Rs 6 K cr penalty on Cement Cos: Competition Commission on slippery ground

The Competition Commission of India (CCI) has imposed a fine of more than Rs 6,000 crore on 11 cement makers alleging cartelisation and price fixing from May 2009 to March 2011.

It is a record penalty and is seen as an attempt by the ant-trust regulator to assert itself. But the last word has not been said on the issue, yet. The cement makers can go on appeal to the Competition Appellate Tribunal (COMPAT), and even to the Supreme Court.

Legal experts think the CCI is on slippery ground here. Cement companies say the CCI rules require the commission to establish the existence of a cartel only if there is a written agreement among the parties involved. That is not the case here and the commission has based its findings on circumstantial evidence. There are around 47 cement players and any sort of agreement or understanding is next to impossible. That too, when the industry has added around 100 million tons capacity in the last three years.

Fact is, despite all the arguments about lower capacity utilization at cement plants and higher prices that informants in the case -- the Builders Association of India -- has brought against the cement companies, it would be tough to prove that cement prices rose because of cartelisation. As the Cement Manufacturers Association (CMA) submitted before the commission, that the capacity utilization is bound to be lower on account of higher capacity growth rate as compared to cement demand growth rate and that the report is based on surmises and conjecture.

The CCI ruling said its director general has submitted that the cement companies have enough scope to reduce the price of cement but have tried to earn better margins on sales instead of utilizing more capacity. The argument flies in the face of the very system of free market economics where the price of cement is determined by demand and supply in the market. Interestingly CCI has totally ignored the submission of the cement industry that cement manufacturers cost is more than the increase in the Wholesale Price Index as well as the cement price increase in the market.

 The shareholders of cement companies want the managements to bring them the best possible returns. But in fact, it is the government which wants to earn more from the cement sector, as government levies have gone up from Rs 49 per bag in FY07 to Rs 72 per bag in FY 12.  This adds to the cement price increase. The result is that despite increase in cement prices, costs, and government levies, PAT margins of companies have come down in FY 11.  

Revive Realty to Rejuvenate Economy

• CREDAI to PM - need widespread realty reforms
• Says Real Estate supports 250 industries, creates massive employment, contributes 11% to GDP
• Calls for end to policy paralysis, presents 10-point agenda
• Targets Housing Surplus India 

NEW DELHI: Pointing out that real estate development can revive the sagging economy, developers’ apex body CREDAI has called for launching a mission to make India Housing Surplus from the current status of a housing deficit nation by 2020.
Real Estate supports 250 industries, generates employment and contributes 11% to GDP, CREDAI national President Mr. Lalit Kumar Jain said a statement today..

Mr Lalit Kumar Jain (centre) flanked by Mr Pradeep Jain, Chairman - Credai
and Mr Shekhar Reddy of CREDAI-HYderabad Chapter

CREDAI also has written an open letter to the Prime Minister and set an 10-point agenda of action for taking the nation on an accelerated growth path while solving the housing problem faced by millions of people across the country.
Pointing out that the economic liberalisation initiated by Prime Minister Dr Manmohan Singh as the finance Minister in 1990 have not covered the real estate sector, CREDAI called for comprehensive reforms for the sector covering land, administration, banking and tax.

