Dismisses complaint against Maruti alleging coercion to use GPS-units from specific cos
CCI rejects GPS manufacturer's complaint against Maruti Suzuki India Ltd ('Maruti') alleging that it abused its dominant position by coercing car carrier trucks ('transporters') to provide the transport service exclusively to it and forcing such transporters to install a GPS unit from specific companies (viz. Trimble or Efcon); Notes that there was no cogent material to show any arrangement between Maruti and aforestated two cos, nor there was any information available in public domain to show any arrangement between Maruti and Trimble/Efcon; Delineates relevant market as "market for procurement of services of GPS device installed vehicle in India"; Observes that percentage of GPS devices installed vehicle used by Maruti was only 1.52 % which was negligible, thus holds, "the OP controls an insignificant fraction of relevant market. Prima facie, the OP does not appear to be in a dominant position in the relevant market"; Also holds that, ""Even if there is such an arrangement between OP and Trimble/ Efcon, the anticompetitive impact is negligible. Thus, prima facie, it appears that such an arrangement neither causes nor likely to cause an AAEC in GPS market within India" :CCI
The order was given by Shri. Ashok Chawla (Chairperson), Shri. S. L. Bunker, Shri Sudhir Mital, Shri. Augustine Peter, Shri. U. C. Nahta and Shri. M. S. Sahoo (Members).
Advocate Narender Singh Yadav and Mr. Piyush Agarwal argued for informant.
RBI issues Second Bi-monthly Monetary Policy Statement, reduces policy repo rate
RBI issues Second Bi-monthly Monetary Policy Statement, 2015-16, reduces policy repo rate under liquidity adjustment facility (LAF) by 25 basis points [from 7.5 % to 7.25%], adjusts reverse repo rate to 6.25% and marginal standing facility (MSF) rate and Bank Rate to 8.25 %: RBI
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RBI liberalises remittance scheme; Cautions on remittances for illegal activities
RBI further liberalises Liberalised Remittance Scheme (LRS) for resident individual, allows remittances by resident individual up to USD 250,000 per financial year for any permitted current/ capital account transaction or combination of both; Lays down Remittance Procedure highlighting requirements to be complied with by remitter, Authorised Persons including AD Category II and full fledged money changer ('FFMC') and Authorised Dealers; Requires Authorised Dealers to furnish on monthly basis information on no. of applicants and total amount remitted under LRS to Foreign Exchange Department; However, cautions that the Scheme cannot be made use for making remittances for any prohibited or illegal activities such as margin trading, lottery, etc.; With respect to persons other than individuals, allows remittances for donations for educational institutions, commissions to agents abroad for sale of residential flats/commercial plots in India, remittances for consultancy services and reimbursement of pre-incorporation expenses within prescribed limit: RBI
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RBI issues guidelines for compensation of non-executive directors of Private Sector Banks
RBI finalizes guidelines for compensation of Non-executive Directors (other than Part-time Chairman) of Private Sector Banks, states that Board of Directors, in consultation with its Remuneration Committee shall formulate & adopt a comprehensive compensation policy for such directors,ensuring compliance with Companies Act, 2013; Board may, at its discretion, provide for payment of compensation in the form of profit related commission, subject to bank making profits, such compensation not to exceed Rs.1 million p.a. for each director; In addition to the directors' compensation as stated above, bank may pay sitting fees to non-executive directors and reimburse their expenses for participation in Board and other meetings; Banks would be required to obtain prior approval of RBI for granting remuneration to part-time non-executive Chairman under Banking Regulation Act, 1949; Banks to make disclosure on remuneration paid to directors in their Annual Financial Statements: RBI
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RBI allows banks to invest in long term bonds of other banks subject to conditions
To encourage issue of long term bonds for lending to infrastructure projects and affordable housing, RBI allows banks to invest in long term bonds issued by other banks subject to conditions; States that Banks' investment in such bonds shall not be treated as 'assets with the banking system in India' for calculation of net demand and time liabilities; Further states that not more than 20% of primary issue size of such bond issuance can be allotted to banks; Restricts banks from holding their own bonds: RBI
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RBI amends regulations for Capital Account Transactions, allows forex upto 250,000 USD
Foreign Exchange Management (Permissible Capital Account Transactions) (Third Amendment) Regulations, 2015 allows resident individual to draw from an authorized person, foreign exchange not exceeding USD 250,000 per financial year or such amount as decided by RBI from time to time for capital account transaction; Provides that no part of drawn foreign exchange shall be used for remittance directly/ indirectly to countries notified as non-cooperative countries and territories by Financial Action Task Force; Such Regulations published in Official Gazette : RBI
