MCA
eForm INC.22A -ACTIVE
(Active Company Tagging Identities and Verification (ACTIVE) will be available
on MCA21 Company Forms Download page w.e.f 25th February 2019.
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ICAI ADVISORY ON E-FORM ACTIVE TO BE FILED BY EVERY COMPANY
INCORPORATED ON OR BEFORE 31.12.17
Any company incorporated
on or before the 31.12.17 shall file the particulars of the company and its
Registered Office, in E-Form ACTIVE (Active Company Tagging Identities and
Verification) on or before 25.04.19 to enable common public to be aware of KYC
(Know Your Company) status of the companies and their directors. The Ministry
of Corporate Affairs has issued Companies (Incorporation) Amendment Rules, 2019
and Companies (Registration offices and Fees) Amendment Rules, 2019 which shall
come into force from 25.04.19 with a view to enable common public to be aware
of KYC (Know Your Company) status of the companies and their directors. In the
Rules it has been mentioned that every company incorporated on or before the
31st December, 2017 shall file the particulars of the company and its
Registered Office, in EForm ACTIVE (Active Company Tagging Identities and
Verification) on or before 25.04.19.
Fee for Filing
1. Upto 25.04.19- NIL
2. After 25.04.19- Rs
10000
The following points to be
noted
·
Any company which has not
filed its due financial statements under section 137 or due annual returns
under section 92 or both with the Registrar shall be restricted from filing
e-Form-ACTIVE, unless such company is under management dispute and the
Registrar has recorded the same on the registrar.
·
Companies which have been
struck off or are under process of striking off or under liquidation or
amalgamated or dissolved, as recorded in the register, shall not be required to
file e Form ACTIVE
·
In case a company does not
intimate the said particulars, the Company shall be marked as
ACTlVE-non-compliant on or after 26th April, 2019 and shall be liable for
action under section 12 (9) of the Act.
No request for recording
the following event based information or changes shall be accepted by the
Registrar from such companies marked as ACTIVE non compliant unless e-Form
ACTIVE is filed –
·
SH-07 (Change in
Authorized Capital);
·
PAS-03 (Change in Paid-up
Capital);
·
DIR- 12 (Changes in
Director except cessation);
·
INC-22 (Change in
Registered Office);
·
INC-28 (Amalgamation,
de-merger)
The members who are
associated with the companies are requested to bring it to the notice of the
companies to file the details within stipulated time.
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NCLT ALLOWS DEBIT FROM 'SUSPENSE ACCOUNT' FOR A COMPANY UNDER
CIRP
While the NCLAT has
previously held that monies from a corporate debtor’s account cannot be
appropriated by a financial creditor once Corporate Insolvency Resolution
Process (CIRP) is initiated, the Allahabad Bench of the NCLT recently passed an
order allowing such appropriation. However, the withdrawal was made from the
suspense account maintained by the bank. CIRP against Uniworld Sugars Private
Limited (Corporate Debtor) was initiated on May 25, 2018 based on a filing made
by an operational creditor. Before CIRP was triggered, however, an Asset Sale
Agreement was entered into between the Corporate Debtor and its joint venture
partner. A Joint Lenders Forum (JLF) meeting in 2017 agreed with terms of the
Asset Sale Agreement, offering a portion of the proceeds to the lenders. The
Corporate Debtor also requested that its current account with IDBI bank be
converted into no-lien Trust and Retention Account (TRA), which will be
utilised for
(i) crediting amounts
received from sugar sale proceeds under the Asset Sale Management and,
(ii) making payments to
lenders from the proceeds. Before CIRP was triggered, IDBI Bank, being the lead
bank, froze the TRA and stopped all transactions. It also transferred a sum of
Rs. 32.4 lakh to the suspense account from the TRA Account, one month prior to
initiation of CIRP. After CIRP was triggered, this money was appropriated by
IDBI as lead bank charges.
The Resolution
Professional of the Corporate Debtor approached the NCLT against this debit of
Rs. 32.4 lakh made by IDBI Bank from the suspense account. It was argued that
IDBI retained this amount under the pretext of releasing to JM Financial, but
later adjusted towards its own lead bank fee. The sum was deducted by IDBI
against the invoice for lead bank charges for the Financial Year of 2017-18.
The RP pleaded before the NCLT that this money be restored back to the
Corporate Debtor. The RP relied on NCLAT ruling in State bank of India vs
Debashish Nanda, where it was held that it is not open for any person including
‘Financial Creditors’ and the appellant bank to recover any amount from the
account of the ‘Corporate Debtor’, nor can it appropriate any amount towards
its own dues. The NCLT, however, found that the money was not appropriated by
IDBI after commencement of CIRP from the corporate debtor’ account. Since the
money was debited from the ‘TRA account’ before initiation of CIRP, the NCLT
found the appropriation to be valid. The money was appropriated from the
‘suspense account’, towards lead bank fee charges, after CIRP was initiated.
The NCLT further found no merit in the RP’s argument that the money was debited
under the pretext of payment to be made to JM Financial since there was no
evidence to substantiate this claim. The NCLT held Transfer of amount from
Suspense Account maintained by respondent bank or any other account is an
internal arrangement made by the banker. Corporate Debtor/ applicant has nothing
to do with their internal arrangement. The banker might have transferred or
might not have transferred the amount to any other account from the suspense
account prior to commencement of the CIRP. The NCLT further held that the bank
has the right to adjust the amount towards the lead bank charges due to it for
the period prior to commencement of the CIRP from the suspense account. Since
the amount was not debited from the account of the Corporate Debtor after the
commencement of CIRP, the decision relied upon by the applicant, was found to
be inapplicable. The application was accordingly dismissed. The NCLT, however,
gave liberty to the RP to raise a dispute over the quantum of lead bank
charges.
