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Sebi to auction 11 assets of pancard, reserve price Rs 260 cr

Looking to recover over Rs 7,000 crore of investors’ money, markets regulator Sebi will next month auction 11 properties of Pancard Clubs and its late CMD at a total reserve price of Rs 260 crore.

This is in addition to 22 properties that were auctioned between December and February with combined reserve price of Rs 552 crore.

In a notice issued, the Securities and Exchange Board of India (Sebi) said SBI Capital Markets will auction 10 properties of Pancard Clubs and one property of its late CMD Sudhir Moravekar on March 21 at a reserve price of Rs 259.48 crore.

The properties listed for sale include a four-star hotel, resorts, land parcels, office space and shops in Goa, Maharashtra, Rajasthan and Haryana.

Sebi said the bidders should make their own independent enquiries regarding the “nature, type, classifications, encumbrances, litigations, attachments, acquisition liabilities” of the properties put under auction before submitting their bids.

“The properties are being sold with all the existing and future encumbrances, whether known or unknown to Sebi. Sebi shall not be responsible in any way for any third party claims, rights or dues etc,” the regulator added.

The company had failed to comply with Sebi’s direction in February 2016 ordering it to refund to investors over Rs 7,000 crore, raised through illegal collective investment schemes (CIS).

Silver futures down 0.65 % on global cues

Silver prices were trading down 0.65 per cent to Rs 38,390 per kg in futures trading as speculators reduced their exposure, driven by a weak trend in global markets.

At Multi Commodity Exchange, silver prices for delivery in March fell by Rs 250, or 0.65 per cent, to Rs 38,390 per kg in a business turnover of 1,063 lots.

On similar lines, the white metal for delivery in far-month May traded lower by Rs 225, or 0.57 per cent, to Rs 38,935 per kg in 204 lots.

Analysts attributed the fall in silver prices in futures trade to a weak trend in global markets as minutes from the last US Federal Reserve indicated a hike in interest rates, strengthening the dollar and reducing the appeal of the precious metals as a safe haven investment.

Meanwhile, silver fell 0.18 per cent to USD 16.47 an ounce in Singapore.

Gitanjali gems shares tank over 58% in 7 days

Shares of Gitanjali Gems continued to face selling pressure for the seventh straight session, falling 58.5 per cent in the past one week.

The stock tanked 4.92 per cent to Rs 26.10 — its lowest trading permissible limit for the day — on BSE on Thursday.

On NSE, shares of the company lost 4.92 per cent to hit a low of Rs 26.05.

In seven days, the stock has plunged 58.5 per cent, eroding Rs 435.41 crore from its market capitalisation.

On February 14, Punjab National Bank (PNB) disclosed that it detected fraudulent transactions with financial implication of about Rs 11,346 crore and the matter has been referred to law enforcement agencies for the recovery.

While billionaire jewellery designer Nirav Modi, the alleged perpetrator of this fraud, is not directly linked to any listed company, his relative and business associate Mehul Choksi’s Gitanjali Gems is a listed firm.

Sumitomo announces $2 bn real estate project with Krishna group

Japanese conglomerate Sumitomo Corp announced USD 2 billion township project in Gurgaon as it forayed into Indian real estate sector in collaboration with local partner Krishna Group.

The 50:50 joint venture, Krisumi Corporation Pvt Ltd will build 5,000 flats, shopping mall, office space and educational institution at 65-acre land in Sector 36-A, Gurgaon abutting the Delhi-Mumbai industrial corridor’s Global City.

The project, which will have a total built-up area of 18-18.5 million square feet, will be developed in phases, the two partners announced at a media round table.

“I want to create a Japanese city here…The first phase will comprise 1.2 million square feet of built-up, consisting of 430-450 apartments and will be completed in 4-5 years,” said Ashok Kapur, Chairman, Krisumi Corp.

Krishna Group, a diversified business house with interests in auto components, media, travel, and entertainment seating, owns the 65-acre land parcel where the mini-township will be built, said Kapur, who is also the head of the Group.

The ‘Krisumi City’, as the project is called, has been developed by the world-renowned Japanese design firm Nikken Sekkei, the name behind the famed Tokyo Sky Tree. It would offer quality high-rise residential options across various sizes and budget.

“Idea is to create a niche which Indian market had not seen,” Kapur said adding the apartment that may cost Rs 1-2.5 crore will have quality and facilities equivalent to those costing Rs 15-20 crore at present.

Sumitomo Corp, which has done 300 real estate projects globally, will bring in the expertise and technology for Krisumi City.

“India’s real estate sector is going through an interesting phase. While consumer’s expectations have evolved manifold, most of the traditional developers are finding it difficult to effectively cater to all their requirements,” said Masahiro Narikiyo, Chairman and MD, Sumitomo Corp India.

Narikiyo, who is co-CEO of Krisumi Corp, said the Tokyo-based group has done projects in Japan, the US, China, Singapore, Indonesia and Vietnam.

The company was attracted to India because it “is politically very stable among emerging markets,” he said. “It is governed by democracy, the value we can share.”

Sumitomo Corp has sold over 30,000 condominiums in Kansai and in the Tokyo metropolitan area over the past 40 years. In the office building business, it operates about 3,30,000 square metres of office space in Tokyo and Osaka.

Kapur said the biggest challenge facing the Indian real estate industry today is quality, efficiency, and commitment to timelines, all of which is exactly what Japan is known for.

“Japan is already beyond RERA,” he said.

RERA is the Real Estate (Regulation and Development) Act passed by Parliament in 2016. RERA seeks to protect the interests of home buyers and also boost investments in the real estate sector.


