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SEBI asks Prabhat Dairy to deposit Rs 1,292 cr in escrow account

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SEBI

Finding Prabhat Dairy and its promoters to be non-cooperative in a forensic audit, SEBI has asked Prabhat Dairy to deposit within seven working days the amount of Rs 1,292.46 crore to an interest-bearing Special Escrow Account.

The subsequent operations in the Special Escrow Account shall be monitored by JM Financial as its manager till the completion of the forensic audit.

The promoters, Sarangdhar Ramchandra Nirmal and Vivek Sarangdhar Nirmal, shall be restrained from disposing, selling or alienating, in any other manner, their assets or divert funds.

The company and its officials have been directed to cooperate with the forensic auditor appointed as per the SEBI letter dated July 17, 2020 and shall furnish all information/documents to the forensic auditor/SEBI within seven working days. The Audit Committee of PDL is directed to ensure that all data /information may be provided to the forensic auditor/SEBI within seven working days.

A SEBI order on Tuesday found, “It is necessary to adopt some urgent measures to safeguard the interests of minority investors/shareholders of PDL and protect the integrity of the securities market by ensuring that the proceeds of the Transaction are secured for the benefit of its investors.”

“However, having regard to the material available on record, the directions in these proceedings are limited to only PDL and its Promoters/Directors, viz. Sarangdhar Ramchandra Nirmal and Vivek Sarangdhar Nirmal as they have prima facie failed to cooperate with the forensic auditor appointed by SEBI and have not furnished the requisite information and documents which leaves an apprehension of fund diversion,” it said.

Further, the conduct of the Company and its Promoters/Directors does not inspire confidence in investors and exhibits blatant unwillingness to be transparent about the financial dealings. The stark opaqueness on the side of the Company and its Promoters/Directors as regards the availability of the Transaction proceeds for distribution to the shareholders of the Company (as had been publicly announced earlier) has aroused suspicion and anxiety in the minds of investors and other stakeholders, SEBI said.

The SEBI order said that the Company and its Managing Director have repeatedly failed to cooperate with the forensic auditor despite multiple efforts from Grant Thornton to obtain the information/documents needed for ensuring the commencement of the forensic audit directed by SEBI.

In addition, the Company and its Managing Director have also failed to adhere to the directions of SEBI for cooperating with the forensic auditor, which were communicated vide the aforementioned e–mails/letters.

“I note that unless the forensic audit is conducted, SEBI will not be in a position to determine whether or not the Company has indulged in misstatement of accounts, diversion of funds to its subsidiaries/associates, etc. which money belongs to its shareholders. While some information has emerged on the basis of a preliminary examination, only a detailed forensic audit could bring out the complete picture and the extent of the misstatement/misappropriation, if any. The Company appears to wilfully deny substantial information/documents to the forensic auditor appointed by SEBI. Further, some of the recent complaints received by SEBI against PDL (as brought out in the preceding paragraphs) point towards the Promoters/Directors trying to defraud the investors of their promised dues, related to the Transaction,” the order signed by SEBI Wholetime Member G Mahalingam said.

SEBI had received a complaint on September 16, 2020, from the minority institutional investors of the Company, viz. TVS Shriram Growth Fund 1B (7.6 per cent shareholding in the Company), India Agri Business Fund Limited (14.4 per cent shareholding in the Company) and Societe De Promotion Et De Participation Pour La Cooperation Economique (8.7 per cent shareholding in the Company) stating: “…It has (now) been more than 17 months since the closing of the Transaction and yet, so far, the Transaction’s net proceeds have not been distributed to the Company’s shareholders and we do not have the confirmation as to whether the monies are still locked in this Escrow Account. Despite repeated follow ups, no further conclusive explanations have been provided by the management or Company’s advisors in this regard.”

Business

Decline in equities continue for 4th straight sessions

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The 30-scrip Sensitive Index (Sensex) and broader 50-scrip Nifty on the National Stock Exchange (NSE) extended their losses from the previous three consecutive sessions and declined on Friday.

At 10.25 a.m., Sensex traded at 58,593 points, down 0.9 per cent from the previous close of 59,464 points. It opened at 59,039 points.

