We have more on the quiet exit of PriceWaterHouse Coopers (PWC) from the auditing assignment of Ashok Leyland. While those involved remain silent, the company’s Annual General Meeting notice confirms that P.K.Choksey, who headed its Audit Committee, has stepped down from the board of directors. There are no details on his curious resignation. The notice also confirms that PWC has quit its auditing assignment, but without an explanation to shareholders. While Ernst & Young was tipped to take over, it too has turned down the assignment. PWC will now be replaced by Deloitte Haskins and Sells (formerly C.C.Choksey).
Curiously, Deloitte also audits Ashok Leyland’s rival, Tata Motors. Interestingly, the Hinduja-managed Ashok Leyland is now eyeing defence contracts specifically through the joint venture with Ural (of Russia) in West Bengal. Clearly, the company will remain in the news during the coming months.
Stock market punters reacted to the Finance Minister’s liberalisation of Foreign Direct Investment (FDI) in telecom by pushing up Bharti Telecom shares in a big way. In fact, they pulled themselves out of their turnover tax gloom to pick up the only listed telecom company to benefit from the Budget.
But what most people forgot is that Reliance could be a bigger beneficiary through its high profile Reliance Infocomm business. The company, which has appointed Citibank and Enam Financial to hunt for a strategic partner is now free to offload up to 74 per cent of the equity for a really lucrative deal. Reliance Industries and of course the Ambani family will stand to benefit the most if such a deal happens. No wonder then that Anil Ambani — the new MP from the Reliance group — was happy with the first Budget that he heard from inside the Parliament house.
The Securities and Exchange Board of India (Sebi) recently claimed that it has collected Rs 2 crore in fines under adjudication proceedings. However, since orders in adjudication actions are not displayed on its website, these penalties remain a well-guarded secret. The Financial Express reported that Sebi has levied a Rs 2.89 crore fine against Alliance Mutual Fund. We now learn that Citibank paid another hefty fine in connection with Participatory Note (PN) disclosure violations. Sources say the Sebi adjudication officer had initially recommended a penalty of over Rs 9.5 crore, but it was later reduced to Rs 2 crore by a member of Sebi’s board. The details of Citibank’s exact transgressions, however, remain a secret.
The six-month suspension of Integrated Enterprises, a Sebi registered Depository Participant (DP) and Registrar & Transfer agent, is another long pending inquiry that has come to a close. In August 2001, Integrated was ordered to stop accepting fresh business or open DP accounts. But Integrated Finance, having appealed against the order, went on to violate the Sebi order by opening 561 new accounts, collecting nearly Rs 5 lakh in advances and exceeding its custody holding limit (in the DP) by over 180 per cent. It has got a month to ensure that its clients are not affected by its punishment.
What is, however, curious is that Integrated was among the five companies that has exclusive permission to grant lucrative MAPIN registrations by the National Share Depository Ltd. MAPIN is the biometric identification database, that charges Rs 300 per entry. Sebi officials are unclear whether this business too will be covered by the Sebi order. While this is itself surprising, it is even more curious that Sebi allowed an organisation under scrutiny to bag an exclusive contract.
The demand by senior citizens’ groups that air-travel concessions must not have ‘unreasonable conditions’ is a little difficult to accept. Airlines now require that a senior citizen, availing of the discount must stay for a minimum of two nights at the travel destination. They are also required to purchase confirmed tickets seven days in advance. While the latter seems an unreasonable condition, given that senior citizens often travel for health reasons, the former seems like a fair restriction. After all, the discount is not meant for businessmen and industrialists actively pursuing work-related commitments. These days, many senior citizens, rightfully claim that medical advances and increased longevity allow them to remain active business chiefs or directors of companies right until their eighties. Yet, when it comes to small savings or travel, they insist on concessions. I once met an industrialist flying business class with a private airline who happily told me that thanks to senior citizens’ concessions, he could zip around on work at nearly economy class fares. Surely airlines should not be deprived of legitimate fares when ‘senior citizens’ use age-related discounts for business travel. However, given that much of genuine travel by senior citizens is for health-related exigencies, it is only fair that the advance booking condition be removed.