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MCA SEEKS MORE DETAILS FROM COMPANIES TO PUT A CHECK ON SHELL
FIRMS
Every company incorporated
till December 31, 2017, has to disclose its particulars and registered office
in a new return, a move aimed at tightening the noose around shell firms. Experts
say the move would increase the compliance burden on companies and be good for
the economy in the long run. Companies will have to give details of their
location, photographs of their registered office, displaying external and
inside portions, and also show at least one director. All these would help
authorities identify cases of multiple shell companies using one building. The
e-form ACTIVE-1 has to be filed by April 25 according to changes in the Companies
(Incorporation) Rules by the ministry of corporate affairs, effective from
February 25. If filing is not done, companies will face action that includes
striking off their names from registers. Such companies will be termed
ACTIVE-non compliant. The ministry of corporate affairs has directed the
registrar of companies to reject requests for change in authorised capital,
paid up capital, registered office, amalgamation and de-merger from
non-compliant companies. Companies that have not filed financial statements or
annual returns will be barred from filing ACTIVE returns. A late fee of Rs
10,000 would be levied in case the ACTIVE form is submitted after April 25.
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WILFUL DEFAULTS RISING IN INDIA DESPITE THREAT OF NEW
BANKRUPTCY LAW
Despite lenders using the
Insolvency and Bankruptcy Code (IBC) and other means to recover loans and check
defaults most of them have seen a substantial jump in wilful defaults in 2018,
shows data from Cibil. Lenders were told by the Reserve Bank of India (RBI) in
2017 to refer more than three dozen defaulting companies to the National
Company Law Tribunal (NCLT). According to data from the Insolvency and Bankruptcy
Board of India (IBBI), 1,484 cases have been admitted to the bankruptcy court
between January 2017 and December 2018. These include referrals by financial
creditors and operational creditors, besides the defaulting companies
themselves. The sharpest increase in wilful defaults among public sector banks
was at loss-making IDBI Bank, which saw wilful defaults more than double—from
3,660 crore to 7,381 crore—between December 2017 and December 2018. This is
more than 13% of the bank’s gross non-performing assets (NPAs). IDBO Bank
reported more than 100% rise in wilful defaults over a one-year period. IDBO
Bank reported more than 100% rise in wilful defaults over a one-year period. Other
public sector banks, such as Bank of India (BOI) and Bank of Maharashtra (BOM),
are not too far behind. While BOI has seen 60% year-on-year (y-o-y) jump in
wilful defaults to 9,785 crore, BOM witnessed a 41% increase to 1,385 crore.
While data for State Bank of India (SBI) and its associates was not available
as on 31 December 2018, they had the largest chunk of wilful defaults till
September at 37,250 crore. A senior banker at one of India’s largest public
sector banks, requesting anonymity, said lenders have been recognizing several
large defaults over the last year and the process could have led to figuring
out which ones have wilfully defaulted. Moreover, after the finance ministry
asked us to probe all bad loans above 50 crore for fraud, we did forensic
audits for all. The ones showing traces of fraudulent activity have been
classified as wilful defaulters. Among private sector banks whose December 2018
data is available, Kotak Mahindra Bank stands out with wilful defaults of 8,757
crore, 22% higher on a y-o-y basis. HDFC Bank has seen little change in the
past one year with wilful defaults at 465 crore in December 2018. The RBI has
also mandated banks to submit a list of suit-filed accounts and non-suit filed
accounts of wilful defaulters of 25 lakh or more at least every month to credit
information firms like Cibil.
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IBBI DEBARS INSOLVENCY PROFESSIONAL WIFE FOR EXORBITANT FEES
IN CRIPS ASSIGNED BY HUSBAND
In the instant case, both
husband and wife were insolvency professionals registered with the IBBI
(Board). While the husband, in the capacity interim resolution professional
(IRP) filed applications for initiating Corporate Insolvency Resolution Process
(CIRP) of corporate debtors (CDs), the wife, consented to act as IRP for CIRPs
of all CDs for exorbitant fees. The IBBI issued SCN on the allegation that she
consented to act as IRP of 15 CIRPs for which applications were filed by a
professional, who is her husband. In the process, she compromised her
independence, integrity and impartiality and that she consented to act as IRPs
of 15 CIRPs simultaneously, even though she had absolutely no experience
whatsoever and no capacity The Disciplinary Committee found that in terms of
section 17 of the Insolvency and Bankruptcy Code, 2016 (Code), the management
of the affairs of the CD vests in the IRP and the powers of the Board of
Directors of the corporate debtor is exercised by the IRP. For all practical
purposes, the IRP is the alter ego of the CD undergoing CIRP. It was noted that
every decision of the CD and in respect of the CD was taken by the IRP, the
wife dealt with her husband, the decision maker for the CD. The DC stated that
it was quite clear why the husband assigned CIRPs of 15 CDs to one IP, namely,
her wife when 2000 IPs were competing for an assignment in the market. It was
not a coincidence that 15 assignments from one source landed on her, when she
could not have a single assignment otherwise. 15 assignments at one go from one
source for an IP having absolutely zero experience establishes that the
considerations were something other than merits and there was a deep-rooted
conspiracy to bleed the ailing CDs for the benefit of Ruia family. The DC noted
that if the conspiracy had materialised, the wife would have acted as IRP / RP
of CIRPs of 15 CDs and would have earned a professional fee of about 50 crore
at one go The DC opined that when relationship triumphs over merits in
professional matters, there is no place for independence, integrity and
impartiality. A professional must be not only be impartial, but also appear to
be impartial. According to the DC, a professional does not appear impartial if
she receives professional assignments for about 50 crore at one go from a CD
which is under the custody of her husband. Neither the wife found any other
professional suitable for any of the 15 CIRPs nor she could get a single CIRP
in her career from any source other than her husband. Any conduct, whether
explicitly prohibited in the law or not, is unfair if it impinges on
independence, integrity and impartiality of an IP or inconsistent with the
reputation of the profession. The DC found that only if the wife had slightest
regard for the rule of law, she would have immediately withdrawn or modified
her consent / terms, when the Hon’ble Adjudicating Authority raised concern
about her conduct in one case. But Instead of mending her ways, she continued
to indulge in similar conduct for several CIRPs, as if there was no law in the
land and in utter disregard of the strictures of the Adjudicating Authority.