Nifty traded at 17,599 points, down 0.9 per cent from the previous close of 17,757 points. It opened at 17,613 points.

Bajaj Finserv, Tech Mahindra, Coal India, Adani Ports, Bharti Airtel were some of the top losers, NSE data showed.

Top gainers during the early trade were Hindustan Unilever, Tata Consumers, Bajaj Auto, Hero MotoCorp, and Power Grid Corporation.

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Consumer Price Index numbers for Agri, Rural labourers up by 5 points in Dec 2021

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The All-India Consumer Price Index Numbers for Agricultural Labourers (CPI-AL) and Rural Labourers (CPI-RL) for the month of December 2021 increased by 5 points each to stand at 1097 and 1106 points respectively.

The major contribution towards the rise in general index of Agricultural Labourers and Rural Labourers came from Fuel & Light group and miscellaneous group to the extent of 1.72 & 1.58 points and 1.02 & 1.06 points respectively mainly due to rise in prices of firewood, kerosene oil, medicine, barber charges, bus fare, toilet soap, washing soap, etc., a release from the Ministry of Labour and Employment said on Thursday.

The rise/fall in the index varied from state to state. In case of Agricultural Labourers, it recorded an increase of 1 to 20 points in 11 states and a decrease of 1 to 12 points in eight states while it remained stationary for Odisha. Tamil Nadu with 1,290 points topped the index table whereas Himachal Pradesh with 861 points stood at the bottom.

In case of Rural Labourers, it recorded an increase of 1 to 20 points in 11 States and a decrease of 1 to 14 points in eight states while it remained stationary for Odisha. Tamil Nadu with 1,276 points topped the index table whereas Himachal Pradesh with 915 points stood at the bottom.

Amongst states, the maximum increase in the CPI-AL and CPI-RL was experienced by Tamil Nadu (20 points each), mainly due to rise in the prices of vegetables & fruits, onion, chillies green/dry, tamarind, etc.

On the contrary, the maximum decrease in the CPI-AL and CPI-RL was experienced by Himachal Pradesh (12 points and 14 points respectively), mainly due to fall in the prices of wheat atta, pulses, onion, vegetables, and fruits etc.

Point to point rate of inflation based on the CPI-AL and CPI-RL stood at 4.78 per cent & 5.03 per cent in December 2021, compared to 3.02 per cent & 3.38 per cent respectively in November 2021 and 3.25 per cent and 3.34 per cent respectively during the corresponding month of the previous year.

Similarly, Food inflation stood at 2.99 per cent & 3.17 per cent in December 2021, compared to 0.88 per cent & 1.07 per cent respectively in November 2021 and 2.97 per cent & 2.96 per cent respectively during the corresponding month of the previous year.

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Air India to commence normal ops to US from Friday

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Air-India

National carrier Air India will commence normal operations to US from Friday, the airline said.

On Tuesday, the national carrier said that it will not be able to operate a number of US-bound flights due to the deployment of 5G communications in the US.

As per industry insiders, the 5G network technology might cause certain crucial flight instruments to malfunction.

The airline informed passengers via its official Twitter handle: “#FlyAI : Flight operations to/from destinations in USA were affected during last two days.

“We would like to inform our passengers traveling to/from destinations in the USA that effective 0001hrs of 21st January 2022 normal flights operations will recommence to/from USA.”

Earlier in the day, Boeing had cleared AI to operate to the US on Boeing 777 aircraft.

Accordingly, the first Air India flight left from New Delhi to JFK airport on Thursday morning.

Besides, Air India is expected to operate other flights to Chicago and San Francisco.

“Arrangements to carry stranded passengers are being worked out,” the airline said.

The US air transport regulator, Federal Aviation Administration (FAA), has been concerned that a version of 5G could interfere with some airplane instruments.

Earlier, aviation industry groups had shared those fears. This is despite reassurances from federal telecom regulators and well as wireless carriers.

Specifically, the FAA has been worried that 5G cellular antennas near some airports – not air mobile devices – could throw off readings from some aircraft equipment designed to tell pilots how far they are from the ground.

The systems, radar altimeters, are used throughout a flight and are considered critical.

At present, Air India operates to 5 destinations in the US.

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