SEBI may give fresh push to loan default disclosure by listed firms
Concerned over a massive Rs 11,000 crore fraud at PNB remaining undetected for years, markets regulator SEBI may give a fresh push to its “on-hold” proposal to mandate listed firms to disclose all loan defaults within a day. 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 and has been involved in some other cases of suspected market manipulations.
RBI’s NPA bitter pill comes with some side effects
The RBI’s revised framework for stressed loans may prove to be disastrous and seems ill timed for an economy that is just recovering from twin policy blows of demonetization and GST implementation. Though there are long-term benefits of administering such a bitter pill, the short-term risks are significant, say bankers. “This (revised NPA framework) is one more shock for the banking industry, which is not that strong any more. Don’t be surprised if 25 per cent of the banking system is NPA in one year’s time from now,” said a banker.
PNB scam: ED raids in 15 cities; lens on 200 shell cos
The multi-agency probe into the Rs 11,300 crore Punjab National Bank swindle widened on Sunday with the Enforcement Directorate (ED) raiding 45 more premises in 15 cities linked to diamantine Nirav Modi, his business partner Mehul Choksi and others even as investigators started looking into around 200shell companies and ‘benami’ assets. The CBI is independently scrutinizing assets and investments of PNB officials, including Gokul Nath Shetty and Manoj Kharat to find out the “quid pro quo” in issuing Letters of Undertaking favoring payments to Nirav’s companies. CBI sources said they were questioning 11 PNB officials, including a few general managers aparet from Shetty and Kharat. Officials said Shetty and Kharat wouldn’t have done the favors for free, so details of money spent by them and their family members on property/investments in the last five-six years were being looked into.
Agencies to probe overseas branches of Indian banks
Investigative agencies are looking into possible involvement of official of six overseas branches of Indian public and private sector banks in the scandal involving jewellery designer Nirav Modi, government officials told ET. The agencies are probing whether the “lackadaisical attitude” of a number of officials of such banks was borne out of laxity or complicity with Modi and his co-accused who allegedly embezzled the several thousands of crore of rupees using fraudulent letter of undertakings (LoUs) obtained from Punjab National (PNB), they said. This stems from questions raised by PNB in its complaint(s) to the Central Bureau of Investigation (CBI).
Independent directors may be held more accountable
The government wants to create a mechanism to make independent directors more accountable and ensure that they are discharging their duties. The Ministry of Corporate Affairs is considering provisions in the Companies Act to measure compliance by independent directors.
“Independent directors are so central to better corporate governance. As a nation of half a million independent directors, a strong system should be in place,” a senior government official told ET. “There is so much reliance on this entity as a separate class of directors and no one is looking at their code of conduct,” the official said.
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