Supreme Court allows DLF units to sell shares, rejects Sebi plea for restraint order

NEW DELHI: The Supreme Court today allowed three DLF subsidiaries to sell shares worth Rs 12,000 crore to reduce debt, declining the regulator's plea to prevent the real estate group's move. The DLF stock was up 3.9 per cent at 11:24 am on the Bombay Stock Exchange.

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 The Securities and Exchange Board of India (Sebi) had previously passed an order restraining DLF and its key directors including promoter KP Singh from directly or indirectly accessing the market or dealing with any securities over what it said was the violation of disclosure norms during the company's initial public offer in 2007. 

The securities appellate tribunal had set aside this order on an appeal by DLF. Sebi has challenged this in the top court. 

On Wednesday, the market regulator, through senior advocate CU Singh, sought a temporary restraint order against the DLF units selling their shares to offshore entities, but a bench of justices Jasti Chelameswar and Abhay Manohar Sapre refused to consider this. 

Instead, the bench directed the Sebi appeal to be listed for hearing. 

Source - ET

In biggest fine ever, Sebi asks realty major to pay Rs 7,269 crore

MUMBAI: Market regulator Sebi on Tuesday imposed a fine of Rs 7,269 crore on Jaipur-based real estate major PACL, and four directors of the company for illegally mobilising funds through collective investment schemes between September 2013 and June 2014. This is the biggest ever fine by Sebi. 

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In its order the regulator said PACL and its directors - Tarlochan Singh, Sukhdev Singh, Gurmeet Singh and Subrata Bhattacahrya - deserved 'maximum penalty' for such large-scale duping of common men. 

This record fine on PACL follows Sebi's August 2014 order which had asked the realty firm to refund Rs 49,100 crore it had collected through unregistered money raising schemes over 15 years. Last month, Securities Appellate Tribunal (SAT) had upheld the Sebi order against PACL. 

In its order on Tuesday, Sebi said that PACL committed the crime repeatedly and mobilised huge amount of money, from which it earned a profit of more than Rs 2,423 crore in less than a year. The fine imposed by Sebi is three times the profit made by the company. "Keeping in view the entire facts and circumstances of the case...there can not be a better case than this which deserves the maximum penalty and if it is done so, it will give a strong message to securities market at large that such type of violation will not be viewed lightly," Sebi said in its order. "In the recent past, the country has suffered a lot in the hands of entities who indulge in such illegal money mobilisation under various schemes, wherein hard earned money of the common man has been duped. Thus, imposition of deterrent penalty is the need of the hour," the order said. 

The order said that its investigations found that PACL had mobilised funds illegally through collective investment schemes including promises to purchase and develop agricultural land. 

For years PACL group operated under the names Pearl Agrotech Corp Ltd and Pearls Golden Forests Ltd. Sebi first started enquiring about the group's activities in 1998, following which the company had moved the Supreme Court challenging Sebi's jurisdiction. After SC gave a go ahead to Sebi to look into the books of PACL group, Sebi asked the group to refund Rs 49,100 crore to investors who had invested in its properties and land pools. The group operated pyramid-like schemes with huge payments to about six lakh agents in Punjab, Haryana, Rajasthan and Delhi. 

The latest order by Sebi is against PACL and its directors for illegally raising about Rs 2,423 crore between September 2013 and June 2014, all of which accrued as profit to the company. 

Source - TNN 

Sebi contests Rs 500 crore service tax demand

As the tussle between the service tax department and Securities & Exchange Board of India (Sebi) over payment of Rs 500 crore in service tax gets muddled, thestock market watchdog has stuck to its guns and written to tax sleuths that they are not liable to pay any such tax amount.

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The market regulator wrote to the department soon after the taxman got the formal nod from the Central Board of Excise & Customs (CBEC) to go ahead with its ongoing investigation against Sebi for not paying tax on the services it has provided since 2012.

"Sebi has given their view, as to why they are not liable to pay service tax," a top service tax official told dna. However, this will not affect the investigation and the further course of action in the case, he said. "We had clarified that services provided by Sebi were taxable. They had their own view on the matter. But our stand is still same. We will continue with the ongoing probe, and a show-cause notice will be served soon,"

According to sources, the regulator is likely to move court after the departments serves the show-cause notice.

An email sent to the Sebi went unresponded.

The sources said that Sebi has a conflict of interest over Section 25 of the Finance Act. In its reply to the department, it had mentioned the provisions of the respective norms. It said, as a regulator from the date of its constitution to the date of establishment will not be liable to pay wealth tax, income tax or any other tax in respect of their wealth, income, profits or gains derived.

dna was the first to report it on August 14 that that finance ministry has backed the tax department to continue its investigation and initiate further course of action. This followed Sebi's move seeking clarification from the ministry over the conflict of interest on the department's tax assessment.

According to the officials, the CBEC board has clarified that the services provided by Sebi were not specifically exempted from taxation or kept in the negative list, and that they were liable to be taxed.

The tax liability on Sebi stood at Rs 250 crore between 2012 and 2015. The regulator needs to pay interest and penalty along with it," said the official.

The rate of interest on late payment of service tax depends on the extent of delay in the payment. Delay up to six months will attract 18% interest while it will be 30% for more than a year.

On the CBEC formal order, a Sebi spokesperson had earlier said, "The matter has been legally examined by Sebi and the legal opinion is that service tax is not applicable to the regulator." He said the regulator has represented to service tax authorities accordingly.

According to the department, Sebi provides services to stock exchanges, its members, brokers, investors for processing of IPOs, debt issues, mutual fund, new fund offers and other services, including informal guidance to companies.

This includes fees of registration of intermediaries, sundry regulatory fees and fees from offer documents filed by companies and on foreign funds.

In 2014, Sebi's fee income stood at Rs 175 crore, which is 18% more than it earned in the previous fiscal.

The government had switched to negative list regime for service tax in 2012, under which all services which are not under negative list are taxable.

Source - DNA