New Delhi: The Federation of Hotel and Restaurant Associations of India (FHRAI) on Wednesday urged the Securities and Exchange Board of India (SEBI) to call off online hospitality major Oyo’s initial public offering (IPO), citing the massive losses suffered by the hotel rooms aggregator in recent years.FHRAI cautioned that Oyo’s IPO will allegedly wipe out public wealth while enriching its founders and key management.As per reports, Oyo incurred losses of Rs 3943.84 crore in FY20-21, translating to a loss of over Rs 76,077 every minute.According to the top hotel industry body, since its inception in 2013, Oyo has been running in losses and its total turnover fell a drastic 69 per cent from Rs 13,413 crore in 2020 to Rs 4,157 crore in 2021.“Oyo is a company that has consistently registered losses since its inception. It may have raised a lot of money to become touted as one of India’s most promising start-ups but it hasn’t done enough to manage the business on the ground as efficiently,” said Gurbaxish Singh Kohli, Vice President, FHRAI.In addition to its financial complications and losses, the company is being investigated for anti-competitive practices by CCI, said Kohli.“It is reported that Oyo has stopped operating single Hotels and has been reduced to just another online travel agent. The hospitality industry is wary of Oyo,” he added.FHRAI had previously objected to gross misstatements and inadequate disclosures contained in the Draft Red Herring Prospectus (DRHP) filed by Oyo.The association also filed a complaint with the SEBI stating Oyo’s tax evasion.The Directorate General of GST Investigation (DGGI) had filed a case of GST/service tax evasion against Oyo and its subsidiaries.“Oyo has been deliberately suppressing sales figures. It has been under-reporting revenues generated from hotels and has also been evading taxes,” according to Pradeep Shetty, Joint Honorary Secretary, FHRAI.The hospitality major was yet to react to FHRAI’s allegations.—IANS

The Federation of Hotel and Restaurant Associations of India (FHRAI) on Wednesday urged the Securities and Exchange Board of India (SEBI) to call off online hospitality major Oyo’s initial public offering (IPO), citing the massive losses suffered by the hotel rooms aggregator in recent years.

FHRAI asks SEBI to axe Oyo’s IPO citing massive losses

New Delhi: After record-high levels of IPO activity in 2021, volatile market conditions have resulted in a significant slowdown during the first quarter of 2022. In Q1 2022, the Indian market introduced 16 IPOs vs 23 IPOs in Q1 2021, according to the EY Global IPO Trends Q1 2022. During Q1 2022, proceeds raised through the main markets equated to $ 995m via three main market IPOs compared to US$ 2.57 bn during Q1 2021, which is a decline of 60 per cent in proceeds raised and a decline of 82 per cent in the number of deals. SME segment raised US$ 17.46m via 13 IPOs during Q1 2022.Nobin Paul has composed music and background score for the movie. The sudden reversal can be attributed to a range of issues, both emerging and residual. These include the rise in geopolitical tensions; stock market volatility; price correction in over-valued stocks from recent IPOs; growing concerns about a rise in the commodity and energy prices; the impact of inflation and potential interest rate hikes; as well as the Covid-19 pandemic risk continuing to hold back full economic recovery.The three largest IPOs in terms of proceeds were Adani Wilmar, Vedant Fashions and AGS Transact Technologies, with consumer products &amp; retail being the most active sector followed by the diversified industrial products. On the findings of the report, Sandip Khetan, Partner and Financial Accounting Advisory Services Leader, EY India, said, "The IPO momentum of a blockbuster 2021 has not carried over to 2022 so far. Issuance and proceeds are well off last year's pace, as geopolitical uncertainty along with other macro factors continues to affect investor sentiment. That said, we are witnessing the largest IPO (of LIC) in Indian capital markets and the successful closure of other recent IPOs. The backlog of IPOs could lead to a strong upswing in volumes if volatility does moderate and earnings are robust."However, in line with continued regulatory developments aimed at enhancing disclosures and market practices, there have been several recent amendments such as a change in disclosures for objects of the issue, revised norms for credit rating agencies (monitoring proceeds), revised norms for price band (wherein now 5 per cent cap is to be maintained between the floor price and upper price). In addition, SEBI issued a consultation paper on 'Basis of Issue Price' covering additional parameters, e.g., Key Performance Indicators (KPIs) to be disclosed, particularly for loss-making companies basis for arriving at the issue price.The EY report also highlights that there is a strong pipeline for IPOs in Q2 2022 and beyond. More than 20 companies have filed their DRHPs in Q1 of 2022, planning to raise funds in the current calendar year. These include a mix of traditional companies with long track records as well as newer age companies across various sectors such as consumer, pharmaceuticals, technology, logistics and financial services. In line with the sharp decline in global IPO activity, there was a considerable fall in cross-border, unicorn, mega (proceeds above US$1b) and SPAC IPOs. There were also several IPO launches postponed due to market uncertainty and instability. On a broader note, EY findings suggest witnessing a robust activity in the private market with more than 10 companies gaining Unicorn status in Q1 2022. PE/VC investments in 2022 continue good momentum, with Jan-Feb 2022 investments (US$10.3bn) being more than twice that of Jan-Feb 2021 (US$4.1bn) but 7.6 per cent lesser than the previous two-month period November-December 2021.—IANS

After record-high levels of IPO activity in 2021, volatile market conditions have resulted in a significant slowdown during the first quarter of 2022.

Indian IPO market experienced significant slowdown

After record-high levels of IPO activity in 2021, volatile market conditions have resulted in a significant slowdown during the first quarter of 2022.



