Question: I had handed over my shares and securities to my broker to cover the cost of any investments which I may make in future. I find that he has used those securities without my consent for trading on his own. I am now finding it difficult to retrieve those shares and securities though he has promised to do so in the near future. I am very much concerned about this misuse done by some brokers. Is the government taking any steps to protect investors from unscrupulous brokers?

The regulator, Securities & Exchange Board of India, has last month issued a directive that brokers can accept collateral from clients in the form of shares and securities solely for the purpose of margin pledge created in the depository system. It has prohibited brokers from making an off-market transfer of shares and securities because such transfers tantamount to change in ownership and cannot be treated as a pledge. It has been further clarified that transfer of securities to the demat account of a broker who may be a trading member or clearing member of a stock exchange is prohibited.

It is also specified in the circular issued by SEBI that brokers should open a separate demat account for accepting ‘margin pledge’. This action has been taken by SEBI to protect the interest of investors like you who have suffered in the past as a result of broking firms illegally pledging shares belonging to their clients with banks and non-banking finance companies to raise money with which the brokers enter into business activities for themselves. In case of defaults made by brokers in the past, they may apply for insolvency, but the clients whose shares have been illegally transferred have been left without recourse and would suffer losses. Therefore, in future, you should specify when you hand over your shares and securities to a broker that these should be used only as ‘margin pledge’ and should be credited by the broker in a separate demat account pertaining to such ‘margin pledge’.

Q: Auditors in the past have been found to be negligent in not reporting financial irregularities committed by companies. Shareholders and investors have therefore suffered and their investments have lost value. This brings no relief to shareholders even if the auditor is debarred from practice. Is anything being done about this?

The Ministry of Corporate Affairs has now made it mandatory for auditors to furnish details of tangible and intangible assets belonging to the company, loans given to promoters and related parties and a report on whistle blower complaints. If there is a discrepancy of more than 10% in inventories, the auditors are required to report this fact in their report to shareholders. If title deeds of immovable properties are not in the name of the company, the auditor would have to report the same.

The auditor of the holding company is required to disclose any adverse remarks which may be made by auditors of the subsidiary companies. He will also be required to give an opinion on financial ratios, the age and expected dates of realisation of financial assets and payment of financial liabilities. To reduce manipulation of books of account, auditors will have to verify whether quarterly statements filed with banks are in agreement with the books of account. Earlier, under the Companies Auditors’ Report Order, 2016, comments had to be given by auditors on 21 issues. This has now been increased to 50 issues under the revised order of 2020.

Q: My son who is working in India is required to travel to some South East Asian countries. I want to know whether any travel policy is available which would cover risks like corona virus?

Most insurance companies are not issuing new policies for travel to China and other South East Asian countries, including Hong Kong and Macau, in the wake of an advisory issued by those Governments. However, some companies like Bajaj Allianz General Insurance Co. Ltd. issue policies through the underwriting process which will be in operation until the advisory is withdrawn. Companies like ICICI Lombard General Insurance Co. Ltd. have retained the option to issue the policy on a case by case basis depending upon the perceived risks. Insurance companies generally assess the situation before issuing a policy, considering the region or area where the travel is to be undertaken.

A multi-trip or annual policy does not require the applicant to give details of his travel in advance. Hence, policies are generally issued. However, at the time of claim, expenses relating to China are rejected on the ground that an advisory has been issued for not travelling to that country. Generally, people are being treated or quarantined at Government facilities. Therefore, the claim for medical expenses would not arise.

Source:https://www.khaleejtimes.com/business/local/mandatory-for-auditors-to-furnish-details-of-tangible-and-intangible-assets

The Value Added Tax (VAT) Recovery Self-Service Kiosks for Tourists scheme has been expanded to be available at major shopping malls and hotels, in addition to the existing ones at air, land and maritime entry and exit ports across the UAE, announced the Federal Tax Authority (FTA).

The expansion aims to provide additional services to tourists, enhancing the UAE’s status as a leading destination on the international tourism map. Planet – the company authorised by the FTA to operate the electronic system for the Tax Refunds for Tourists Scheme – debuted nine self-service kiosks in stage one of implementing the plan, setting them up at multiple shopping malls and hotels. The kiosks are equipped with state-of-the-art technology allowing them to fully process VAT refund requests for tourists.

In a statement issued on Monday, the authority explained that the kiosks allow tourists to process their requests to recover VAT from the convenience of their hotel or at major malls in a matter of minutes.

Applicants can scan their boarding pass to prove they will be leaving the UAE in the next 24 hours, as well as their original passport (or identity card for GCC nationals), and then follow the simple instructions displayed at the self-service kiosks. The FTA revealed that up to 55 new self-service kiosks will be deployed by the end of 2020 – 25 of which would be stationed in malls and 30 in hotels.

Khalid Ali Al Bustani, director-general of the FTA, said: “Our objective from expanding the self-service kiosk is to provide further facilities and additional options for tourists looking to recover taxes. Eligible tourists who meet the necessary criteria for reclaiming the VAT they incurred on their purchases in the UAE can process the refund applications from the convenience of their own hotels or from a list of major shopping malls around the country.”

The number of digital transactions under the Tourists Refunds Scheme grew to 3.2 million in the period between its launch in November 2018 and the end of 2019.

Tourists can submit their requests to recover the taxes they incurred on purchases in the UAE when they are about to depart from the country. Applicants must submit the tax invoices on their purchases, marked with ‘Tax-Free’ stickers issued by retail outlets registered in the system, along with their passport and credit card. No limit is placed on the maximum amount that can be recovered if said amount is transferred to the tourist’s credit card, however, in the event that the applicant requests a cash refund, then the maximum amount is set at Dh7,000 per day. This process can be carried out at self-service kiosks, as well as at tax refund offices located at ports of exit across the UAE.

Source:https://www.khaleejtimes.com/business/vat-in-uae/vat-in-uae-now-get-refunds-at-shopping-malls-hotels