PNB adopts strict swift controls after mega fraud case

The state-run Punjab National Bank has stepped up its controls on the use of global payments network SWIFT following an alleged $1.77 billion(Rs 11,300 crore) fraud, according to memos issued this month and seen by source.

India’s second biggest state lender this month revealed the country’s biggest loan fraud, which it alleges was committed by two junior officials at a Mumbai branch, who issued unauthorized “letters of undertaking” (LOU) via SWIFT, for firms linked to a billionaire jeweler Nirav Modi and his uncle Mehul Choksi.

The undertakings, which PNB says were issued between 2011 and 2017 with incomplete ledger entries by the two officials, were used by Modi and Choksi’s firms to obtain credit from the overseas branches of mostly Indian lenders.

A lawyer for Modi has denied his client was involved in any fraud. Choksi has not commented but his firm, Gitanjali Gems, has also denied involvement in the alleged fraud.

The new measures mean only PNB officers will be able to initiate messages on SWIFT, taking away the authority of clerks to do so. Several new limits have been placed on the amount that officers can generate depending on their seniority in the bank hierarchy.

The note sent by the bank’s head office in New Delhi to all regional offices on February 17 also stated any SWIFT message will have to be created, verified and authorized by three different officers, starting Thursday. Previously only two individuals were needed for the process.

“In continuation of efforts to strengthen SWIFT operation and deploy additional measures to ensure more effective control, it has been decided to set up SWIFT user base limits,” the note went on to say.

A SWIFT spokeswoman in Brussels said it was aware of the reports around PNB but that it could not comment on individual customers.

“When a case of potential fraud is reported to us, we offer our assistance to the affected user to help secure its environment,” Natasha de Terán said. “SWIFT can reassure customers that there is no indication the SWIFT network has been compromised.”

PNB has also created a unit called “Treasury Division Mumbai” for re-authorization of most messages sent over SWIFT by branches. The messages include those meant for LOUs, according to a separate circular the bank sent to all its offices on February 12.

Sleuths try to figure out how Rotomac’s Kothari duped banks

The Central Bureau of Investigation on Wednesday brought Rotomac owner Vikram Kothari and his son Rahul to its headquarters in Delhi and subjected them to intensive questioning about the Rs 3,695-crore fraud allegedly perpetrated on seven public sector banks.

Earlier, Kothari was being questioned in Kanpur where his company and residence is located.

Bank of Baroda had approached CBI on Sunday requesting an FIR against Kothari as the bank apparently feared he might leave the country.

In its FIR, CBI has alleged that Rotomac had taken loans from Bank of India, Bank of Maharashtra, Indian Overseas Bank, Union Bank of India, Allahabad Bank and Oriental Bank of Commerce to the tune of Rs 2,919 crore. The total outstanding amount along with interest and liabilities for the company were pegged at Rs 3,695 crore.

Sources told that Vikram Kothari is being asked about the modus operandi used by him, including use of shell companies abroad to transfer money in his accounts on the pretext of importing and exporting goods.

The banks have alleged that Rotomac violated the FEMA rules as well while conducting business transactions abroad. CBI and ED have named Kothari’s company – Rotomac Global Private Limited, his wife Sadhana Kothari, son Rahul and unknown officials of banks in its FIR.

The scam was earlier estimated to be around Rs 800 crore but in its complaint filed on Sunday, Bank of Baroda gave details of money disbursed to Rotomac over the years and modus operandi used by Kothari and others to cheat the banks.

I-T takes number of Nirav Modi accounts attached so far to 141

With agencies cracking down on perpetrators of bank frauds, the Enforcement Directorate continued its search in the Nirav Modi bank scam case on Wednesday at 17 locations across the country and seized more diamond and gold jewellery worth Rs 10 crore, even as in another case the agency provisionally attached assets worth Rs 100 crore of REI Agro.

In a separate action, the income tax department on Wednesday attached more bank accounts of Nirav Modi and associated firms taking the total bank accounts attached so far to 141 having a cumulative balance of Rs 145 crore. The I-T department has also attached four immovable properties of Rotomac group in Kanpur and Ahmedabad.

The ED also scrutinised papers of some of the shell companies associated with Modi and those of Mehul Choksi of Gitanjali Gems.

Choksi is a co-accused in the Punjab National Bank’s Rs 11,400 crore swindle along with Modi and was partner in three firms linked to the case—Diamond R US, Solar Exports and Stellar Diamonds. The other accused in the case are Modi’s wife Ami and brother Nishal.

On Wednesday, ED teams raided four locations at Opera House, Peddar Road, Goregaon (East) and Powai in Mumbai besides searches in other cities. So far ED has seized diamonds and gold jewellery from Nirav Modi stores worth over Rs 5,700 crore.

The income tax department had conducted searches on 13 companies of the Mehul Choksi’s Gitanjali group on Tuesday at 20 locations in five cities. The searches included some of the shell companies associated with Choksi.

Many of the shell companies searched had huge financial transactions with Choksi’s Gitanjali Gems Ltd and Gili India Ltd though they had insignificant businesses. The I-T department has attached 29 high-value properties of Modi and eight of Choksi and attached their bank accounts too.

In another case, the ED on Wednesday provisionally attached assets worth Rs 100 crore of REI Agro Ltd in connection with another bank fraud case worth about Rs 3,800. The second case relates to diversion of funds sanctioned by a consortium of banks by the accused to many of his shell companies. The case dates back to 2015 when the CBI had first registered an FIR against REI Agro.

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