Saturday, August 1, 1998
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B U S I N E S S | Saturday, August 1, 1998 |
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Fema Bill to bring forex
offences under civil laws |
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Blasts step towards India
equity brand |
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Haryana silent on octroi |
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Fema Bill to bring forex
offences NEW DELHI, July 31 (PTI) — All foreign exchange violations hitherto treated as criminal offences, will now be brought under the purview of the civil laws attracting only monetary penalties in the Foreign Exchange Management (Fema) bill expected to be introduced in Parliament on Monday. Consequently, under the new regulatory regime, the powers of the enforcement directorate (ED) are sought to be diluted considerably, informed sources said. Foreign exchange violations under the existing Foreign Exchange Regulation Act (Fera) have so far been treated as criminal offences. Fema seeks to repeal the dreaded Fera which the industry and trade has said is no longer in tune with the liberalised economy. Fema, which seeks to put in place a new simplified regulatory regime for foreign exchange transactions and liberalise capital account transactions, proposes that the Reserve Bank of India be made the sole monitoring agency for exchange transactions under the capital account. The Bill, sources said, says the new provisions do not take retrospective effect and that existing cases would continue to be tried under Fera, notwithstanding the repeal. The Money Laundering Prevention (MLP) bill, the twin legislation being introduced with Fema, seeks to create a new enforcement and regulatory authority to deal with crimes relating to laundering of black money abroad. The new enforcement authority to implement the MLP Act will have a Director heading it and members drawn from the ED, the CBI and the Central Board of Excise and Customs (CBEC). Under the MLP Act the onus to prove innocence shifts to the individual from the enforcement authorities who were earlier charged with the responsibility of proving a person guilty of economic offences. The definition of the MLP Act, sources said, includes all offences committed under the Indian Penal Code, the Prevention of Corruption Act, and narcotic laws. Offences under the Income Tax Act of 1961 are, however, excluded from the Bill. An inter-ministerial task force which helped draft the money laundering prevention laws left to the government the decision relating to administrative mechanisms for implementing the Act. The committee of
secretaries, which reviewed the task force’s
recommendations, took exception to the RBI contention
that it should not be mandatory upon banks to report
suspect transactions to a designated authority. |
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Blasts step towards India equity
brand LUDHIANA, July 31 — The nuclear blasts conducted by India in May have created a respect for India and its products in the world market and constitute the first step towards creation of an India equity brand. This interesting observation was made by Mr N.L. Lakhanpal, Director-General, Foreign Trade, Government of India, during the course of an interview with TNS and also in an address to a meeting of the Ludhiana Management Association here today. Mr Lakhanpal was also the main speaker at an “open house on exports from Punjab” organised here by the Punjab Trade Centre, a unit of the Punjab Small Industries and Export Corporation, in association with the Federation of India Export Organisation, an apex trade promotion body set up by the Ministry of Commerce. Mr Lakhanpal said he was not worried about the impact of the sanctions imposed on India by the USA and certain other countries in the wake of the nuclear tests. “Neither the Government of India nor the people are worried about the sanctions. But I do see some anxiety on the part of the business class although even they feel India did the right thing in going in for atomic blasts,” he added. The fact of the matter was the nuclear blasts had earned for India respect and recognition which it deserved but lacked earlier. “We needed an India equity brand just as the USA and UK brands are recognised and treated with respect. Nuclear tests by India constitute the first step towards the creation of an India equity brand,” he held. The world recognised nuclear power alone. Otherwise, what role did Russia with its shattered economy have to play at a meeting of the G8? Why should China, which had a totally controlled economy, find itself rubbing shoulders with countries which had totally free economies in a capitalist world? It was obvious it was nuclear muscle which imparted strength to economic power. India would, therefore, be now looked upon with a little more respect, Mr Lakhanpal said. But he cautioned India had a long way to go before it made its presence felt economically. Tests had certainly created an identity for the country and its products. But India had to do much more to become an economic power. Sanctions had so far hurt the USA more than they had India. “We are not Libya or Iraq but even they are surviving. Now the USA has on its own relaxed sanctions on agriculture and has also empowered the President to left them. They are doing it not for love of India but to safeguard their own interests. The stock market sensex and the rupee after some fluctuations in the wake of the sanctions have now stabilised at their real value. It would like
to put sanctions to good use. “If a country has to
play its assigned role, it has to pay its cost. So we
should be prepared and forearm ourselves economically so
that other countries don’t thwart our march towards
our rightful place in the comity of nations. No country
can progress without exports. Every industrial unit,
whether or not it is engaged at present in exports, has
to gear-up for the exports market. Industry must move to
a system where there is no government protection,
subsidies or dependence. The biggest opposition to the
move towards liberalisation of the economy to bring about
transparency has come not from the politicians and the
bureaucracy but from the industry itself,” he said.