CREDAI reiterated its long standing demand for a Single Window clearance system and pointed out that McKinsey has said in its report to the Government of India that delays in approval processes alone increase sale value of houses by 40%. Delays due to multi clearances/approvals numbering over 40 by various Agencies/Departments of the Government - the average time being 18 months – are the order of the day though most of the Departments have the same series of check lists. This obviously leads to duplication of submission by architects. In fact, the number of building plans sanctioned over the past ten to fifteen months has drastically come down.
The only way forward for a clean and cost effective housing sector is an e-based standardization of single window approval process. CREDAI has submitted a Single Window Act for consideration to Ministry of Housing (HUPA) and Ministry of Urban Development. However, there has been no progress at all, Mr Jain said.
Presenting CREDAI case for close coordination among various government departments, he said the various Central and State Government Departments are issuing directives in isolation. For instance, the Environment Ministry issued Building Approval guidelines authorising its Committees to link the height of a building to its distance from a Fire Station, though the Ministry is neither the technical nor the administrative head of Fire Safety issues! Such arbitrary exercise of power by MoEF has crippled the sector due to approval delays, adding to costs.
“Sir, we developers are entrepreneurs, conducting our business to the best our ability. We too hate the system that labels us as crooks, cheats and breeders of black money. Few people seem to realise that we are victims of the system and not beneficiaries or generators of black money for that matter,” he said in the open letter to PM.
He pointed out that developers are forced to deal with 140 officials at various stages to obtain 40 plus clearances and history is witness to the fact that corruption creeps in wherever there is a human interface. “Files are not cleared unless one greases the palms,” he lamented.
On land reforms, CREDAI said restrictive land use has led to raising the cost of the tenements, killing agriculture land, reducing Green cover and made physical infrastructure costlier. It is high time the policy makers consciously shed their skeptical, narrow views on land use. Andhra Pradesh has set the right trend by removing the concept of FAR leading to stabilization of prices and creating adequate supply.
The current home loans for affordable housing segment with 1% interest incentive is still very costly for many needy people. The interest rates on home loan, especially in affordable category, cannot and should not be more than 7%. Also, the current guidelines by the Reserve Bank are anti-housing industry as the cost of finance is very high that in turn makes housing costlier.
Currently, any purchase of housing unit costs @ 36% in direct and indirect taxes which include VAT, Service Tax, Excise Duty and Municipal Taxes etc., At this rate, one has to earn 150% of one’s current income to be able to afford a house and end up paying a heavy income tax of 32%!
There is a need to devise a special tax-free affordable housing project scheme. Though there will be seemingly a revenue loss, this will be more than offset by the collection of other indirect taxes, he said.
Delving on slum rehabilitation, CREDAI said as much as 15% of entire population of this country lives in slums. Few urban areas in state like Maharashtra have come up with slum rehabilitation policy. However, these policies fall short of expectations to achieve desired results, mainly because they are impractical. Also, the Rajiv Awas Yojana in its present form cannot achieve desired results. “What we require is slum lord free environment where all the slum-dwellers attaining majority age of 21 get their own rightful homes,” Mr Jain argued.
These issues cannot be resolved by routine administrative remarks on files like “Please attend to” or “for your attention please”. Housing is a State subject. Even at the centre, housing policy making is fractured between two Urban Ministries, and several other Central Ministries which dabble into the matter at their own sweet will without even referring the matter to either of the Urban Ministries.
From the point of accountability, CREDAI suggested that for every building proposal submitted, there should be a mention of Revenue to be generated, Employment opportunity created, contribution to GDP, along with the date of application submission and the date of final approval. In case of delay, those responsible must be punished.
CREDAI said India’s urban population has grown from 290 million in 2001 to 377 million in 2011 which accounts for over 30 percent of the country’s population. The number of cities and towns has also increased from 5,161 in 2001 to 7,935 in 2011 - a 51% growth. The number of 1 million plus cities has grown from 35 in 2001 to 53 in 2011, registering a 45% growth.
By 2031, India will have more than 87 metropolitan areas and the country’s urban population is likely to soar to over 600 million, adding about 225 million people to present urban population.
“If this goes unchecked and unattended, we will have an explosive situation of hundreds of slum colonies everywhere because housing has become unaffordable,” Mr Jain said.
“Sir, we have been trying to seek an appointment with you for long since we cannot hope to achieve anything tangible without your intervention. We have already made several representations to all the concerned ministries but with no positive response,” the open letter said.
“It is in this context that, Prime Minister Sir, we would like to urge upon your honour to pay an immediate attention to the Future Shock scenario and take concrete steps to tackle the crisis,” the letter added.

Hindalco posts impressive Q1; Net up by 21%

Hindalco announces Q1 FY 2011-2012 results

		Vs. Q1 FY11
Revenues	Rs. 6,031 crore	16% Ç
EBITDA	Rs. 1,045 crore	16% Ç
Net Profit	Rs.    644 crore	21% Ç

EBITDA crosses Rs. 1,000 crore mark for second consecutive quarter

Standalone Financial Highlights (unaudited)

(In Rs. crore)	Quarter	Quarter
	ended	ended
	30-Jun-11	30-Jun-10
Net sales and operating revenues	6,031	5,178
Other Income	178	69
EBITDA	1,045	901
Depreciation and impairment	175	169
Interest and financing charges	67	59
Profit before tax	803	673
Provision for taxes	159	139
Net profit	644	534
EPS (Basic) (Rs.)	3.36	2.79

Hindalco Industries Ltd, an Aditya Birla Group company, today announced its unaudited financial results for the first quarter ended June 30, 2011. Its performance in the quarter has been significantly better than the comparable quarter in the previous year.