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RBI dispenses with prior RBI-approval requirement for individuals availing forex-facility upto USD 2,50,000
Foreign Exchange Management (Current Account Transactions) Amendment Rules, 2015 published in Official Gazette; Dispenses with prior RBI approval requirement for individuals availing foreign exchange facility, states that prior RBI approval required only if foreign exchange drawal limit exceeds USD 2,50,000; With respect to remittances by persons other than individuals, notifies remittances which shall require prior RBI approval: RBI
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Abraxis denied cancer drug patent; Apple loses trademark case vs MyPhone; Xiaomi gets HC breather
Abraxis denied cancer drug patent; Apple loses trademark case vs MyPhone; Xiaomi gets HC breather
Person acting in concert with acquirer collectively responsible for Takeover Regulations breach
SEBI directs acquirer & persons acting in concert ['PACs', collectively referred to as 'noticees'] to make public announcement to acquire shares of target co. ['Apollo Finvest (India) Limited'] in accordance with 1997 Takeover Regulations, also directs consideration payment at 10% p.a. interest; Observes that through series of acquisitions, acquirer acquired 6.16% [exceeding 5% creeping limit under reg. 11(2) of 1997 Takeover Regulations] shares of target co. and failed to make requisite public announcement; Rejects noticees' proposal to dispose of shares acquired in excess of 5% and transfer proceeds thereof to SEBI (Investor Protection and Education Fund); Observes that by failing to make public announcement, noticees deprived exit opportunity to shareholders at best offer price and public announcement now would provide a delayed exit opportunity to target co.'s shareholders; Also rejects noticees' contention that only acquirer was responsible for such violation, holds that PACs are collectively responsible with acquirer for acquisition under Takeover regulations and the fact that they did not make any acquisition on their own does not affect their collective obligation:SEBI
Despite share transfer agent's due-diligence failure, refrains from penalty imposition
SEBI holds that share transfer agent ('noticee') violated Share Transfer Agent Regulations 1993 by transferring shares of deceased shareholder ('seller') without obtaining confirmation from power of attorney holder of seller (seller's father); Peruses the evidence on record and observes that noticee was "very well aware of the demise of its shareholder viz., Hemalatha and inspite of the same the Noticee transferred shares... within a short period of 6 days from the date of receipt of transfer form.", holds that noticee failed to take proper diligence and care while discharging its duty as share transfer agent; Rejects noticee's submission that merely on the basis of intimation by seller's father about shareholder's death without supporting documents i.e. Death Certificate, it could not take note of death of its client in its record, states that, "postal authority / father will not lie about the death of any person / his own daughter"; On noticee's submission that no specific provision of Regulations or SEBI guidelines was violated, SEBI holds that, "it is practically not possible to foresee every possible situation that may arise in future and have a specific provision for the same..being a SEBI registered intermediary, the Noticee should have its own systems and procedures in fulfilling its obligations towards investors effectively"; However, refrains from imposing penalty on noticee, but states that, "this does not preclude SEBI from taking any further action, as deemed fit, in accordance with law against the Noticee for the fraudulent transfer of shares":SEBI
Bars abettor from securities market for aiding in siphoning off IPO proceeds
SEBI bars Precise Consulting & Engineering Pvt. Ltd. ('noticee') from accessing securities market for 5 years for aiding and abetting Onelife Capital Advisors Ltd. ('OCAL') in siphoning off/ diversion of IPO proceeds, thereby violating SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003; Peruses OCAL's board meeting minutes containing a transfer of Rs.12Crores to noticee for finalizing an official premises for OCAL's Portfolio management services business, however, observes that noticee purchased diamonds with that money; Rejects noticee's contention that funds were utilized in ordinary course, observes that "purchase of diamonds was not even remotely related to the line of business of Precise..these diamonds were claimed to have been bought by Precise from entities whose KYC documents revealed that they were not in the business of selling diamonds.."; Also observes that finder fee agreement entered into between OCAL and notice was not genuine as created on non-judicial stamp papers post facto, thus infers that noticee purchased diamonds at behest of OCAL for diversion of IPO proceeds; Observes non-filing of income tax returns by noticee for 3 years, its make-shift office, and concludes that noticee was not an active co. but merely acted as OCAL's vehicle to divert IPO proceeds:SEBI
Penalises target co. for annual shareholding disclosures, 'belated' disclosure doesn't serve purpose
