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Government approaches National Company Law Appellate Tribunal, seeks power to attach properties of persons involved in PNB scam 

NEW DELHI: The government has approached the National Company Law Appellate Tribunal (NCLAT) seeking modification of an NCLT order so that it can attach the properties of those involved in the USD 2 billion PNB fraud.

In a petition, the corporate affairs ministry has also sought to invoke powers including the removal of the management and recovery of undue gains.

The plea seeks modification of the order passed by the Mumbai bench of the National Company Law Tribunal (NCLT) by adding sections such as 241, 242, 246 read with 339 of the Companies Act.

A two member bench of NCLAT headed by Chairman Justice S J Mukhopadhaya has directed the matter to be listed on April 23.

The tribunal has also directed the government to come along with an application for condonation of delay as it had approached beyond the permissible period.

“Interim order dated February 23, 2018 passed by the NCLT bench Mumbai be modified to the extent that it be declared to be passed under section 221, 241, 242 read with 339 of the Companies Act, 2013 and not just under section 221 of the act,” the government said in the petition filed before NCLAT. According to the government, addition of the above mentioned sections would “ensure effective implementation” of direction issued by NCLT.

“Section 221 only operates to restrain alienation of assets of the concerned companies and does not apply to the individual properties of the accused directors and other accused,” the government said in its petition filed before the appellate tribunal.

The NCLT had restrained more than 60 entities, including Nirav Modi, Mehul Choksi, various individuals, companies and limited liability partnership firms, from selling their assets under section 221 of the Companies Act.

Gitanjali Gems, Gilli India, Nakshatra Brands and Firestar Diamond are among the barred companies, while partnership firms include Solar Exports and Stellar Diamond.

The government further said that execution of the NCLT’s order requires “massive coordination” between numerous agencies such as SEBI, IBA, RBI, CSDL, NSDL, CBDT, CBFC and other state government agencies.

It contended that section 221 allows it to freeze the assets of company on inquiry and investigation.

Section 241 and 242 of the Companies Act deal with oppression and mismanagement and give wide powers to the tribunal, which include removal of the managing director, manager or any of the directors of the company and recovery of undue gains.

It also allows tribunal power to appoint subsequent to an order removing the existing managing director or manager.

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MN Supreme Court Upholds Audit Law

Supreme Court upholds audit law, ending Otto’s lawsuit

The Minnesota Supreme Court has upheld a 2015 law limiting State Auditor Rebecca Otto’s duties.

Wednesday’s unanimous decision ends Otto’s years of challenges and mounting legal fees. A district court and the Minnesota Court of Appeals had previously ruled against Otto, triggering her appeal to the Supreme Court.

The legal saga began after the Legislature passed a law allowing more counties to hire private firms for annual financial audits. Otto has argued that law was a constitutional breach of her duties that significantly downgraded the state’s oversight of county finances.

But the state’s high court disagreed. Wednesday’s ruling maintained that the law left the auditor’s oversight of those private audits intact.

Otto called that conclusion a confirmation of her office’s duties and “a win for the taxpayers.”

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Belgian firms prosecuted over Syria chemical exports

Summons says firms sent 168 tonnes of isopropanol, which can be used to make sarin, to Syria

A spokesman for Anex Customs and Danmar Logistics confirmed the companies had been exporting chemicals to factories in Syria, Lebanon, and Jordan for 15 to 20 years.



A spokesman for Anex Customs and Danmar Logistics confirmed the companies had been exporting chemicals to factories in Syria, Lebanon, and Jordan for 15 to 20 years.
Photograph: Akio Kon/Bloomberg via Getty Images

Three Belgian companies are being prosecuted for exporting chemicals to Syria, one of which could be used in the production of sarin gas.

The firms say they acted with the seeming consent of Belgian customs between 2014 and 2016, but were subsequently alleged to have failed to apply for the permits that would protect them from falling foul of a current global ban on the exports.

According to a UK research group, Bellingcat, and a German non-profit organisation, Syrian Archive, Belgium is the only EU country to have exported a chemical called isopropanol since July 2013, when a prohibition from the international Organisation for the Prohibition of Chemical Weapons (OPCW) came into force.

The customs investigation into the firms appears to have been initiated by the Dutch authorities.

Isopropanol, more commonly known as rubbing alcohol, is found in disinfectants, cleaning agents, paints and varnishes, but it is also a major component of the type of gas used in recent suspected chemical attacks by the Assad regime.