“They have developed a dependence on the government.
They must change their mind-set”, he added. |
HLL net profit surges 28.2 pc
Addressing newspersons after the board meeting here today, HLL Chairman K.K. Dadiseth said the net profit in the first half of 1998 stood at Rs 328.6 crore (Rs 249.58 crore in the corresponding period last year) while sales had grown impressively to Rs 4662 crore (Rs 3891 crore).He announced an interim dividend of Rs 9.60 per share, an increase of 28 per cent over last year’s interim of Rs 7.50 per share.He said the company could register strong volume and profit growth despite tough market conditions by delivering value-for-money products at affordable prices through product innovation, low unit price packs and supply chain initiatives,Mr Dadiseth said timely and normal rainfall so far should augur well for agriculture and rural demand. He expects rural demand to
sustain growth in the second half but the newly
introduced excise and customs duty, 5 per cent Modvat
restriction and rupee depreciation had led to cost
increases and price revisions, which might have an impact
on the overall market growth and product offtake. The
group’s exports turnover was Rs 924 crore, a record
growth of 80 per cent in rupee terms compared to the
country’s exports growth of less than 10 per cent
with branded personal products and packet tea exports
reaching new highs.The soaps, detergents and household
care businesses grew ahead of the market in each
category, registering about six per cent volume growth
and increasing market share. |
Hoffland told to seek investors’ views NEW DELHI, July 31 (PTI) — The Company Law Board (CLB) has directed Hoffland Finance Ltd (HFL) to seek investors’ view for the repayment scheme for its depositors before the approval of the board. Earlier this week HFL Managing Director B.B. Sharma through his counsel had submitted a affidavit to CLB on the repayment scheme for the approval by the northern bench of CLB. Under the repayment scheme HFL has offered two options to the depositors. Under option-one the entire amount will be paid by the company before December, 1999, and in case of option-two the entire principal will be repaid by the third quarter of 2000. The CLB earlier had to postpone the hearing as the order could not be served to B.B. Sharma and had sought police assistance for it. However, requests from the Hoffland Investor Forum led CLB to take up the case as HFL Managing Director’s counsel was present. The board in its last hearing had issued a notice for the presence of B.B. Sharma so that CLB could issue a order for repayment. HFL Managing Director in an affidavit dated July 22 had written to CLB seeking police protection so that he could open offices, attend hearing in person and refund the money to the investors. CLB has also directed the Investors Forum to reply to the board within 15 days on the scheme framed by HFL on repayment. Under option one of the scheme, 5 per cent of the principal would be paid in the first quarter, 10 per cent in the second, 15 and 20 per cent respectively in the third and fourth quarter. While the balance would be paid in two equal instalments of 25 per cent in the fifth and sixth quarters clearing the entire liability before December 1999. In case of the second
option, 50 per cent of the principal amount will be paid
in the second quarter of year 2000 and the balance in the
third quarter of the same year.