Net sales at Rs. 6,031 crore in Q1FY12 were up 16% despite flat volumes, mainly on the back of higher LME.

The adverse impact of strong inflationary pressures largely in energy products and rupee appreciation were mitigated by improved operating efficiencies in both its Copper and Aluminium businesses. Higher value-added by-product credit and TcRc in the Copper Business also contributed towards sustaining the Company’s performance.

Other Income was higher by Rs. 109 crore driven by improved treasury yield and an enhanced corpus, consequent to return of capital from Novelis.  Other Income is inclusive of Rs. 69 crore received as dividend from Aditya Birla Minerals Ltd, the Company’s Australian subsidiary.

EBITDA exceeded Rs. 1,000 crore, despite steep input cost escalations. Better realization, higher other income and improved operating efficiencies fuelled this rise.

Profit before tax at Rs 803 crore, registered a 19% growth. Net profit after tax stood at Rs. 644 crore up 21% over that of Rs. 534 crore in Q1FY11.

Strategic Initiatives

The existing joint venture [JV] agreement with Almex Inc. USA (Almex) in relation to Hindalco-Almex Aerospace Limited [HAAL], a subsidiary of the Company, has been terminated with effect from 10^th August, 2011 and the Company has acquired 8,011,000 out of 13,011,000 equity shares held by Almex in HAAL.

Business Segment Results

Of the Rs. 6,031 crore revenue, Aluminium Business contributed Rs. 2,093 crore Vs.  Rs. 1,867 crore in Q1FY11. EBIT at Rs. 599 crore was up 8% Vs. Q1FY11. The results would have been better, but for the increased input costs (especially coal) and an appreciating rupee.

In the Copper Business, revenues for the quarter were higher at Rs. 3,940 crore, a rise of 19% from Rs 3,314 crore in Q1FY11, mainly on account of higher copper LME and by-product realisation. The benefits of the marked improvement in operational efficiencies and higher TcRc were partially offset by higher energy cost and bi-annual shutdown. Despite the spike in energy cost, EBIT at Rs. 145 crore was 17 % higher over the corresponding quarter of the previous year.

Operations  Review

Aluminium
Alumina production was lower at Renukoot, due to constrained bauxite availability. Metal Production has been maintained at 140 Kt level; Higher production from the new pots at Hirakud is expected from Q2FY12 onwards.

Flat Rolled Product (FRP) production was lower due to the sluggishness in the market. Production of Extruded products was affected as operations at Alupuram, Kerala continued to be hampered, following the lock-out declared on February 22, 2011.

Production – MT	Q1FY12	Q1FY11
Alumina	334,587	341,419
Aluminium Metal	140,387	140,061
Flat Rolled Product	49,544	51,373
Extrusions	7,321	9,617

Copper
Copper production was lower on account of the bi-annual shut down at one of the smelters at Dahej. The Smelter is back in operation from July ’11. CCR production fell in line with market conditions.

Production – MT	Q1FY12	Q1FY11
Copper Cathodes	73,192	76,309
CC Rods : Own	33,701	40,708

Expansion Projects

Brownfield

Hirakud Smelter Expansion: The Smelter expansion at Hirakud from 155 KTPA to 161 KTPA was completed in Q4 FY11. A further expansion from 161 KTPA to 213 KTPA, along with a 100 MW Captive Power Plant [CPP] will be commissioned in early 2012. 

The next phase of expansion of the Smelter from the proposed 213 KTPA to 360 KTPA, with a corresponding increase in CPP capacity from 467.5 MW to 967.5 MW is under evaluation. The environmental clearance is in place.

Hirakud Flat Rolled Products [FRP] Project: This project is underway with the transfer of all the critical equipments for FRP production from the Novelis plant at Rogerstone, UK to Hirakud. In addition, orders have also been placed for related and balancing equipment.

The erection of the Cold Rolling Mill has started at the site. Almost 50% of the structural fabrication and erection is complete. The project will enable the Company produce a wide range of superior engineering products, including can-body stock, for both domestic and export markets. The project is slated for completion towards end-2011.  Around 3,000 people are working at the site.

