Two UBS <http://markets.ft.com/tearsheets/performance.asp?s=ch:UBSN>bankers tried to create an offshore vehicle through which one of India’s most powerful businessmen could illegally invest in securities at home, according to evidence heard in a London tribunal.
Anil Ambani, whom bank executives described as a “mega-client”, was the ultimate owner behind a Mauritius-based vehicle called Pleuri, the tribunal heard. Pleuri was established with the specific objective of investing in Indian stocks, according to evidence presented by the UK’s financial regulator in a case against the former head of UBS’ London-based India desk. Indian nationals and companies are not permitted to invest in Indian securities through foreign institutional investors. Details of the controversial structure have emerged in the case of Sachin Karpe <http://www.ft.com/cms/s/0/6f5d1eee-24c4-11e1-ac4b-00144feabdc0.html>, former head of the desk that managed Indian client portfolios at UBS’s wealth management division in London. Mr Karpe is challenging a £1.25m fine from the Financial Services Authority <http://www.fsa.gov.uk/>. Mr Karpe and the other UBS banker, who cannot be named for legal reasons, have since left the Swiss bank. They allegedly misled UBS’s compliance team by maintaining that Pleuri was owned by a wealthy French couple. UBS ultimately refused to sanction the structure. “The source of funds [...] was plainly the Ambani family,” Jonathan Crow QC for the FSA told the tribunal on Tuesday. “[Mr Ambani] asked for a transaction and Sachin Karpe enabled it,” said Michael Blair QC, Mr Karpe’s barrister. “There was no suggestion that the client himself was damaged. The most that can be thrown at [Mr Karpe’s] door was that he probably ought to have told the client that the bank would not deal with him because the transaction was not legal in India.” Mr Blair described the FSA’s case as “fat and splurgy”. Mr Ambani, who is not represented at Mr Karpe’s tribunal hearing, has not been accused by the FSA of any wrongdoing. After the hearing, phone calls and emails to his spokesmen were not immediately returned. The FSA alleges that in addition to trying to establish the offshore structure for Mr Ambani, Mr Karpe made unauthorised trades on other clients’ accounts. To hide losses, Mr Karpe allegedly arranged loans from other clients, falsely promising them that the loans would be guaranteed by UBS at an above-market rate. Mr Karpe is not appearing at the tribunal and not contesting an FSA ban. He claims he did not know that the Pleuri structure would be illegal. Mr Karpe is arguing against the size of the fine, and maintains the FSA overreached its powers. After an investigation by the FSA, UBS paid a £8m fine in 2009 for not preventing the unauthorised trades. It also paid $42m in compensation to clients. UBS is supporting the FSA’s case against Mr Karpe and two other ex-employees. Indian authorities have also launched their own investigations. Mr Ambani entered into a settlement <http://www.ft.com/cms/s/0/57de18ae-2006-11e0-a6fb-00144feab49a.html>with the Securities and Exchange Board of India in January over allegations that his group misrepresented its end-of-year financial statements and violated overseas borrowing rules, without admitting any liability. As part of the Rs500m (£6.1m) settlement, the billionaire and his Reliance Infrastructure<http://markets.ft.com/tearsheets/performance.asp?s=in:RELINFRA>and Reliance Natural Resources<http://markets.ft.com/tearsheets/performance.asp?s=in:RNRL>companies cannot trade stocks on Indian exchanges through December 2012. On Wed, Dec 14, 2011 at 2:52 PM, taiyeb ali <[email protected]>wrote: > Retail counters *Pantaloon* and *Provogue* have touched new 52 week lows, > below their price from where they moved when the retail FDI clearance was > announced. > > > On Wed, Dec 14, 2011 at 2:45 PM, yamini chopra <[email protected]>wrote: > >> >> *Tata Steel* trades 3.3 percent lower at Rs 379.6 after Moody’s said >> that the steel company is the most vulnerable among the Tata group of >> companies as rupee depreciates. >> >> On Wed, Dec 14, 2011 at 2:44 PM, yamini chopra >> <[email protected]>wrote: >> >>> >>> >>> On Wed, Dec 14, 2011 at 2:37 PM, s s <[email protected]> wrote: >>> >>>> *BUT - if rupee depreciates without much outflow right now, what will >>>> happen when fccb & other related outflows start from march till next 15 >>>> months !!!* >>>> >>>> >>>> On Wed, Dec 14, 2011 at 2:30 PM, yamini chopra <[email protected] >>>> > wrote: >>>> >>>>> Credit rating agency Moody's Investors Service today, 14 December >>>>> 2011, said that the sharp decline in the value of the Indian rupeeagainst >>>>> the dollar is generally exerting only a moderate impact on rated Indian >>>>> companies. Risks for companies holding large amounts of dollar >>>>> denominated debt are also manageable in the near term, given that debt >>>>> maturities are limited for this time frame, Moody's said in a new report. >>>>> This means Indian companies rated by Moody's do not have a significant >>>>> dollar outflow at a time when the Indian rupee is losing ground. Moody's >>>>> latest assessment comes even as the local currency continued its recent >>>>> steep slide, recording a new all-time low against the dollar for a third >>>>> straight day today, 14 December 2011. >>>>> >>>>> On Wed, Dec 14, 2011 at 1:43 PM, kuku manmohan <[email protected] >>>>> > wrote: >>>>> >>>>>> >>>>>> Pennar Industries clocked volume of 44.14 lakh shares by 13:30 IST on >>>>>> BSE, a 59-times surge over two-week average daily volume of 75,000 >>>>>> shares. The >>>>>> stock rose 4.04% to Rs 39.95. >>>>>> >>>>>> -- >>>>>> Manmohan Tandan >>>>>> >>>>>> >>>>> >>>> >>> >> > > > -- > Best Regards, > > Taiyeb Ali > 786 > > -- CA. Rajesh Desai -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
