| 'Nokia's I- T dues: ~ 21,153 cr' |
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New Delhi, 9 December The Income Tax Department has told the high court here that Nokia India and Nokia Corporation owe it ₹ 21,153 crore as total tax liability ( existing and anticipated), including penalty during aseven- year period from 2006 to 2013. The amount payable by Nokia has been arrived at by the I- T department on the basis that the mobile manufacturing firm does not discharge its TDS liability on royalty payments and is not entitled to any deduction under tax laws for operating from a special economic zone ( SEZ). The submission has been made by the I- T department in its reply to Nokia's plea for unfreezing of its assets in India prior to its $ 7.2 billion deal with Microsoft. Nokia's Director, Communications, Poonam Kaul, said, " We have not been served with any official claim, so we cannot comment on this. We want to stress that our main focus right now is to remove the freeze on our Indian assets, including Chennai, before the deadline of December 12. This is a separate matter from the broader tax dispute. In recent months we have seen and read about many claims from the tax authorities. We feel they are without merit and will defend ourselves vigorously in court." Nokia's offer to pay a minimum of ₹ 2,250 crore, which could increase depending upon the outcome of its deal with Microsoft, was recently turned down by the I- T department during the proceedings before the high court. Nokia will look for buyer for Chennai unit Finnish handset maker Nokia on Monday said it would have to look for another buyer for its Chennai manufacturing unit if it could not transfer the plant to Microsoft due to a tax dispute in the country. US software giant Microsoft had in September agreed to acquire Nokia's devices and services business for $ 7.2 billion. The Chennai unit, which employs 8,000 persons, was part of the deal. However, the unit might have to be segregated if the tax case is not settled before |
| Bourses await powers to penalise promoters |
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Mumbai, 9 December Alack of clarity on the implementation of penal proceedings against promoters has emerged as a major block for exchanges looking to ensure regulatory compliance by companies and promoters. Stock exchanges are awaiting clarity from the regulator, Securities and Exchange Board of India ( Sebi), over the use of powers such as imposing fines and freezing shares. The bourses have again resorted to the unpopular tool of suspension of trading in case of non- compliance — a move said to hit minority investors more than the erring companies or promoters themselves. Sebi, in September, had directed the exchanges to impose fines as action of first resort and only invoke suspension of trading in case of consecutive defaults. "We have little option but to suspend trading, as still there is a lack of clarity on how we should go about imposing penalties on companies that don't comply with listing requirements," said an exchange official, requesting anonymity. Last week, the National Stock Exchange ( NSE) and the Bombay Stock Exchange ( BSE) together suspended about three dozen companies, which had failed to comply with various clauses of the listing agreement. The wealth of public investors locked due to the suspension of these companies was pegged at ₹ 200 crore. BSE and NSE spokespersons could not be reached for comments on whether they had officially written to Sebi on the matter. Suspension of trading has been a contentious issue, as it closes the exit route for public shareholders and does little damage to the promoters who run the affairs of the companies in question. Taking cognizance of this, Sebi had recently prescribed a standard operating procedure ( SOP) for exchanges to deal with non- compliant companies. Besides putting in place a fine structure, the regulator had suggested measures such as freezing of promoter shares and shifting scrips to the trade- to- trade segment. It also asked the exchanges to provide for an ' exit window' to public shareholders before suspension. Experts say suspension of trading is an unfriendly practice and exchanges should clarify with Sebi and move to the new process the regulator has put in place. In the past, public interest litigation has come from investor protection groups in high courts against stock exchanges and Sebi, alleging that they failed to protect investor interests by resorting to measures such as suspension of trading. Exchanges over the years have suspended trading in about 1,000 companies, typically small in size, for noncompliance with clauses of the listing agreement. Estimates suggest thousands of small shareholders and investment worth several crores have been hit on account of suspension. Last month, Sebi chairman U K Sinha had expressed displeasure over the high number of listed companies not complying with the disclosure requirements prescribed in the listing agreement. According to Sebi data, there are about 1,100 companies that are noncompliant with requirements of clause 35 of the listing agreement and about 900 companies non- compliant with the requirement of corporate governance ( Clause 49) of the listing agreement. The listing agreement is a contract between a stock exchange and a listed company. It has several clauses dealing with disclosure requirements, such as filing of results, shareholding data and corporate governance requirements that companies have to follow. Can only suspend non- compliant companies at present owing to a lack of jurisdictional clarity |Due to non- compliance of listing agreement, exchanges suspend trading of shares |The move affects nonpromoter shareholders as it closes the exit route for them |Sebi has asked exchanges to use suspension as a measure of last resort |Regulator has suggested other measures such as fines, freezing of promoter shares, exit window |Exchanges continue to suspend companies due to a lack of clarity on use of penal powers TO SUSPEND OR NOT TO SUSPEND? |
Source Businessline
Govt to consult all stakeholders on foreign funds in e-retail
NEW DELHI, DEC. 9:
With global retailers such as Walmart and Carrefour ignoring India despite the watering down of the Foreign Direct Investment (FDI) policy in multi-brand retail, the Industry Department has decided to be more careful while framing rules for foreign investments in e-commerce and involve stakeholders across the board.
