Friday, January 25, 2013

Sai Prasad Group's activities under multi-agency probe

MCA, Sebi, RBI and EOW probing violations firm says it has replied to notices

Pune-based Sai Prasad Group, which has interests in real estate, food and films, is being probed for alleged financial irregularities, including illegal raising of funds. The probe was initiated by the ministry of corporate affairs ( MCA) about two years ago, after it received complaints from investors based in Raipur. Now, the Securities and Exchange Board of India ( Sebi), the Reserve Bank of India ( RBI) and the economic offences wing (EOW) of the Goa police are also involved in the investigations.
The Sai Prasad Group, promoted by Balasaheb Bhapkar and his son, Shashank Bhapkar, has seen good growth in less than a decade. Among its assets, it lists several hundreds of acres of agriculture farms in Maharashtra, Madhya Pradesh and Chhattisgarh. The group also has offices in Goa and Uttar Pradesh. Last year, the Bhapkars also ventured into tinsel town, producing the film Chhodo Kal Ki Batein.
The funds for these ventures, however, are collected in an unauthorised manner from small investors who are promised attractive returns. The money is collected under several plans such as monthly installment plans and one-time plans. Several ‘advisers’ and ‘zonal’ and ‘regional’ officers, who together took up to 40 per cent of the amount collected as commission, helped the group collect the funds, investigations by Business Standard showed.
In a report in October, an investigation officer of the Goa police's economic offences cell said though Sai Prasad Properties had its registered office in Goa, the operations were being managed from Pune. "The Goa office is managed by an office assistant and an employee. The company is inviting investment in property and promising high returns. There is no allotment of property in the investment plan," the report said, adding the company hadn’t shown any property for the current investment scheme in Goa. “The investment plans of the company will start maturing after two to three years and a problem of repayment might arise,” it said.
The report was accessed under the Right to Information (RTI) Act by Mumbai-based RTI activist Bhupendra Singh.
According to the group’s website, currently, the group is spread across about 100 cities and accounts for 131 branches and 1,500 employees. It has about 600,000 advisers serving about 1,100,000 customers and associates. “The ultimate goal of Sai Prasad Group of Companies is to provide customer satisfaction and customer delight with diligence, sincerity and commitment, which is based on the principle of joint participation and expectations of customers,” the website says.
Shashank Bhapkar, managing director of the group, did not respond to calls and an email seeking comments. Group Chief Executive Officer Sanjay Roy said, “We have responded to all notices from the RoC (Registrar of Companies). If there are investigations, you have to ask the people conducting the investigations.” He declined to share further details on the group.
Sources in the RoC, however, confirmed the company hadn’t given satisfactory responses to many of the questions raised in show-cause notices. They added the registrar was in the process of initiating criminal prosecution proceedings against the directors and senior officials of the group.
The MCA and RBI have been receiving complaints on the group’s activities since 2010-11. RBI had written to the Goa police’s economic offences cell, saying the company wasn’t registered as a non-banking financial company and, therefore, wasn’t authorised to raise deposits from the public.
The MCA had directed its regional director for the western region (based in Mumbai) to inspect the books of Sai Prasad Properties and Sai Prasad Foods under Section 209. The inspection report alleged several violations, including diversion of funds, manipulation of records and non-compliance with provisions under the Income Tax Act, the Banking Regulation Act, etc. It also alleged several violations of the provisions of the Companies Act.
In August 2012, the RoC, Goa, had written to the Sebi chairman, intimating violation of Collective Investment Schemes Regulations under the Sebi Act. Officials said Sebi had issued a show-cause notice to this effect and was investigating the matter.
UNDER THE SCANNER
  • Funds for group ventures are collected from small investors who are promised attractive returns
  • The money is collected under several plans such as monthly installment plans and one-time plans
  • 'Advisers' and 'zonal' and 'regional' officers together take up to 40% of the amount collected as commission
  • Goa police's economic offences cell said though Sai Prasad Properties had its registered office in Goa, operations were being managed from Pune
  • RBI said the company wasn't registered as an NBFC and, therefore, wasn't authorised to raise deposits from the public.
Courtesy:

Sunday, January 20, 2013

Depts holding up action against ‘corrupt’ exposed

Mumbai: The Maharashtra government has put several of its departments in the dock for sitting on requests for action against public servants prima facie found engaging in corruption.

In an affidavit filed on Monday before the Bombay high court, the state home department notes that other departments have repeatedly failed to clear the prosecution or investigation of more than 150 administrators and politicians accused in graft cases. Some permissions are awaited since 2001.

In the affidavit, joint secretary (home) Ruprao Deshmukh says that seven reminders were sent to the concerned departments’ secretaries between 2011 and 2012 to approve at the earliest the pending Anti-Corruption Bureau (ACB) proposals. Officials revealed to TOI that their response was far from ideal.

Rules mandate that the ACB follow stipulated steps while investigating a government official or minister. Most prominent among them is seeking the state’s approval to conduct an “Open Inquiry” and to prosecute. The state gives its nod after an ACB appeal has travelled through various stages and been green-lighted at every juncture.

“To clear the sanction-to-prosecute cases and review pendency, meetings were taken by the chief secretary on July 14, September 28 and December 31 of 2012. A booklet on relevant judgments on sanction to prosecute under the Prevention of Corruption Act, 1988, was circulated to secretaries,” reads the affidavit filed before the high court, which is hearing a public interest litigation on the issue.

The petition is likely to be heard by the court on Wednesday.


According to the affidavit, the highest number of the allegedly corrupt officers is in the police and revenue departments, which together account for more than 40% of the pending approvals. These are followed in the graft list by municipal corporations, zilla parishads and others.

The affidavit lays bare some departments’ delay in clearing action against high-profile functionaries as well as class III and class IV employees for over a decade.

Home department officials said the affidavit is an effort to debunk accusations that the government is not willing to take on corrupt officials and politicians. Governmental apathy has been blamed even by the ACB for lack of headway in graft cases.

According to the affidavit, 42 applications for prosecution of class I and class II officials were pending till December 2012. For class III and IV officials, the list was longer at 67 pending cases.

In 17 cases, even Open Enquiries were not sanctioned against senior politicians and bureaucrats: Among these were PWD minister Chhagan Bhujbal, former CM Vilasrao Deshmukh, then Akola municipal commissioner L Deshmukh, IAS (officer) Ashok Lal, M B Appalwar (then posted with MHADA), Congress MLA Ram Prasad Bordikar, Haffkine Biopharma MD Prakash Sabde, and former Nashik municipal commissioner Bhaskar Sanap.

“These are crucial cases, but not a single approval has come in them. Why has the government not taken action against the department secretaries sitting on these files?” said a senior ACB officer. He added that the delay in sanctions is a deliberate attempt to put the cases in cold storage.
Courtesy:
Sharad Vyas TNN
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Fake Bail Bond Scam: CBI INFORMS HC : ‘Chargesheet against four in rly bail bond scam by month-end’

Mumbai: The Central Bureau of Investigation (CBI) on Tuesday told the Bombay high court that it will file a chargesheet against four Railway Protection Force (RPF) personnel in the fake bail bond scam by month-end.

A division bench of Justices A M Khanwilkar and K K Tated was informed by additional solicitor general Kevic Setalvad that although the CBI has identified 23 persons, it has sufficient evidence against nine RPF personnel. “We require to sanction against five under Prevention of Corruption Act. We shall file a chargesheet against the remaining four by January 31,” he said. He further said one of the four persons, who was the overall incharge of the RPF, was the “main perpetrator” of the scam.

Setalvad also told the court that with regard to the remaining 14 persons, loose ends need to be tied up as evidence was destroyed after a fire in 2010. “Do whatever is possible,” said Justice Khanwilkar. The judges, in their order, said they hope the authorities concerned will grant sanction for prosecution of the five RPF personnel expeditiously and within reasonable time. Adjourning the hearing to February 11, they directed the investigating officer to file a further compliance report by then.

The HC was hearing a PIL, filed by Sameer Zaveri of Railway Suburban Passengers Association, stating that the RPF personnel posted at Kurla station during 2008-2009 booked commuters for trespassing and crossing tracks and released them on fake cash bail bonds, hence misappropriating the money. In August 2011, the HC handed over the probe to the CBI. The HC had at the earlier hearing rapped the CBI for dragging its feet in probe and seeking adjournments.
Courtesy:
Rosy Sequeira TNN
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Money Laundering Case : ED attaches Jagan’s assets worth 147cr

New Delhi: Y S R Jagan Mohan Reddy is in fresh trouble with the Enforcement Directorate on Tuesday attaching assets worth around Rs 147 crore in connection with its probe in the money laundering case against Jagan.