Following the death of more than 80 people in an attack on the rebel-held town of Khan Sheikhoun in north-western Syria on 4 April 2017, the French government said that “since 2014 it has been established that Syria has been attempting to acquire dozens of tons of isopropanol”.

Between May 2014 and December 2016, there were 24 deliveries to Syria from the three companies, who were working together, containing 168 tonnes of isopropanol, 219 tonnes of acetone, 77 tonnes of methanol and 21 tonnes of dichloromethane, according to a court summons.

Sarin, which has been banned since the 1993 chemical weapons convention (CWC), is made through a reaction between isopropanol and methylphosphonyl difluoride.

The trial of the Flemish firms – AAE Chemie Trading, Anex Customs and Danmar Logistics – along with a managing director and a manager, is set for 15 May in Antwerp.

The irregular export of goods subject to permits can be punished with a prison sentence of between four months and five years.

A spokesman for the Belgian federal authorities said: “Customs have established infringements of the law concerning the import, export and transit of goods. The established facts were the subject of a criminal customs investigation and the prosecution was initiated at the end of March at the criminal court.”

The spokesman added that they had no reason to believe the chemicals in question had been used in the production of weapons.

AAE Chemie confirmed that it had been exporting isopropanol at a concentration of 95% or more to Syria, but said that it had been trading with private partners in the country for 20 years, and “none of those companies appears to be on any suspicious list”. The company said it had not been aware of the need for a licence for the exports and, before being summoned to court, believed it had come to a settlement with the authorities.

A representative of Anex Customs and Danmar Logistics told Knack magazine in a statement: “My customer [AAE Chemie] has been exporting chemicals to various paint factories and leather processing factories in Syria, Lebanon, Jordan for 15 to 20 years.

“Since the war in Syria the risk analysis of customs for export to that country has been set for scanning, physical checking and checking of the documents.

“It is therefore not the case that we have hidden ourselves and/or have taken illegal actions. Also in contacts between AAE Chemie and high customs officers, no one pointed out that something was wrong. Never was there even one export refused.”

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EU data law shakeup could boost tech firms like Facebook — but that’s not what it’s supposed to do

Big tech firms such as Facebook could inadvertently benefit from new European privacy rules aimed at strengthening consumer control over personal data.

Facebook Product Management Director David Baser said in a blog post Monday that the company collects and receives information about people even if they’re logged out or don’t have a an account. “This is because other apps and sites don’t know who is using Facebook,” he wrote.

Baser said Facebook collects information including your computer’s IP address, the type of browser you’re using to access the internet, the software your computer runs (Android, macOS, Windows, iOS, etc.), and other material.

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Belgian firms prosecuted over chemicals exports to Syria

Summons says firms sent 168 tonnes of isopropanol, which can be used to make sarin, to Syria

A spokesman for Anex Customs and Danmar Logistics confirmed the companies had been exporting chemicals to factories in Syria, Lebanon, and Jordan for 15 to 20 years.



A spokesman for Anex Customs and Danmar Logistics confirmed the companies had been exporting chemicals to factories in Syria, Lebanon, and Jordan for 15 to 20 years.
Photograph: Akio Kon/Bloomberg via Getty Images

Three Belgian companies are being prosecuted for exporting chemicals to Syria, one of which could be used in the production of sarin gas.

The firms say they acted with the seeming consent of Belgian customs between 2014 and 2016, but were subsequently alleged to have failed to apply for the permits that would protect them from falling foul of a current global ban on the exports.

According to a UK research group, Bellingcat, and a German non-profit organisation, Syrian Archive, Belgium is the only EU country to have exported a chemical called isopropanol since July 2013, when a prohibition from the international Organisation for the Prohibition of Chemical Weapons (OPCW) came into force.

The customs investigation into the firms appears to have been initiated by the Dutch authorities.

Isopropanol, more commonly known as rubbing alcohol, is found in disinfectants, cleaning agents, paints and varnishes, but it is also a major component of the type of gas used in recent suspected chemical attacks by the Assad regime.

Following the death of more than 80 people in an attack on the rebel-held town of Khan Sheikhoun in north-western Syria on 4 April 2017, the French government said that “since 2014 it has been established that Syria has been attempting to acquire dozens of tons of isopropanol”.

Between May 2014 and December 2016, there were 24 deliveries to Syria from the three companies, who were working together, containing 168 tonnes of isopropanol, 219 tonnes of acetone, 77 tonnes of methanol and 21 tonnes of dichloromethane, according to a court summons.