Belgaum Special Alumina: A feasibility study on the Specials Plant expansion from 189 KTPA to 301 KTPA, with a coal based co-generation power plant, along with natural gas firing for its rotary kilns, is currently on.

Greenfield

An overview of the projects is as indicated below:

* MoEF approval for 3 mio-tonne/annum

** MoEF approval for 325 KTPA and 750 MW CPP

*** MoEF approval for 260 KTPA and 600 MW CPP

+ The process of seeking approvals is in progress

Of late, the uncertainty in the regulatory environment has impacted the progress of some of these projects and has posed challenges with respect to the commissioning of these projects as per schedule.

These Greenfield projects are located in remote places, devoid of adequate infrastructure, which needs to be developed. The execution gets impacted by local factors that may not be conducive to planned progress. The Company is building necessary infrastructure to support the execution of the projects, to sustain commercial operations, when these are commissioned.

While the critical long lead equipment for UAIL, Mahan and Aditya Smelters have been tied up and committed, severe inflationary pressure is being witnessed, triggered by the increase in commodity and fuel prices, for ongoing civil and other related activities.

Developments During the Quarter

Mahan Coal:  The Forest Advisory Committee of the Ministry of Environment and Forest (MoEF) has recommended that the forest diversion proposal for Mahan Coal block be rejected. However the Minister has referred the matter to a Group of Ministers (GoM) which has been constituted for the purpose of deciding on forest clearance for coal blocks, including that for Mahan. The issue of Mahan Coal block is likely to be discussed in the next meeting of the GoM.

The company has already made detailed representations and is hopeful of a favourable disposition by GoM, considering the merits of the case and the investments already made.

To meet the coal requirements during the interim period, the Company has made an application for tapering linkages which are being considered by the authorities. The company is also exploring open market purchase and imports to meet the shortfall, if any, until a satisfactory resolution of the matter.

Given the changes that may be involved in the approval and coal sourcing pattern, the scope and cost of the project may undergo some modifications.

Mahan Aluminium Project: This 359 KTPA Aluminium Smelter, along with 900 MW CPP, is coming up in Bargawan, Madhya Pradesh.

Contractors have mobilised about 17,000 people at the site.  Engineering for the project is complete and installation of major equipment for both the Smelter and the CPP is going on full swing at site. 

Civil foundation, fabrication and erection of structures have progressed substantially at both the Smelter and the CPP.  The progress is in line for commissioning of 1^st set of pots and two units of CPP. The first metal from the project is, expected to be available by end 2011.

Utkal Alumina International Ltd. (UAIL): The construction of the alumina refinery, along with a 90 MW captive co-generation plant is on track at UAIL, a 100% subsidiary of the Company.  The output from UAIL would feed alumina to the Mahan and the Aditya Smelters.  Contractors have mobilised more than 9,000 people at the site.  The erection of major equipment like boilers, evaporators and turbines is in full swing.

The project progress is broadly on scheduled lines. As indicated earlier, some of the major contractors who have not delivered in line with their commitments are being replaced.  The performances of the other contractors are being closely monitored.

Despite overruns in cost, the project capital cost continues to be favourably benchmarked with the capital cost of other comparable global projects.

The operating cost of this project will continue to be in the lowest cost quartile of the global cost of production and will be value accretive.

Aditya Aluminium: Stage II forest clearance in the Aditya Smelter and Power Plant has been received. It is expected that first metal will start flowing by early 2013.

Industry Outlook

Following the deepening of sovereign debt crisis in Europe and the downgrade of US sovereign rating recently, macroeconomic risks have accentuated. Setting of risk aversion into financial markets can potentially have an adverse impact on investment flows into commodities and therefore, on prices of aluminium and copper on the London Metal Exchange (LME).

Aluminium

Global aluminium consumption in Q1FY12 showed a robust growth of 9% vis-a-vis Q1FY11. There has been an increasing demand from all the major economies. China had a double digit growth due to high demand from construction, electrical and packaging sectors. The global demand trend, however, could be vulnerable in the coming quarters due to macroeconomic headwinds.

In India, most aluminium consuming sectors reflect a steady performance, though there has been some slowdown compared to the strong growth trend witnessed last year.