She continued on a consent spree with objectionable terms in at least seven
CIRPs. In view of the above, the Disciplinary Committee, in exercise of the
powers conferred under section 220 (2) of the Code read with sub-regulations
(7) and (8) of regulation 11 of the IBBI (Insolvency Professionals)
Regulations, 2016, cancelled registration of the wife as Insolvency
Professional and debarred her from seeking fresh registration as an insolvency
professional or providing any service under the Insolvency and Bankruptcy Code,
2016 for ten years.
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PLENTY OF GOOD NEWS MAKES A CASE FOR TAKING A LOOK AT BATTERED
BANK STOCKS
The banking sector
recorded a drop in NPA ratio in the second half of FY2019, after consistent
rise in last three-and-a-half years. Collective losses of 21 PSU banks declined
to Rs 11,605 crore in the third quarter from Rs 14,743 crore in the second quarter
and Rs 16,614 crore in the first quarter. Actually, a drop in fresh slippages
and some Rs 80,000 crore debt resolutions through NCLT proceedings have helped
the sector reduce NPAs. Meanwhile, banks are expecting to recover more than Rs
1 lakh crore in 2019 as several big-ticket default cases are pending. Both the
government and the central bank have initiated measures to tackle NPAs and
brought about various regulatory norms. RBI has also addressed the issue of
stress in the MSME sector by allowing one-time restructuring of stressed loans
during January-March 2019 period. Government’s measures such as PSU bank
recapitalisation and consolidation of banks were designed to tackle bad loans
of the banking sector. So far the government has consolidated the State Bank of
India group while merger of Bank of Baroda, Vijaya Bank and Dena bank is in the
process. In order to tackle NPAs, the government has announced recapitalisation
of PSU banks to the tune of Rs 2.11 lakh crore in October 2017 through infusion
of government capital and fund raising by banks from the market. During
FY2017-18, the government infused Rs 88,139 crore in PSU banks and made
provisions for Rs 65,000 crore made in the Budget for this financial year. In
December 2018, the government infused Rs 28,615 crore in seven public sector
banks through recapitalisation bonds. The latest government’s announcement to
inject Rs 48,239 crore in 12 public sector banks this financial year will not
only help banks maintain regulatory capital requirements but also help finance
growth plans. Besides, five state-run banks are likely to exit the prompt
corrective action (PCA) framework soon after meeting their regulatory capital
norms. On the NPA front, the silver lining is that NPA recognition process,
which started in 2015, is almost complete and now NPAs have begun to stabilise,
even though they are still at an elevated level. Capital positions have
softened and the provision coverage ratio has improved to some extent. Almost
all PSU banks are showing remarkable improvement in recognition, provisioning,
recovery and reforms. Other data showed credit growth of scheduled commercial
banks (SCBs) has improved to 14.5 per cent till February 1, 2019 from 10.6 per
cent a year ago. The government effort indicates that it has been doing a lot
to make the banking sector turn around The government’s recapitalisation
exercise would increase fresh credit, and aid credit growth. This, in turn,
would spur growth in the economy. Given these developments, one may think of
going long on stocks such as State bank of India, Bank of Baroda, Bank of India
and United Bank.
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SBO RULES NEED MORE CLARITY
Identification of the
‘beneficial owners’ behind legal entities remains a tricky yet crucial
endeavour in the global fight against money laundering and terrorist financing.
Despite well-intentioned efforts, country-level initiatives targeted at
improving transparency have often lacked clarity and incisiveness.
Drafting the original
Companies (Significant Beneficial Owners) Rules, 2018, would have entailed a
complex exercise given the government was faced with multiple choices for key
design elements like applicability, exemptions, definition of compliances and
penalties. Countries like the UK, Singapore and Hong Kong introduced nuanced
guidelines to demystify the concepts when they embarked on similar journeys.
The Rules prescribed in June 2018 stirred much debate due to several open and
interpretative issues. While the latest amendments, no doubt, address many of
these issues, they could have covered further ground. A question that merits
discussion is the extent to which the amended provisions may help promote the
identification of the real ownership influence or control of businesses
operating in the country, where needed.
1. In certain cases, the
Rules issued by the ministry of corporate affairs (MCA) in 2018 required the
senior managing official (SMO) of a company to be treated as the significant
beneficial owner (SBO), where no SBO was identified Several EU countries treat
SMOs or equivalents as the ‘ultimate beneficial owner’ where the qualifying
criteria are not met or cannot be verified (Denmark, Ireland, Hungary, Italy).
Countries like the UK, Singapore and Hong Kong do not require a default
treatment of one or more executives as SBO-equivalent, if the prescribed
conditions are not satisfied. A specific entry in the prescribed register to
the effect that there is no person who meets the qualifying criteria is the
only requirement. Arguably, this approach is suitable for countries with
stronger monitoring and enforcement mechanisms and relatedly higher levels of
compliance and self-governance.
While the amended Rules in
India have dispensed with the approach of identifying SMO, the new definition
of the term ‘significant influence’ treats any person with the power to
‘participate’ in the operating and financial policy decisions of the company as
an SBO. Identifying persons who are visibly essaying their assigned roles in an
organisation or whose details are available with the government (for example,
directors), as SBOs, may not serve any useful purpose. But given the potential
risks, the MCA is possibly seeking maximum information from senior executives
occupying positions of influence in a company to assign greater accountability
over the conduct of its financial and operating affairs.
2. The amended Rules
explicitly provide that the reporting responsibilities with respect to SBOs
only apply to companies incorporated in India Potential misuse of legal forms
of presence is not restricted to companies and given that the (MCA) is also the
administrative ministry for LLPs and partnership firms in India, the SBO
reporting requirements may be extended to these legal forms in due course.