Sarin, which has been banned since the 1993 chemical weapons convention (CWC), is made through a reaction between isopropanol and methylphosphonyl difluoride.

The trial of the Flemish firms – AAE Chemie Trading, Anex Customs and Danmar Logistics – along with a managing director and a manager, is set for 15 May in Antwerp.

The irregular export of goods subject to permits can be punished with a prison sentence of between four months and five years.

A spokesman for the Belgian federal authorities said: “Customs have established infringements of the law concerning the import, export and transit of goods. The established facts were the subject of a criminal customs investigation and the prosecution was initiated at the end of March at the criminal court.”

The spokesman added that they had no reason to believe the chemicals in question had been used in the production of weapons.

AAE Chemie confirmed that it had been exporting isopropanol at a concentration of 95% or more to Syria, but said that it had been trading with private partners in the country for 20 years, and “none of those companies appears to be on any suspicious list”. The company said it had not been aware of the need for a licence for the exports and, before being summoned to court, believed it had come to a settlement with the authorities.

A representative of Anex Customs and Danmar Logistics told Knack magazine in a statement: “My customer [AAE Chemie] has been exporting chemicals to various paint factories and leather processing factories in Syria, Lebanon, Jordan for 15 to 20 years.

“Since the war in Syria the risk analysis of customs for export to that country has been set for scanning, physical checking and checking of the documents.

“It is therefore not the case that we have hidden ourselves and/or have taken illegal actions. Also in contacts between AAE Chemie and high customs officers, no one pointed out that something was wrong. Never was there even one export refused.”

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Australia plans strong anti-slavery law

New legislation requires public bodies and companies to outline what they have done to combat slavery in their supply chains

London: Australia aims to be a global leader in the fight against modern slavery with a new law that builds upon Britain’s landmark legislation and demands stronger action from the government and businesses, its foreign minister and lawmakers said on Tuesday.

The country is expected to this year pass a Modern Slavery Act to tackle the risk of forced labour in supply chains, protect people vulnerable to enslavement such as migrant workers and compensate victims of slavery, politicians said.

Following Britain’s world-leading 2015 anti-slavery law, Australia’s legislation goes further by requiring public bodies as well as companies to outline what they have done to combat slavery in their supply chains, said Senator Linda Reynolds.

“One of most significant things is that we aren’t just expecting businesses to act, but will take action ourselves,” she told the Thomson Reuters Foundation on the sidelines of the Commonwealth Heads of Government Meeting (CHOGM) in London.

“This is a game-changer,” she said at an event hosted by Australia and the charity Walk Free Foundation.

The British law introduced life sentences for human traffickers, compel firms to address the risk of forced labour and established a role of independent anti-slavery commissioner.

Yet the British government has been criticised by several anti-slavery activists for a lack of support for victims and for working with suppliers who flout the law.

“It is important that we are following Britain’s lead, but the requirements of our act have come about as a result of discussions in Australia,” said foreign minister Julie Bishop.

“We will be one of the world leaders in introducing modern slavery legislation,” she told the Thomson Reuters Foundation.

Compared to Britain, Australia’s law would be stricter on the content of the annual statement showing actions taken to ensure supply chains are slavery-free, while the government would publish a list of all entities required to comply.

The proposed law should require firms doing business in Australia with a revenue of more than $50 million to file a statement, found a December report by a parliamentary inquiry.

Yet the threshold should be lower than this to force more companies to fight a crime estimated to affect 40 million people globally with annual profits of $150 billion, according to Andrew Forrest, the Australian founder of Walk Free.

“Filing out a statement is not hard,” said Forrest, who is also chairman of Fortescue Metals Group, a major iron ore miner.

“The Australian government is setting the example and businesses need to follow.” Australia is home to an estimated 4,300 slavery victims — from forced labour and sexual exploitation to domestic servitude — according to the 2016 Global Slavery Index by Walk Free.

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Chicago gets more enticing for metro Detroit law firms

The Bank Nightlife has 10 days to pay up or get out of the former Mount Clemens Federal Savings & Loan building under a consent judgment entered today at a Macomb County district court.

Co-founder and managing partner Alexander Kristoff says the plan is to pay, and continue the dance club operations in July under a new owning company capitalized by new investors.

“We’ve been in negotiations about the lease for months now. All past due rent and tax money was place in escrow over two months ago while we work this out,” he said.

