RBI tweaks accounting standards for ARCs
The Reserve Bank of India (RBI) on Wednesday tweaked the accounting standards for asset reconstruction companies(ARCs). From now, expenses incurred at pre-acquisition stage for performing due diligence for acquiring financial assets from banks/Fls would need to be expensed immediately by recognising them in the statement of profit & loss for the period in which such costs are incurred. Expenses incurred after acquisition of assets on the formation of the trusts, stamp duty and registration, which are recoverable from the trusts, would be reversed, if these are not realised within 180 days from the planning period. The yield would be recognised only after the full redemption of the entire principal amount of security receipts. Management fees may be recognised on an accrual basis. Management fees recognised during the planning period must be realised within 180 days from the date of expiry of the period.
SAT sets aside order in EIIL promoter-director case
The Securities Appellate Tribunal (SAT) set aside a Sebi order that slapped a fine of R1 crore on the promoter-director of Empower Industries India (EIIL), and asked the market regulator to hold fresh proceedings in the case. Sebi, in January last year, had imposed a penalty of R1 crore on EIIL promoter-director Devang D Master for allegedly indulging in fraudulent trading practices and violating disclosure norms related to company?s shares. Master approached SAT challenging Sebi’s ruling. It was alleged that Master made misleading corporate announcement in March 2005 regarding a preferential/rights issue. The issue did not materialise and had lured investors, leading to creation of artificial volumes in the scrip of EIIL.
SAT upholds Sebi?s R1-cr fine in fraud case
SAT on Wednesday upheld Sebi?s penalty of R1 crore on an individual in a case related to fraudulent trading in scrips of four companies. Pooja Menghani was found guilty by the Securities and Exchange Board of India (Sebi) in April 2012 of indulging in fraudulent and unfair trades in shares of Amtek Auto, Amtek India, Monnet Ispat and Ahmednagar Forgings. As per Sebi, Menghani had resorted to ?front-running? and had earned ?ill-gotten? profits (R49 lakh) by such trades. Subsequently, Menghani had approached SAT challenging Sebi?s ruling.