3. Borrowing a page from
the widely followed global approach and the AML/KYC guidelines issued by
SEBI/RBI, companies whose shares are listed on a stock exchange in India or
outside India or subsidiaries of such listed companies could have also been
exempted from SBO regulations, given their existing stringent disclosure
requirements.
4. The amended Rules place
strong emphasis on a company’s investigative process but prescribe no penalties
for failure to issue the mandated enquiry notices or refer matters to the NCLT
where it receives unsatisfactory or no responses. Given the sheer volume of
compliance across the country, effective monitoring/audit mechanisms will be
needed for verification and enforcement of the compliances in identified
high-risk cases.
With the amended Rules and
revised forms now notified, speedy issuance of supplementary guidance/FAQs
would go a long way in ensuring that corporate India is better equipped to
fulfil its compliance obligations.
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MORE FIRMS BID FOR BANKRUPT COMPANIES AFTER SC REMOVES TAX
DETERRENT
More companies are coming
forward to bid for bankrupt companies after the Supreme Court removed a major
deterrent in relation to tax demands made by the tax department vis a vis write
back of loan waivers or haircuts. Lenders said more companies are enquiring
about bidding for stressed assets since the Supreme Court made it clear in
January this year that tax is not payable on haircuts taken by lenders which
was considered as an income in the hands of the borrower company post takeover.
While the minimum alternate tax (MAT) is payable, the SC order has helped to clarify
on the write-back of loan waivers, said a lender. The bidders had also sought
waiver from the MAT but this has not been granted. Tax analysts said that one
of the contentious issues in the debt resolution under Insolvency and
Bankruptcy Code (IBC) of 2016 was in terms of tax for the borrowing company
when there is a haircut taken by banks or financial institutions. While the
income tax department was inclined to hold that the quantum of haircut taken by
lenders was income in the hands of the company, the Supreme Court in the case
of Mahindra & Mahindra last year held that it was not taxable. However, the
tax department continued to raisie some questions in the context of loans taken
for capital expenditure. In an order in January 3, the SC said that tax
benefits were also applicable on loans taken for funding losses, not
necessarily capex. I think this decision is very useful because in IBC
resolution, when the buyer wants to bid, he does not have the certainty
regarding such taxability and often the amounts involved are huge. In fact,
representations have consistently been made to the Central Board of Direct
Taxes (CBDT) to clarify this expressly, but for some strange reason, this has
not been done till now and in that context, this Supreme Court decision will
hopefully put an end to this controversy and bring more certainty in a crucial
aspect of IBC matters, said Ketan Dalal. As of now, Indian lenders have
recovered close to Rs 3 trillion of their dues from defaulting companies with
rivals taking over these companies. On an average, the lenders have taken a 50
per cent haircut on these accounts.
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MORE DEFAULTS ON CARDS? REALTY CASH CRUNCH THREATENS STRESSED
SHADOW BANKS
India’s property
developers are finding it hard to borrow money raising the prospect of a wave
of debt defaults from the sector hitting shadow lenders that are trying to
survive a funding crunch of their own. Developers have to repay about Rs 1.29
trillion a year on outstanding debt but generate less than half the amount in
income that can be used for repayments, according to an analysis of about
11,000 companies by research firm Liases Foras. Rolling over loans and tapping
private-equity funds will be a struggle for all but the established names, like
Oberoi Realty Ltd. and Godrej Properties Ltd., said Niraj Rathi. This drying up
of liquidity comes on top of years of sluggish home sales, mounting inventories
and falling prices. The difficulties were masked over as non-banks lenders
rapidly increased exposure to developer loans not protected by rental revenues
in recent years, according to Jefferies Group LLC. They accounted for more than
a third of lending to the sector last financial year. Now there’s a risk of a
vicious cycle developing between struggling lenders and distressed builders.
Non-bank financial companies were facing developer defaults for more than 12
months but were brushing them under the carpet, said Vikas Chimakurthy, a $1.5
billion realty-focused private equity fund. We may start to see some of these
issues come to the surface in the next few quarters. Already real-estate and
allied businesses account for the largest number of cases referred to India’s
two-year-old bankruptcy process after a 2016 crackdown on cash, tightened
regulations and a new tax damped sentiment The metropolitan areas around
national capital Delhi and financial capital Mumbai have been the hardest hit.
Developers in the north have been jailed and home prices in the Mumbai dropped
in 2018 for a second year. More defaults will come from the north and west,
with fewer likely from the south, said Kumaran Chandrasekaran, a credit fund
manager at Sundaram Alternate Assets Ltd. About 10 percent of outstanding loans
probably won’t be repaid and 10-15 percent will face delays, he said. For
shadow banks, defaults would raise the risk of a repeat of last year’s funding
freeze after investor confidence was rocked by a series of missed payments by a
large non-banking financial company, Infrastructure Leasing & Financial
Services Ltd. The sector got a reprieve over the weekend when India reduced the
sales tax on unfinished residential buildings and affordable houses from April
1. The cuts are likely to cover 90-95 percent of homes in smaller towns and
about a third of projects in big cities.
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SBI CONSIDERS MOVING NCLT FOR INSOLVENCY PROCEEDINGS AGAINST
JET AIRWAYS
To recover its loans from
Jet Airways, state-run lender SBI is mulling moving National Company Law
Tribunal as it feels the airline is running out of funds for operations even as
shareholders of the debt-laden carrier have approved a debt rejig plan,
officials said. Shareholders of Jet Airways have approved conversion of loan
into shares and other proposals during the Extraordinary General Meeting (EGM)
on Thursday. A consortium of banks, led by the SBI, has extended loans to Jet
Airways, which is looking to rejig debt and raise funds. Officials associated
with the lenders and key shareholders said the SBI is considering moving the
National Company Law Tribunal (NCLT) seeking insolvency proceedings against Jet
Airways since it is running out of money for operations. Lenders can initiate
proceedings under the Insolvency and Bankruptcy Code (IBC) to recover dues from
debt-laden entities. The process can commence only after approval from the
NCLT.