SEBI penalises Madhusudan Securities Ltd. ('noticee') for failure to make annual shareholding disclosures to stock exchange ('SEs') under Regulation 8(3) of 1997 Takeover Regulations within prescribed time; Rules that co. related disclosures are made public only through SEs and the basic purpose of requiring timely disclosures to SEs under takeover regulations is to ensure that investing public is not deprived of vital information, thus dissemination of complete information is required and delayed/ belated disclosure would serve no purpose at all; However, with regard to the alleged violation of Takeover Regulation by noticee as acquirer did not making public announcement for authorization of transfer of noticee's 48% shares, observes that such transfer was inter se transfer among members of same group; Thus, holds that acquirer was exempt from making public announcement, and noticee did not violate Takeover Regulations for not confirming with such public announcement:SEBI
Allows Madras Stock Exchange exit, orders name change & tax compliance
SEBI allows exit of Madras Stock Exchange ('MSE'); Observes MSE's substantial compliance with conditions required for de-recognising Stock Exchange & seeking exit under SEBI Exit Circular, 2012; Directs compliance with tax obligations under Income Tax Act, 1961, compliance with undertakings given to SEBI & other consequential conditions of Exit Circular; Orders MSE to change its name and not to use expression 'Stock Exchange' or its variant in its name and avoid any representation of present/ past affiliation with Stock Exchange, in all media:SEBI
Dear Patrons,
In the recent landmark judgment delivered by Bombay HC in Hubtown, IDBI Trusteeship Services Ltd v Hubtown Ltd [LSI-511-HC-2015-(BOM)], the Bombay High Court observed that a two-stage transaction involving foreign direct investment ('FDI') in a real estate company which provided an assured return to the foreign investor was a colourable device and violated FDI regulations. Emphasizing on the principle laid down by the Supreme Court in Vodafone International Holdings BV vs. Union of India that a transaction is required to be viewed as a whole, the HC held that a debenture transaction when viewed as a whole was a colourable device, thus, could not be enforced.
In this article, the author, Apurv Sardeshmukh (Partner, Legasis Partners, Advocates & Solicitors), briefly analyses the judgment. He states that, "It seems that the Court has considered the transaction in the present as whole although the transaction involved two stages -a foreign investment into a holding company, which in turn invested in two operating companies".
Talking about the implications of the judgmdent, author says that the judgment has to be considered in the context of RBI's intention to liberalize foreign investments in India and to simplify the pricing guidelines. He states, "Additionally, this judgement may also impact the downstream investments in India as foreign companies will realise that even a downstream investment by their Indian subsidiary will require compliance with all aspects of foreign investment regulations."
Click here to the article titled "Bombay HC ruling in Hubtown - Decolourizing the colourable device".
Best Regards
LSI Team
CCI orders investigation against Jaypee Greens for abusing its dominant position by imposing unfair & one sided terms on buyers of its residential units / villa in Noida & Greater Noida; Delineates the relevant market as "services of development and sale of residential units in Noida and Greater Noida"; States that "Noida and Greater Noida exhibit distinct characteristics from a buyer's point of view and conditions of competition in Noida and Greater Noida areas appear to be distinct from the areas such as Delhi, Gurgaon and Ghaziabad in the National Capital Region", thus segregates "Noida and Greater Noida" as relevant geographic market; Holds Jaypee Greens to be in dominant position in the defined relevant market, as it is a flagship company of Jaypee Group which has been developing various types of residential projects on 452 acres of land in Greater Noida region and as part of Yamuna Expressway Project, it is given approximately 1223 acres of land in Noida; Peruses Jaypee Greens' provisional allotment letter, observes that it did not include provisions for total area of the plot, basement area & exorbitant rates were charged for additional construction, thus, holds that such conduct emanating from Jaypee Green's dominant position "prima facie amounts to imposition of unfair terms and conditions..which is anti-competitive":CCI
The Order was passed by Shri Ashok Chawla (Chairperson), Shri S. L. Bunker, Shri Sudhir Mital, Shri Augustine Peter and Shri U. C. Nahta (Members).
Advocates Jagmohan Singh Khera and Himmatbir Singh Kataria appeared on behalf of Informant.
FDI policy revised; NRI investment deemed to be domestic investment
Govt of India reviews FDI policy on investments by NRIs, persons of Indian origin (PIOs) and overseas citizens of India (OCIs); Amends definition of NRI to include OCI cardholder under its ambit, earlier citizens of India & PIOs were only included; Investments by NRIs shall be deemed to be domestic investment at par with investment made by residents; Such policy to come into effect from June 18, 2015 : DIPP Press Note
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Govt. revises investment limit for cases requiring Govt approval
Govt of India revises limit of investment that require approval of Foreign Investment Promotion Board (FIPB) / Cabinet Committee of Economic Affairs (CCEA); FIPB to consider proposals with total foreign equity inflow of Rs. 3000 cr (earlier it was Rs. 2000 cr); Proposals with foreign equity inflow of more than Rs. 3000 cr to be placed before CCEA; CCEA to also consider proposals referred to it by FIPB; Such revision to take effect from June 18, 2015 : DIPP Press Note
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