The attachment order, under criminal provisions of the Prevention of Money Laundering Act (PMLA), is the third by the agency after it issued two separate attachment orders of Rs 51 crore and Rs 71 crore earlier, in this case.

Sources said this would not be the last attachment order in the case and that as investigations progress more attachments could be ordered. Immovable properties and movable assets worth Rs. 146.94 crore under section 5(1) of PMLA were attached.

The properties attached include 135.46 acres of land belonging to Ramky Pharma City (India) Ltd and deposit of Rs 3.20 crore in mutual funds and fixed deposits for Rs 10 crore from Jagati Publications Private Limited (owned by Jagan), ED sources said.
Courtesy:
Deeptiman Tiwary TNN
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Medical Scams : Pharma cos adopt tough ethical norms

Mumbai: The noose may get tighter for the pharma industry. After facing flak for illegal drug trials, and unethical marketing practices, the pharma industry seems to be pulling up its socks.

In a significant development, the industry has decided to adopt strict guidelines to bring in transparency in clinical drug trials, and break the nexus between companies and doctors by adopting stringent MCI (Medical Council of India) guidelines which ban all gifts to doctors. The “Code of Pharmaceutical Practices” adopted recently bans all trials conducted for “disguised promotion” of medicines, while laying down that companies need to disclose all trials conducted in the country.

A new code drawn up recently by the MNC-led industry body, Organization of Pharmaceutical Producers of India (OPPI) with 50-odd members, which has roughly 35% market share includes standards for ethical promotion of pharmaceutical products to doctors and healthcare professionals (HCPs) and seeks to ensure that companies’ interactions with HCPs and other stakeholders such as medical institutions and patient organizations, are appropriate and transparent.

OPPI president Ranjit Shahani told TOI: “We can widen the scope and aim to make pharmaceutical practices across all stakeholders transparent. Going beyond marketing practices, we have included clinical trials, and have added stakeholders like medical institutions and patient organizations as part of the code.”

In India, there is lack of transparency in conducting clinical trials for drugs, with a view that the rules were not being followed. Recently, the Supreme Court rapped the government asking it to regulate “illegal” drug trials. Globally, the pharma industry has been under fire due to its aggressive marketing and unethical promotion of drugs and the nexus it enjoys with healthcare professionals.

In the US, certain legislations have already been adopted to break this nexus, while in India, the Medical Council of India, earlier brought in stringent guidelines. Though the OPPI code is stringent and plugs certain gaps, it is not mandatory on companies. Also, a majority of the pharma industry — represented by domestic companies — has still not finalized its code.

The Indian Pharmaceutical Alliance (IPA), which represents the domestic companies’ interests, is working on a code which will be transparent, practical and include all relevant disclosures from drug companies, its secretary-general D G Shah says. After being flooded with complaints about the pharma-doctor nexus and unethical promotions, the government initiated an exercise to bring in a uniform code for drug companies four years back. But, nothing has been finalized and only a draft exists.

Experts say that the code for pharma companies needs to be made mandatory, otherwise it is not effective. The OPPI code has been adopted from the code of ethics of Genevabased IFPMA (International Federation of Pharmaceutical Manufacturers & Associations) of which OPPI is a member. One of the significant guidelines incorporated says that no pharmaceutical product shall be promoted for use until the requisite approval for marketing for such use has been given. This plugs the gap on clinical trials of off-label use of medicines-- a practice which drug companies have been increasingly resorting to, over recent years.

BREAKING THE NEXUS
• MNC-led industry body OPPI seeks to make all interactions transparent
• Adopted recently, 'Code of Pharmaceutical Practices' bans all trials for 'disguised promotions'
• Pharma cos will also have to list all trials conducted in the country
• Though OPPI code is stringent it is not mandatory, also a majority of industry (domestic cos) are yet to finalized code
• Indian Pharmaceutical Alliance (IPA) is working on a code that will be transparent, practical and call for disclosures
Courtesy:
Rupali Mukherjee TNN
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Tax Scam : I-T officials survey Nokia plant

Chennai: More than 20 income tax department officials descended on the Nokia India plant in Sriperumbudur and its offices here on Tuesday for a survey. The survey, conducted on the suspicion that the company has not been paying tax on the payments made to its parent company in Finland for the past seven years, was continuing when reports last came in.

“A survey is being conducted on the premises of the Nokia plant by the investigating wing of our department,” income tax chief commissioner (Chennai) S Senthamarai Kannan said. “In a search operation, the business and residential premises are searched but, a survey is done only on the business premises,” he said. A clear picture would emerge in a couple of days, he said.

In an official release, Nokia said, “Tax officials visited Nokia’s manufacturing unit in Chennai. Nokia is fully cooperating to ensure they get the necessary information to help in the inquiry. As a global company, Nokia consistently fields a large and steady number of tax queries, audits and assessments. Nokia’s commitment to being a good corporate citizen is firm and unwavering: we always observe applicable laws and rulings in the countries where we operate. This has been a core principle of our operations in India, where Nokia has been present since 1995.”
Courtesy:
TIMES NEWS NETWORK
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BOMBAY HC QUASHES FIR : Interpol told to release fraud accused

Mumbai: The Economic Offences Wing of the city police has, through the CBI, informed Interpol to release a woman, Bhavna Doshi, who was arrested in Abu Dhabi last December for a cheating case registered here.

According to cops , the letter was written after the Bombay HC quashed the First Information Report on January 4 after three other accused arrested in Mumbai settled the financial dispute with the complainant Kapol Co-operative bank.

Cops said this would be the first case where the Mumbai police is requesting UAE authorities to release an accused arrested in a cheating case. Police inspector Shalini Sharma of the extradition cell confirmed the news but refused to comment further.

Doshi, who fled India in 2005, was on the ‘Wanted’ list and the CBI had issued a red corner notice (RCN) on the request of the Mumbai police. According to the EOW, Doshi, along with her husband Prakash and a few others, had allegedly duped the bank of Rs1.5 crore by availing loans using bogus documents.

Some police officials said that even if the co-accused settled the matter out of the court, the case of forgery should be tried as the accused had created bogus documents. Sources said that it could take at least another ten days before Doshi is released.
Courtesy:
S Ahmed Ali TNN
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DOLE SCAM : Netas, officials clean up 101cr meant for poor

State In A Fix As Minister Among 20,000 Involved
Mumbai: Roiled by a rash of corruption charges, the Maharashtra government appears to be headed for deeper trouble. An investigation has unearthed the involvement of thousands of officials and politicians in a decade-old fraud, in which Rs 101 crore of public funds were siphoned off and disbursed to 1.49 lakh bogus beneficiaries. Of the numerous recipients of the dole meant for the destitute, the probe found 19,367 were long dead and 25,484 missing.

The investigation, though incriminating, has placed the government in a quandary. The Bombay high court last month gave the state four weeks to decide on the request for filing of a chargesheet against current medical education minister Vijay Kumar Gavit. Gavit, as the then chairman of a committee in-charge of selecting dole beneficiaries, is accused of having played a role in a part of the fraud many years ago.

If the government agrees to the chargesheet against Gavit, officials pointed out, it will have to do the same against the 13,732 state employees and 7,519 politicians allegedly involved in the scam.

THE DOLE SCAM
• The fraud ran over 10 years
• Rs 101 crore of public funds meant for the destitute, including senior citizens, landless and tribals, were disbursed to 1.49 lakh bogus beneficiaries
• Current medical education minister Vijay Kumar Gavit is among the politicians allegedly involved

Netas blame dole fraud on tehsildars
The exposure of the Rs 101 crore dole fraud in Maharashtra, incidentally, began with another court order. About a decade ago, the Aurangabad bench of the Bombay HC had asked the state to investigate charges of irregularities in the implementation of Sanjay Gandhi Niradhar Yojana, National Senior Citizens’ Pension Scheme and Indira Gandhi Landless Labour Assistance Scheme. The ensuing probe found that, in Nandurbar district, 637 ineligible people were given financial assistance of Rs 4.04 lakh.

