Fall of Db Reaty With Regards to Stock

8/4/2019 Fall of Db Reaty With Regards to Stock

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`

India's biggest real estate developerbased in Mumbai

` DB Realty Limited is a real estate industry leader that

builds residential, commercial and gated community

developments.

` Company's existing product portfolio ranges from

upscale buildings, lavish villas and some of the most

elite malls


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` Incorporated as a public limited company on January

8, 2007

` Received a fresh certificate of incorporation on July

9, 2007` was converted to a public company and the name was

change to D B Realty Limited

` Changes in the Registered Office


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` Entrepreneurbased in Mumbai, Maharashtra, India

` One of the Promoters of Mumbai-based DB Group

which runs DB Realty India's 3rd largest realtor, DBHospitality and Swan Telecom (now Etisalat DB

Telecom).

` Involved in 2g scam


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` MD DB Realty is an Indian billionaire real-estate

developer and co-founder ofDB Realty.

` Been in the real estate business for the last 25 yearsand is a mentor to the Dynamix Balwa Group.

` Under his leadership, DB Realty was listed on both

the National StockExchange and Bombay Stock

Exchange in 2010.


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MR. A RAJA MUTHUVEL KARUNANIDHI


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` 2G signifies second-generation wireless digital

technology

` 2G networks saw their first commercial light of day

on the GSM standard` 2G on GSM standards first used in commercial

practice in 1991 by Radiolinja, which was a Finnish

GSM operator founded on Sept. 19, 1988


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` CHEAP TELECOM LICENSES

` NO PROCEDURES FOLLOWED

` FAVOURITISM, CORPORATES ENCASH PREMIUM

` OTHERS IN THE NET

` THE ROLE OF KALAIGNAR TV


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NAME CHARGES

1.S.Behura

Former telecom secretary who served in the

DOT at the time of the 2G allocation.

2.Pradip Baijal A bureaucrat who is alleged to have

implemented policies that favored certain

Telecom companies when he was headingthe TRAI.


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Name Allegation

1.Nira Radia A former airline entrepreneur turned corporate

lobbyist whose conversations with politicians &

corporate entities were recorded by govt

authorities & leaked .2.Barkha Dutta AnNDTVjournalist alleged to have lobbied for

A. Raja's appointment as minister.

3.Vir Sangavi A Hindustan Times editor alleged to have edited

articles to reduce blame in the Nira Radia tapes.


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` Unitech Group

` Swan Telecom:

` Videocon Telecommunications Limited

` Reliance Communications` Sistema Shyam Mobile (MTS) Sistema Mobile

Russia

` Tata Communications

` Dish net Wireless


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` DB's name first cropped up in the 2G spectrum

allocation scam

` flouted norms to allocate 2G licences to companies like

Swan Telecom (now Etisalat DB) and Unitech Wireless` DB's promoters also diversified into the telecom sector

and bagged 2G licences, for Rs 1,537 crore (Rs billion),

to operate in 15 circles.

` They sold 45 per cent stake in telecom venture SwanTelecom to UAE-based Etisalat for nearly Rs 4,200

crore


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` Swan had given false certificates and its application did

not conform with requirements for UASL

` CAG said Swan was also given spectrum in Punjab

circle, even as it was fourth in the priority list.` The promoters later sold 45 per cent stake in Swan for

Rs 4,200 crore (Rs 42 billion) while the company had

acquired licences for Rs 1,537 crore

` email interview with Business Standard earlier, DB'sBalwa had denied that DB Realty had any direct or

indirect shareholding in Etisalat DB.


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` The promoters and Etisalat DB have shared all

data/information and documents relating to the grant of

licences with the government agencies

` When investigating agencies were reported to be probing the

Rs 214-crore (Rs 2.14 billion) loan given by Dynamix Realty

` A subsidiary of DB Realty, to Kalaignar TV, which had Tamil

Nadu Chief Minister M Karunanidhi's wife M K Dayalu anddaughter Kanimozhi as major investors, in a three-step deal


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` The reports said that Dynamix Realty, a firm owned 99 per

cent by DB Realty, transferred Rs 209 crore (Rs 2.09 billion)

in unsecured loans to Kusegaon Realty Pvt Ltd.

` Then, Kusegaon Realty invested Rs 206 crore (Rs 2.06 billion)

in Cineyug Films. Finally, Cineyug gave Rs 214.8 crore (Rs

2.148 billion) as advances to Kalaignar TV in 2009-10.

` DB Realty has denied giving any loans to KTV and havingany association with Cineyug or KTV,


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` After the arrest of Balwa , DB Realty issued a

statement saying: "These developments will not affect

the functioning of DB Realty in any manner

whatsoever.

` DB Realty will continue its business in the normal

course along with the top-tier team, under the guidance

of the company's board.


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` Three different methods to assess the presumptive loss to the

exchequer resulting from not auctioning 2g spectrum

` The first method was based on the fact that S Tel

` The second method was based on the price recovered by the

3G auction in 2010

` The third method was based on the fact that some of the

licensees received FDI in the form of equity, shortly after the

spectrum allocation.


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` Post 2G, DB Realty finds its projects scrapped,

delayed

` 2G scam: ED likely to attach DB Realty's

assets

` 2G scam: DB Realty appoints Shahid Balwa'sfather on board


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` In January 2008, Department of Telecommunications

issued 120 new licenses for unified access services

` Were issued at price which had been discovered in2001.

` Issuance of 120 licenses in just one day and at a price

discovered in 2001 has drawn the attention of Media,

Parliament and informed members


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` The claim in each such reference is that ineligible applicants

seem to have been granted licenses and at a price which

appeared far below what has been perceived to be the

appropriate market price in 2008.

` It was in this context that this department felt that there was a

sufficient justification to review the entire process of issuance

of licenses, award of spectrum and the implementation of the

UAS regime


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` Gaps in policy implementation

` Telecom commission was not consulted

` Views and concerns of ministry of finance overruled

` Advise of ministry of law and justice were ignored

` Honorable prime ministers suggestions were not followed


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` Arbitrary changes by DoT in the cutoff date

` Issue of license to ineligible applicants


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` Greed of a single person overpowering rational

functioning of entire department.

` Vested interests of various politicians, corporate and

media.` Loop Holes and Irregularities in Existing Policies.

` Strong Nexus between the Media and Corporate.

` Ignorance Shown by the Law Ministry, the Finance

Ministry and even the Prime Minister.


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` Major concern for telecom sector which was beginning

to get competitive in the Indian economy.

` Many leading companies were a part of the 2G

spectrum scam of which were certain reputed names` The scam has badly bruised the image of Indian

telecom and the government in international investor

circles

` Whenever a scam of this sort happens, the entireindustry is pulled down on the stock markets and firms

go down with the slump.


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` The first casualty in Stock Markets once Raja was

arrested was DB Realty.

` Sun TV had its shares fall by 10%.Sun TV COO

refused the allegations.` Swan Telecom Chief Balwa was arrested on Feb 8 and

this led to rumors of links with Anil Ambani's Reliance

ADAG and it led to 20% fall of his stocks

` Spice jets Stocks went down after reports ofinvestigation on Maran's recent takeover of Spice jet.


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Fall of Db Reaty With Regards to Stock