BHEL & GAIL GRANTED MAHARATNA STATUS BY UNION GOVERNMENT

The Union Government of India gave the Maharatna status to two PSUs- BHEL and GAIL on 1 February 2013. Granting Maharatna status to BHEL and GAIL will provide them with better functional and financial freedom and will also guarantee them with better valuation of the shares.

Ideally any Maharatna firm has a capacity to take investment decision of around 5000 crore Rupees withouttaking assistance from the government. On the other hand, forms with Navratna status have the capability of 1000 crore Rupees.

However, both BHEL and GAIL do not have enough non-official directors on the board, which is why they cannot exercise their Maharatna powers. Even though all other conditions of Maharatna status were met by both these PSUs but their boards do not have requisite number of board members. While GAIL is short of 4 independent directors, BHEL, on the other hand is short of 6 non-official directors.

In terms of turnover, net worth as well as net profit, both these companies meet all the eligibility criterions.


ELIGIBILITY OF A COMPANY TO GET A MAHARATNA STATUS

• For any company to qualify for Maharatna status, the annual turnover should be over
25000 crore Rupees in past three years, as per the guidelines issued by Department of
Public Enterprises.

• The net worth of the PSU should be more than 15000 crore Rupees in past three years.

• The net profit should be over 5000 crore Rupees during past three years.

At present, there are seven Maharatna companies, after inclusion of BHEL and GAIL and these companies are - ONGC, Indian Oil, SAIL, NTPC and CIL. Also, there are 14 Navratna companies, including Rashtriya Ispat Nigam Limited and NMDC.

ED SLAPPED 98.5 CROR E RUPEES PENALTY ON RAJASTHAN ROYALS

The Enforcement Directorate (ED) slapped the IPL team Rajasthan Royals with a penalty notice of around 100 crore Rupees for violating the Forex laws. ED issued this penalty notice after investigating the matter for 2 years under the Foreign Exchange Management Act (FEMA). Three notices in all were sent across to the IPL franchise which totaled to 98.5 crore Rupees.

The Jaipur IPL Cricket Private Limited (JIPL) as well as its directors was sent a penalty notice of
50 crore Rupees. Apart from this, 34 crore Rupees penalty notice was issued against EM Sporting Holding, Mauritius and its directors for evading the Forex duties. A notice of 14.5 crore Rupees was also issued additionally against the Ms ND Investments, United Kingdom and its directors.

All these three parties are free to appeal against the penalty order in appellate authority of FEMA. According to the order, IPL team needs to make the payment in 45 days. This is said to be the first biggest order against any team issued by the ED. According to the penalty order, it was found that the foreign investment in JIPL was conducted in flagrant contravention of FEMA.

The first penalty order was issued by ED against the Rajasthan Royals in mid-2011. Now, it issued the final orders after it moved to FEMA Adjudicating Authority in Delhi in order to examine investigations in the case.