New Delhi: Riding on intense retail investors' interest and a sharp rally in equity markets, asset management companies (AMCs) launched 176 new fund offerings (NFOs) in 2021-22, garnering a whopping Rs 1.08 lakh crore. With liquidity tightening, interest rates on the rise, stock market consolidation in progress, return to work from office, there could be subdued interest in NFOs going forward. While fixed maturity plans (FMPs) category could see considerable launches, the same cannot be expected from other categories, Gopal Kavalireddi, Head of Research at FYERS, said.Also, almost all AMCs have launched new schemes across most categories, thereby fillings the earlier existing product gaps that was created post-recategorization, he said.''Gaps in investment objectives, interest of investor in specific themes, availability of funds for deployment, credibility and reputation of fund managers, and performance of stock markets could dictate the quantum of new launches,'' he added. According to the data compiled by Morningstar India, there were 176 new fund offers (including closed-end funds and ETFs) in 2021-22. These managed to collect a staggering Rs 1,07,896 crore during their inception stage.This was way higher than 84 NFOs floated in 2020-21 and cumulatively, these funds were able to mobilize Rs 42,038 crore. Usually, NFOs come during a surging market when investor sentiment is high and optimistic. The stock market along with the positive investor sentiments kept surging post-March 2020, leading to the launch of higher number of NFOs. The NFOs were floated to capitalise on the mood of investors and attract their investment as they were willing to invest at that time. Coincidentally, over the same period, the Indian capital markets Sebi along with Association of Mutual Funds of India (AMFI) brought in considerable investor-friendly changes which included exit-load removal, entry-load capping, categorization and reorganization of mutual fund schemes, direct plans, risk-o-meter, addition of new category, Flexicap, and other policies, thus ensuing investor awareness and bringing about clarity and transparency in investments.With the need to improve income levels, and also with a view of long-term investing, along with measures taken by Sebi and Amfi resulted in a flurry of NFOs across many categories of mutual funds-- equity and debt alike, Kavalireddi said. Most of the schemes were launched in the index and ETF category, to support both - passive and active investors. The maximum number of funds (49) were launched in the index fund segment, which amassed Rs 10,629 crore, followed by other ETFs (34), which collected Rs 7,619 crore and fixed-term plans (32), which mobilised Rs 5,751 crore.In addition, investors were attracted to international funds and sectoral or thematic funds. The AMCs launched overseas funds of funds, which mopped up Rs 5,218 crore and 11 sectoral or thematic funds, which raised Rs 9,127 crore. Experts believe that the dominance of index funds and ETFs (exchange-traded funds) within NFOs is not surprising, owing to a couple of factors.The ongoing financial year 2022-23 saw the launch of only four NFOs, garnering a total of Rs 3,307 crore, with ICICI Prudential Housing Opportunities Fund taking in the lion's share of Rs 3,159 crore. Further the latest ban by Sebi on NFOs will delay the launch of around 15 schemes, as the market regulator is focused on streamlining the issue of pool accounts, upgrading technology at AMCs, two-factor authentication among others to avoid potential frauds besides minimising operational risk, Kavalireddi said. Also, the latest issue of front running of stocks in Axis Mutual Fund has given rise to issues of trust and credibility of fund houses and their respective fund managers, he added. In April, Sebi had barred the launch of new mutual fund schemes till July 1.—PTI

Riding on intense retail investors' interest and a sharp rally in equity markets, asset management companies (AMCs) launched 176 new fund offerings (NFOs) in 2021-22, garnering a whopping Rs 1.08 lakh crore.

MFs collect Rs 1.08 lakh cr via 176 NFOs on retail investors' interest

New Delhi:&nbsp;Leading B2B payments and services provider PayMate India has filed preliminary papers with capital markets regulator Sebi to raise Rs 1,500 crore through an initial public offering (IPO).The initial share-sale comprises a fresh issue of equity shares worth Rs 1,125 crore and an Offer-for-sale (OFS) of Rs 375 crore by promoters, investors, and other shareholders, according to the draft red herring prospectus (DRHP).Those selling shares in the OFS include promoters -- Ajay Adiseshan and Vishwanathan Subramanian and investors -- Lightbox Ventures I, Mayfield FVCI Ltd, RSP India Fund LLC, and IPO Wealth Holdings, besides, certain existing shareholders are too offering shares through this route.The offer also includes a reservation for subscriptions by eligible employees.Currently, the promoter and promoter group holds a 66.70 percent stake in the company and public shareholders own the remaining stake.Additionally, the company may consider a private placement of equity shares aggregating up to Rs 225 crore. If such placement is completed, the fresh issue size will be reduced.Proceeds from its fresh issuance worth Rs 77 crore will be utilized for investment for expanding the business into new geographies, Rs 228 crore for pursuing inorganic initiatives, and Rs 688.70 crore for placing cash as collateral with its financial institution partners to improve its margins and general corporate purposes.PayMate has developed from a consumer-facing to a Business-to-business (B2B) payments platform since its inception in 2006.It is a multi-payment category platform that incorporates vendor payments, statutory payments, and utility payments, giving its customers a ''fully-integrated'' B2B payment stack.The platform also allows consumers and their vendors, suppliers, buyers, dealers, and distributors to use commercial credit cards to make statutory payments of direct taxes and GST, as well as utility payments.Visa has a partnership with PayMate. It is also a shareholder in PayMate, owning 2.94 percent of the fully diluted paid-up equity share capital.PayMate's revenue from operations increased 61.19 percent from Rs 216.14 crore in Fiscal 2020 to Rs 348.40 crore in Fiscal 2021. Revenue for the nine months ended December 2021 stood at Rs 843.44 crore.ICICI Securities, HSBC Securities and Capital Markets (India) Private Limited, JM Financial, and SBI Capital Markets are the books running lead managers to the issue.The equity shares are proposed to be listed on BSE and NSE.—PTI

Leading B2B payments and services provider PayMate India has filed preliminary papers with capital markets regulator Sebi to raise Rs 1,500 crore through an initial public offering (IPO).

