7/25/2019 20,000 crore Rupee Laundered Through Penny Stocks Business Standard 24December, 2014

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> IN BRIEF

Verdict in Satyam caseon March9AspecialcourtonTuesdaysetMarch9 asthedatefor theverdictin themulti-croreaccountingfraud inerstwhileSatyamComputer Services. 2>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

S Bhattacharya is CoalIndia chiefA Cabinet committeehas appointedSutirthaBhattacharya, a 1985AndhraPradeshcadre IASofficer, asthe newchairmanand managingdirectorof CoalIndia. 8>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Dowindex tops18,000forfirsttimeTheDowJonesIndustrialAveragerosetoarecord18,043.61 onTuesday,up 84.17points, or0.5per cent,as faster-than-forecastgrowth intheUS grossdomesticproductboostedconfidence inthe economyand overshadoweddeclines in healthcarecompanies. 15>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Fate of insurance Bill uncertainTheInsurance Laws(Amendment)Bill thatwouldhaveenabledthesectorto haveup to49percent foreign investmentin companies,amongotherprovisions,was unableto makeitswayinto alaw onTuesdayasthe RajyaSabha

wasadjournedsinedieon thelastdayof thewinter session. 6>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Govtslasheshealth BudgetThegovernment hasordereda cutof nearly20percentin itsFY15healthcareBudgetdueto fiscalstrains,puttingat riskkey diseasecontroliniti-ativesin a countrywhosepublicspending onhealthis amongthe lowestin theworld. 4>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Cabinet decision on spectrum baseTheCentreis likelytotakea callthismonthonthebaseprice oftelecomspectrumto beauctioned inFebruary nextyear. Thespectrumbase pricewillbe placedbeforeCabinetin thismonthfor itsdecision,a sourcesaid.

AsBusinessStandardlooksaheadto its40th

anniversary in March, we bringyoua special series on Indiasjourneythrough thepast40 years.SEE PAGE2to know howCipla hasgrown tobecomeoneof themightiestmultinationalson patents and isproducinglow-costdrugsfor theworld's extreme poor

CIPLA:THEAFFORDABLEINDIANDRUGWARRIOR

DomesticbankssurgeinM&Aleaguetable

ABHINEETKUMARMumbai,23December

Homegrown investment bankshaveovertakenmany globalgiantsin the mergers and acquisitions(M&A) league table this year asdomestic deals took prominenceovercross-border transactions.

M&A in India has been longdominated byinternationalbanksthat have consistently capturedthe top five positions in annualrankings.But forthefirsttimetwohomegrown investment bankshave broken into this club this

year with ICICI Securities andKotak Investment Banking,respectively, placedatfourth andfifth positions, according toBloombergdata.

These are closely followed byJM Financial at sixth place. Thisputs them ahead of GoldmanSachs, Morgan Stanley, StandardChartered,JPMorgan, HSBC andUBS. The top three positions,however, are still with interna-tionalheavyweights,Citi,EY andBank of America Merrill Lynch.

It captures the changes thathavetakenplace sincethe election

results were announced. Thechange in the economic environ-menthasboostedtheconfidenceof

local companies, said SouravMallik, senior executive directorand head of M&A at Kotak

InvestmentBank.His bankadvisedon15 transactions worth over $4.4billion,includinggroupfirmKotak

MahindraBank'sacquisitionof INGVysya Bank in a $2.4-billion deal.

While global banks have anedgein cross-border transactions,domestic players claim to havegreater bonding with local com-panies. Indian clients are morecomfortablewith domesticbanksintheirunderstandingofthe localenvironment. Even the inbounddeals have a strong domestic legand investors coming in want tohavebetter understandingof themarket, so domestic banks havean edge, said Ajay Saraf, execu-tive director, ICICI Securities,whichadvisedRanbaxyduringits$4.1-billion acquisition by SunPharmaceuticals.

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Advisor Market Totaldeal(deal count) Rank share (%) value ($ mn)

Citi (5) 1 16.98 8,401.27EY(31) 2 16.92 8,372.51BofAMerrillLynch (6) 3 15.65 7,742.80ICICISecurities (13) 4 15.38 7,610.51KotakInvestmentBanking (15) 5 9.00 4,451.87JMFinancial(10) 6 8.78 4,347.40GoldmanSachs& Co(3) 7 8.33 4,122.09EvercorePartners Inc (1) 7 8.33 4,122.09GCASavvianGroup(4) 7 8.33 4,122.09HSBCBank(1) 10 6.45 3,190.98

Source:Bloomberg/Dataason22December CompiledbyBSResearchBureau

DEAL SEALEDForthefirst time thisyear,two localinvestmentbanksfigureamong thetop five

With thepoolof high-valuecross-borderdeals shrinking,globalbanks fallbehind

Jaiprakashsells2cementunitsfor~5,400crore

BSREPORTERSNewD elhi/Mumbai,23 December

Jaiprakash Associates completed its divest-mentprogramme aimedat cutting debtwiththe sale of two cement plants in MadhyaPradeshto UltraTechCement for~5,400croreonTuesday. Thecompanyhas intotal divest-edassets worth over~20,000crore.