The Department of Industrial Policy & Promotion (DIPP) is likely to put up a discussion paper on the proposed policy for FDI in e-commerce on its Web site soon to get the views of all concerned, a DIPP official told Business Line.
The Government is seeking to open up the e-commerce sector to foreign investments, but is yet to make up its mind on the areas to include and the safeguards to put in place to protect domestic investors. India allows 100 per cent FDI in business-to-business e-commerce while business-to-consumer e-retailing is banned.
"While preparing the discussion paper we have realised that e-commerce is a vast area and there are several facets that could either be incorporated in the policy or left out. We want to benefit from the opinion of all stakeholders," the official said.
One big question that the policy makers are grappling with is whether to restrict FDI in e-commerce to goods or also include services in its ambit. If a decision is taken on opening up e-commerce in services as well, it would mean that trading in financial products such as shares and insurance, too, would get covered.
The DIPP already has had discussions with global e-commerce companies such as Amazon and e-Bay and domestic ones such as Flipkart that have conflicting interests.
"Some global companies that are already operating in India by putting in place arrangements with local companies may not be too keen for FDI to be allowed," the official said.
On the other hand, companies such as US-based Amazon have been pushing the Indian Government to open up the sector so that it can bring in investments.
Small local e-commerce companies, too, have differing views on the issue.
IT industry body Nasscom, in a submission to the DIPP, has outlined sourcing conditions that the Government may weave into the policy.
Interestingly, Walmart has not yet invested in India as it is unhappy with the condition of local sourcing of inputs. Although the Government has made the FDI policy in retail less stringent after discussions with the company, the US-retailer is not quite satisfied.
"We want a wide-ranging discussion on all components of the policy. We look forward to hearing from all stakeholders," the official added.
The DIPP will finalise the Cabinet paper on e-commerce based on the feed-back it gets.
SEBI needs more powers to tackle Ponzi menace: Govt
PTI
NEW DELHI, DEC. 9:
Fraudsters are adopting innovative ways of pooling funds from gullible investors, making it necessary to provide greater powers to SEBI to tackle this growing menace of Ponzi schemes, the Government said on Monday.
Removing lacuna
Justifying promulgation of ordinance to amend various SEBI Acts between August and September, the Government said this was done to remove a lacuna that allowed fraudsters to escape regulatory actions.
The amendments to existing laws would provide the Securities and Exchange Board of India greater powers to respond to the "growing menace of illegal deposit taking and Ponzi schemes," the Government informed the Parliament.
The ordinance came amid rising instances of people getting defrauded by fraudulent money-pooling schemes.
Special courts
With the amendments, SEBI would have powers to access call records as well as carry out search and seizure, among others.
With regard to investigations, SEBI would have powers for seeking information and records from any entity, including bank or any other authority established or constituted under Central or State Acts.
Among others, special courts are proposed to be set up for speedy trial of offences under the SEBI Act.
The Securities Laws (Amendment) Ordinance, 2013, was first promulgated on July 18.
Later, Securities Laws (Amendments) Bill, 2013, was introduced in the Lok Sabha and then referred to the Parliamentary Standing Committee on Finance. Since the Bill was not passed, the ordinance was promulgated for the second time on September 16 by the President.
Meanwhile, SEBI has proposed detailed guidelines for its new powers, including for the procedure to be adopted for search and seizure operations.
The proposed norms focus on detailed procedures that need to be laid down relating to the procedural safeguards during different stages of search and seizure and the rights of those persons subjected to search and the obligations of the authorised persons.
(This article was published on December 9, 2013)
Keywords: menace of Ponzi schemes, SEBI, fraudulent money-pooling schemes, ponzi schemes
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