Thursday, July 9, 2009

COVER FEATURE....


BLACK MONEY:GOVT DENIES LINK BETWEEN TERROR OUTFITS & STOCK MARKET 
(SOURCE:-E.T)

Government today ruled out any surreptitious entry of terrorist outfits into the stock market and said sufficient caution have been administered to the stock exchanges to look out for any suspicious entry into their activity.
"The Government, at present, does not have any reliable, credible information of any surreptitious entry of terrorist outfit into the stock market," the Department of Revenue said in a fresh affidavit to the Supreme Court which is hearing the issue relating to stashing away of black money by Indians in foreign banks.
"However, the Board (Security and Exchange Board of India) as well as stock exchanges have been administered sufficient caution to look out for any suspicious and irregular entrant into the stock market activity," said the affidavit filed in response to the PIL accusing the government of not taking action in bringing back black money stashed in foreign banks.
The PIL filed by eminent lawyer Ram Jethmalani and others had referred to the media reports alleging a link between money belonging to Indian citizens lying deposited in foreign banks and terrorist fundings.
"Upon enquiry, it has been confirmed by the Bombay and Chennai Stock Exchanges that no fictitious or notional companies can be stated to be involved in stock market operations," the second affidavit filed in response to the PIL said.
The government elaborated on the mechanism for regulating the flow of money coming into the stock market through Foreign Institutional Investors (FIIs) by SEBI and ruled out the possibility of banning participatory notes.
"In view of the fact that participatory notes are market instruments and when they are created and traded abroad it is not possible to ban the issue of the said instrument," it said adding they are subjected to regulations and effectively being regulated by SEBI.
The Centre said all FIIs are mandated to report at the end of every month all the informations relating to participatory notes issued by them including the names of the subscriber to the said participatory notes.
However, the Centre agreed that there is a possibility of misuse of double taxation treaty between India and Mauritius.
"The Centre is alive and conscious of the potentiality of misuse of double taxation treaty between India and Mauritius. In fact, further amendments to the treaty are being negotiated," the affidavit said.
The Department of Revenue brushed aside the allegation of inaction relating to stashing of black money in foreign banks by Pune-based businessman Hasan Ali Khan against whom Enforcement Directorate has lodged a complaint for violating Foreign Exchange Management Act (FEMA.)
It termed as baseless the allegation that the Centre was interested in protecting powerful individuals who may have been using Khan and his wife as their nominee/benamidar.

2 comments:

Anonymous said...

Last week, the Reserve Bank said the economy could grow 6 percent with an upward bias and warned of price pressures by end of the fiscal year to March 2010.



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