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ADRs, GDRs now without govt
approval
New Delhi: The government has decided to permit Indian companies to make
private and public equity offerings in international markets without prior government
approval. It has framed a new set of guidelines for issue of American depository receipts
and global depository receipts that does away with the twin provisions of scrutiny of
records and approval by the finance ministry. Private placement of ADRs and GDRs will also
be eligible for the automatic approval, provided the issue is managed by an investment
banker registered with the US Securities and Exchange Commission or under the Financial
Services Act in the UK or the appropriate regulatory authorities in Europe, Singapore and
Japan. The guidelines will not, however apply to foreign currency convertible bond issues.
The liberalised guidelines apply for issuing ADRs and GDRs for the expansion of the
existing capital base. The automatic route will also apply for issuing employee stock
options by Indian software companies and other firms in the infotech sector too.
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Review index page Trai to be split, reconstituted
New Delhi: The union cabinet has taken a decision to split the powers of
the Telecom Regulatory Authority of India. Apart from reconstituting Trai, the government
has decided to set up an appellate authority. The move will demarcate the recommendatory
and dispute settlement roles of Trai. The dispute settlement part will be handled by a new
Telecom Dispute Settlement and Appellate Tribunal
The existing Trai will be disbanded and it will be
reconstituted to comprise two permanent members and two part-time members, apart for the
chairman. The present members will vacate their offices, but they will be eligible for
appointment to the reconstituted body. The reconstituted Trai will have a recommendatory
role in all key licensing issues, need and timing of new licenses, terms and conditions of
the licenses, new technology improvements, quality standards and these recommendations
will be binding on the government. Significantly, .the body will have the powers to fix
interconnect terms and conditions. The reconstituted Trai is expected to reissue an order
on the ‘calling party pays’ regime, which was set aside by the Delhi high court.
This order will then be binding.
The dispute settlement and appellate tribunal will consist
of a chairman and two members. The tribunal will hear appeals against orders and decisions
of Trai as well as disputes between service providers and licensor-licensee disputes.
Appeals against the tribunal decisions will be heard by the Supreme Court,.
The government is to come out with an ordinance to
implement these decisions.
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Delhi high court
clarifies
New Delhi: The Delhi high court has clarified that cellular operators an
make incoming calls free if they want to do so. The court’s clarification came in the
wake of its order on 19 January, where it was reported that it had struck down the
"calling party pays" regime. The court said it has not struck down the regime as
such. It had only ruled that the Telecom Regulatory Authority of India did no have the
power to fix revenue shares between operators. The court also said the cellular phone
companies will have to pass on the benefits from the reduction of licence fee to the
consumers.
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Government to
publicise bank defaulters
Bangalore: The government has asked the Reserve Bank of India to direct
all banks to make public a list of defaulters of over Rs one crore. Union minister of
state for finance (expenditure, banking and insurance) Balasaheb Vikhe Patil says the
government will deal strongly with big industrialists who have defaulted on loans from
banks. Mr Patil has been addressing a meeting of state level bankers’ committee of
Karnataka.
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Manipal Finance to
respond to RBI
Bangalore: Ramesh Pai group non-banking finance company Manipal Finance
Corporation is planning to submit an action plan to the Reserve Bank of India in response
to a notice issued by the regulator prohibiting it from accepting fresh deposits or
renewing existing ones. RBI has charged that the company had violated various provisions
of the RBI Act. The company said the RBI had not given it a chance to explain its
position. The major complaint of RBI has been that the non-banking finance company had
made provisions for non-performing assets, which are not as per the guidelines of the
central bank.
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Citigroup buys out
Schroders’ investment arm
London: Citigroup is buying the investment arm of Britain’s
Schroders for $2.21 billion in a bid to make its investment bank, Salomon Smith Barney,
one of the top 10 investment bankers in Europe. The unified entity, Schroders Salomon
Smith Barney will move past leading players, especially in the booming mergers and
acquisitions market, like Warburg Dillon Read and Lehman Brothers to the No 7 position and
compete directly with organisations like Goldman Sachs and Morgan Stanley Dean Witter. At
present Salomon Smith Barney is at No 12 position.
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