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ADANI POWER, ADARO, NLC IN RACE TO BUY SOME IL&FS ASSETS
Indonesian coal miner
Adaro, Adani Power and state-run NLC India are among a dozen companies that
have expressed interest in buying IL&FS Tamil Nadu Power and related assets
of the debt-laden IL&FS group, two people familiar with the matter said.
Along with the thermal plant in Cuddalore, the group is looking to sell its
stake in a captive port associated with the power company. Also on the block is
a Singapore-based investment vehicle, ILFS Maritime Offshore Pte Ltd, which
owns a coal mining company in Indonesia. IL&FS has got 12 EoIs for the
Cuddalore power plant and other assets, said one of the people.
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MUSIC COMPOSER HARRIS JAYARAJ MOVES HC AGAINST
DISQUALIFICATION FROM DIRECTORSHIP
Acclaimed film music
composer Harris Jayaraj has approached the Madras High Court challenging an
order passed by Registrar of Companies (RoC) on November 1, 2017 disqualifying
him from occupying the post of Director of Trinity Audio Studios Private
Limited (TASPL) and also from being a director of any other company till
October 31, 2021. Justice M. Sundar adjourned their cases to March 8 to decide
their maintainability. The judge wondered why the petitioners had not moved the
National Company Law Tribunal or invoked the writ jurisdiction of the High
Court seeking relief. In his petition, Mr. Jayaraj said TASPL was incorporated
on April 10, 2002 to acquire, construct, take on lease, run or manage audio
recording studios and to buy, sell, import or deal in film, devotional,
carnatic, Hindustani, western, classical, instrumental, religious, folk and
other various music genre. He was the director of the company since its
inception. On September 6, 2017, the Union Ministry of Corporate Affairs issued
a press release statement that directors of shell companies, which had not
filed their annual returns for three or more years, would be disqualified. The
Registrar of Companies disqualified directors of companies which had failed to
file returns for three consecutive years in pursuant to an announcement from
September 2017. No exercise was carried out to find out whether the individual
company concerned was a shell company or not and no show-cause notice was
issued to the directors before taking the drastic action of disqualifying them,
the composer claimed. He pointed that TASPL did not have any liabilities and no
investigation or inquiry was pending against it. He urged the High Court to
come to his rescue by exercising its powers under Section 463 of the Companies
Act of 2013.
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SEBI RULES MOTILAL OSWAL, IIFL COMMODITY ARMS 'NOT FIT AND
PROPER'
Sebi on Saturday declared
Motilal Oswal Commodities Broker and India Infoline Commodities as not ‘fit and
proper’ for undertaking commodity derivative trades The two were among 300
brokerages named
by Sebi in a first
information report (FIR) pointing to the violation of rules in the National
Spot Exchange Limited (NSEL) scam. These brokers were allegedly involved in
illegal forward contracts at NSEL in contravention of the Forward Contract
Regulations Act 1952 (FCRA). SEBI termed the contracts as illegal as NSEL had
authority to allow trading only in spot contracts, which must be settled in 11
days. Reputation is an important factor for consideration of ‘Fit and Proper
Criterion’ and the reputation of the noticee has been seriously eroded, Sebi
said. The noticee shall cease to act, directly or indirectly, as a commodity
derivatives brokers, Sebi said. A similar order was issued in case of India Infoline
Commodities. In case of any existing clients of the Noticee as commodity
derivatives broker, the Noticee shall allow such clients to withdraw or
transfer their securities or funds held in its custody or withdraw any
assignment given to it, without any additional cost to such clients within 45
days from the date of this order, Sebi order on India Infoline Commodities
read. In case of failure of any clients to withdraw or transfer their
securities or funds within 45 days from the date of this order, the Noticee
shall transfer its balance clients with their corresponding securities and
funds to another person, holding a valid certificate of registration to carry
on such activity, within a further period of 30 days. Such person should not be
directly or indirectly related to the Noticee, it read.
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STRICTER RULES FOR PLEDGED HOLDING, SEBI EXPLORING VARIOUS
OPTIONS
The finance ministry is
closely monitoring the issues of liquidity in the NBFC space and loans against
pledged shares of promoters of listed firms, along with Sebi and the central
bank, and the regulatory mechanism could be tightened around such pledged
holding to prevent unscrupulous elements from manipulating the system, an
official source told. There is no systemic crisis but we are watchful. If
required, regulators may take steps to ensure the knee-jerk reaction of a very
few players in a given situation doesn’t affect the broader market stability,
said the source. Sebi is exploring various options to introduce some checks and
balances with regard to sale of pledged share, said an industry source. For its
part, the Reserve Bank of India (RBI) has asked NBFCs to submit details of
moratorium granted to certain borrowers. The banking regulator could take a
grim view of any attempt by lenders and NBFCs to subvert established processes
to evergreen loans, said another source. The Anil Ambani-led Reliance Group
recently reached an understanding with more than 90% of its lenders to prevent
sale of any stock pledged by the promoters until September 30. In January,
Subhash Chandra-led Essel Group reached a similar stand-still pact with
lenders, which provided promoters time until September 30, after the shares of
group companies plunged. While pledged promoter holding dropped in companies
like Fortis Healthcare and Suzlon Energy, promoters of many others have
increased their pledged holdings.