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Haryana silent on octroi CHANDIGARH, July 31 — Mr O.P. Vaish, president of the PHD Chamber of Commerce and Industry, told newspersons here today the Haryana Government was still non-committed on the issue of abolition of octroi. Mr Vaish said the chamber had suggested a levy of 10 per cent of the surcharge on sales tax as an alternative measure to abolish octroi. Representatives of the chamber met the Chief Secretary of Haryana, Mr R.S. Varma, today. The delegation urged the government to quicken the payment of subsidy on generating sets.He said the Haryana Government would strengthen the state roads and power infrastructure. The government had
negotiated for upgradation and strengthening of major
roads and loan from the World Bank was likely to be
released by the end of the year.The earlier problem of
source for fuel to be used by the 25 MW units had now
been resolved and it was hoped at least 10 such units
would be commissioned in the next six months. The
delegation also met the Governor, Mr Mahabir Prasad. |
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ITC net up 18 per
cent Tata Tea LM Tata Electric VSNL Asian Hotels Arvind Mills Pond’s India Escorts Ltd
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Check
Out YOU send an application for shares to a company and you are allotted a certain number of shares. However, despite repeated reminders, the company does not send the share certificate, forcing you to file a complaint before the District Consumer Disputes Redressal Forum. But then unless you are careful, your case may well get dismissed on grounds of lack of jurisdiction because the National Consumer Disputes Redressal Commission has held in cases such as this where applicants from all over the country apply for shares those who may not receive the share certificate cannot take the plea that the “cause of action” arose at their doorstep and therefore they have every right under the Consumer Protection Act to file a case at the forum closest to their home. To put it simply, suppose you live in Bangalore and you buy the shares of a company that is based in Calcutta and has no branch office in Bangalore. If the company fails to send you the share certificate and you want to take it up before a consumer court you cannot file it in the consumer forum in Bangalore. You will have to file it in Calcutta, where it has its registered office or any other place where it may have a branch office. The Act defines “branch office” as “any establishment described as a branch by the opposite party or any establishment carrying on either the same or substantially the same activity as that carried on by the head office of the establishment”. Let me explain this. Under the Consumer Protection Act, the District Consumer Disputes Redressal Forum or the consumer courts at the district level have the jurisdiction to entertain complaints where the value of the goods or services being complained against and the compensation, if any, claimed does not exceed Rs 5 lakh. Besides this pecuniary jurisdiction, the Act also specifies the territorial jurisdiction of the district forum. Accordingly, it says a complaint shall be instituted in a district forum within the local limits of whose jurisdiction the opposite party or each of the opposite parties where there are more than one at the time of the institution of the complaint actually and voluntarily resides or carries on business or has a branch office or personally works for gain; or the cause or action, wholly or in part, arises. In the case of Rajaram Corn Producers Punjab Ltd vs V.Suryakant, Nitin Kumar Gupta and others, the complaints were filed before the district forum at Rajanand Gaon in Madhya Pradesh, alleging that the share certificates had not been sent by the company. Here the main contention of the company before the consumer court was the district forum at Rajanand Gaon had no jurisdiction to hear the case. When the district forum dismissed this argument stating that the complainants could file complaints at the place where they were resident the company filed an appeal before the Madhya Pradesh State Commission, which pointed out that the complainants were entitled to receive the share certificates at Rajanand Gaon. Since they had not received it there, part of the cause of action arose at Rajanand Gaon and therefore the district forum there had the territorial jurisdiction to hear the case. The national commission before which the company filed a revision petition however held both the orders to be erroneous and set them aside. Said the national commission: “When a company goes public and various applicants from different places apply for shares, it does not mean that the cause of action will accrue to the applicants at the places where they reside or are expected to receive the share certificates. The applications for the shares will be deemed to have been accepted at the place where the company has its registered office or from where the shares are to be dispatched. The post office will be deemed to be acting as agent for shareholders for delivery of shares to them.” It therefore held the state commission was in error in holding that part of the cause of action had arisen in Rajanand Gaon. Since the company had its registered office in Chandigarh and work office at Mandsaur (MP) and had no branch office at Rajnand Gaon the district forum there had no jurisdiction to entertain the complaints. This judgement will affect
a large number of consumers who wish to institute
complaints pertaining to the non-receipt of share
certificates or dividends if the company does not have an
office in the city or town in which they reside. However,
consumer courts have held they would take cognisance of
complaints sent by mail and so consumers can still
exercise that right. But given the time taken for the
adjudication of complaints before consumer courts a
better option may be to write to newspapers which run
grievance redressal columns. Or consumers can seek the
help of consumer organisations that take up cases such as
this on their behalf. |
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Insurance SBI RIBs Bank of Baroda |
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