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ICICI to set up enquiry on allegations against CEO Chanda Kochhar

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Mumbai, May 30: ICICI Bank’s Board of Directors have decided to institute a “comprehensive enquiry” to look into an anonymous whistle blower’s complaint alleging that Bank’s MD and CEO Chanda Kochhar had not adhered to provisions relating to “code of conduct” of the bank.

In a regulatory filing on Wednesday, the bank said: “The Board of Directors, at its meeting held on May 29, 2018 decided to institute an enquiry to be headed by an independent and credible person, to examine and enquire into an anonymous whistle blower complaint, disclosing certain information, alleging in substance that Bank’s MD and CEO had not adhered to provisions relating to “Code of Conduct” of the bank and legal and regulatory provisions relating to “conflict of interest” over a period of time, as also alleging quid pro quo in the course of her work in dealing with certain customers/borrowers of the Bank.”

The bank said the scope of enquiry would be comprehensive and include all relevant matters arising out of and in the course of examination of the facts and wherever warranted, “use of forensic/email reviews and recordal of statement of relevant personnel, etc.”

The enquiry would also cover all connected matters in the course of the investigation to bring the matter to a final close.

“In keeping with the Whistle Blower Policy of the bank, Board has mandated its audit committee to take all further actions in the matter to operationalise this decision — including in particular, appointment if an independent and credible person as Head of the Enquiry, determining the terms of reference of the Enquiry, the period which will be covered by the Enquiry,” the bank said.

“The Audit Committee will also, in consultation with the Head of the Enquiry, make arrangements to assist him with independent legal and other professional support as may be required,” the bank added.

Private lender ICICI Bank on May 25 said that Securities and Exchange Board of India (SEBI) had sought responses from the company and its MD and CEO Kochhar on alleged non-compliance of the “erstwhile ‘Listing Agreement’ and the ‘Listing Obligations and Disclosure Requirements) Regulations, 2015′”.

According to a BSE filing, SEBI sought the reply via a notice issued to the private lender and its MD and CEO on May 24.

As per the securities market regulator’s LODR regulations, all listed entities are mandated to immediately disclose relevant and important information to stock exchanges.

The notice by SEBI had been issued “based on information furnished by the bank or its MD and CEO to diverse queries made by SEBI concerning dealings between the bank and Videocon Group and certain dealings allegedly between Videocon Group and Nupower, an entity in which Deepak Kochhar spouse of MD and CEO has economic interests,” the bank said.

The bank said that appropriate responses would be submitted to SEBI in accordance with regulation.

The SEBI notice comes more than a month after nepotism and conflict of interest allegations were levelled against Kochhar. It has been alleged that Kochhar had wrongfully granted a loan to Videocon Group and that her husband’s company — NuPower Renewables — received a loan from the Videocon Group’s Chariman Venugopal Dhoot on a quid-pro-quo basis.

Chanda Kochhar on May 7 had said that private lender works under and abides by all regulatory norms and that it has been fully cooperating with regulatory and investigative agencies.

On March 29, ICICI Bank Chairman M.K. Sharma had said that reports alleging nepotism by Kochhar were “unfounded and malicious” in nature.

Saying that ICICI Bank’s exposure to the Videocon Group (Videocon Industries and 12 of its subsidiaries or associates as co-obligors) for a debt consolidation programme and for the group’s oil and gas capital expenditure programme aggregating approximately Rs 40,000 crore was less than 10 per cent.

Sharma had asserted that no individual bank employee has the ability to influence decisions of the credit committee.

He clarified that none of “the investors of NuPower Renewables are borrowers of ICICI Bank” and that Kochhar did not chair the committee that had lent to Videocon.

In addition, Sharma said at the press briefing that Kochhar has been making all her disclosures in accordance with the regulatory guidelines under the Companies Act and the Banking Act.

Sharma revealed that the bank has ‘satisfactorily’ replied to the questions of all the regulators, which he described as an ongoing process between “a regulated entity like a bank and the regulators and other government departments”.

In 2012, a consortium of 20 banks and financial institutions sanctioned credit facilities to the Videocon Group for a debt consolidation programme and for its oil and gas capital expenditure programme aggregating to approximately Rs 40,000 crore.

IANS

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India’s Apr-Aug fiscal deficit at over 109% of budgetary target

The Central government’s total expenditure stood at Rs 12.47 lakh crore (41 per cent of BE) while total receipts were Rs 3.77 lakh crore (16.8 per cent of BE).

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Rupee

New Delhi, Sep 30 : India’s budgetary fiscal deficit for the April-August 2020-21 period stood at Rs 8.70 lakh crore, or 109.3 per cent of the budget estimates (BE).

The 2020-21 deficit — the difference between revenue and expenditure — has been pegged at Rs 7.96 lakh crore, as compared to the revised deficit of Rs 7.66 lakh crore for the last fiscal.

As per the Controller General of Accounts (CGA) data released on Wednesday, the fiscal deficit during the corresponding months of the previous fiscal was 78.7 per cent of that year’s target.

The Central government’s total expenditure stood at Rs 12.47 lakh crore (41 per cent of BE) while total receipts were Rs 3.77 lakh crore (16.8 per cent of BE).