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SEBI ORDER IN NSEL CASE RATTLES FINANCIAL SERVICES FIRMS
The Securities and
Exchange Board of India (Sebi) order that declared leading brokers Motilal
Oswal Commodities and India Infoline Commodities as not being ‘fit and proper’
to undertake commodities derivatives trading has sent a ripple of fear through
them and other financial services firms over whether this will apply to all
their business activities The market awaits similar orders against several
other brokers for their alleged role in the Rs 5,500-crore National Spot
Exchange Ltd (NSEL) scam in 2013. The bigger concern is whether the capital
market regulator and the Reserve Bank of India will now impose the ‘fit and
proper’ criteria on other units that they run such as stock broking, nonbanking
finance companies (NBFCs), mutual funds and portfolio management services. Sebi
has traditionally applied the rule to all the segments of a firm’s business You
can’t be unfit as a broker and fit as a merchant banker, said a person familiar
with the development. Generally, there is no automatic revocation. When the
licences come up for renewal, Sebi will have to consider this order. Unlike the
equity broking licence which is a permanent one, the others have to be
periodically renewed. Generally, ‘fit and proper’ criterion is universal in the
context of a particular company or promoters. If you are considered unfit and
improper to run a particular segment, then you are not allowed to operate in
another segment as well, said Sumit Agrawal of RegStreet Law Advisors and
former law officer, Sebi. To determine whether an intermediary is fit and
proper, the regulator has to take into account the integrity of the directors,
promoters and key management personnel. It also considers the reputation,
character and absence of convictions and restraint orders.
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SEBI ORDERS IMPOUNDING OF RS 1 CRORE FROM ADF FOODS'
PROMOTERS, 4 OTHERS IN INSIDER TRADING CASE
Markets regulator Sebi has
ordered impounding of alleged illegal gains worth over Rs 1.02 crore from ADF
Foods' promoters Bhavesh Thakkar and Priyanka Thakkar and four others in an
insider trading case. As per Sebi's order, on July 27, 2016, ADF Foods informed
the BSE and NSE that the board of directors in its meeting on the same date had
approved a buyback of equity shares for an aggregate amount not exceeding Rs 18
crore On May 21, 2016, the discussion of an idea to undertake buyback or
payment of dividend was first tabled at a meeting, Sebi said. Therefore, Sebi
considered the time period from May 21-27 July 2016 as unpublished price
sensitive information (UPSI) period when the price sensitive information of
buyback remain undisclosed. Sebi conducted a probe and found that entities had
access to UPSI and traded in the scrips of the firm during the May 21-July 27,
2016 (UPSI period). The regulator further said that it prima facie found that
'insider' Bhavesh Thakkar being a promoter and executive director of the firm
communicated UPSI to other entities whom Sebi classified them as insiders as
they were related to Bhavesh and his promoter wife Priyanka.
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SEBI FINES 2 FIRMS FOR FRAUDULENT TRADE IN BSE STOCK OPTIONS
Sebi Thursday slapped a
total penalty of Rs 13 lakh on two entities for non-genuine trades in illiquid
stock options on the BSE. The two entities are Bhiragacha Finance Company and
Blue Bird Mercantiles Pvt Ltd, according to Sebi's two separate but similarly
worded orders. The Securities and Exchange Board of India (Sebi) conducted an
investigation into the trading activity in illiquid stock options on the BSE
from April 2014 to September 2015 after observing large-scale reversal of
trades in the bourse's stock options segment. The regulator observed that the
entities deliberately adopted strategy to enter into reversal trades with same
counterparties and that too at price incurring losses to them. Facts shows that
these trades were executed with precision to match with the same counterparty
to create artificial volume in these contracts, and create misleading
appearance of trading, Securities and Exchange Board of India (Sebi) said.
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IL&FS’ LENDERS MAY SEEK NPA DISPENSATION OF ‘AMBER’ LOANS
Lenders are likely to seek dispensation on
asset classification for their exposure to Infrastructure Leasing &
Financial Services to the extent of at least Rs 16,000 crore, which falls under
the amber category. The ministry of corporate affairs has asked the banks to
revisit the Reserve Bank of India with their request for dispensation on asset
classification and full justification for it. Loans under the red category is
around Rs 65,000 crore, which banks will have to compulsorily make provision
for. This was represented to the board. The ministry has said that deferment of
provisioning should be requested only for the ambercategory companies where
banks are unable to enforce payments due to moratorium and funds are available
in escrow accounts. The National Companies Law Appellate Tribunal has asked the
IL&FS board to ensure that companies with positive cash flow remain as
going concern and their operations are not disrupted. Money from the escrow
accounts of SPVs will not flow into and remain in individual accounts after
meeting the operational expenses. However, all companies of the group that fail
to meet the cash flow solvency test will remain under the moratorium granted by
NCLAT. In the last hearing, the court had asked IL&FS to provide a list of
group companies that can meet the payment obligations in the next 12 months
based on solvency and cash flow. The group can service loans under the green
category. Of these 64 companies in green bracket, 22 are audited, which can
service interest and principal payment of up to Rs 7,000 crore. The bankers
have insisted that the resolution process should be akin to the IBC process to
the extent possible.
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ETIHAD CONDITIONS MAY DELAY DEBT-LADEN JET AIRWAYS RESOLUTION
PLAN
Etihad Airways is learnt
to have abstained from voting on several resolutions to convert Jet Airways’
debt into equity in the EGM the Naresh Goyal-led airline held last Thursday.
Etihad has laid down stiff conditions for backing the resolution a move that
could delay the deal to bail out Jet. A delay in resolution will further
squeeze Jet Airways, which is negotiating interim funding from banks. The
lenders’ consortium is considering a Rs 500-crore loan, but a final decision is
yet to be taken, Punjab National Bank Managing Director Sunil Mehta had said on
Friday. However, the lenders may seek additional securities, including share
pledges or guarantees from promoters, while sanctioning loans and are not
planning to move the NCLT. A PTI report on Sunday, however, said lead lender
SBI might consider taking Jet to the NCLT if the proposed resolution deal
turned unfeasible. Etihad is waiting for clarity on the funding that State Bank
of India (SBI) and National Investment and Infrastructure Fund (NIIF) will
provide Jet Airways in terms of equity. Etihad has sought the right of first
refusal (RoFR) after one year and wants SBI to get a confirmation from the
Securities and Exchange Board of India (Sebi) that the right, if exercised,
will not trigger a mandatory open offer, said sources in the know. Under Sebi
norms, entities have to make an open offer to shareholders in case their
shareholding goes beyond a threshold.