In the wake of this, the government issued two orders. On March 4, 2002, then social justice secretary Suresh Kumar asked the Nashik divisional commissioner to initiate criminal proceedings against those involved in the fraud. And, on July 19, 2002, then chief secretary V Rangnathan directed all divisional commissioners to conduct a high-level probe into the implementation of the schemes. Following Suresh Kumar’s directive, the Nandurbar collector lodged a complaint against Gavit, who was the chairman of a committee tasked with picking beneficiaries, and 50 officials, who processed the beneficiaries’ application forms.

Separately, in their findings, the divisional commissioners across the state confirmed rampant irregularities in the selection of dole recipients. The largest number of sham beneficiaries—97,221 —were found in Aurangabad; they were allegedly picked by 1,618 government employees and 1,567 politicians. Next in the fraud list came Amravati (21,039 bogus recipients, picked by 1,912 officials and 812 politicians), Konkan (12,657 sham recipients, chosen by 377 officials and 486 politicians), and Pune (2,405 bogus recipients, selected by 833 officials and 231 politicians).

In all, the divisional commissioners reported, the state lost Rs 101 crore in the fraud. Of this, Rs 8.9 crore was disbursed in the Konkan region, Rs 90 lakh in Nashik region, Rs 1.47 crore in Pune, Rs 14.8 crore in Nagpur, Rs 10.8 crore in Amavati and Rs 63.7 crore in Aurangabad region.

In the Konkan region, it was discovered that six bogus beneficiaries were given assistance in Khetwadi area, which was then represented by senior Congress leader Bhai Jagtap. Similarly, 14 recipients were found in Nagpada area, then represented by Syed Ahmad, who is now the Jharkhand governor; 50 beneficiaries were identified in Dharavi, which was represented by women and child welfare minister Varsha Gaikwad.

Industries minister Narayan Rane argued that politicians cannot be blamed for the systemic embezzlement since they have a limited role to play in the implementation of the schemes. “All the proposals are processed at the lower level and finally approved by the tehsildar. As a formality, they are brought before the committee headed by an elected representative,” Rane said.

TimesView : Stop this loot
This seems to be the latest in a long line of schemes meant to benefit the poor that has been hijacked by netas and babus. No amount of welfare-minded schemes initiated at the top will help people at the bottom of the pyramid if the benefits get channelised outside midway. Strict action must be taken in this case and the government must ensure benefits really trickle down to the intended recipients. It’s unfortunate that there is some remedial action in such cases only when the judiciary steps in or there is exposure by the media.

ANATOMY OF A SCAM
Crores meant for the state’s destitute were allegedly embezzled over a prolonged period

SCHEMES | Sanjay Gandhi Niradhar Yojana, National Senior Citizens’ Pension Scheme and Indira Gandhi Landless Labour Assistance Scheme. Their beneficiaries are chosen at the tehsil level by a committee headed by an elected representative. Application forms are processed by the tehsildar and then submitted before the committee. The beneficiary gets financial assistance of Rs 250 per month. The dole was first Rs 60 per month and then Rs 100, before being hiked to Rs 250

FRAUD | Bogus beneficiaries were given dole AMOUNT SIPHONED OFF | Rs 101 crore

BOGUS BENEFICIARIES | 1.49L, including 19,367 dead people and 25,484 missing

INVOLVED | 7,519 politicians and party workers, who were members of the committees involved in selecting recipients, and 13,732 officials

EXPOSE | In Nandurbar, following a complaint lodged by Congress leader Chandrakant Raghuwanshi, a probe discovered that 637 bogus people were given financial assistance of Rs 4.04 lakh. All the beneficiaries deposited the amount after a criminal case was filed

ACTION PLAY
While the government has issued show-cause notices to 13,732 employees, criminal complaints have been filed against 50 people in Nandurbar district. The state government is now awaiting the outcome of a case pending before the high court

POLITICIAN SPEAK
Most politicians claimed they had a limited role in the process of selecting dole beneficiaries. The exercise, they say, was conducted by tehsildars, who have the network and machinery to verify the beneficiaries.
Courtesy:
Prafulla Marpakwar TNN
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SCAM in Banking : HSBC Client Based In US Admits To Using NRI Account To Dodge Taxes

Indian-American pleads guilty in tax case
A New Jersey client of HSBC Holdings pleaded guilty to charges that he hid as much as $4.7 million through Swiss and Indian accounts not declared to the US Internal Revenue Service. Sanjay Sethi, 52, who owns SanVision Technology, conspired with HSBC bankers in New York, London and Geneva to hide assets from the IRS, he admitted on Monday in federal court in Newark, New Jersey. Sethi will pay a $2.37 million penalty for failing to file reports required for foreign accounts.

“Sethi and his co-conspirators used nominee and shell companies formed in taxhaven jurisdictions and elsewhere to conceal the defendant’s ownership and control of assets and income from the IRS,” according to his charging document.

HSBC’s Geneva-based private bank is one of at least 11 Swiss firms under investigation by US prosecutors investigating offshore tax evasion. HSBC’s Swiss unit gave lists of employees to aid the US probe, a spokesman said in April. Last month, Londonbased HSBC, Europe’s largest bank, agreed to pay $1.92 billion to settle US probes of money laundering in the biggest such accord ever.

Medard Schoenmaeckers, a Zurich-based spokesman for HSBC’s private bank, declined to comment on the court decision. Since 2009, at least 50 US clients of offshore banks and more than two dozen bankers, lawyers and advisers have been charged in a crackdown on offshore tax evasion by the US.

Sethi, of Watchung, New Jersey, is one of several HSBC clients charged with opening undeclared accounts through the bank’s NRI division, which were marketed to US citizens of Indian descent. “He accepts full responsibility for what he did, and he is happy to get this matter behind him,” said Sethi’s attorney, Amy Walsh of Kostelanetz & Fink LLP of New York.

New Jersey businessman Vaibhav Dahake pleaded guilty in April 2011 to conspiring with five HSBC bankers to hide his Indian accounts from the IRS. His plea came four days after a US judge in California allowed the IRS to serve a so-called John Doe summons on HSBC for information about Americans who may have banked in India to hide accounts from US tax authorities.

Last August, federal jurors convicted a Milwaukee neurosurgeon, Arvind Ahuja, of filing a false tax return and failing to file a Report of Foreign Bank and Financial Accounts, or FBAR, related to HSBC accounts in India. BLOOMBERG
Courtesy:
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Land Scam : Builder held for trying to grab dead man’s plot

Mumbai: The Economic Offences Wing (EOW) has arrested adeveloper who tried to usurp a dead man’s plot, estimated to be worth Rs 1.52 crore, by showing the owner, Ramchandra Patil, had sold it to him.

The arrested developer, Atul Patel, and his father, Nathlal Delvadia, also an accused, knew Patil and in 1988 had offered to buy the plot, measuring 2,178 sq yards in Eksar village, Borivli. The accused duo had made a part payment.

However, three years later, Patil died and the accused did not pay the balance amount. “After Patil’s death, his son, daughter and daughter in-law were the plot’s rightful owners. Patel and Delvadia, who owned Atul builders and Associates, never paid the arrears to the Patil family,” a police officer said.

In 2008, Patel allegedly produced a man at the deputy tehsildar’s office identifying him as Ramchandra Patil and completed the procedures for the sale of the land. “On November 21, 2008, Patel submitted an application to the office of the sub-divisional officer in Bandra. Fake documents were also prepared and submitted to the sub-divisional office. Letters were sent to other offices related to the sale and purchase and the statement of the seller and purchaser was signed by the then deputy tehsildar as ‘Before Me’. On December 23, permission to sell the property was approved,” said the officer.

The police are also verifying the information that an agent had facilitated the entire process by charging Rs 5.5 lakh from Patel. The property is valued at Rs 1.52 crore.

A case of cheating, forgery and impersonation has been registered. “Patel had fraudulently obtained the sale permission, prepared the conveyance deed and got the same registered.

The property is in his name now. It’s a serious offence and we have taken him in custody till January 17 for interrogation,” said a police source.
Courtesy:
Mateen Hafeez TNN
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Scam In Bombay Bullion Association : Bullion association expels ex-president for ‘criminal fraud’

Mumbai: The Bombay Bullion Association (BBA) on Saturday expelled Prithviraj Kothari, one of the biggest bullion dealers in India, for allegedly forging documents to lease the BBA basement to his nephew.

Kothari, the owner of Riddhi Siddhi Bullion Ltd, is former president of the association whose term ended in September 2011.

