Sebi in turmoil over vacancies
Mumbai: Even as it struggles with the ongoing stock market crisis, the country’s capital markets regulator, Securities and Exchanges Board of India (Sebi) is struggling to cope with yet another problem on its hands.

This time it is the issue of filling the top slots in the organisation that have recently become vacant. This problem has left market players and investors groping in the dark.

Five executive directors’ posts are to fall vacant by August this year. These include LK Singhvi (in charge of investigations and surveillance), OP Gehrotra (in charge of primary markets and takeovers), MD Patel (in charge of secondary markets and retired more than a year ago), Ashok Kacker (in charge of mutual funds) and CM Mehra (in charge of administration).

Earlier, Prof JR Varma, architect of the derivatives market in India and main proponent of the ban on badla (also a Sebi board member) has already put in his papers and will leave by mid-June this year.

The problem in the organisation has arisen with the announcement that officials from the Reserve Bank of India (RBI) will be roped in to fill the five top slots at the Sebi. The lower officials who were hoping to get promoted have become restless and have opposed the move.

As many as 16 existing officers are understood to have submitted a letter to the Sebi chairman opposing the reported policy to fill top slots with deputationists.

The employees are of the opinion that despite so many regulations being framed for the operation of the stock markets, no attention has been paid to the framing of any rules to build up the Sebi cadre in the eight years of its existence. The employees point out to another regulator, the Insurance Regulatory Authority of India (Irda), which was formed only in 2000 and had already notified service regulations.

The officers have claimed that they are professionally qualified and have on-the-job experience of the securities market for the last eight to 12 years, a pool of talent which is not available outside.
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Despite political crisis, the sensex rules steady
Mumbai: Despite the political turmoil following the Samata party episode, the stock markets remained fairly stable.

The sensex opened at 3,643.29 and moved in a narrow range of 33 points throughout the day before closing at 3,640.60. The NSE Nifty lost 1.35 points and closed at 1,168.10.

According to leading market players, the market had become very dull and lacks clear direction. The lack of interest in the main counters was also due to the Sebi diktat to compulsorily unwind the positions on or before July 2. As a result of this, the operators have shifted their focus to low priced new economy stocks which have began to attract higher volatility, they added.
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UTI launches damage control exercise on MIP-95
New Delhi: The country’s largest mutual fund, Unit Trust of India, has launched a damage control exercise in the face of a glut of redemption requests for its MIP-95 scheme.

It is meeting these investors with an "assurances" that it woud "try" and redeem the units at par value on maturity, and that the investors would stand to lose if they redeem their units now.

The rush to redeem the units has come about in the wake of a sharp cut in returns to 5 per cent for the year 2001-02 and a fall in the net asset value of the scheme to Rs 7.74 (on April 25, 2001). Any investor opting for redemption at present will face serious losses as immediate redemption can only be at the NAV-linked price, Rs 7.51 for a Rs 10 unit.

It is understood that the UTI management has taken an in-principle decision to redeem the MIP-95 units at par but cannot announce such a decision officially since the scheme is not an assured income scheme.

Senior officials of the UTI said that the organisation will make all attempts to ensure that the NAV of the scheme is brought to par by the time of the redemption. At the current NAV, the shortfall could be in the region of over Rs 100 crore.

And to bolster this claim, the Trust says has put forward the argument that not a single monthly income scheme launched by UTI and redeemed till date has paid out less than par value of capital invested.
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Open offers in PSU divestment to non-government companies, a must
New Delhi: The capital markets regulator, the Securities and Exchanges Board of India (Sebi) has clarified that in the case where a listed PSU is divested from government holding to a non-government company in excess of 15 per cent equity, an open offer is mandatory.

This clarification clears all ambiguities on the applicability of the Sebi Takeover Code on PSU disinvestment cases. This also implies that in the impending disinvestment of PSUs’ like IBP, CMC, VSNL, IPCL, Shipping Corp, Nalco, open offers need to be made to remaining shareholders after the divestment proceedings are completed.

Sebi has clearly said that this requirement is not applicable to the acquisition of PSU by other government owned companies, in accordance with the provisions of section 617 of the Companies Act, 1956.

In the meanwhile, Sebi has initiated an investigation into the price movement of the VSNL share prices on representation made by the department of disinvestment. There has been a suspicion the VSNL stock’s downward movement has been a deliberate attempt made on the eve of the bidding process.
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ITC raises bid for VST to Rs 120 per share
Mumbai: Multinational cigarette company, ITC, raised its bid for an open offer of shares in associate company, VST Industries to Rs. 120 per share.

This increase is likely to mount a serious bidding war in between ITC and the broker Damani-controlled Bright Star investments, which mounted a raid on VST. Last week, Bright Star revised its offer to Rs 118 per share.

Before news of the increased bid was released, ITC shares ended down 1 per cent at Rs 772.40, and VST closed marginally higher at Rs 118.70.
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