Aluminium prices averaged USD 2,600/t for Q1FY12, the highest since Q2FY09. This increase is attributable to the hardening of cost structures, inventories locked up in warehouses, and investor interest in aluminium. While the cost push and warehouse deals could continue to provide support to prices, downside macro risks mentioned earlier, need to be watched out.

Copper

Even though medium-term demand prospects for copper remain bright – globally as well as in India, its consumption is witnessing some deceleration on account of high relative copper prices and concerns over the strength of the global recovery in some economies.

Concentrates market had eased up since late 2010, following maintenance shutdowns / disruptions in major smelters. The market has begun to tighten again following strikes at some of the major mines, delays in anticipated mine projects and decline in ore grades. The spot TcRc have corrected from their peaks seen about a quarter ago. Going forward, concentrates market balance will depend upon the resolution of mine supply issues and ramp up of new projects. Hindalco is unlikely to be affected by any adverse movements in the concentrate market as the Company is adequately covered for supplies during remaining FY12.

Company Outlook

The environment in both the businesses has become very challenging due to volatile LME, spiralling energy and other costs and non-availability of coal.  The regulatory uncertainty is compounding the concern.

The long term prospect of aluminium and copper consumption in India and globally augur well for the Company.  Capacity expansions under implementation will enable the Company in achieving its vision of being a premium metals major, global in size and reach.

‘Green Man’ Lalitkumar Jain heads CREDAI; Embarks on ‘Mission transparency’ in realty

NEW DELHI: Civil engineer-turned multi-project developer Mr Lalitkumar Jain, nicknamed as the “Green man of Pune” for his eco-friendly nature, who has been elected as the President of Confederation of Real Estate Developers’ Associations (CREDAI) has vowed to take up the issue of transparency in real estate deals.

 

Mr Jain, commenting on his plans for CREDAI, said the developer community as such has been facing several problems relating to transparency in transactions.

“We at CREDAI have planned to tackle with this problem head-on and ensure customer delight in our transactions. We are also keen to ensure that the customer relationship management gets a new meaning in real estate, for real,” he said.

Mr Jain, Chairman and Managing Director of Kumar Urban Development Limited (KUL) was earlier the Vice President of CREDAI (West) and his election as the national President marks a new high in his nearly 3-decade long experience as a developer.

A people’s man that he is, Mr Jain took active part in organizing the developer community. In fact, he was the youngest Secretary and President of the Promoters Builders Association of Poona (PBAP). He, along with Mr JiendraThakkar, has also played a stellar role in creating and developing the Federation of Promoters Builders Associations of Maharashtra.

Mr Jain has been associated with CREDAI right from its inception. As the first convener of CREDAI national convention in Vigyan Bhawan he is also credited for mobilizing the largest number of developers on one platform. He has been the Vice President of CREDAI twice and has significantly contributed to the organsiation’s activities and representations on policy and legal issues.

He started his career at the age of 17 years as a supervisor in a Pune company and contributed to the firm making handsome profits. Restless to perform, Lalitkumar joined his father Late Shri Kesarimalji Kamdar‘s business Kumar &Co and mastered legal knowledge and the government policies.

With his Company Motto - “We Build Trust” - he practices what he preaches. Small wonder his business grew manifold and Kumar Builders quickly became synonymous with quality real estate of Pune. In 1999, his family saw partition and Lallitkumar started with development of 35,000 sq ft and within five years he delivered 1.4 million sq ft.

He has carved a niche for himself in Pune construction with more than 100 projects and 14,000 tenements, setting a new benchmark in trustworthiness. Apart from residential complexes, he developed IT Buildings, Retail Malls, IT Park and gated communities.

Kumar Builders has recently been rechristened as Kumar Urban development Limited to give it a new identity to change with the changing times. KUL has so far developed 70 million sq ft with 9million sq ft of city centre projects, with focus on Pune and Mumbai.

Bangaluru, Hyederabad and Nagpur are on KUL’s radar for the near future. Its current projects range from redevelopment projects to SEZ.

KUL can also be credited for being the largest single contributor to the City’s greenery drive. Each year, KUL donates about 10,000 saplings to the civic bodies, besides developing public gardens.  The environment park called “Nakshtra Udyan” stands testimony to the fact that greenery is a way of life at KUL.