BBA president Mohit Kamboj told TOI, “We have detected a serious case of fraud and filed a formal complaint at LT Marg police station. During his tenure as president of the association, Kothari forged the minutes of the BBA board meeting to lease the basement to his brother’s son. This building is the property of the BBA and we cannot allow any member to misuse his position. The board of directors has unanimously passed a common resolution expelling him from the association. We are publishing a notice in the newspapers as well.”

The new committee that took charge in September 2011 was scrutinizing the records when it came across the fraudulent deal involving the 3,000 sq ft basement of the BBA building in Zaveri Bazar. Kamboj said the association offered Kothari a chance to explain the forgery but he chose not to appear before the committee.

Kothari, meanwhile, will not contest the expulsion. He said the BBA was unwilling to furnish proof of fraud. “The lessee who had occupied the basement is my brother’s adopted son, he is not a blood relative. Why are the authorities taking action months later? In any case, my nephew has surrendered the property peacefully so what is the fuss about?” he said.

An official of LT Marg police station confirmed receiving a complaint.
Courtesy:
Bella Jaisinghani TNN
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Scam In Making : ‘Costly’ kerosene makes way for diesel

Mumbai: This could sound strange, but citizens, who depend on kerosene to light up their kitchen stoves, these days prefer the cheaper fuel—diesel.

Petrol pump owners told TOI that there has been a long queue of slumdwellers arriving to fill their cans with one to two litres of diesel.

“These slumdwellers are fed up with the black-marketing of kerosene, which is available for as high as Rs 70 to Rs 80 per litre on the black market. There is an acute shortage in the fair price shops and they prefer switching to diesel to light their stoves,” said Ravi Shinde of Petrol Dealers’ Association, the apex body for petrol pumps in the Mumbai region.

Shinde pointed out that while petrol cannot be dispensed in cans and one needs to bring a scooter/bike/car at the pump, diesel can be given away in cans. “Diesel is a B-class petroleum product and the government allows us to dispense it in cans. There are people who need diesel for generators,” Shinde said.

He recalled that in the past one month, his petrol pump (near Amar Mahal) has had slum dwellers from Ramabai Ambedkar Nagar and Kamaraj Nagar slums queuing up. “They find diesel cheaper as it is available for around Rs 52,” he said.

A slum resident, who did not wish to be named, said that it was always better to have kerosene in the stoves instead of diesel. “But we are left with no option. When we go to fair price shops, we are informed that there is a shortage. Also, we do not want to spend as high as Rs 70-Rs 80 to purchase kerosene from the black market. So, we opt for diesel.”

The drawback of using diesel in stoves is that utensils get blackened and one has to bear the stench. “But as long as we are able to light the stove and cook food or boil water, we have no concerns,” said a resident. He complained that there were long queues for kerosene at ration shops and there was no guarantee that one would get it at fair price.

Shinde said, “Due to this, our diesel sales have also gone up. I have got the collection figures from most petrol pumps and the average sale of 300 kilolitres per month has increased to 400 kilolitres per month.”

Sources in the government said several people were unaware of their quotas and the days on which kerosene supply reaches the fair price shops. Several errant retailers were found keeping such information under wraps to divert the quota which is not picked up.

Sources allege that according to an estimate in 2012, as much as 40% of kerosene supplied was siphoned off to be used as furnace oil in industries or for adulteration of diesel and lubricants.
Courtesy:
Somit Sen TNN
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News You Can Use : Treating customers fairly

Here are six ways in which financial firms and advisers can focus better on clients
The language of financial advisers, investment managers, banks and brokers has altered significantly. They no longer speak about how big they are, the size of assets they manage, or the money they have mobilised. Instead, they try to impress upon anyone who cares to listen that they are focused on the customer. They speak about customer needs, suitability of products, simple products that can be understood, and about financial planning. While good intention is a great start, I suspect we have some distance to travel before we see actual change on the ground.

The Financial Services Authority (FSA) in the UK brought about a detailed regulation for retail distribution of financial products in 2008. Treating customers fairly (TCF) (http:// www.fsa.gov.uk/doing/regulated/tcf) is at the core of this regulation. There are six outcomes listed under TCF, which provide a good framework to see what we are doing in India and how much more needs to be done.

First, customers need to know that they are dealing with firms that have a corporate culture of treating customers fairly. When firms employ poorly qualified relationship managers, whose conversations are primarily oriented towards selling, customers see a sales culture. We need mandatory, basic qualification, highquality communication, and knowledgebased customer interaction to achieve this change. Second, products and services should be designed to meet customer needs and should be targeted accordingly. It is common for the products that offer higher incentives to find their way into the white list of offering for the customer. The latter have to know how the product or service meets their needs. They should insist that the positioning of the product is not based on its performance alone, but is aligned to how it works for them. We need mandatory processes that ensure compliance and impose penalties.

Third, customers should receive clear and reliable information before, during and after the point of sale. Elaborate regulation on information disclosure in India has led to lengthy and verbose offer documents and agreements. Retail distributors depend mostly on communication material provided by producers. We do not have research that tells us how information is perceived, understood and used by customers. Formal processes should be in place to incorporate this research into regulatory formats and market practices for information disclosure.

Fourth, when customers receive advice, it should be suitable and take into account their specific circumstances. A bank relationship manager selling a credit card or home loan may rely on internal computations for a customer’s credit limits. However, the actual amount of loan that the customer can reasonably service might require more inputs on income, existing liabilities and assets. It takes a wellqualified, knowledgeable and informed adviser to play this role.

Fifth, customers should be provided with products that perform as they have been led to expect. It is easy to sell on the basis of false promises; more so, if accountability for untruth is absent. It is tough to tell the customer that the fund being sold might underperform its benchmark; or that the insurance policy might deliver only in the long run; or that the annuity might provide a negative return after adjusting for inflation. However, fairness towards the customer requires building the right expectations. Assurances about return are unethical, even if they are easily understood and persistently sought by customers.

Sixth, customers should not face unreasonable post-sale barriers to change the service providers, service a claim or make a complaint. The sum total of all lapses in the five practices listed above manifest in a large number of customers in the Indian markets facing severe postsales barriers. Many are stuck with products and services that they are dissatisfied with, but are unable to get rid of. Customers find that complaints are not redressed in a reasonable time frame; claims are turned off citing clauses and provisions that were not highlighted during the sales process; and service providers make it tough and expensive for customers to switch.

What does it take to ensure that we treat customers fairly? We need a regulatory framework, which includes everyone who sells a financial product or service to retail customer. What are the problems we have? Intellectual capital to create such a framework is limited; multiple regulators in the financial market are unwilling to come together; vested interests, including that of the government, come in the way of disbanding undesirable practices; and setting a high standard for the business is seen as expensive, inhibiting and restrictive. Hence, we are unable to move ahead from anguish, activism and hype about mis-selling in financial services to cohesive and meaningful action.
Courtesy:
Uma Shashikant

—The author is Managing Director, Centre for Investment Education and Learning, and can be reached at uma.shashikant@ciel.co.in
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Know Your Rights : Delayed insurance claims valid: Panel

Mumbai: The Maharashtra State Consumer Disputes Redressal Commission recently held that filing an insurance claim late cannot be the reason for rejecting it. The commission, while upholding a district forum’s order, directed Oriental Insurance Company Ltd to pay the widow of a man who died in a 2006 accident the entire claim of Rs 1 lakh plus a compensation of Rs 46,000 even though the claim had been filed well past the one-month ‘deadline’. The commission held that the deadline was not a “mandatory condition”, but a kind of directive.

Referring to past orders, the commission observed, “This commission has constantly held that giving intimation within a specified period or within one month is not a ‘mandatory condition’, but a ‘directory’ in nature and breach of this condition does not empower the appellant insurance company to forfeit or foreclose the insurance claim required to be duly settled.…”

Firm didn’t explain penal penalty for non-compliance
Mumbai: Shri Vitthal Sahakari Sakhar Kharkhana Ltd had subscribed to a Group Janata Personal Accident Insurance Policy to provide insurance cover to members in their factory. During the term of the policy, one of the members, Vitthal Gawande, died in a road accident on December 31, 2006.

The insurance claim was filed on January 18, 2008. The insurance company repudiated the insurance claim on the grounds of non-compliance of terms and conditions incorporated in the policy document.Aggrieved with the repudiation, in 2009, Vitthal Sahakari Sakhar Kharkhana, along with Gavande’s wife Rani Gavande, filed a consumer complaint before the district forum in Solapur.

