'NSEL, board violated rules; failed to act against defaulters'

 
The corporate affairs ministry has found that the beleaguered National Spot Exchange (NSEL) and its Board not only violated multiple regulations but did not take action against repeated defaults which resulted in Rs  5,600- crore scam at the bourse.

According to PTI, the Registrar of Companies (RoC), Mumbai, has concluded that NSEL breached as many as 15 provisions of the Companies Act, including those related to corporate governance, sources said. The spot commodity exchange never declared any member as defaulter despite repeated instances of defaults, which is also one of the main reasons for the present crisis, sources added. Many of the defaulters were also allowed to trade and increase their exposure.

NSEL, part of Jignesh Shah-led Financial Technologies Group (FTIL), is grappling with the crisis after it suspended trade on July 31 on government direction. It has already seen major fallouts with rejig of Boards at the exchange as well as at some other Group companies.

Besides finding corporate governance failures, including lack of transparency, integrity and compliance, sources said that the bourse did not have as many as nine committees. These panels are required under regulations.

Among others, the exchange did not set up vigilance, dispute resolution, trading, clearing and arbitration panels. There have meetings and it has been found that the Board did not discuss the exchange's compliance with various rules such as those related to admission of new members, sources said.

Flagging various concerns, the inspection found that the exchange did not have a mechanism for verification of physical stock at the warehouses. As per the findings, many NSEL directors, including Shah and Joseph Massey, were holding common directorship in Group companies of FTIL and they cannot claim to be not aware about happenings at the exchange.

The inspection of books was ordered under Section 209 A of the Companies Act.

Non-executive chairman ShankarlaI Guru and two non- executive directors Ramanathan Devarajan and B D Pawar have also quit from NSEL Board.

GDP growth likely edged up to 4.6% last quarter

New Delhi: India's economic growth likely picked up slightly in the July-September quarter as improved manufacturing activity steered it from a four-year low in the previous three months, a Reuters poll showed on Tuesday.

Any improvement would be welcome news for the government as a string of opinion polls forecast a poor performance for the ruling party in general elections which must be held by next May.

Economic growth virtually halved in two years to 5 percent in the last fiscal year - the lowest level in a decade - and most economists surveyed by Reuters last month expect 2013/14 to be worse.

The consensus of 40 economists showed gross domestic product expanded 4.6 percent year-on-year in the last quarter, better than the 4.4 percent in the previous three months, which was the lowest since the global financial crisis.

"It is only a marginal improvement with much of the support from a slight recovery in manufacturing sector," said Upasna Bhardwaj, an economist at ING Vysya Bank.

A moderate recovery in Indian factories and exports were probably the main drivers for an increase in overall growth in the quarter through September. Annual industrial output picked up 2 percent in September, driven by an uptick in export and domestic orders.

Stronger global demand for India's exports also led to an increase in production, with exports growing 11.15 percent annually in September.

Also, a good monsoon should have boosted rural income and perked up flagging consumer demand.

However, a dearth of investment lies at the heart of India's economic malaise.

Little improvement is expected ahead of the general election, with investors doubting whether Prime Minister Manmohan Singh's minority government can force through any bold actions between now and then.

Radhika Rao, an economist at DBS in Singapore, said euphoria surrounding Singh's earlier reform plans had eased after they failed to materialise.

"It is not surprising that the private sector keeps expansion plans on ice," Rao added.

With wholesale price inflation moving back above the Reserve Bank of India's perceived comfort level of 5 percent and consumer inflation quickening to more than 10 percent, there is little expectation the central bank will act to ease policy boost growth.

In face, new RBI chief Raghuram Rajan has hiked interest rates twice in as many months since September, tackling rising prices head on.

Indian rupee up 6 paise against US dollar, at 62.44

 
The Indian rupee appreciated by six paise to 62.44 against the US dollar in early trade at the Interbank Foreign Exchange market on selling of the US currency by exporters.

The rupee had gained 37 paise to end at 62.50 on Monday after global crude oil prices dropped following a nuclear deal between Iran and world powers.