TheMadhyaPradeshplantsincludetwocap-tive power plants. In September last year,Jaiprakashsoldits cementplantinGujarattotheAditya Birla group company for an enterprisevalue(thatis, includingtheunitsdebt)of ~3,800crore.Thetransactioncomprisedanintegrated

unit in Sewagram and a grinding unit inWanakboriwitha combinedcapacityof4.8 mil-lion tonnes (mt) a year. UltraTech is Indiaslargest cement maker. The deal will push thecompanys India capacity to 65 mt a year.SwitzerlandsHolcim, operatingthrough ACCand Ambuja Cements in the country, has acapacity of about 57 mt a year. UltraTech hasplans totakeits capacityto71 mtpaby2016.

In a statement on Tuesday, Manoj Gaur,executive chairman, Jaiprakash Associates,said: With this disinvestment, JaiprakashAssociatesmajordisinvestmentplans getrest-ed and the focus will now shift to innovativeoperationalefficienciesto matchwiththebestinclass,coincidingwiththe imminentrevivalofthe Indianeconomy.

Theboardof directorsof thecompany meton Tuesday to approve a memorandum ofunderstandingwith UltraTech forthe MadhyaPradeshplants.Thedealincludesclinkercapac-ityof 2.1mta yearandcement-grindingcapac-ityof2.6mta yearinBelaalongwitha captivepowerplantof25 Mw.Another3.1mt ofclinkercapacityand 2.3mt of cement-grindingcapac-ityinSidhiwillalsobesoldalongwitha 155-Mwcaptivepower plant. Turn to Page 6>

BJP creates history inJ&K, Jharkhand

BSREPORTERNewDelhi, 23December

The Bharatiya Janata Party(BJP)onTuesdaycamecloseto the majority mark in

Jharkhand, where it has said itwould ally with the All JharkhandStudents Union to form a govern-ment, and became the second

largestpartyinJammuandKashmirwith 25 seats. The BJP fell badlyshort of the 44 seats needed in the87-memberJ&KAssemblytoformagovernmentand was unable to wina single seat in the Valley (all butone of its candidates lost theirdepositsinSrinagar).Butit achievedthe distinction of being the onlynational party to have won morethan20seatsin theAssembly.

Thepartysparliamentaryboardwill meet on Wednesday to take aview on its alliance partner in J&Kand finalise the name of its chiefministerialcandidate in Jharkhand.Ina first,despitea 30percenttribalpopulation, the eastern state couldget a non-tribal chief minister. Thenamedoingtheroundsis RaghubarDas,vice-presidentof thestate unitfrom Singhbhum, whohaswon theJamshedpur East seat. Das, whomigrated to Jharkhand, is from theOtherBackwardClasses.

In J&K, which gave no party

enough seatsto forma governmentonits own, theballwasin thecourtof the Peoples Democratic Party(PDP)thatwonthe mostnumberofseats and is likely to stake claim toforma government.However, itwas-ntclearwhetheritwillallywiththeCongress(againstwhich ithad cam-paignedusingbitter invective) ortheBJP. The trends are showing thatwewillnotbe forminga governmentonourown.Itis adifficultsituationforus,"saidPDP chiefspokespersonNaeemAkhter. Onwhetherit couldpartnerthe Congress,Akhterevadeda direct reply but said that the votewas against the national party.

Though the PDP spokesman notedout there were ideological differ-ences with the BJP, he refused tocommentona possiblealliancewiththeparty.

Itwillbe easierto come togeth-erwith theCongressthan theBJP toform a government in Jammu and

Kashmir, said senior PDP leaderandmember ofParliamentMuzaffarHussainBaig. Turn to Page 6>

BJPsupporterscelebratethepartysvictoryin J&KandJharkhand

Assemblypolls,attheir headquartersin NewDelhion Tuesday. PHOTO: PTI

Related reports on 19>

BuytoraiseUltraTechs capacityto 65mta year

THEMARKETSON TUESDAY

Sensex 27,506.46 195.33Nifty 8,267.00 57.00

NiftyFutures* 8,340.40 73.40Dollar ~ 63 .2 9 ~ 63 .2 5 **

Euro ~ 77 .3 9 ~7 7. 53 **Brentcrude($/bbl) 58.92 # 59.05**

Gold (10 g)## ~26,750.00 ~320.00

WEDNESDAY, 24DECEMBER201424pagesin 2sections

MUMBAI (CITY)~5.00VOLUMEXIX NUMBER96

WILLVISTARASPREMIUMECONOMY TAKE OFF?