On December 7, 2010 the district passed an order in their favour. Aggrieved, the insurance company filed an appeal in the state consumer disputes redressal commission.

According to the commission, the only point challenged by the insurance company was that the terms and conditions of the policy was violated by the complainants as intimation of the claim was not received within a stipulated period but after almost 13 months. The advocate, on behalf of the insurance company, submitted that as per the terms and conditions a claim under the Group Janata Personal Accident Insurance Policy was required to be brought to the notice of the insurance company within one month of the date of the incident leading to the claim.

The commission observed that during the arguments, the insurance company did not point out the penal provisions for non-compliance of the policy condition. The commission then dismissed the appeal. Times View: Don’t deny rightful claims T his order will come as a relief to people whose claims are stuck only because they have been filed late. Late filing of insurance claims can clog the system and delay processing other claims in queue. But insurance firms need to take a humane approach and decide on a case-by-case basis instead of using this clause as a means to deny the insured their rightful claims.
Courtesy:
Rebecca Samervel TNN
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Save Your Money : How indexation benefits you

To neutralize the negative effects of inflation on investors, the government has provided for a system called indexation in the Income Tax Act. It allows investors to use the rate of inflation to reduce their tax liability from the returns they get from their investments in debt mutual funds and bonds. The lower tax burden is commonly called indexation benefit, and under the IT Act, you as an investor can claim such benefits if your investments were held for more than 12 months.

Since, under the income tax rules, more than a year means long term, for capital gains accrued over more than a year you have the option to pay tax at the rate of about 10.30%. On the other hand, if you plan to use indexation, you would have to pay at the rate of about 20.60% on the capital gains after indexation. The amount of tax that is lesser when calculated using both the methods, is to be paid by the investor.

The idea of indexation
The idea behind indexation is that the purchase price of the investment should be linked to the rate of inflation during the holding period, and then only the earnings over and above the inflation-adjusted cost of acquisition should be taxed. What this process does, in a number of cases, is reduce the tax outgo for the investor.

Indexation benefits
Suppose you invested Rs 10,000 in the debt scheme of a mutual fund in fiscal 2008 and you have stayed invested in it for four years, till fiscal 2012. When you redeemed your units, you got Rs 15,000, which means a long term capital gain of Rs 5,000. If you want to pay directly, at 10.30% rate of tax without indexation, your tax burden is Rs 515.

Now suppose, rather than paying tax at the flat rate of 10.30%, you want to use indexation benefits for the gains from your investments. The government publishes cost inflation index to calculate indexation. Say for fiscal 2008, the relevant number was 575 and for fiscal 2012 it was 750. The formula for calculating the inflated cost of acquisition is:
{Purchase price x (index for fiscal 2012/index for fiscal 2008)}
By this calculation we have:
{Rs 10,000 x (750/575)} = Rs 13,043
Now the actual value of your
investment is Rs 15,000. So the taxable part would be:
(Rs 15,000 - Rs 13,043) = Rs 1,957

Now if you have to pay tax at the rate of 20.6%, then your tax outgo would be Rs 403.

In the first case, without indexation benefit, your tax outgo would be Rs 515. In the second case, with indexation benefit, your tax outgo is about Rs 403. So by taking advantage of the indexation benefits, your tax burden on your debt fund investments is reduced by Rs 112. Now, if your initial investment in the same debt fund was Rs 1 lakh, the savings would be Rs 1,120 and if it was Rs 10 lakh, the savings would be Rs 11,200.

Other issues
This indexation method, however, could result into higher tax outgo if the rate of inflation remains low during the holding period. And in cases where the rate of return in the debt fund is equal to the rate of inflation, there would be no tax burden on the investor.

A similar situation was observed recently in India. For a major part of fiscal 2012, fixed maturity plans (FMPs) gave annual returns of about 9% or more. And during the same period, the rate of inflation was also hovering above 9% or more. Given this situation, investors need not pay any income tax and can pocket the full gains from the FMPs.

To claim indexation benefits, you should remember that this is applicable only in case you have long-term capital gains from your investments in debt mutual funds,gold and real estate, the assets where other tax sops are not available. For example, if you invest in an equity mutual fund and held it for more than a year, you qualify to pay no taxes on those gains since such gains would qualify for long-term capital gains from investments in securities which in turn is not taxable.

The onus of calculation of indexation benefits, and to decide whether to pay income tax with indexation benefits or without, is the responsibility of the investor, that is you as a taxpayer. So if you are not very conversant with the calculations of taxes and indexation benefits that can accrue to you in your investments in debt mutual funds, gold and/or real estate, it is better to seek help from a person qualified to handle the same for you. Here, you should also remember that when you redeem your debt fund units, the money will come to you without the fund house deducting any TDS (tax deducted at source).
Courtesy:
TIMES NEWS NETWORK
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Scams In Share Market: Sebi says getting 100 alerts a day

The Securities and Exchange Board of India’s (Sebi) surveillance system throws up roughly 100 alerts everyday on incidences of suspicious market activity.

The regulator has teams following up on each of them, according to U K Sinha (pictured), its chairman.

“There are teams following up on each and every alert and taking a note of possible action in each case. They are looking at enforcement action or adjudication proceedings wherever required,” he said, speaking at the 8th Annual National Conference on Capital Markets organised by the Associated Chambers of Commerce and Industry of India (Assocham).

The regulator has in place a sophisticated surveillance and data warehousing system for the same, he said.

Sebi has been beefing up its investigation and surveillance systems in recent times.

It rolled out a Data warehousing and Business Intelligence Project – the first phase of the project was launched in February 2011.

A sum of `20.10 crore was budgeted during 2010-11 for the same.

Phases-II and III were set to be completed during 2012-13, according to

Sebi’s budget estimates for FY13.

Investors complaints too seem to be on a high following Sebi awareness programmes through print and television advertisements.

Sinha said that Sebi has received more than 1 lakh calls on its helpline in the last six months and 80,000 complaints on its centralised web-based complaints redressal system called SCORES.

Sebi had launched a toll-free helpline for investors in December 2011 and SCORES in June 2011 to enable investors to lodge and follow up their complaints and track the status of redressal of such complaints from anywhere.

Interestingly, Chitra Ramakrishna, joint managing director of the National Stock Exchange, who was also speaking at the event, made a strong plea for capital market participation from corporate pension funds, noting that up to 15% of the corpus could be deployed in equities.
Courtesy:
Author : Sachin P Mampatta, 10 Jan 2013
http://epaper.dnaindia.com/story.aspx?id=36304&boxid=15557&ed_date=2013-1-10&ed_code=820009&ed_page=13

SRA Scam : Inquiry against six bldrs in SRA scheme

CM Promises Rejig, Seeks Transparent Guidelines
Chief minister Prithviraj Chavan has ordered a probe against six developers after social worker Medha Patkar alleged that they were involved in illegal activities while executing projects under the Slum Rehabilitation Authority (SRA) scheme. The CM has also decided to overhaul the scheme, which is often alleged to be steeped in irregularities.

During a meeting last week, Patkar had told Chavan and home minister R R Patil that the six developers had produced misleading information on beneficiaries of the slum rehabilitation scheme. The CM promised her a thorough probe into the allegations and accordingly, principal secretary (housing) Debashish Chakrabarty on Friday wrote to her saying he would conduct an inquiry against Shivalik (Khar), Satra (Ghatkopar), Saiwala (Jogeshwari), Sumer (Chandivli), Shahana (Sion) and Samarth (Mulund) developers. “Once we receive a specific complaint from Patkar, we will conduct the probe within a month. We will decide on the next course of action after the inquiry,” Chakrabrarty told TOI.

A senior Congress minister said following Patkar’s allegation, Chavan also planned to modify the conditions for the scheme. “The government has received several complaints against developers involved in the SRA scheme. The most common charge is that the builders have fabricated the list of beneficiaries. In fact, the entire list of bogus beneficiaries of one project has been submitted to Chavan,” he said. “In
the backdrop of such irregularities, it is felt that instead of making it developer-driven, the scheme should involve slumdwellers more.”

On the new guidelines, the Congress minister said during Chavan’s interaction with social workers, it was proposed that slumdwellers should have the final say in the projects and under no circumstances, a developer should be offered an opportunity to hijack the scheme.