Forex dealers said strength in other currencies against the Greenback overseas, after fresh figures showed pending US home sales slowed for the fifth straight month in October, also supported the rupee. They said, however, a lower opening in the domestic equity market capped the gains on Tuesday.

Meanwhile, the BSE Sensex fell by 66.06 points, or 0.32 per cent, to 20,539.02 in early trade on Tuesday.

Doubt and hope cloud Ajay Piramal and Rahul Bajaj's expectations of India's 26/11-preparedness

 
The trauma is receding, but India's industry leaders still feel a lack of confidence on the fifth anniversary of November 26. Frontline leaders feel that while the government has taken some steps, a lot still needs to be done before confidence comes back.

Five years since the attack, memories of the incident in which over 160 people were killed does not instil confidence among business leaders that such an act will not happen again.

"No significant measures to restore confidence come to mind. I am not confident that it won't take place, again," says Ajay Piramal, chairman, Piramal Group.

In 2008, when Business Today asked the question: will this be enough to kick-start a reversal in confidence and in activity? Industry leaders responded with hope, and expectation. "I feel the entire issue of security and governance will, in fact, be revisited and hopefully we will see improvements," Adi Godrej, Chairman, Godrej Group had said then. Ness Wadia, Joint MD, Bombay Dyeing had said, "This is a long-awaited wake-up call."

Today, Rahul Bajaj, chairman, Bajaj Group, says he is still not confident enough. "I can only hope that my government has taken steps and will continue to ensure that such an event will not happen again on Indian soil".

On November 26, 2008, at around 9.30 pm, Mumbai came under siege by 10 gunmen who launched simultaneous attacks on key business and tourist locations. These included five-star hotels The Taj, Oberoi and Trident hotels, Leopold Cafe, a restaurant in the shopping district of Colaba famous for being a haunt of foreign tourists, the crowded Chatrapati Shivaji Terminus, Nariman House, and Cama Hospital.

Mumbai's businesses were hit right in their nerve centre in the event. Ashok Kapur, then chairman of YES Bank was one of the victims. His funeral at Baanganga in South Bombay was attended by CEOs from all over the country, including those from the Tata Group and elsewhere. Anand Bhatt, a senior partner of Wadia, Ghandy & Company, a leading legal firm, lost his life as well.

While the hotels lost close to a year of business due to renovation (actual losses of which still remain unknown), business sentiment towards India had also taken a beating. Media reports suggest while Taj incurred a loss of around Rs 400 crore, Oberoi Group spent close to $40 million (Rs 170 crore then) in renovating the two properties overlooking the Arabian Sea. The 60 hours of terror spread over four days, had resulted in a loss of roughly Rs 4,000 crore to Mumbai, industry body Assocham estimated in 2008 after talking to companies and industries in the city.

Even today, the Taj Mahal palace has a barricade all around it. Most large office complexes are gated and have high, electronically monitored walls. Private security firms have proliferated, and metal detectors and frisking is mandatory, even at shopping malls and theatres.

Terrorist have struck in India after 26/11. People have died in bakeries and on trains. Questions are being asked, and inevitable comparisons are coming out. "It has been thirteen years since 9/11. Since then in the US, no major incident has occurred. But terrorist attacks have happened here," says Piramal.

BSE Sensex trades in red as investors book profits

 
The BSE Sensex fell over 66 points in early trade as investors booked profits after on Monday's strong rally amid a mixed trend on other Asian bourses.

The 30-share index of the Bombay Stock Exchange fell by 66.06 points, or 0.32 per cent, to 20,539.02, led by losses in stocks of FMCG, IT, banking, realty and oil and gas sectors.

The Sensex had gained nearly 388 points in the previous session.

Similarly, the wide-based National Stock Exchange index Nifty shed 17.15 points, or 0.28 per cent, to 6,098.20.

In the Asian region, Japan's Nikkei Index was down by 0.69 per cent, while Hong Kong's Hang Seng index gained 0.09 per cent in early trade on Tuesday.

The US Dow Jones Industrial Average ended 0.05 per cent higher on Monday.