PayMate India files IPO papers with Sebi to raise Rs 1,500 cr

New Delhi: Capital market regulator Securities and Exchange Board of India (SEBI) on Friday passed its final order in the IIFL group front-running case, finding the group’s equity dealer Santosh Singh guilty of wrongfully using his knowledge of impending orders of its group entities.Front-running is the practice of dealing on advance information provided by their brokers and investment analysts, before their clients have been given the information is called front running. The SEBI also found his friend Adil Suthar guilty, thereby penalised the accountholders whose accounts were used by the duo for placing those front running trades. Additionally, Singh and Sutar would be barred from 5 years, while slapped with Rs 10 lakh and Rs 8 lakh penalties, respectively, which must be paid within 45 days time.—IANS

Capital market regulator Securities and Exchange Board of India (SEBI) on Friday passed its final order in the IIFL group front-running case, finding the group’s equity dealer Santosh Singh guilty of wrongfully using his knowledge of impending orders of its group entities.

IIFL Group Dealer Found Guilty In Front-Running Case, 5-Year Ban Imposed

New Delhi:&nbsp;Capital markets regulator Sebi has notified a framework for the social stock exchange to provide social enterprises with an additional avenue to raise funds.The framework for the Social Stock Exchange (SSE) has been developed on the basis of the recommendations of a working group and technical group constituted by the regulator.The social stock exchange is a novel concept in India and such a bourse is meant to serve the private and non-profit sectors by channelling greater capital to them. The idea of SSE was first floated by Finance Minister Nirmala Sitharaman in her Budget Speech 2019-20.Under the new rules, SSE will be a separate segment of the existing stock exchanges, according to the three separate notifications issued by the Securities and Exchange Board of India (Sebi) on Monday.Social enterprises (SEs) eligible to participate in the SSE will be entities -- non-profit organisations (NPOs) and for-profit social enterprises -- having social intent and impact as their primary goal. Also, such an intent should be demonstrated through its focus on eligible social objectives for the underserved or less privileged populations or regions.The social enterprises will have to engage in a social activity out of 16 broad activities listed by the regulator. The eligible activities include eradicating hunger, poverty, malnutrition and inequality; promoting healthcare, supporting education, employability and livelihoods; gender equality empowerment of women and LGBTQIA+ communities; and supporting incubators of social enterprise.Corporate foundations, political or religious organisations or activities, professional or trade associations, infrastructure and housing companies, except affordable housing, will not be eligible to be identified as a social enterprise.Concerning fund raising, Sebi said eligible NPOs can raise funds through zero-coupon zero principal bonds and mutual funds, while for-profit social enterprises can mobilise capital through the issuance of equity shares on the main board, SME platform or equity shares issued to an alternative investment fund, including social impact fund.NPOs desirous of raising funds on the SSE will be required to be registered with the exchange.In respect of disclosures, a social enterprise, raising funds or registered on SSE, will be required to submit an "annual impact report" to such a bourse. The annual impact report will be audited by a social audit firm employing a social auditor.Also, social venture funds under Sebi's alternative investment funds norms have been rechristened as social impact funds in a bid to make such funds an attractive means for investment in NPOs. Further, the corpus requirements for such funds have been reduced from Rs 20 crore to Rs 5 crore and the minimum value of the investment by an individual investor in such funds will be Rs 2 lakh.The amount of grant that may be accepted by the fund from any person has been reduced to Rs 10 lakh from Rs 25 lakh."A social impact fund or schemes of a social impact fund launched exclusively for an NPO registered or listed on an SSE shall be permitted to deploy or invest 100 per cent of the investable funds in the securities of NPOS registered or listed on an SSE," Sebi said.The notifications came after the board of Sebi approved a framework in this regard in September 2021.To give these effects, the regulator has amended rules governing alternative investment funds, ICDR (Issue of Capital and Disclosure Requirements) rules and LODR (Listing Obligations and Disclosure Requirements) norms.—PTI

Capital markets regulator Sebi has notified a framework for the social stock exchange to provide social enterprises with an additional avenue to raise funds.