“More often than not, shantydwellers are left high and dry, while developers benefit; even small-time contractors have become leading builders,” he said. Further elaborating on the proposal, the minister said once slumdwellers agreed to be relocated, the SRA should first float tenders for the construction of tenements and then for the auction of the vacated land. “Either Mhada or a private entrepreneur will build homes for the slumdwellers. Following the rehabilitation, tenders will also be floated for the auction of the land that have been vacated by the slumdwellers; the money will be used to meet the cost of construction of tenements,” he said. The minister said the proposal would be placed before Chavan and later the cabinet for approval. “The CM is keen on a completely transparent plan.”

Alarmed by the mushrooming of slums in the city, the late Shiv Sena leader, Bal Thackeray, had launched a plan to provide free tenements to the poor. A specialpurpose vehicle was also set up to make Mumbai slumfree within a timeframe. “It was Thackeray’s dream project but the scheme failed to be implemented owing to the lack of political will,” a senior Sena leader said.
Courtesy:
Prafulla Marpakwar TNN
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Black cash amounts to 10% of GDP: Study

Figure Above 10 Lakh Cr, Says Govt Report
New Delhi: A study commissioned by the government last year on quantifying black money generated in the country has estimated that the illicit wealth is likely to exceed 10% of GDP or anywhere above Rs 10 lakh crore, given the size of the economy.

The 1,000-page report was submitted to the finance ministry by the National Institute of Public Finance and Policy (NIPFP) in the last week of December. The finance ministry is taking a view on it before deciding to table it in Parliament, sources said.

The study was headed by R Kavita Rao, head of NIPFP’s tax policy and research, and included former director general of income tax investigation S S Khan. The report has given sectoral break-up of the scope of black money such as the real estate sector, telecom, mining etc.

The last such study carried out at the instance of the finance ministry was by NIPFP in 1984 when the latter had estimated black money generated in the country to the tune of 19% to 21% of GDP or up to Rs 36,000 crore.

After major ruckus in Parliament and a civil society movement, the government had in March 2011 selected three thinks tanks to estimate the quantum of black money — National Council for Applied Economic Research (NCEAR), NIPFP and National Institute of Financial Management (NIFM). The first report has been submitted by NIPFP while officials in the finance ministry refused to disclose status of other two reports.

The NIPFP had earlier carried out studies in 1976 and 1981 when it had estimated black money generated in the country to be around 15% to 18% of GDP and 18% to 21% of GDP respectively.

In a white paper on black money tabled in Parliament last year, then finance minister Pranab Mukherjee had listed tax evasion through transfer pricing as one of the major areas of generation of black money. He had said it was largely invisible to the public and difficult and expensive for tax officers to detect.

The white paper had quoted a private study report saying “developing countries may be losing over $160 billion of tax revenues a year, primarily through transfer pricing strategies”.

The white paper had said, “The illicit money transferred outside India may come back to India through various methods such as hawala, mispricing, foreign direct investment (FDI) through beneficial tax jurisdictions, raising of capital by Indian companies through global depository receipts (GDRs) and investment in Indian stock markets through participatory notes.”
Courtesy:
Pradeep Thakur TNN
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Scam In Making : Centre releases 778 cr to tackle drought in state

Mumbai: Coming to the state’s rescue, the Centre on Thursday released Rs 778 crore as drought fund for urgent use in relief and mitigation measures. Several parts of the state are reeling under unprecedented drought situation. Last year. Maharashtra had asked the Centre for Rs 3,400 crore in view of the alarming drought condition in western Maharashtra, Marathwada and other parts of the state.

However, the opposition criticized the state and the Centre for not doing enough to help the affected. “I had asked the state why the Centre was releasing help in piecemeal when urgent help is required. What has the state done to push its case?” asked leader of opposition in the council Vinod Tawde.

The opposition demanded the state no longer depends on the Centre for help and releases the remaining amount immediately for the drought-affected regions.

The state is suffering from one of its worst droughts since 2003, with as many as 6,000 villages in 15 districts being worst affected. The state had officially declared drought in 123 talukas to seek Centre’s assistance.

‘Don’t hold exams in affected belt schools’

The NCP has asked the government to promote students (class I to IX) in drought-hit areas without conducting exams. NCP’s student wing chief Nilesh Raut has raised the demand before CM Prithviraj Chavan and deputy CM Ajit Pawar. “Families might have to be evacuated and relocated in certain drought-hit areas in April and May. Many affected students could lose an academic year if exams were held,” he said. Raut has also asked the government to waive off exam fee for the current academic year and exam and admission fees for the next year. Meanwhile, the CM visited drought-hit areas in Satara. TNN

Tax for water bottling units? 
An NGO working in drought-hit areas has demanded that water-intensive bottling plants pay additional tax to help raise scarcity funds. TNN
Courtesy:
TIMES NEWS NETWORK
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Irrigation Scam : Controversial irrigation official back in saddle

Mumbai: Three months after shunting out water resources secretary DP Shirke following allegations against him in the multi-crore irrigation scam, chief minister Prithviraj Chavan has finally given him an alternative posting.

Shirke has now been posted as the managing director of Aurangabad-based Maharashtra Water Conservation Corporation (MWCC). This posting would alienate Shirke from irrigation projects and the department’s day-to-day functioning. Shirke is facing a departmental inquiry for allegedly clearing cost escalation in irrigation projects as former executive director of the Vidarbha Irrigation Development Corporation. TNN
Courtesy:
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Indian NGO funding is a multi-crore scam: ACHR

The government of India's funding to the tune of hundred of crores to non government organizations is a huge scam, the Asian Centre for Human Rights has alleged.

In its report titled 'India's Funds to NGOs Squandered', the ACHR says: 'The selection of grantees (NGOs to whom government funds are allocated) is often determined not on ability or technical expertise but rather on the applicant's ability to pay a bribe.'

'NGOs allegedly had to pay bribes amounting to 15 per cent to 30 per cent of the grant to have their projects approved. If a conservative estimate of 15 per cent is used as a bribe to process the applications, during the fiscal years 2002-2003 to 2008-2009 at least Rs 1000 crore have been spent on bribes to different layers of officials approving the projects.'

As per the replies by central and state governments to RTI pleas filed by ACHR, over Rs 6654.36 crore as grants to NGOs/voluntary organisations during 2002-2003 to 2008-2009 or an average of over Rs 950 crore every year. This includes over Rs 4756 crore given by the central Government and Rs 1,897 crore by the state governments.

According to ACHR Director Suhas Chakma, "The figure of Rs 6654.36 crore of funds given to NGOs is only indicative and not accurate."

He added, "Firstly, a number of states and Union Territories such as Madhya Pradesh, Uttar Pradesh, Orissa, Jammu and Kashmir, Arunachal Pradesh, Mizoram, Dadra and Nagar Haveli, Daman and Diu and Lakswadeep failed to provide information about the grants given to NGOs. Second, many departments of the state governments and UTs which replied did not provide full information. Third, the central government ministries provided much less figures under the RTI applications in comparison to information placed before the Parliament (both Lok Sabha and Rajya Sabha). Fourth, little information was made available with respect to many flagship programmes, including Mahatma Gandhi National Rural Employment Guarantee Act. Fifth, many of the government owned Public Sector Undertakings did not provide information about the funds given to the NGOs as part of the Corporate Social Responsibility and therefore, not included in this study."

With regard to ACHR's allegation on kickbacks paid by NGOs/VAs to receive funds, Chakma stated: "The estimate of Rs 1,000 crore in bribes must be seen in the context of the Comptroller and Auditor General's Report No.17 of 2010-2011 pertaining to audit of transactions and performance in the Ministry of Environment and Forest in which the CAG concluded that 7,916 Utilisation certificates (UCs) from the grantees for grants worth Rs 596.79 crore from 1981-2009 were not obtained under the scheme of Grants-in-Aid to Voluntary Agencies."

"The CAG concluded that the possibility of misutilisation/fraud is not ruled out as majority of VAs/state forest departments /forest development associations neither came back to the National Afforestation and Eco-Development Board for the next instalment after release of first instalment nor did they furnish UCs/progress reports"

The ACHR report also highlighted the lack of accountability in the system.

It noted that the Council for Advancement of People's Action and Rural Technology sanctioned 24,760 projects during September 1, 1986 to February 28, 2007 involving a total sanctioned grant of over Rs 252 crore. Out of these, 511 NGOs were placed under the blacklist category due to irregularities committed.