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Businesses not ready with GST e-invoicing get 30-day grace period

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GST Collection Down

New Delhi, Oct 1 : The Central Board of Indirect Taxes and Customs (CBIC) has announced a 30 day grace period for those businesses which are not yet ready for GST e-invoicing which comes into effect from Thursday, October 1.

In a notification on Wednesday evening, CBIC noted that even after more than nine months of the first notification in this regard, some of these taxpayers having aggregate turnover of Rs 500 crore and above are still not ready.

“Accordingly, as a last chance, in the initial phase of implementation of e-invoice, it has been decided that the invoices issued by such taxpayers during October 2020 without following the manner prescribed under rule 48(4), shall be deemed to be valid and the penalty leviable under section 122of the CGST Act, 2017, for such non-adherence to provisions, shall stand waived if the Invoice Reference Number (IRN) for such invoices is obtained from the Invoice Reference Portal (IRP) within 30 days of date of invoice,” it said.

Elucidating the relaxation, the notification said: “In case a registered person has issued an invoice dated 3rd October, 2020 without obtaining IRNA but reports the details of such invoice to IRP and obtains the IRN of the invoice on or before 2nd November, 2020 then it shall be deemed that the provisions of rule 48 (5) of the CGST Rules, 2017 are complied with and the penalty imposable under section 122 of the CGST Act, 2017 shall also stand waived.”

It further said that no such relaxation would be available for the invoices issued from November 1, 2020 and such invoices issued in violation of rule 48(4) of the CGST Rules 2017 would not be valid and all the applicable provisions of CGST Act and Rules would apply for the said violation.

The government had in December 2019 prescribed that the GST Taxpayers having aggregate annual turnover more than Rs 100 crores in any preceding Financial Year will be required to issue e-invoice for all the Business to Business (B2B) supplies, in the manner prescribed under rule 48(4) of the CGST Rules, 2017 with effect from April 1, 2020.

Further, it was also mandated under rule 48(5) of the CGST Rules, 2017 that a B2B invoice or an export invoice issued by such a taxpayer, in any other manner, shall not be treated as an invoice. In March 2020, the date of implementation of e-invoice was extended to October 1, 2020.

Keeping in view the hardships faced by the taxpayers due to COVID-19 lockdown, in July 2020, it was further prescribed that the taxpayers having aggregate turnover of Rs 500 crore and above only would be required to issue e-invoice with effect from October 1, 2020.

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SEBI amends norms for delisting of subsidiaries, debenture trustees

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Mumbai, Sep 29 : The Securities and Exchange Board of India (SEBI) on Tuesday decided to amend regulations for delisting of equity shares, stipulating that the shares of the parent listed company and the listed subsidiary entity should be listed for at least three years and should not be suspended at the time of the delisting process.

Further, the subsidiary should have been a listed subsidiary of the listed holding entity for at least three preceding years.

The SEBI Board, in its meeting on Tuesday, also decided to grant exemption from the Reverse Book Building process (RBB) for delisting of listed subsidiaries, where it becomes the wholly-owned subsidiary of the listed parent pursuant to a scheme of arrangement.

“To be eligible to take this route, the listed holding company and the listed subsidiary should be in the same line of business. Both the companies should be compliant with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, specifically, the regulations (no. 11, 37 and 94) pertaining to processing of the schemes of arrangement,” a SEBI statement said.

Further, to protect the interests of investors in the listed subsidiary, it has been stipulated that the votes cast by public shareholders of the listed subsidiary in favour of the proposal will be at least two times the number of votes cast against it in terms of the present delisting regulations.

The Board also decided to bring amendments to the SEBI (Debenture Trustee) Regulations, 1993, the SEBI (Issue and Listing of Debt Securities) Regulations, 2008 and the SEBI (Listing Obligations and Disclosure Requirements), 2015.

It approved the proposal of strengthening the role of debenture trustees so as to protect the interest of debenture holders. The debenture trustees shall exercise independent due diligence of the assets on which charge is being created.

“The DT(s) shall take required action by convening the meeting of debenture holders for enforcement of security, joining the inter-creditor agreement (under the framework specified by the RBI), etc,” the statement said.

Debenture trustees shall also carry out continuous monitoring of the asset cover, including obtaining mandatory certificate from the statutory auditor on half-yearly basis.

Further, the issuer company shall create a recovery expense fund at the time of issuance of debt securities that may be utilised by debenture trustees in the event of default, for taking appropriate legal action to enforce the security.

The board of the securities market regulator also approved the amendment of MF Regulations to introduce a Code of Conduct for Fund Managers including Chief Investment Officers and Dealers of AMCs.

Further, the Chief Executive Officer will be responsible to ensure that the Code of Conduct is followed by all such officers.

The Board also approved an amendment to MF Regulations to enable Asset Management Companies to become a self-clearing member of the recognised Clearing Corporations to clear and settle trades in the debt segment of recognised stock exchanges, on behalf of its mutual fund schemes.

It has also approved the proposal to facilitate setting up of a Limited Purpose Repo Clearing Corporation.

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