Sebi notifies social stock exchange framework

New Delhi (The Hawk): On a petition by Reliance Industries (RIL), alleging non-compliance with the court's August 5 order, which allowed the market regulator to be directed to provide access to certain documents to the company, the Supreme Court issued a contempt notice to the Securities and Exchange Board of India (SEBI).
The bench was addressed by judges MR Shah and MM Sundresh with the following statement: "The accused has been given notice to appear on December 2, 2022. Abhishek Singh served as the accused's attorney.
The defendant (SEBI) was given the go-ahead to furnish copies of the documents despite the Supreme Court's direction from August 5, according to senior attorney Harish N. Salve, who spoke in court on behalf of RIL. However, nothing similar has yet been delivered.
The Defendant's preferred request for review is still pending in this court, according to senior attorney and former Attorney General of India KK Venugopal, who spoke on behalf of SEBI. As a result, no further orders will be made in this case.
"We have passed the subsequent order passed by this court in the review petition on October 12, 2022," the judge wrote in his order. The pending review petition cannot be compared to the pending appeal, writ petition, or both. On appeal, this court has the final say. A defendant may not grant a stay on his or her own without adhering to the court's orders just because an application for a stay is being considered.
The state of J&amp;K vs. Mohd. Yaqoob Khan and others initiated the contempt case against an ex parte order passed by an ex parte judge pending a written motion, according to the bench, and that is the item to watch.
Therefore, this court decides that a stay motion cannot be heard, decided upon, or otherwise resolved when contempt proceedings cannot be started. The Supreme Court ruled that the aforementioned decision in this case did not in any way benefit the defendant. The subject will be heard again by the bench on December 2.
The company has asked SEBI for three papers that it claims can shield it and its promoters from legal action over allegedly unauthorised purchases of its stock between 1994 and 2000.
On August 5, the judges, under the direction of the outgoing Chief Justice NV Ramana, stated: "SEBI's conduct, particularly its failure to provide records, also raises questions about openness and fair trials. Transparency prevents the propagation of bias and favouritism. Transparency is the opposite of opacity.
According to the Supreme Court, market regulators must exhibit fairness and submit the paperwork requested by the RIL. When pursuing litigation or other actions against parties, SEBI must behave fairly.
Due to SEBI's failure to provide three papers, including two legal opinions from a former Supreme Court Justice BN, RIL filed a suit for contempt of court. Violations are examined in the report by Srikrishna and former ICAI chairman Y.H. Malegam.
The company also sent a letter to market regulators, claiming that SEBI cannot continue to refuse the production of the records. If the documents are not supplied by August 18, the company will conclude that SEBI does not intend to follow the Supreme Court's ruling.
S. Gurumurthy, a chartered accountant, submitted a complaint with SEBI in 2002 alleging violations by RIL, its affiliates, and directors/promoters Mukesh and Nita Ambani, Anil and Tina Ambani, and 98 others.
Two senior placements of non-convertible bonds in 1994 were mentioned in the complaint. By financing the purchase of its shares, RIL and Reliance Petroleum, according to SEBI, violated sections 77 and 77A of the Companies Act of 1956.
(Inputs from Agencies)

On a petition by Reliance Industries (RIL), alleging non-compliance with the court's August 5 order, which allowed the market regulator to be directed to provide access to certain documents to the company, the Supreme Court issued a contempt notice to the Securities and Exchange Board of India (SEBI).

SC sends contempt notice to SEBI over RIL's non-compliance

New Delhi (The Hawk): By a 2:1 majority decision, the Supreme Court rejected a petition from the Securities and Exchange Board of India (SEBI) that asked for a review of its August 5 decision ordering the market regulator to release specific documents with Reliance Industries (RIL).
A bench composed of Justices J.K. Maheshwari and Hima Kohli and presided over by former Chief Justice U.U. Lalit made the following ruling: "By decision dated October 19, 2022, the Chief Justice of India ordered that notice be given in the review petition. By order dated October 19, 2022, Justices J.K. Maheshwari and Hima Kohli dismissed the Review Petition. The Review Petition is dismissed in accordance with the written orders in light of the majority opinion. Any applications that are still pending will be dismissed." In their majority judgement, Justices Maheshwari and Kohli stated: "The Review Petition was given notice by the Chief Justice of India in an order dated 19.10.2022, which was due back on 23.11.2022. With all due respect, we are unable to concur with the same since we have already stated in our separate orders dated 30.09.2022, that the Review Petitioner has not established any grounds for a notice to be issued or for a review of the decision this Court made on 5.8.2022, when it dismissed Criminal Appeal No. 1167 of 2022." In a previous step related to the lawsuit, the Supreme Court had also served SEBI with a notice of contempt for allegedly failing to comply with the court's decision dated August 5 that required the market regulator to grant the business access to certain records.
Justices M.R. Shah and M.M. Sundresh were on the court when they said: "Send the respondent notice that it is returnable on December 2, 2022. On behalf of the respondent, Abhishek Singh, attorney, accepts delivery of the notice." In its ruling, the bench presided by by Justice Shah stated: "We have reviewed the following order issued by this court on October 12, 2022 in the review case. The status of a review petition cannot be compared to the status of an appeal, writ petition, or both, coupled with a stay.
"This court has made a final determination about an appeal. The respondent cannot obtain a stay on its own and disregard the orders given by this court just because the stay application is still pending in the review case." Because the accused business does not have the authority to request information from the market regulator under the SEBI (Settlement Proceedings) Regulations, the market regulator declined to consider RIL's request to divulge the confidential papers.
The Supreme Court of India rejected this position of the market regulator in its ruling on August 5.
RIL had argued that certain papers would shield it and its promoters from any criminal charges brought against them in connection with the purported irregularities in the purchase of its own shares between 1994 and 2000.
On August 5, a bench presided over by former Chief Justice N.V. Ramana had stated: "Transparency and a fair trial are also raised by SEBI's strategy of withholding the documents. Opaqueness only serves to reinforce bias and prejudice. Transparency is opposed to opacity." The top court had ruled that SEBI has a responsibility to act fairly when conducting hearings or taking any action against the parties and should demonstrate impartiality and provide the papers requested by RIL.
RIL filed a contempt complaint against Sebi because it hasn't provided access to three documents: the two legal opinions written by former SC judge B.N. Srikrishna and the report written by former ICAI president YH Malegam that looked into the anomalies.
The corporation asserted that SEBI cannot continue to oppose the disclosure of these records. The regulator was also warned that if the documents were not obtained by August 18 then Sebi did not intend to abide by the ruling of the supreme court.
S. Gurumurthy, a chartered accountant, filed a complaint with Sebi in 2002 alleging irregularities by RIL, its affiliated companies, and their directors and promoters, including Mukesh and Nita Ambani, Anil and Tina Ambani, and 98 other people.
Two non-convertible debentures were placed preferentially twice in 1994, according to the complaint.
According to SEBI, RIL and Reliance Petroleum circumvented Sections 77 and 77A of the Companies Act of 1956 to illegally fund the purchase of their own shares.
(Inputs from Agencies)

By a 2:1 majority decision, the Supreme Court rejected a petition from the Securities and Exchange Board of India (SEBI) that asked for a review of its August 5 decision ordering the market regulator to release specific documents with Reliance Industries (RIL).