However, out of 511 blacklisted agencies/NGOs only 10 cases were referred to the Central Bureau of Investigation for investigation while the First Information Reports were lodged against only 101 NGOs. By August 3, 2009, the number of NGOs blacklisted by the CAPART increased to 830 and FIRs were lodged against 129 blacklisted NGOs. By May 3, 2012, another 81 NGOs were placed under Black List category and 195 NGOs were placed under Further Assistance Stopped category by the CAPART.

To address the malaise, the ACHR has recommended the establishment of a 'National Grants-in-Aid Commission' through which all grants to the voluntary sector by all the ministries shall be routed. It will be responsible for selection of proposals, monitoring of implementation, review of reports and recovery of funds.

In the interim period, ACHR has requested the Centre to direct (i) all ministries to do away with the current process of recommendations by district magistrates and the state governments, invite applications through open call for proposals, consider applications on merits by independent evaluators, and conduct necessary verification only after short-listing of the applicants; and (ii) direct all central ministries, state governments and UTs to make all information pertaining to grants to the voluntary sector, including recommendations of the state government publicly available as part of the voluntarily disclosure under the Right to Information Act, 2005.
Courtesy:
updated on: January 18, 2013 17:07 IST
http://www.rediff.com/news/slide-show/slide-show-1-indian-ngo-funding-is-a-multi-crore-scam-achr/20130118.htm

Wednesday, January 16, 2013

Adarsh Scam : Adarsh did not have CRZ nod, says state govt

Mumbai: In a huge setback to Adarsh society, the Maharashtra government has told the judicial commission that the controversial society did not have coastal regulation zone (CRZ) clearance or a nod from the Union ministry of environment & forests (MoEF).

The state also said the society could not have risen to 31 floors, as developmental control regulations (DCR), 1967, were applicable to it. This meant it could have risen to 46.5 metres, as opposed to it towering today at around 102 metres.

The state’s stand, for the first time, puts the society in the dock, even as the judicial commission wrapped up hearings in the case on Tuesday. The commission headed by Justice (retired) J A Patil and member P Subrahmanyam has indicated that it will submit its report to the state government by mid-March.

Senior advocate A Y Sakhare and advocates U Nighot and B Vasudev have supported the MoEF’s claim that its 2003 letter was misrepresented as environmental clearance. The Adarsh members insisted they had the CRZ nod from the state urban development department and that even if there was no clearance they could seek permission later. The MoEF had recommended demolishing the building, which is in a CRZ area, for lack of permission.

The state insisted that DCR (1967) was applicable to the building; instead the Mumbai Metropolitan Region Development Authority (MMRDA) had applied DCR (1991), which did not have height restrictions. DCR (1967) had more stringent rules concerning height of a building, parking space, exemption of areas used for common amenities like staircase, lift and the construction of a podium. The state further admitted that a ‘‘bona fide error’’ had been committed by former principal secretary Ramanand Tiwari on procedures followed for dereserving land meant for the Brihanmumbai Electric Supply & Transport undertaking to favour the society.

The government, however, insisted members were approved for Adarsh on the basis of documents they submitted and no fault could be found with the collector if some had not submitted all the papers.

The state avoided a direct answer on whether any of its officers gave permission to Adarsh as quid pro quo for favours from the society.

Once the commission submits its report, the state will have to decide whether to accept it or not.

THE GREAT HOUSING SAGA

The Adarsh commission was set up on January 8, 2011. It is headed by Justice (retired) J A Patil, a former judge of the Bombay High Court, and member P Subrahmanyam, former state chief secretary

It was given 13 terms of reference, including who owned the land and whether it was reserved for housing Kargil war widows, and whether reduction of width of Captain Prakash Pethe road was in accordance with law

In its 2012 interim report, the commission held that the land belonged to the state government and negated the army’s claims over the plot

IMPORTANT WITNESSES
Union home minister Sushilkumar Shinde
Former chief ministers, the late Vilasrao Deshmukh, and Ashok Chavan
Former army chiefs Deepak Kapoor and N C Vij

WHAT NEXT
The commission is scheduled to submit its report to the state by mid-March. The state can accept or reject its findings. The state can also submit an action taken report before the legislative assembly

214 | Number of witnesses
2,500 | Number of pages of statements of witnesses
Courtesy:
Shibu Thomas TNN
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Thursday, January 10, 2013

Land Scam : ‘21 acres of mangrove land have been usurped’


THE SARPANCH HAS SOUGHT AN INQUIRY INTO HOW REVENUE OFFICERS ALLOWED THE GOVT TO BE EXPLOITED BY PRIVATE PARTIES

MUMBAI: Three local residents of Dhutum village in Uran tehsil have allegedly usurped 40 acres of local government land – worth more than Rs 360 crore – and destroyed mangroves spread over 21 acres in order to set up private container depots on the land, a public interest litigation filed in the Bombay high court states.

The division bench of justice Ajay Khanwilkar and justice Ashok Bhangale has directed the Revenue and Forests Department to file an affidavit stating whether the allegations made in the PIL filed by Dhanaji Thakur, sarpanch of village Dhutum, were true.

The village headman has stated in his PIL that three local residents – brothers Pandurang, Ram and Narayan Thakur – had usurped the common cattle grazing land of the village. The PIL, filed through advocate Rahul Thakur, stated that the trio had destroyed mangroves spread over 21 acres by dumping debris and had leased out the land to private container depots.

The government had, in 1940, leased three hectares of the cattle grazing land to the predecessor in the title of the three brothers for agricultural purposes, the PIL states. It adds that after Dhanaji Thakur lodged several complaints, on January 28, 2008, tehsildar, Uran, had issued a notice to the three brothers calling upon them to show cause why the land should not be forfeited to the government, and in reply to the notice, the trio had specifically admitted that they had carried out unauthorised development on the land to the extent of 40 acres.

According to the PIL, the land adjoining sector 1 and 2 of CIDCO’s Dronagiri Node is valued at more than Rs360 crore and the trio have leased it out to several private entities.
Courtesy:
    10 Jan 2013
    Hindustan Times (Mumbai)
    Kanchan Chaudhari kanchan.chaudhari@hindustantimes.com

SALARY SCAM : `30cr ‘illegal pay’ for Prasar Bharati staff

THE Broadcasting Corporation of India or Prasar Bharati, which controls Air India Radio (AIR) and Doordarshan, has allegedly caused a loss of about Rs 30 crore to the exchequer following anomalies in fixing salaries of senior employees.

The organisation not only formulated an erroneous pay scale years ago, but also misinterpreted an order of the Information and Broadcasting Ministry in 2004, leading to a continuing loss each year since 1996.
Worse, prompted by the pay scale fixed for the directly appointed programme executives, some promoted executives also applied for the same.

Their pay was illegitimately increased too, confirmed a report by RK Sharma, former deputy director (administration) in AIR. The December 2011 report highlighted the losses and issued a recommendation to recover the excess payment from more than 300 senior employees (direct appointees). However, little has been done on Sharma’s report.

The report said, “The government has to pay almost Rs four thousand per month per head undue payment to almost 300 programme executives. This causes undue expenditure of almost Rs 1.44 crore per year, as such the loss projected per day is in millions…”

It all started in 1999 when a few directly recruited programme executives approached the Central Administrative Tribunal (CAT) seeking upward revision of pay scale. In 2002, the CAT directed that an anomaly committee be constituted. This committee, headed by Additional Secretary, Ministry of Information and Broadcasting, rejected the claims. The director general of AIR went on to seek a clarification from the ministry.

In June 2004, the ministry directed, “If their pay claim is found correct, then the concerned AIR Station(s) be directed to fix their pay…with effect from 1996.”

Kundan Singh, a former promotee programme executive who retired last year, says this order was misinterpreted. “The ministry did not okay an increased pay, the order was to clarify individual claims,” says Singh. “AIR misinterpreted facts to favour its officials.”

Sharma’s report also confirms that the directorate general of AIR failed to verify individual executives’ claims and instead surprisingly ‘misinterpreted’ rules and misguided higher authorities while giving its nod for stepping up the pay in 2004.

The report issued instructions that the error must be rectified by all AIR stations and Doordarshan kendras by issuing orders for re-fixation of pay of all officers concerned as on January 1, 1996 and onwards.
Various DD Kendras and AIR stations acknowledged the error but failed to take any action.
In a letter to Prasar Bharati in June 2011, a senior accounts officer from Mumbai admits that 30 to 40 programme executives in the city are benefiting from the incorrect fixation of pay.