ECONOMY& PUBLIC AFFAIRSP18

YELLENS FIRST YEAR AS FEDCHIEF:ASTEADYCOURSE

TAKE TWOP13

www.business-standard.com

*(Jan)Premiumon NiftySpot;**Previousdays close;# At6 pmIST##Marketrate,includingVATandpremium

Militantskill37 peoplein AssamThirty-sevenpeoplewere killed and10othersinjuredin aseriesof attacksbysuspectedNationalDemocratic FrontofBodoland(Songbijit) militantsat fourplacesinSonitpurand Kokrajhardistrictsof Assam.Allthosekilledin theSonitpurattackwerestatedtobe adivasis, saidSuperintendentof Police Sanjukta Parasar.A groupof themilitantswith sophisticated armsfiredatpeople inSonajuliunder BiswanathCharialisub-division inTinisutinear theArunachalPradesh border,she said.Additional para-militarypersonnelwerebeingrushedbyUnionHomeMinistryto thesedistricts. 8>

HungHouseinJammuand Kashmiras Peoples DemocraticPartyremainsundecided on ally; Jharkhand maygetfirst non-tribalCM

~20k-cr laundered throughpennystocks

JAYSHREEP UPADHYAYNewDelhi,23 December

TheSecuritiesand Exchange BoardofIndia (Sebi), the income-tax depart-mentand thespecial investigativeteam(SIT) on black money are learnt to bespearheading a multi-agency probeinto an alleged flow of unaccountedmoneythrough100 listedcompanies.

Accordingto sources, Sebiis exam-ining the role of these companies inmisuse of the exchange platform tolaunder money and evade taxes. Inthe near term, the regulator mightpass an order against 25 of those.Considering the number of compa-nies involved, regulatory estimatespeg the quantum of the alleged scamatclose to~20,000crore.

The companies include PearlAgriculture, Pearl Electronics,Greencrest Financial Services, GlobalInfrastructure and Finance, MishkaFinance and Trading, Dhanleela

Investment, Mahan Industries,

Prabhav Industries and AdvanceTechnologies.Most ofthese stocksarepenny counters. Queries sent to thecompanieselicitedno response.

Revenue Secretary ShaktikantaDas,whiletalkingaboutblackmoneystashedabroadby Indians,hadrecent-ly referred to unaccounted moneypresent in the domestic market. Thequantum of domestic black money isequal to the money stashed abroad,Dashad said.

TheSITon blackmoneyhas alreadytaken the case on record. We hadreceiveda referencefrom the income-tax department that the promoters ofcertainlow-valuelistedcompaniesareusing the stock exchange platform toget an advantage of long-term capitalgains (LTCG) and evade taxes. Theprobe against some companies is cur-rentlyunderway,saida sourceprivytothematter.

The modus operandi is believed tobesimilarto theoneseeninthe casesof

Radford Global and First Financial

Services. Inan orderpassedlastweek,Sebi whole-time member RajeevKumarAgarwalhadbarred260marketentities,including twocompanies,theirpromoters, brokers and a clutch ofinvestors,from accessingthe securitiesmarkets.

Theregulatorhasaccusedthese enti-tiesof misusingstockexchangesto gen-erate long-termcapitalgainsof around~485crore,andconvertingunaccountedcash intolegitimate money.

Acordingto initialinvestigations bySebi, these 100 companies exist onlyon paper and are using the exchangeplatform to convert blackmoney intowhite.These firms,thanksto theclauseof a compulsory one-year lock-in onsharesissued through the preferentialroute, were eligible for LTCG on anygains madeonsale oftheseshares.Theregulatory probe is determining theroleoftradersand operatorsthatactedinconcertwith promotersto artificial-ly rigvolumesand prices.

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Capital marketsregulator,I-Tdepartmentsuspecttaxevasionandmarket manipulation

OPINION 11 >

> E

d

it

: Lessonsfrom twoelections

CHECKINGTHE BOOKS| Scamof~20,000 crore in listed

spacebeing probed

| Enquiryon byseveral agencies,including theSIT onblackmoney

| About 100 companies underscanner; most oftheseexistonlyon paper

| TheSecurities andExchangeBoard of India might pass anorder against25 ofthese

companies

TO OURREADERSThefour-page commercialfeature,AutoMania,beingdistributedas a separatesection,isequivalentto paid-foradvertisement.NoBusinessStandardjournalistswereinvolvedinproducingit. Readersareadvisedtotreatit as

an advertisement.

LOTUSBLOOMSIN JHARKHAND J&KUNDECIDED

87seats 2008 2014 ChangePDP 21 +7

28BJP 11

+1425NC 28

-1315Congress 17 -512Others 10 -3

7

81seats 2009 2014 ChangeBJP+ 20 +22

42*JMM 18 +1

19Congress+ 25 -19

6**

JVM 11*** -38

Others 18 -126

BJPisBharatiyaJanataParty;JMM,JharkhandMuktiMorcha;JVM,JharkhandVikasMorcha;PDP,PeoplesDemocraticParty; NC,National Conference*(BJP37+ AllJharkhandStudentsUnion5),**(Congress6,JanataDalUnited0,RashtriyaJanataDal0),***In 2009,JVM andCongresswereallies(Congress14+JVM11)

JAIPRAKASHS SALESUnits Buyer Value (~ cr)Gujaratcementplant UltraTech 3,800

Bokarocementplant Dalmia 851(74%equity) Cement

B ulksa leof land 1,529

HP*hydropower JSW Energy 9,700projects

MP*cementplantswith UltraTech 5,400captivepowerunits

Total 21,280

*HimachalPradesh,Madhya PradeshSource:JaiprakashAssociates

REST OF THE NEWS 8 >

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