SEBI's review petition against RIL is dismissed by the SC

New Delhi: Senior Congress leader Jairam Ramesh has requested an investigation into financial irregularities and stock manipulation allegations against the Adani Group by writing to Reserve Bank of India (RBI) Governor Shaktikanta Das and Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch.
Ramesh wrote to Das on Wednesday, and the tweet was shared on Twitter, asking the RBI to prevent "excessive debt exposure" by the Adani Group from destabilising India's financial system. "The Adani Group has been described as 'deeply over-leveraged' - if the Adani Group has artificially inflated the value of its stock through manipulation by offshore shell companies and raised funds by pledging those overvalued shares, the recent sell off in stock prices is creating vulnerabilities for the Adani Group to find financing, and by implication for India's banking system,"   the Congress MP wrote on February 14.
Ramesh has requested that the RBI investigate two issues: first, the extent to which the Indian banking system is exposed to the Adani Group, and second, the extent to which the Adani Group has been assured, either explicitly or implicitly, that it will be bailed out by Indian banks in the event that it loses access to overseas funds.—Inputs from Agencies

Senior Congress leader Jairam Ramesh has requested an investigation into financial irregularities and stock manipulation allegations against the Adani Group by writing to Reserve Bank of India (RBI) Governor Shaktikanta Das and Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch.

Cong's Jairam Ramesh asks RBI, SEBI to investigate Adani Group charges.

New Deldi: On Wednesday, the heads of various opposition parties demanded that the Enforcement Directorate (ED) look into charges of corruption and money laundering by the Adani Group using shell companies.
The parties informed the investigation agency that "it cannot turn around and abandon its authority" in an email sent to ED Director S K Mishra.
In addition to the Congress and CPI, the letter was signed by leaders from the JDU, SS (UBT), RJD, DMK, JMM, AAP, IUML, VCK, and the Kerala Congress.
Many opposition party leaders were prevented from delivering a complaint to the Enforcement Directorate on the Adani problem by police as they marched from Parliament House to Vijay Chowk.
We are acutely aware of how in the recent past, the ED has also actively pursued matters of suspected political favouritism, including sharing concurrent jurisdiction with SEBI and CBI," the opposition leaders wrote to the ED. We're also cognizant of the Supreme Court Commission's limited authority in this matter. We emphasise this to remind the ED that it cannot renounce its authority on this or any other basis.
"In light of the aforementioned, we, the members of the Opposition, ask that you take prompt action on the above listed charges," they said to the ED director.
In addition, the letter asserted that, within the previous three months, a number of significant pieces of information had been made public that incriminate the Adani Group.
Even though the Enforcement Directorate professes to aggressively and fairly investigate situations like this, they have not done so in this case.
"As a result, we are constrained to register this official complaint so that the ED is obligated to examine a relationship that has major repercussions not just for our economy but most crucially, our democracy," they stated.
I quote: "Leaders and MPs of 16 opposition parties, who were about to hand over a complaint letter requesting probe into the Adani scam to the ED this afternoon, were blocked from accessing the ED office," this was tweeted by Congress leader Jairam Ramesh.
It has been claimed by the opposition that this case involves severe and far-reaching allegations of corporate fraud, political corruption, stock-price manipulation using fraudulent techniques, and the misuse/monopolization of public resources for the benefit of a single business group.
The letter's authors claimed that the Adani Group companies "artificially inflated stock prices and to portray a false picture with regard to the group companies' financial health" by creating a web of offshore shell companies and offshore funds managed by people affiliated to the Adani Group.
All of the "wrongdoing" allegations presented by the US-based Hindenburg study have been flatly refuted by the Adani Group.
The opposition also referenced the September 2021 drug recovery at Mundra port in their letter, claiming that the business in charge of the port, under whose watch this terrible crime occurred, has been subject to zero serious investigation.
They claimed that the ED's jurisdiction should have been invoked because of the investigation's potential international repercussions.
The opposition leaders have claimed that there is a "clear pattern of corruption, cronyism, and persistent law-breaking" in the debt that the Adani Group has borrowed from various public sector banks.
"It is astonishing that despite all of the above, the ED has showed little to no interest in pursuing a basic examination into the entities' affairs," they added.—Inputs from Agencies

On Wednesday, the heads of various opposition parties demanded that the Enforcement Directorate (ED) look into charges of corruption and money laundering by the Adani Group using shell companies.

Adani issue: Opposition leaders write to ED, saying agency cannot "abdicate" jurisdiction

New Delhi: On Wednesday, Sebi, India's markets regulator, accepted a number of measures, such as a framework to combat stock broker fraud and an end to the practise of individuals holding permanent directorship at the boards of listed businesses.
The Securities and Exchange Board of India (Sebi) board met on Wednesday and unanimously approved the proposals.
Private equity funds will soon be able to become mutual fund sponsors thanks to a new regulatory framework approved by the regulator.—Inputs from Agencies

On Wednesday, Sebi, India's markets regulator, accepted a number of measures, such as a framework to combat stock broker fraud and an end to the practise of individuals holding permanent directorship at the boards of listed businesses.