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4,557 HOMEBUYERS’ COMPLAINTS SOLVED SINCE UP RERA FORMED
The Uttar Pradesh real
estate regulatory authority (UP Rera) on Friday said it has resolved 4,557
cases of homebuyers, out of the 11,550 filed since the authority’s formation in
March, 2017, in Lucknow. The authority was formed on the basis of the Rera Act,
2016, and had come to Greater Noida in September, 2018. We have successfully
resolved 4,557 cases of homebuyers who have their cases with the real estate
regulatory body so far. Compared to the number of resolved cases from other
states, we can say that the UP Rera has performed much better, Rajive Kumar,
said. UP Rera has handed over 146 complaints for reconciliation In
reconciliation, the Rera gives an opportunity to the builder and the buyer to
sit together and resolve their disputes amicably without going in for further
litigation. It is allowed in cases where it is possible for two parties
(builder-buyer) to resolve disputes that have arisen out of an agreement with
regard to sale or purchase of a flat or other property. According to the
authority, out of the 146, 24 reconciliations have been accepted by builders
and three rejected. In reconciliation, government agencies concerned, that
include Noida, Greater Noida and Yamuna Expressway Authorities, also take part
to help the parties reach a solution. Talking about the pendency status of
cases, the chairperson said, Total pending cases so far are 6,993, filed by
home buyers seeking justice. We aim to provide justice in all cases as soon as
possible The UP Rera’s bench 1 has 2,298 cases of the national capital region
pending, bench 2 has 2,106 cases pending, and secretary of Rera has 545 cases
pending. The pending cases in Lucknow are 713 with bench-1, 819 with bench-2
and 466 with the secretary. There are a total of 2,619 registered projects with
the authority. Out of this, there are 2,020 ongoing projects and 556 new
projects while registration is under process in 43 projects. There are 2,502 registered
agents.
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PLEA SUBMITTED TO REVIVE CASES OF UNNATI FORTUNE’S HOUSING
PROJECT
Uttar Pradesh real estate
regulatory authority (UP Rera) on Friday held a project-monitoring meeting with
Unnati Fortune group allottees during which the latter submitted an application
for revival of their cases after the National Company Law Tribunal (NCLT) stay
on proceedings was vacated. As no representative from builder or co-developer
was present, the next date for the meeting was fixed for March 1. RD Paliwal,
Rera consultant and head of the monitoring committee, said, The co-developer
could not be present at the meeting. The next date of meeting has been fixed
for March 1. I had kept the 79 cases of Unnati Fortune group listed for January
30 and January 31 under abeyance after the NCLT stay order copy was produced
before me, Balvinder Kumar, member, UP Rera, said. Now, we have started the
revival process of cases. The monitoring committee meeting was planned to get
allottees’ views and the co-developer’s plan for revival of the project,
Balvinder added
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REFUND NOT TO BE ENCOURAGED, SAYS UP RERA CHAIRMAN
The Uttar Pradesh real
estate regulatory authority (UP Rera) has decided not to encourage refund of
investment to homebuyers in housing projects that have a potential of getting
finished and delivered. We are reviewing the conditions of those housing
projects that are registered with us against which homebuyers have filed
complaints. We have decided not to encourage refunds in housing projects which
can be finished and delivered by December-end, Rajiv Kumar, UP Rera chairman ,
said. The Rera is reviewing 132 housing projects in Noida and Greater Noida
after homebuyers’ complaints. The UP Rera has called a meeting of Noida,
Greater Noida and Yamuna E-way authority to review projects. It has called builders
too. If we keep ordering refunds then this can affect the project due to fund
crunch. If we can resolve 50% of complaints by reviving a stuck housing project
we will not allow refunds so that the builder can finish the project, he said.
The UP Rera is of the view that if every buyer starts seeking refund of his/her
investment then a majority of buyers will want a refund rather than waiting for
possession. If a builder has completed the civil work but is yet to do the
finishing then he has already spent much of the funds collected from buyers.
The chairperson added that if the UP Rera directs the builder to refund, the
latter will not have funds left. The key objective of the Rera is to ensure
that stuck housing projects get delivered, Kumar added. In 631 cases, the
deadline for projects was till February 7, while completion date for another
124 projects will expire in 3 months.
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RIL PREPARING TO LIST RELIANCE RETAIL SOON
Reliance Retail Ventures
Ltd, the retail unit of India’s most valuable company, is preparing to go
public soon two people aware of the development said. It may be after June and
the company expects a good response, one of the two people cited above said on
condition of anonymity. Parent Reliance Industries Ltd (RIL) operates its
retail business through Reliance Retail Ventures, the holding company for
Reliance Retail Ltd and Reliance Brands. The latter operates joint ventures
with international brands. Billionaire Mukesh Ambani, chairman and managing
director of RIL, is betting on the company’s consumer businesses—Reliance
Retail Ltd and Reliance Jio Infocomm Ltd—to double sales in about seven years
and expects the businesses to contribute nearly as much to overall earnings as
its energy and petrochemical businesses. Reliance Retail already operates more
than 9,900 stores in over 6,400 cities across India. That is more than the
stores of all other organized retailers put together. India’s second-largest
retailer, Future Retail, operates nearly 1,400 stores in 400 cities. Reliance
Retail has 127 grocery stores across 73 cities; it is the largest fashion
retail chain with 609 stores; it operates 343 electronic stores and 5,705 Jio
points across the country. Online sales account for 10% of sales across stores.
A separate RIL subsidiary, Reliance Petro Marketing Ltd, operates 514 retail
outlets.