Presenting environment friendly projects, KUL is one of the first developers to have received the coveted  ISO 14001 certification under 2004 guidelines, globally

The company, under Mr Jain’s leadership, has been hounoured with the National Shrusti Award for contribution to environment as it was the first developer company to adhere to PMC’s environment norms. It has also won “CNBC CREDAI AWARD” for Best Commercial Building Systems, City Scapes’ “Future City Award”, “Amacus” Best Developer Award, “Best Regional Developer Award” by Realty Plus. KUL is rated as one of the top 10 developers of INDIA by Construction World Magazine in 2009.

A meritorious student right from his 1^st Standard, Mr Jain has shown keen interest in education and sports. For well over decade, he has been running a unique project called “Adarsha Vidya Mandir Yojana” designed to ensure an overall growth of students by adopting schools especially in backward rural areas around Pune.

Now, he is all set to major role at the national level taking up passionately the cause of developers and their stake holders – the customers.

You are wrong, Sahara tells SEBI

Sahara India this rebuttal to SEBI order banning two of its group companies and promoters from raising funds.

Though as an institution, SEBI is a highly responsible and one of the respectable regulators of the Country, but certain individuals occupying their office, act with malice and biased approach which serve no public good and earn only a bad name. 

Registrar of companies under Ministry of Company Affairs officially and lawfully had allowed the unlisted companies Sahara India Real Estate Corporation Limited (SIRECL) and Sahara Housing Investment Corporation Limited (SHICL) to issue Optionally Fully Convertible Debentures, based on our Red Herring Prospectus fully complying with the provisions of Companies Act 1956  (the Act) keeping in view the latest provisions of first proviso to Sec. 67(3) of the Act.

Unfortunately some officers bearing the grudges against the Sahara India Pariwar, repeatedly not fulfilling there vested legal demands, have even gone to the extent of uploading the order on website; and not supplying it directly to the company. This is but obvious to whimsically hit the company and disturb its well wishers and investors from associating with it.

SEBI in the past fought with Insurance Regulatory and Development Authority (IRDA) and now giving us direction to stop issuing Bonds (OFCDs) which has been permitted by Ministry of Company Affairs (MCA) without consulting a word even with the actual regulator MCA.

Note :     Media has also wrongly interpreted and stated that in M/s. Sahara Prime City Limited IPO has been rejected by SEBI.

SEBI had been seeking informations from us about OFCDs. We all the time wrote back that this matter is not definitely under SEBI’s jurisdiction.  We should not become the victim of cross fire between two Government regulators SEBI and MCA.

We submitted to SEBI the legal opinion that this OFCD is definitely not the matter of SEBI, it is not their jurisdiction. This opinion has clearly been submitted in SEBI given by five legal luminaries namely Shri A.M. Ahmadi, Former Chief Justice of India; Shri C. Achuthan, Former Presiding Officer, Securities Appellate Tribunal, Mumbai; Shri S.P. Kurdukar, Former Judge, Supreme Court of India; Shri A.K. Manmadhan, Advocate, High Court of Bombay and Shri U.P. Mathur, (Former Secretary Company Law Board & former Director of Inspection & Investigation in the Department of Company Affairs), Advocate & Corporate Law Consultant.

Not only this the SEBI has also shown total disrespect to the orders passed by Hon’ble High Court of Bombay in the matter of Kalpana Bhandari and Others vs Securities and Exchange Board of India and others 2004 (1) BomCR 663, 2005 125 CompCas 804 Bom in which it has given that “SEBI has powers (i) in case of listed public companies and (ii) in case of those public companies which intend to get their securities listed on any recognised stock exchange in India.  In other words SEBI does not have power in relation to the issue and transfer of securities and non-payment of dividend under the various provisions referred to in section 55-A for the companies other than listed public companies and the public companies which intend to get their securities listed on any recognised stock exchange in India.  Such power is vested in the Central Government”.

Note:   Sahara companies in question are neither listed nor intend to be listed.

SEBI is doing all these irresponsible acts based on some baseless (anonymous also) complaints. We repeatedly asked SEBI for the name and address of complainant which they so wrongfully refused to inform us. Recently the main complaint case against us has been totally rejected by Government of Madhya Pradesh. We some times face these complaint problems from very greedy people who try to extort large sum from us which we never have entertained or allowed.

