• Growth on track, reforms to take it back to 9%: FM
• Tax board orders scrutiny of firms taking AS-11 relief
• On market bans, SEBI tells SC they are remedial,preventive
• 'Get-rich-quick' schemes of the 80s under SEBI lens
• Airtel-MTN deal to follow revised FDI norms
• Finance minister Pranab Mukherjee joined a distinguished panel, 100 CEOs, senior bureaucrats and policymakers on Tuesday to thrash out ‘Mission 2010: The Reform Road Map’. Both Mr Mukherjee and C Rangarajan, chief of the Prime Minister‘s Economic Advisory Council, have pegged the GDP growth for this fiscal at 6-6.5%, after factoring in the drought damage. Mr Mukherjee also said that reforms would continue “in right earnest” to get the economy back to its 9% clip. The good news was the green shoots in industry with basic goods, intermediates and consumer durables doing better in the first quarter. Growth is expected to pick up speed to hit 7-8% next fiscal. (ET)
• Central Board of Direct Taxes (CBDT) has advised its field formations to scrutinise all cases in which companies have amortised foreign exchange losses under the one-time discretion allowed by the government through an amendment to Accounting Standard 11 (AS-11). The scrutiny will assess the nature of foreign exchange losses typically on overseas borrowings. CBDT feels the amendment has substantial revenue implications on corporate earnings since this option, once exercised, is irrevocable. The temporary relief on AS-11 was permitted against the background of the sharp depreciation of the rupee against the dollar, euro, pound and Swiss franc in 2008, as a result of which several companies with significant foreign currency loans had to suffer mark-to-market losses. (ET)
• SEBI has told the Supreme Court in an affidavit filed with it that SEBI is empowered to issue orders prohibiting companies and brokers from accessing the capital market in the interests of investors and while such orders may seem penal but are actually preventive and remedial in nature. It further stated that if the nature and gravity of the misconduct is such that it is likely to affect adversely the securities market or the interests of the investors in general, it is the statutory duty of the board to issue under section 11B of SEBI Act, 1992 such directions as may be necessary to protect the integrity of the market or the interests of the investor including a direction to restrain the delinquent from accessing the securities market. The affidavit came in an appeal filed before SC challenging SEBI order against Bonanza Biotech Ltd (BBL), Design Auto System Ltd (DASL) and their directors in connection with the alleged irregularities in allotment of shares. SC is examining if SEBI has the power to issue orders barring companies and brokers from accessing the securities market under section 11B of the SEBI Act, 1992. (ET)
• SEBI has stepped up its drive against shady entities that operate collective investment schemes (CISs). While exploring the possibility of widening the classification of entities that float CIS, SEBI has initiated legal action against almost 550 entities as on July 31. So far, around 56 CIS entities have been penalised in various courts across the country and the amount initially raised by such entities is expected to have swelled to as much as Rs 3 lakh crore. (ET)
• Bharti Airtel chairman Sunil Mittal and MTN CEO and president Phuthuma Nhleko are understood to have apprised finance minister Pranab Mukherjee on the structure of the deal, underlining that it would be in accordance with the revised FDI norms. The move suggests a positive state of affairs in the ongoing negotiations between Bharti Airtel and the South African telecom operator for a $23-billion complex share-cum-swap deal. According to sources, both chiefs were essentially garnering an informal nod for the deal and they also discussed the new FDI norms. (FE)
