Institutional desks of many brokerages in India are in the process of selling about Rs 2,000 crore worth of equity holding of bankrupt US investment bank Lehman Brothers Inc in some Indian companies.
More than four years after it went bankrupt, the US-based Lehman Brothers has offered to surrender its brokerage membership of NSE.
Lehman Brothers, fourth largest investment firm, filed for bankruptcy, after Barclays pulled out of an 11th-hour rescue, becoming the largest financial firm to fail in the global credit crisis, after federal officials refused to help other companies buy the venerable investment bank.
The strong domestic flow offset selling by foreign portfolio investors who pulled out $23.3 billion (Rs 2.03 trillion) from domestic equity markets in CY25.
Why is an NRI banker with an MBA from MIT canvassing votes in Madurai?
A day after US-based investment banker announced its intension to file for bankruptcy protection, three of its Asian subsidiaries suspended their operations.
More than 90 per cent of the affected investors at Lehman Brothers International Europe are in support of the plan to return the assets.
Senior executives and auditing firm Ernst & Young have been criticised, among many others, for the failure of Lehman Brothers, by an official report that delved deep into the collapse of once-famed Wall Street major.
In the nine weeks since Lehman Brothers filed for bankruptcy, global syndicated loan volume declined 37 per cent as against the nine weeks prior period to Lehman's collapse, deal tracking firm Dealogic said. Similar trend was witnessed on the bond market as well. In the nine weeks after the fall of Lehman the global syndicated loan volume dipped 41 per cent as compared to the nine weeks prior to the US investment bank's collapse, Dealogic added.
Real estate companies such as Unitech, Peninsula Land, HDIL and Future Capital, the financial services arm of Future Group, are in talks with investors including some leading private equity funds for raising investments for their projects, after the collapse of Lehman Brothers, whose third party fund had promised investments in these property companies' projects, according to industry sources.
Lehman Brothers Holdings Inc's estate has filed a lawsuit against JPMorgan Chase, alleging that the Wall Street major siphoned billions of dollars just days before the demise of the company.
Most of these deals include outstanding payments for acquisitions or stakes in companies. Market experts explained that these Indian firms were keen to settle their deals, even at a discount as they feared that payments might get delayed indefinitely, in case the matter reached court. Lehman's assets in India are currently valued at over Rs 500 crore (Rs 5 billion).
Ten public sector banks and two private banks have an exposure of $1.08 billion to US financial majors Wachovia Corporation, Washington Mutual, AIG, Lehman Brothers and a European financial institution Fortis. About $445.60 million was fund-based exposure, while $634.20 million was non-fund based exposure.
US District Judge Katherine Forrest in Manhattan denied JPMorgan's bid to dismiss the 2009 lawsuit by the Operating Engineers Pension Trust of Pasadena, California.
Breaking his silence after nine years, Vijay Mallya said he may return to India if assured a fair trial.
Barclays and BNP Paribas are considering the acquisition of Lehman Brothers' investment banking and brokerage businesses in India.
The 62-year-old Fuld, who run Lehman for nearly 15 years, is considering to launch a firm to advise small companies on financial and strategic issues. British daily the Financial Times has reported that Fuld plans a comeback and has told friends that he might launch a small advisory firm to harness his contacts in US companies.
IT major Wipro Technologies and Gurgaon-based knowledge process outsourcing firm Copal Partners have expressed interest in bidding for the Indian back office business of Lehman Brothers Holdings, the US-based investment banking firm that filed for bankruptcy protection on Monday.
While Lehman will invest Rs 500 crore and hold 75 per cent in the JV, Peninsula Land will subscribe to the remaining equity at an investment of Rs 200 crore, according to sources.
Analysts feel green shoots like recovery in economic growth and return of stability in the financial systems have led to a revival in confidence and risk appetites.
However, it could still take many years before the 161-year-old Lehman, once a poster-boy of the US markets, could regain its lost glory.
Attributing to people familiar with the plan, the Financial Times said that SEC and Federal Reserve officials were warned by Merrill Lynch about Lehman's balance sheet calculations as far back as March 2008.
Investors ask if the hugely successful investment banking model can be fully repaired.
Lehman Brothers, whose collapse worsened the global financial crisis in late 2008, slumped into bankruptcy as the entity failed to get the necessary support from the US authorities, former chief Richard S Fuld has said.
The recession triggered unemployment, which rose to all-time highs in the US and around the world. Markets felt the ripples of the meltdown wiping off trillions of dollars of investor wealth.
In a move to soften the blow of Lehman Brothers' bankruptcy in the Indian stock and asset markets, four banks are set to take over its structured products businesses in India.
With America's fourth largest investment bank Lehman Brothers filing for bankruptcy protection and Merrill Lynch being bought over by the Bank of America, placements at the Indian Institutes of Management will be affected.
The initial cost of the project, including land, is Rs 125 crore (Rs 1.25 billion) and the development cost is nearly Rs 1,400 crore (Rs 14 billion). The company is planning to fund the project through debt and draw more funds from Lehman if required, sources said. Recently, PLL and Lehman tied up to invest in the realty projects of Peninsula. In the Rs 700-crore (Rs 7 billion) joint venture, Lehman invested Rs 500 crore (Rs 5 billion).
Four years on, too little has changed
International brokerages, especially those which have made recent entry into the domestic market, are lining up to acquire the institutional broking business of the city-based Brics Securities.
The analysis by Moody's assumes significance with many central banks around the world talking about exit from monetary stimulus soon to tame the rising inflation.
New York prosecutors are poised to file civil fraud charges against Ernst & Young.
The ripple effects of the fall of Lehman Brothers in September last year is evident in the field of global mergers and acquisitions, which shrank by nearly 40 per cent in the 12-month period since then.
VMIL officials declined to comment on the development. According to sources close to the development, VMIL will sell stake to raise money for expanding Hungama, the content and mobile services arm. The Mumbai-based company has already held two to three rounds of meetings with these private equity investors. The company's valuation has been pegged at Rs 800 crore (Rs 8 billion). The funds raised would be used for Hungama's expansion.
In dollar terms, the Indian markets managed to climb back to 2008 levels only in January this year. The subsequent fall in the rupee because of emerging market woes has once again pushed the markets below their 2008 level in dollar terms.
If India counts itself as a 'great power', it will have to play a role in framing and enforcing new global rules, says T N Ninan.
The US market regulator Securities and Exchange Commission was doing what it could to stem the flow. It temporarily prohibited naked short-selling in the securities of major financial players including Freddie Mac and its sister firm Fannie Mae in July. But this didn't really help. It was only after global central banks pumped in unprecedented liquidity into global markets, that the storm was finally calmed.
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