Stock broker fraud prevention framework by Sebi

Mumbai: On Wednesday, Sebi, India's capital markets regulator, introduced a number of measures intended to stimulate the growth of the mutual fund industry. These include the establishment of a Rs 33,000-crore corpus for a corporate debt market development fund and the authorization of private equity funds to sponsor a mutual fund house.
As part of its effort to make things easier for businesses, the regulator authorised mutual fund schemes to have self-sponsors.
Against the backdrop of Bandhan Financial Holdings, the Singaporean sovereign wealth fund GIC, and the private equity fund ChrysCapital's recent acquisition of IDFC Mutual Fund, regulators have decided to allow private equity funds to sponsor mutual fund houses.—Inputs from Agencies

On Wednesday, Sebi, India's capital markets regulator, introduced a number of measures intended to stimulate the growth of the mutual fund industry. These include the establishment of a Rs 33,000-crore corpus for a corporate debt market development fund and the authorization of private equity funds to sponsor a mutual fund house.

PE funds can sponsor MFs; Sebi permits Rs 33,000 crore debt market development fund

New Delhi: Market regulator, the Securities and Exchange Board of India (SEBI) has cancelled the Certificate of Registration of Karvy Stock Broking (KSBL).
SEBI had received a preliminary report dated November 22, 2019, from NSE, containing its observations of the inspection of KSBL.
It was observed in the NSE-IR that KSBL was raising funds by pledging client securities and diverting the funds raised to related entities.
The SEBI order said that a sample fund trail exercise was undertaken by the Forensic Auditor of the bank statements of KSBL, and it was observed that there were transactions from the bank accounts earmarked as 'client bank accounts' by KSBL to the "own bank accounts" of KSBL. It was also noted that such funds were, in turn transferred to the Group Companies of KSBL.
Securities of clients who had no negative balance (i.e., zero or credit balances) were also pledged by the Noticee. These securities were transferred to KSBL margin/beneficiary accounts without obtaining consent from the clients. Furthermore, KSBL also did not follow the stock lending and borrowing mechanism to borrow stocks from clients, SEBI order said.
It is, however, observed that KSBL had pledged client securities amounting to Rs 2,700 crore beyond September 30, 2019, which is a violation of the provisions.
Further KSBL, by pledging the securities of the clients in the manner described above and continuing to do so even after a specific direction by SEBI prohibiting such pledging of securities of clients has violated the Circular dated June 20, 2019.
It is noted from the records that as on November 22, 2019, KSBL had not settled funds to the extent of Rs. 527.18 Crore and securities worth Rs 2,862.05 Crore, which were returnable to its clients, the order said.
It is noted that out of the additional borrowings of Rs 1,531.90 crore, during the period April 1, 2019 to September 30, 2019, Rs 1,228.36 crore was given as loan/advances/investments to Group Companies (Rs 428.36 crore was given as advances for investment in subsidiaries and Rs 800 crore was given towards loans/receivables from subsidiaries).
The FAR also records, based on an analysis of the total inflow/outflow between KSBL and its Group Entities, that an net amount of approximately Rs 1,120 crore was transferred from KSBL to its various Group Companies from FY 2017 till October 19, 2019, the order said.
KSBL had not reported six own bank accounts (stock broker-own accounts) to stock exchanges as required under the Circular dated September 26, 2016. It is also noted from the FAR that KSBL had credited funds raised by pledging client securities to these six own bank accounts.
NSE had undertaken a sample analysis of the funding provided to KSBL's top 25 debit balance clients, and it was noted that KSBL had provided funding for 13 of the said 25 clients.
The Noticee, by funding the positions of these clients, has compromised its risk management procedures and contravened the provisions of the Circular dated September 26, 2016, the SEBI order said.—IANS

Market regulator, the Securities and Exchange Board of India (SEBI) has cancelled the Certificate of Registration of Karvy Stock Broking (KSBL)

Karvy Stock Broking Pledged Securities Of Clients, Diverted Funds To Group Companies

New Delhi: On Thursday, the Congress claimed a Joint Parliamentary Committee is needed to determine who weakened and then deleted the basic rule in this regard to benefit the Adani group. The Congress also requested that SEBI guarantee thorough disclosure of ownership of Foreign Portfolio Investors from retrospective effect.
The demands were made a day after the Securities and Exchange Board of India (SEBI), which regulates India's financial markets, recommended enforcing more information regarding the holding of high-risk Foreign Portfolio Investors (FPIs).
To help the Adani Group, Congress general secretary for communications Jairam Ramesh said that the market regulator is now looking to tighten the rule that it was "forced to dilute" in December 2018 and its removal in August 2019.—Inputs from Agencies

On Thursday, the Congress claimed a Joint Parliamentary Committee is needed to determine who weakened and then deleted the basic rule in this regard to benefit the Adani group.

Cong wants JPC probe of SEBI's "forced diluting" FPI disclosure standards to favour Adani

Hardoi: On Monday, authorities announced that Khan Mubarak, a close associate of crime boss Chhota Rajan, had died while receiving medical care. District Officer Hardoi Mangla Prasad Singh said that Khan Mubarak, 43, had been hospitalised for several days due to pneumonia.
He was being cared for at the medical school hospital when he passed away.
Mubarak, a local of the Ambedkar Nagar district, was one of the top 10 most wanted criminals in all of Uttar Pradesh and was involved in multiple high-profile gun battles. Throughout India, notably in Maharashtra, his name was linked to the extortion of millions of rupees and gun battles.—Inputs from Agencies

On Monday, authorities announced that Khan Mubarak, a close associate of crime boss Chhota Rajan, had died while receiving medical care.