Kundan Singh says the number of employees benefiting is much more than 400. He filed several Right to Information applications regarding the matter but received different numbers each time. Moreover, Prasar Bharati also reportedly informed him that some executives’ files are missing. “The actual loss is much greater,” says Singh, who has complained to the prime minister’s office, the comptroller and auditor general and others. In August this year, the PMO forwarded his complaint to the ministry.

When Kundan and others learnt about the matter in 2007, they had applied for an increase in their pay as well, and got it. Eventually, about Rs 1 lakh was recovered from him before retirement, with the public broadcaster stating that since the pay of directly-appointed programme executives was raised illegally, his pay hike was unlawful too. “Recovery should be done from both directly appointed and promotee executives. They targeted me because I was raising this issue,” he adds.

The ministry advised AIR to take action too. In June this year, it wrote a letter saying, “DG: AIR has clearly admitted in the proposal [Report] that the wrong pay fixation has been done … the rectification of the same has to be done...”

Despite repeated attempts to contact various senior authorities at Prasar Bharati since November 27, they remained unavailable to respond to a detailed questionnaire on the matter.
Courtesy:
Sandeep Pai l Mumbai
Published Date:  Jan 10, 2013
http://epaper.dnaindia.com/story.aspx?id=36351&boxid=15524&ed_date=2013-1-10&ed_code=820009&ed_page=9

Housing Scamster escapes from cop custody

Housing scam accused Yogesh Karande escaped from the custody of the Mira Road police in Vasai just 50 metres away from the Manickpur police station.

The Kanakia police arrested Karande after 13 complaints were registered against him for duping people of Rs75 lakh, while the Manickpur police station already had 150 complaints against him for cheating the complainants of Rs3 crore.

Karande and his accomplices used to lure people into purchasing auctioned flats at cheaper rates. They would ask them to pay 30% of the flat cost in advance and then disappear. The Manickpur police had earlier arrested two persons in connection with these cases.

On Wednesday evening, the Kanakia police was bringing Karande for further investigation when he pushed one of the accompanying cops and fled in an auto from near Manickpur police station during a halt, said Arvind Chaudhary of Manickpur police station, adding that they have increased nakabandi to re-arrest him.

The Manickpur police have registered a case against Karande under Section 224 (resistance or obstruction to his lawful apprehension) of the IPC.
Courtesy:
Imran Fazal
imran.fazal@dnaindia.net
Published Date:  Jan 10, 2013
http://epaper.dnaindia.com/story.aspx?id=36321&boxid=14731&ed_date=2013-1-10&ed_code=820009&ed_page=7

Sebi warns companies against market misconduct

Sebi chairman UK Sinha warned corporate houses of stern action if they don’t adhere to the regulator’s norms and they are caught for serious market misconduct.

“We have introduced a very sophisticated surveillance mechanism and every day we’re getting hundreds of alerts through a data warehousing system and I would like to ensure the investing community that we will thwart any attempts to bypass the rules of the market,” Sinha said at an Assocham seminar here.

“We’re taking all possible decisions and measures to ensure that nobody is able to avoid the rules of the games especially on a continuous basis to harm the interests of the individual and institutional investors,” he said.

On the consent mechanism, Sinha said, “We’ve come out with new guidelines on consent mechanism and if any corporate or individual is found going against that policy then a stern action will be taken.”

Sebi has also sought the reasons as to why certain independent directors, citing that things have not been going as per standard practices, are silently withdrawing themselves thereby resigning in an impulsive and haphazard manner, Sinha said.

On the issue of executive compensation, Sinha said the short-term interest of senior executives should not guide the company into taking unnecessary risks, which precisely has been the problem in many large companies over the course of the last five years.

“Going forward, we think there should be some norms on the subject and that is why we want to set up certain parameters without doing anything in a disruptive manner and will implement it stage-wise.”

Sinha said the government has assured the Sebi that listed public sector undertakings will meet the August 2013 deadline to meet the capital markets regulator’s 25 per cent mandatory public shareholding norms.

“I am happy to inform that we have received confirmation from government that it will abide by public shareholding guidelines within the timeframe,” he said.
Courtesy:
ENS Economic Bureau : Mumbai, Thu Jan 10 2013, 00:35 hrs
http://www.indianexpress.com/news/sebi-warns-companies-against-market-misconduct/1057049/0

ATM Scams: Bank to pay 9L for ATM card misuse

Mumbai: Upholding a district forum order, the Maharashtra State Consumer Disputes Redressal Commission ordered Citibank to pay Rs 9.44 lakh to a man, after Rs 6 lakh was fraudulently withdrawn from his account using an ATM card that he did not possess.

In December 2006, when Ratilal Israni received his monthly bank statement, he noticed that Rs 6 lakh had been withdrawn using an ATM card between November 22, 2006 and December 5, 2006. The Marine Drive resident, Israni, contended that he never been issued an ATM card for his saving bank account.

According to Israni, in 2004, the bank had sent him two ‘Diners Club’ cards—a MasterCard of Indian Oil and a Citi Card—both of which were returned after he “cut them up into pieces”. Israni alleged that it was a fraudulent act on the part of bank officials to debit his account for the amount claimed to be withdrawn using an ATM card.

Israni lodged a police complaint and in 2007 filed the consumer complaint in a district forum. However, the bank maintained that the money was withdrawn using an ATM card and it was neither guilty of negligence nor deficiency in service. The forum allowed the complaint. In March 2012, it directed the bank to pay compensation of Rs six lakh along with interest of 9% per annum from December 2006, which amounted to Rs 3.24 lakh. The forum also awarded him compensation of Rs10,000towards mental torture and Rs 5,000 as costs.

The bank filed the appeal. In the commission, the bank could not prove that it had given Israni an ATM card and PIN number. Referring to the bank’s failure to show any records to prove its contention, the commission said, “Absence of such record only corroborates the complainant’s case that he never possessed any ATM card relating to his saving bank account or used it at any time.” The commission dismissed it and directed the bank to pay an additional Rs 5,000 to Israni ascosts.
Rebecca Samervel TNN
http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=TOIM/2013/01/06&PageLabel=4&EntityId=Ar00402&ViewMode=HTML

Scam in Making: ‘Worst drought in 50 yrs’ looms, CM talks tough

Pune: As the state gears up to face one of its worst droughts in recent history, chief minister Prithviraj Chavan on Saturday announced “unprecedented and stringent” steps to curb wastage of drinking water and its usage for purposes other than drinking.

“Major parts of the state, including the Pune region, Marathwada and parts of Vidarbha, have been facing a major water crisis, and the situation is likely to worsen. This is the first time there is not enough water even for even drinking. We have to take unprecedented and stringent decisions which no government has taken earlier. And even then, I am not sure it will be enough. The situation is serious and we have to look for answers,” the chief minister said, speaking near Pune.

Echoing Chavan, Union agriculture minister Sharad Pawar said, “I have not seen such a serious water crisis in the last 50 years. We have seen droughts in the past too, but this is the first time that even drinking water is not available.” The NCP boss stated that although by next week, the Centre would approve Rs 770 crore for the state, the situation was bad and people should curb excess use of water.

State seeks 2,200cr to refill reservoirs
Pune: Chief minister Prithviraj Chavan, speaking at a combined annual general body meeting of the Maharashtra State Co-operative Sugar Factories Federation Limited and the Vasantdada Sugar Institute at Manjari near Pune, warned of a major water crisis ahead for the state. Chavan said the state was ready with a mechanism to supply water to drought-affected areas, but the system itself would not be of help as there was no water to provide.

“The water level in the Ujani dam is zero. Imagine what the situation will be if we are not able to provide drinking water to drought-affected areas. The state has sought Rs 2,200 crore from the central government to refill water reservoirs,” he said, adding that if the additional funds fail to come from the Centre, the state would have to divert funds meant for other works.

Meanwhile, CM Prithviraj Chavan said the state was planning to ban flood irrigation system and encourage drip irrigation. “Excess water is used for crops, especially sugarcane, through the flood irrigation system. We can save water by using drip irrigation. We need to ban flood irrigation and encourage drip irrigation,” he said, adding that the state plans to focus on grants only for drip irrigation. “
Courtesy:
TIMES NEWS NETWORK
http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=TOIM/2013/01/06&PageLabel=1&EntityId=Ar00106&ViewMode=HTML