“The new company looks forward to starting a new lease and moving in a new direction. It’s been a difficult market to operate a high-end nightclub in Mt. Clemens, but we’re working through it.”

Kristoff, co-owner of A&R Macomb LLC with Ron Masters, signed the consent judgment entered today at 41B District Court in Clinton Township. Macomb County has owned the former bank building since 2004 and sought to evict the club over unpaid rent and property taxes on its lease, which lapses in 2017.

The consent judgment gives the bar owners until June 27 to pay up on a balance of $131,361 — $76,428 in back rent and interest and more than $54,900 in unpaid property taxes between late 2009 and the A&R’s petition for Chapter 11 bankruptcy petition in October 2010.

The company has stayed current on rent owed ever since the Chapter 11 filing, which a U.S. Bankruptcy Court Judge Steven Rhodes dismissed in April with the company’s consent, according to Macomb County Finance Director Pete Provenzano.

“It’s a landlord-tenant judgment, so all this really deals with is the possession (of the site),” Assistant Macomb County Executive Al Lorenzo said Thursday. “The money that may still be due or owing later, if they’re evicted, is a separate matter.”

The new owning company, MJ TBN Group LLC, is partly owned by investor Mike Jarbo and Kristoff said it should take over operations of the bank sometime around July 1, in a seamless transition after it negotiates a new lease.

Built in 1961 and designed by the late architect William Kessler, the former savings and loan building was vacant until A&R Macomb completed renovations in 2006 with assistance from Kessler’s daughter, Tamara Checkley.

A&R Macomb reported a net loss of $69,822 on revenue of $235,638 in the first eight months of 2010, including expenses of $28,500 for rent and more than $23,000 in advertising, according to a cash flow statement filed shortly after the bankruptcy petition. But Kristoff said the newly-formed company will be profitable.

“All arrangements and expenses were looked at across the board, and the business has worked on becoming lean,” he said.

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Elite Kenyan law firms set sights on big deals

Economy

Kenya’s elite law firms have stepped up global partnerships as they seek to leverage on international experience in the race for lucrative corporate advisory deals. FILE PHOTO | NMG
Kenya’s elite law firms have stepped up global partnerships as they seek to leverage on international experience in the race for lucrative corporate advisory deals. FILE PHOTO | NMG 

Kenya’s elite law firms have stepped up global partnerships as they seek to leverage on international experience in the race for lucrative corporate advisory deals in multi-billion-shilling infrastructure development projects.

Coulson Harney, Hamilton Harrison & Mathews (HH&M),  Anjarwalla & Khanna, Kaplan and Stratton, Iseme, Kamau & Maema (IKM) Advocates and Walker Kontos rule the corporate legal advisory deals.

Kenya has, over the last decade, been a lucrative market on the continent for corporate deal-making, prompting the law firms to forge links with international firms to take advantage of economies of scales.

Coulson Harney has enjoyed close links with Bowman Gilfillan, which traces its roots in Johannesburg since August 2008, while IKM Advocates has had ties with DLA Piper – a top law firm by revenue in the USA – since January 2010.

Walker Kontos in October 2016 inked a partnership deal with Norton Rose Fullbright which has roots in the USA and the UK, with a presence in 33 countries across the world.

Oldest law firm

HH&M, Kenya’s oldest law firm founded in 1902, last month joined the fray after it signed a deal to formalise its 10-year “loose” relationship with world’s leading law firm Dentons, subject to regulatory approval.

Insiders in the lucrative legal corporate advisory industry say many players are cranking up global collaborations with sights on mega pipeline infrastructure projects, largely in roads and electricity generation.

Kenya enacted the Public-Private Partnerships Act in 2013, bringing in private sector in the development of infrastructure.

The PPP contracts in the road sector – which account for single largest share of government’s development spend – are set to combine design, build, finance, operate and maintain framework.

The risk under PPP projects is also transferred to the private investor who sources for own cash and recoups the same over the long-term through user fees such as tolls before handing the road project back to the State after agreed time.

More complex

The PPP concept, unlike the previous design-and-build models under Public Procurement and Asset Disposal Act 2015, makes their formulation more complex, building the case for indigenous law firms to tap global experience, head of Infrastructure Hub for Africa at KPMG James Woodward said.

“While there is no lack of capability in the Kenyan market for local law firms to draft large complex contracts, long-term roads PPP contracts are nuanced and have never before been completed in Kenya,” Mr Woodward said.