Sebi bans Subhash Chandra, Punit Goenka from holding directorial position for siphoning off ZEEL funds

New Delhi: From October 1, Sebi has notified guidelines requiring the top 100 listed companies by market capitalization to confirm, reject, or clarify any market rumour reported in the mainstream media in order to streamline the disclosure requirements.
The Securities and Exchange Board of India (Sebi) has announced that the rule would go into effect on April 1, 2024 for the largest 250 listed entities.
Companies will have 24 hours from the time of publication to "confirm, deny, or clarify any reported event or information in the mainstream media that is not general in nature and which indicates rumours of an impending specific material event"—Inputs from Agencies

From October 1, Sebi has notified guidelines requiring the top 100 listed companies by market capitalization to confirm, reject, or clarify any market rumour reported in the mainstream media in order to streamline the disclosure requirements.

Sebi notifies disclosure rules; asks top 100 listed cos to confirm or deny mkt rumour from Oct 1

New Delhi: The Securities and Exchange Board of India (SEBI) in its reply in the matter of Zee Enterprises to Securities and Appellate Tribunal (SAT) has pointed out that Chairman Emeritus Subhash Chandra and Managing Director and CEO Punit Goenka of this large listed company have diverted public money to private entities.
"In the instant case, we have a situation before us where the Chairman Emeritus and the Managing Director and CEO of this large listed company are involved in a myriad of different schemes and transactions through which vast amounts of public money belonging to listed companies are diverted to private entities owned and controlled by these persons," SEBI said in its reply to SAT.
Subhash Chandra and Punit Goenka have moved SAT against the SEBI order barring them from holding director positions or key management personnel in any listed company on allged siphoning of funds from Zee Enterprises. "The Appellant's conduct is telling in this regard. Not only have there been violations but also the issuance of multiple false disclosures and submission of statements to cover up such wrongdoings. In Shirpur, we have also seen that the promoter group timed its offloading of shares in the open market to avoid bearing the brunt of the fall in the market value of Shirpur's shares. It is ultimately the small retail investors who endured the downfall in share price," SEBI added.
ZEEL is one of the top 200 largest listed companies in India today having large number of public shareholders and retail investors and therefore, occupies a prominent position in the Indian securities market.
SEBI said as noted in the impugned order that the Appellants created a facade through sham entries to misrepresent to the investors as well as the regulator that the money had been returned by Seven Related Companies, whereas in reality, it was ZEEL's own funds which rotated through multiple layers to finally end in ZEEL's account. These facts reasonably warrant urgent action on the part of the Respondent to safeguard the management of such companies and protect their investors and other stakeholders.
In fact, if during a preliminary examination, it is found prima facie that the person is indulging in manipulation of the securities market, SEBI is obliged to pass an ex-parte ad interim order to safeguard the interest of investors and protect the integrity of the securities market. It is undoubtedly evident from the manner in which monies flowed from one promoter company to another that the monies of ZEEL and other listed companies have been used by the promoters to give the false impression that the Seven Related Parties have repaid the amount of Rs 200 crore (appropriated by Yes Bank) to ZEEL.
In fact, an analysis of the transactions evinces that the transfers occurred between the conduit (middlemen) entities on the same date or consecutive days in a sequential fashion and at very quick intervals (within seconds and minutes), indicating that these transactions are not bonafide in nature but that these transfers were only for the purpose of funnelling money to the Seven Related Parties so that they could make payment to ZEEL of the amounts appropriated by Yes Bank, SEBI said.
—IANS

The Securities and Exchange Board of India (SEBI) in its reply in the matter of Zee Enterprises 

Chairman Emeritus And Md Of Large Listed Company Diverted Public Money: SEBI Reply To SAT In Zee Matter

New Delhi: The Securities Appellate Tribunal (SAT) has stayed the Securities Exchange Board of India's (SEBI) June 19 order prohibiting IIFL Securities from onboarding new clients for two years. The matter has been listed for final disposal on August 23. The stay order by SAT considered that IIFL Securities has already been penalised for Rs 2 crore through two separate adjudication orders for the same allegations. The earlier two orders of SEBI for monetary penalties are pending before SAT and has received stay. Nishith Doshi, Head (Legal), IIFL, said, “The SEBI order placing restrictions on opening new client accounts has been stayed by the Hon’ble SAT. The tribunal after considering that the same facts had already led to monetary penalty in earlier appeals which were pending before SAT.” “IIFL Securities would like to reiterate SEBI’s own assurance in the very order imposing restrictions that even SEBI has not found anything wrong if its changes to the law effected in 2017 were applied prospectively. IIFL reiterates its commitment to serving its clients as it always has in full compliance with the letter and spirit of the law.” The SEBI order was based on allegations of mixing client’s and own funds by IIFL Securities during inspection by the regulator during 2011-2014. However, the order was passed based on Enhanced Supervision Circular 2017 applying it retrospectively to the 2011-2014 period.  IIFL Securities in its appeal before SAT said, “The impugned order relates to a period prior to July 2017 when a new circular popularly known as ‘Enhanced Supervision Circular’ dated September 26, 2017 came into effect. The impugned order contains a positive certification that after the Enhance Supervision Circular was brought into effect in 2017, there has been no violation. The core submission of the Appellant is that this circular is being applied retrospectively.” IIFL Securities further submitted that “in utter haste, even deviating from the normal approach of letting orders of suspension of registration (although partial) take effect at the expiry of 45 days (the statutory period for appeal), the impugned order has been brought into force with immediate effect, inflicting serious debilitating damage on the appellant. IIFL Securities also argued that the SEBI punishment was disproportionately harsh, unreasonable. “Judicial deference has been thrown to the winds and on this ground alone, the impugned order deserves to be set aside.” Further, SEBI in its own order said, "I find no violation by the way of assigning wrong nomenclature to ‘clients accounts’ have been remedied by the noticee (IIFL Securities)… further the violations committed by the way of mixing funds of clients with its own funds has not been observed in March 2017 inspection. Further, I find no instance of misuse of clients’ funds by the notice placed before me which has occurred subsequent to implementation of the Enhanced Supervision Circular dated September 16, 2016.”—IANS