SEBI in its order has cited various information it collected through MCA website vindicates the stand of the company that the information required as per the Act have been supplied to proper regulator, i.e., MCA. Further, when company had appealed SEBI to wait till receiving the directions of MCA and no undue long time had elapsed, the action of SEBI looks to be taken in haste with bias. The reasons look apparent but we have no written basis to mention here. It is apparent that SEBI has for best reasons known to it, totally ignored all legal opinions and Hon’ble High Court Judgement. 

SEBI’s very important reaction was that we are not supplying them all the information that they are asking for. We wonder why they asked these information from us and why not from MCA? You please go through the part of our detailed last letter of 30th September 2010 to SEBI that clearly says why we have not sent them the information. 

“Once again our humble request to you is to take all information from Ministry of Corporate Affairs (MCA) who are the regulators in this matter.  There may be jurisdictional problems amongst Regulators like it happened between SEBI and IRDA recently, still the Business and Industry like us should not be put as party in cross fire, as it is happening with us, hence please do not make our company as disobedient company in the eyes of its Regulator, i.e., MCA. When information was taken on our deposit mobilization (RNBC) activities of our Group Company from RBI why not to take information on Bonds (OFCD) from MCA.  

Inside information from SEBI’s internal people says that if we give all the information ourselves to SEBI, SEBI would take action against Sahara through Media to disturb Sahara establishments.  If SEBI takes all information from MCA they won’t be able to act against Sahara. Of course, SEBI knows this is wrong and arbitrary action which will not stand in legal trial but SEBI will create Media trial to destabilize Sahara. The above is substantiated with the fact that SEBI is not taking the information from MCA and is insisting to get it from the Company. Kindly take the information from MCA. 

We do not want to blame SEBI which is definitely a highly respected institution and we genuinely respect SEBI as institution. Yes, there are sometimes such individuals who go unreasonable and baselessly biased and create unnecessary problems. We are definitely pained.

We are an orgnaisation where 9 lac families are earning their bread and butter.  Please do not disturb us unreasonably, unnecessarily. Please support on merit and bless us.”

In the past also similar biased act of regulator we have experienced, so we were very apprehensive and after this biased order our apprehension has now come right. 

SEBI has talked about 4 to 7 thousand crores which we have received through OFCDs etc. Out of confusing so many newspapers etc. had mentioned about Rs. 20000 plus 20000 crores etc. SO..

..One Should Know About Sahara’s Financials (Provisional as on 30th June 2010)

Group Liability Statement

Net Outstanding liability with accrued interest of Public Deposits plus Unsecured loan from Banks plus Money from close Associates plus Advances against various projects plus Life insurance Policy Holders Fund plus Money in Mutual Fund. (Book Value Rs 34,328 Crores)

Group Assets Statement

Liquid Investment, Cash & Bank balances and Fixed Deposits etc. (Book Value – Rs. 19,390 crores), (Market Value – Rs. 19,456 crores)

Sundry Debtors, Loan and Advances, tax refundable and other current assets etc. (Book Value – Rs. 7,629 crores), (Market Value – Rs. 7,629 crores)

Land, construction Work in progress, Finished Stock and Fixed Assets etc. (Book Value – Rs. 27,949 crores), (Market Value – Rs. 82,139 crores)

Total Group Assets (Book Value – Rs. 54,968crores), (Market Value – Rs. 1,09,224 crores) 

Note: The above statement is prepared on the basis of provisional Balance Sheet a on 31/03/2010 or 30/06/2010 of Sahara Flagship Group Companies.

WE ARE ABSOLUTELY AND RELIGIOUSLY LAW ABIDING ORGANISATION NOT BECAUSE WE FEAR LAW BUT WE RESPECT LAW OF THE LAND.

NOW WE SHALL SOON APPEAL AGAINST SEBI’s ACTION AT AN APPROPRIATE FORUM.

SEBI could have approached MCA in this matter to fulfil their duties towards the masses (as they are claiming). Otherwise they would have given this order in the interest of people (so called claim by SEBI) directly to us through a letter. What was the reason of putting 34 pages in their website to make it public?  Respected Readers must be understanding the intentions clearly.

So in the interest, image, goodwill of entire Sahara India Pariwar SEBI has pushed us against the wall that is why we are forced to come out with all above details.

Source : www.sahara.in
English - http://sahara.in/sebi-eng.pdf
Hindi - http://sahara.in/sebi-hindi.pdf