 251 billion cubic feet below the five-year average of 775 billion cubic feet after a net withdrawal of 5 billion cubic feet.

Markets were expecting a recent cold snap would have taken its toll on supplies more than it did, which sparked a selloff until bottom fishing kicked in.

Prices also came under pressure after updated weather-forecasting models called for a return of milder temperatures across the eastern U.S.

The U.S. National Weather Service said that higher temperatures than previously forecast were expected in the Midwest from March 6 to March 10.

Prices rallied to over a five-year high of $6.493 per million British thermal units earlier in the week as frigid winter temperatures in the U.S. led households to burn a higher than normal amount of the fuel in furnaces to heat their homes.

The heating season from November through March is the peak demand period for U.S. gas consumption. Approximately 52% of U.S. households use natural gas for heating, according to the Energy Department.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in April were down 0.47% and trading at $102.11 a barrel, while heating oil for April delivery were down 1.03% and trading at $3.0070 per gallon.

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A jist of the Forbes India Art Awards

The collection displayed at the Forbes India Art Awards includesd painting, sculpture, lithographs and tapestries.

The Forbes India Art Awards held at The Leela Palace Hotel, New Delhi saw a galaxy of prominent faces from the corporate as well as art world. The Latin's inspired architecture with its formidable collection of modern and contemporary art reflects The Leela Palace Hotel, a natural choice for a partner.

Madhu Nair, a member of the owning family is the creative and design force behind this formidable collection of art. The collection includes painting, sculpture, lithographs and even tapestries. Some of the artist that you will find on display at The Leela Palace Hotel are Satish Gujral, Satish Gupta, Lita Albuquerque, Paresh Maity, Seem Kohli and Laxaman Goud. With that let's go right into the show.

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BPCL raises Rs 1,240 crore from overseas bond sale

The notes are rated at the same level as BPCL's issuer default rating of 'BBB-' as they will constitute direct, unconditional, unsubordinated and unsecured obligations of the company, says Fitch

State-run oil marketer  Bharat Petroleum today said it has raised 175 million Swiss francs (around Rs 1,240 crore) through an international bond sale at a coupon of 2.988 percent.

"We raised 175 million Swiss francs (around Rs 1,240 crore) through an overseas bond sale programme today at a competitive coupon of 2.988 percent, which is 235 basis points above the Swiss mid-swap rate, in a 5.75-year money," a BPCL spokesman told PTI here.

The RegS issue has been raised to meet working capital requirement of the company, he said.

Also read: BPCL growing better now than in H1FY14: MD Varadarajan

Lead bankers to the issue were BNP Paribas, Deutsche Bank, RBS, and UBS, he said, adding this is the first Swiss franc issue by an Indian corporate since February 2012. International rating agency Fitch has assigned BBB-/ stable rating to the issue.

The notes are rated at the same level as BPCL's issuer default rating of 'BBB-' as they will constitute direct, unconditional, unsubordinated and unsecured obligations of the company, Fitch said in a statement from Singapore.

BPCL stock price

On February 26, 2014, Bharat Petroleum Corporation closed at Rs 377.75, up Rs 5.80, or 1.56 percent. The 52-week high of the share was Rs 428.45 and the 52-week low was Rs 256.00.

The company's trailing 12-month (TTM) EPS was at Rs 66.24 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 5.7. The latest book value of the company is Rs 230.04 per share. At current value, the price-to-book value of the company is 1.64.

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GBP/USD gains on soft U.S. consumer confidence report

Investing.com - Investing.com - The pound firmed against the dollar on Tuesday after a soft U.S. consumer confidence report prompted investors to speculate that the Federal Reserve will scale down stimulus measures at a slower clip than once anticipated until recovery picks up the pace.

Stimulus tools such as the Fed's $65 billion in monthly bond purchases weaken the dollar by driving down long-term interest rates, making stocks and commodities more attractive asset classes.

In U.S. trading on Tuesday, GBP/USD was trading at 1.6696, up 0.25%, up from a session low of 1.6643 and off a high of 1.6727.

Cable was likely to find support at 1.6584, Monday's low, and resistance at 1.6823, the high from Feb. 17.

The dollar softened after the Conference Board reported that its consumer confidence index slipped to 78.1 in February from 79.4 in January, mainly due to concerns over general business conditions, jobs, and earnings.

Analysts were expecting the index to tick up to 80.0.

The present situation index rose to its highest level in almost six years, but the expectations index declined, indicating that while consumers believe the economy has improved they do not foresee further considerable improvement in the coming months.

The dollar weakened as investors speculated that the Federal Reserve will very gradually taper its $65 billion monthly bond-buying program, which weakens the dollar by suppressing long-term borrowing costs to spur recovery.

Also on Tuesday, the Standard & Poor's/Case-Shiller house price index rose 13.4% in December from a year earlier, the best December reading in eight years and slightly ahead of forecasts for a 13.3% gain.

Meanwhile across the Atlantic, the pound saw support after data from the British Bankers Association showed that mortgage approvals rose 57% in January from a year earlier to 49,972, hitting a 76-month high.

A separate report by the Confederation of British Industry said U.K. retail sales rose at the fastest rate since June 2013 in February. The CBI distributive trades survey rose to 37 up from 14 in January, well ahead of forecasts for an uptick to 15.

Sterling was up against the euro, with EUR/GBP down 0.14% to 0.8236, and down against the yen, with GBP/JPY down 0.08% as 170.57.

On Wednesday, the U.K. is to publish revised data on fourth quarter economic growth, as well as preliminary data on business investment.

The U.S. is to release data on new home sales, a leading indicator of demand in the housing market.

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Crude falls on soft U.S. consumer confidence report, warming trend

Investing.com - Investing.com - Crude prices fell on Tuesday after a soft consumer-confidence barometer painted a picture of a sluggish U.S. economy that will demand less fuel and energy, while weather forecasts for a warming trend sent prices dipping as well.

On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in April traded at $101.91 a barrel during U.S. trading, down 0.89%. New York-traded oil futures hit a session low of $101.03 a barrel and a high of $102.87 a barrel.

The April contract settled up 0.61% at $102.82 a barrel on Monday.

Nymex oil futures were likely to find support at $99.41 a barrel, the low from Feb. 14, and resistance at $103.45 a barrel, Monday's high.

Oil prices slid after the Conference Board reported that its consumer confidence index slipped to 78.1 in February from 79.4 in January, mainly due to concerns over general business conditions, jobs, and earnings.

Analysts were expecting the index to tick up to 80.0.

The present situation index rose to its highest level in almost six years, but the expectations index declined, indicating that while consumers believe the economy has improved they do not foresee further considerable improvement in the coming months.

Giving oil some support were expectations the Federal Reserve will very gradually taper its $65 billion monthly bond-buying program, which weakens the dollar by suppressing long-term borrowing costs to spur recovery.

A weaker greenback makes oil an attractive commodity on dollar-denominated exchanges.

Also cushioning losses, the Standard & Poor's/Case-Shiller house price index rose 13.4% in December from a year earlier, the best December reading in eight years and slightly ahead of forecasts for a 13.3% gain.

Elsewhere, forecasts for warmer weather across the eastern U.S. in early March edged prices lower.

A powerful blast of cold air will shoot across the northern U.S. states this week, through in the first and second week of March, warmer temperatures may return.

Temperatures could even climb higher than once expected around March 7, according to updated weather-forecasting models, which could cut into demand for heating oil.

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for April delivery were down 0.97% and trading at US$109.57 a barrel, while the spread between the Brent and U.S. crude contracts stood at US$7.66 a barrel.

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