The Securities Appellate Tribunal (SAT) has stayed the Securities Exchange Board of India's (SEBI) June 19

SAT Suspends SEBI Order Banning IIFL Securities From Onboarding New Clients For 2 Years

New Delhi: Besides undertaking enforcement action against unregistered finfluencers who breach SEBI regulations, the regulator proposes to disrupt the revenue model for such finfluencers, so that the perverse incentives in the ecosystem reduce. SEBI has come across instances where SEBI registered intermediaries/regulated entities may be relying on such unregistered/unregulated finfluencers to promote their products and services. As per a new paper, no SEBI registered intermediaries/regulated entities or their agents/representatives shall, directly or indirectly, have any association/relationship in any form, whether monetary or non-monetary, for any promotion or advertisement of their services/products, with any unregistered entities (including finfluencers) Entities registered/regulated by SEBI or stock exchanges or AMFI shall not share any confidential information of their clients with any unregistered entities. Financial influencers, commonly called ‘finflue-ncers’, are persons who provide information and/or advice on various financial topics such as investing in securities, personal finance, banking products, insurance, real estate investment, etc. through social/digital media platforms/channels, and have the ability to influence the financial decisions of their followers. Thus, the activities of finfluencers may deal in areas regulated by financial sector regulators such as SEBI, RBI, PFRDA, and IRDA. Finfluencers often attract investors/prospective investors through their engaging stories, messages, reels and videos on various social media platforms such as Instagram, Facebook, YouTube, LinkedIn, Twitter, etc. However, finfluencers not registered with the relevant financial sector regulator may not have the requisite qualifications or expertise on the subject. Worse, not being formally subject to a financial sector regulator’s code of conduct, they may not disclose any potential conflict of interest such as their association with or interest in the products, services or securities that they promote. Many unregistered/unregulated finfluencers directly or indirectly promote products, services or securities. They may induce clients to avail these products or services in return for referral fee for usage of the product, channel, platform, or services that they advertise – such referral fee may be variable (per use or per user), or fixed (retainer model), or a combination of both. The commission may be in an upfront or trail manner, non-cash benefits such as free usage of products or services, compensation received directly from the social media or other platform where they share their content; and profit sharing with the underlying product, channel, platform, or services. Other unregistered entities/finfluencers may be effectively enticing their followers to purchase products, services, or securities in return for undisclosed compensation from platforms or producers. This paper seeks to restrict the association of SEBI registered intermediaries/regulated entities with such unregistered finfluencers, to curb the flow of such compensation.—IANS

Besides undertaking enforcement action against unregistered finfluencers who breach SEBI regulations

SEBI Proposes To Enforcement Action, Disrupt Revenue Model For Finfluencers

New Delhi: Markets regulator SEBI has proposed the creation of a Performance Validation Agency (PVA) to validate any claims of performance by SEBI registered intermediaries and other entities.
Intermediaries/ ther entities need to showcase their performance to attract more clients and grow and continue to do business. However, in the rush for more clients, some of these entities may indulge in making inflated claims of their performance or recommendations to investors, thereby misleading the investors, said a SEBI consultation paper.
Currently, Asset Management Companies (AMCs) calculate the performance of mutual fund schemes. Similarly, portfolio managers have been permitted to report their performance vis-a-vis certain benchmarks. The claims made by these intermediaries/entities are mostly self-verified and currently there is no dedicated agency to validate such claims.
Investment Advisers (IAs) and Research Analysts (RAs) are also inherently involved in giving investment advice and 'buy/sell/hold' recommendation, respectively. In terms of the advertisement code for IAs and RAs issued by SEBI, IAs and RAs are currently not allowed to make any reference to past performance.
There has been a demand from registered intermediaries to showcase their performance to investors so as to establish/ enhance their credibility.
Accordingly, it is proposed to create an independent body called Performance Validation Agency (PVA) to validate the claims/performance related to investment advice, 'buy/sell/hold' recommendation, mutual fund scheme, portfolio management service, algorithm, etc. by SEBI registered intermediaries/other entities such as IA, RA, portfolio manager, AMC, stock broker, etc.
PVA shall validate the claims by SEBI registered intermediaries/ other entities of the actual profit made by their clients on the basis of advice/ recommendation/ services provided by them.
PVA shall validate the performance claims of SEBI registered intermediaries/ other entities. PVA shall validate the performance of algorithms by testing the algorithms during a prospective reasonable test period.
Apart from the above, any other performance claim may be validated by PVA, subject to the core principle that there will be no selective cherry-picking of favourable events/ strategies/ client and other results. Further, any claim should be independently verifiable from sources other than the entity making the claim.
—IANS

Markets regulator SEBI has proposed the creation of a Performance Validation Agency (PVA) to validate any claims 

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