“One of the perceived shortfalls of the PPP approach is the potential for up-front time delays that can stem from local capacity constraints to deal with such complex procurement processes.

“To manage this from the perspective of the legal profession, it is both prudent and practical for local law firms to partner with international firms. International firms bring decades of PPP legal corporate advisory expertise to these projects that can be leveraged by local firms when working in close partnership.”

Partnership with global law firms, HH&M senior partner Richard Omwela said, will help bring down costs of the projects because all a law firm requires is localise a previous contract for a similar project done elsewhere.

Local content

The Kenyan procurement law under Section 157(9) further requires that international contractors, including law firms, should reserve at least 40 per cent share for local content, a boost to the elite indigenous firms with a track record.

Sharing of IT systems, staff and insurance indemnity – which provide cover for legal costs when defending a claim and compensation for clients – are the main areas of focus in collaborations between indigenous and global law firms.

“We have the sea and airports coming up, we have the railways continuing to expand, but the bigger one that’s happening now is the highways. We have a huge potential in management of highways,” Mr Omwela said.

“The ability to deliver on assignments depend on expertise you have in-house and what numbers can you put on project to deliver.”

The Kenya National Highways Authority (KeNHA) has settled on Nairobi’s Southern Bypass, Nairobi-Nakuru Highway, Nairobi-Mombasa Highway and Thika Superhighway for implementation of the proposed road tolling programme where road users will pay fees for maintenance.

“To ensure value for money from PPP projects, the procurement process is usually competitive. Working with financial and technical advisors, law firms will coordinate the development of the procurement documentation on behalf of government and participate in the evaluation process,” Mr Woodward said.

HH&M’s choice of Dentons was strategic, Mr Omwela said, citing the global firms strong roots in China – Kenya’s largest lender with a portfolio of $5.2 billion (Sh520 billion) last December, largely in infrastructure financing.

Chinese firms

Chinese firms also control the lion’s share of infrastructure deals in other East African countries as well as Central and Southern Africa.

“Having that Chinese connection gives us leverage above the other law firms in Kenya because if a Chinese firm is doing a project in East Africa and they are clients of Dentons, we will automatically be involved in that project unless we are conflicted,” the HH&M senior consultant told Smart Company.

“We believe we will be able to bring that cost down because there is a very fierce competition among law firms in Kenya. So we will have a head start against everybody else.

“When we join Dentons, you find that whatever you want to do has been done elsewhere because we are not the first ones to do the road concessioning under the PPPs.”

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EU wants tech firms to share ‘terror’ data

Technology companies such as Google, Microsoft and Facebook will be forced to hand over users’ data to European law enforcement officials even when it is stored on servers outside the bloc, under a law proposed by the European Union yesterday.

The law would allow European prosecutors to force companies to turn over data such as emails, text messages and pictures stored online in another country, within 10 days or as little as six hours in urgent cases.

The EU executive says the proposed law, which would apply to data stored inside and outside the bloc, is necessary because current legal procedures between countries to obtain such electronic evidence can drag on for months.

“Electronic evidence is increasingly important in criminal proceedings,” said European Commission Vice President Frans Timmermans.

“We cannot allow criminals and terrorists to exploit modern and electronic communication technologies to hide their criminal actions and evade justice.”

On the frontline of the ongoing investigation into claims that Cambridge Analytica may have illegally harvested Facebook data for political ends, former CA boss Alexander Nix has refused to appear for a second grilling by British lawmakers, the MPs’ scrutiny panel investigating him said yesterday.

The ex-CA chief executive was due to appear today before parliament’s culture, media and sport committee over the British political consultancy firm’s highly controversial work. They wanted to probe inconsistencies in the testimony he gave before the committee on February 27.

Digital borders are a growing global issue in an era where big firms operate so-called cloud networks of giant data centers, which means that an individual’s data can reside anywhere.

Technology companies have found themselves torn between protecting consumers’ privacy while cooperating with law enforcement. The political pressure has intensified after Islamist-inspired attacks across Europe in recent years.

The United States recently moved to address the same problem, passing a law making it clear that US judges could issue warrants for data held abroad while giving firms an avenue to object if the request conflicts with foreign law.

Prosecutors and police will have to ask a judge to approve their request for electronic evidence where it concerns more sensitive data, such as the actual content of messages, emails, pictures and videos.

The proposal will apply only in cases where crimes carry a minimum jail sentence of three years. In cases of cybercrime there will be no minimum penalty requirement.

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