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MORE BANK REFORMS NEEDED TO SUPPORT ECONOMIC GROWTH: NITI
AAYOG CHIEF
Rajiv Kumar has pushed for
further banking reforms including spelling out a glide path for bringing down
the country’s bank capital adequacy norms to the level of Basel norms, or even
lower, as is the case with China. Besides a glide path, Kumar identified
governance issues scale (global-sized banks), cost of capital, extent of
foreign ownership in the financial sector, and the need for arrangement to take
care of long-term finance needs of infrastructure as critical reform areas that
need further deliberation and immediate action by policy makers. If we agree
(and I don’t agree) that higher capital norms are required for Indian banking
system than Basel, do we have a glide path to the normal one? There has to be
debate on what are the reasons why we should have a norm higher than what the
Basel norms require, he said. It may be recalled that the contentious issue in
the Indian situation is the regulator’s (RBI) insistence of Indian banks having
to maintain a Tier-I capital that is 1 percentage higher than the global norm
(Basel requirements) Kumar also stressed the need to look at whether India has
reached the limit of foreign equity participation in the banking sector and if
there is more room available for foreign ownership. He also called for steps to
fully integrate the Indian financial system into global system without losing
regulatory control.
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NBFCS COULD SELL NON-CORE ASSETS WORTH RS 15,000 CRORE, SAYS
CLSA
More non-banking financial
companies ( NBFCs) could be forced to sell their non-core businesses as they
grapple with funding challenges and solvency risks. Brokerage firm CLSA said
NBFCs facing this double-whammy could off-load non-core assets worth Rs 15,000
crore-Rs 20,000 crore. NBFCs with higher leverage (asset-equity ratios of say
more than eight-times), or those that have seen downgrades to credit ratings or
are facing significant funding constraints from lenders, are likely to explore
options for stake sales Leverage at the promoter level and the pledge of stakes
could also drive such sales, analysts at CLSA said in a note. The analysts
added that promoters of NBFCs, may monetise stakes in businesses like life and
general insurance and mutual funds, as well as niche lending platforms which
may look to monetise these stakes. The liquidity situation of NBFCs is showing
some signs of improvement with the share of NBFCs and housing finance companies
(HFCs) in total corporate bond issuances rising to 87.4 per cent in January
2019 from 53.6 per cent in the previous month, said a note by CARE Ratings. However,
equity analysts don't see much reason for cheer from the performance reported
by NBFCs in the December quarter. Except for a few highly-rated and strong
parent-backed NBFCs, most in the sector saw challenges in liquidity, cost of
funds and also some ratings volatility. Several NBFCs need to re-align their
borrowings to streamline their asset-liability profile. Most NBFCs face margin
pressures, due to slower growth and higher funding costs, analysts at Sharekhan
said in a note. The analysts added that MFs’ exposure to NBFCs and HFCs has
declined from the peak of 42 per cent of the debt AUM in September last year to
35 per cent in January, 2019. With the above decline in AUM exposure
translating into a contraction of Rs 90,000 crore, this has opened up a large
liquidity gap for NBFCs.
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PE, VC FUNDRAISING FRENZY SEEN SLOWING DOWN IN 2019
Private equity and venture
capital deal making in India has seen record activity levels in recent years,
with 2018 setting a new high of $35.1 billion, but global cues could play
spoilsport in the coming months. Indian PE/VC deal activity in 2018 topped the
previous high of $26.1 billion set in 2017, data from consulting firm EY
showed. Mergers and acquisitions (M&A) also had a great year, with the
total deal value crossing the $100 billion mark in 2018. Global private equity
fundraising has exceeded $400 billion annually since 2014, but high pricing is
putting pressure on future returns and distributions have slowed, leading some managers
to cut their targeted returns, according to a report by alternative assets data
tracker Preqin. It is quite clear that the environment is changing. We are at
best in the late stages of a decade-long expansion, asset valuations are
stretched, and economic growth in most places is weakening, all of which is
compounded by growing protectionism and ‘trade wars.’ Investors everywhere see
a challenging environment ahead for returns, said Mark O’Hare. According to the
report, 72% of investors and 62% of fund managers named high asset pricing as a
key concern in 2019, making it the biggest issue cited by either group. These
pressures, coupled with increasing crowding and competition in the market for
both fund-raising and deal making is making the environment even more difficult
for fund managers. Both the fund-raising and deals marketplaces are more
crowded than ever before, making it particularly challenging for fund managers
without an established track record, the report said. A record 3,749 private
equity funds have been in the market since the start of 2019, collectively
seeking to raise $972 billion, an all-time high, said Preqin. Additionally,
almost half of fund managers (46%) saw increased competition for deal
opportunities in 2018 and 35% saw competition for deals as a key concern in the
months ahead. The Indian deal making environment has been hit, with PE/VC
investments in January 2019 dropping by 49% to $1.8 billion, compared with the
same period last year. The fall was on account of an absence of large deals. Dealmaking
in 2018 scaled record highs on the back of eight deals of more than a $1
billion each, compared with 11 such deals in the preceding 12 years.
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FPIS POUR RS 6,311 CR INTO DOMESTIC CAPITAL MARKETS, HIGHEST
IN FEB SO FAR
Foreign investors Friday
pumped in a huge net of Rs 6,311 crore into the Indian capital markets, the
highest inflow in a single day this month so far, exchange data showed. According
to the latest data from the BSE, foreign portfolio investors (FPIs) bought
securities worth Rs 10,437.99 crore and sold securities amounting to Rs
4,126.98 crore, translating into a net inflows of Rs 6,311 crore. The investors
had pumped in a net sum of Rs 2,965.66 crore on February 11, the second-highest
single-day inflow so far this month.
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ING EXITS KOTAK MAHINDRA BANK BY SELLING RESIDUAL 3% STAKE
ING Group has sold its
entire 3% stake in private sector lender Kotak Mahindra Bank. As a result,
ING’s nominee on the board of the lender has also resigned. ING Group sold its
remaining stake in the bank. I hereby resign from my position as a director of
the company with immediate effect, Mark Newman, the ING nominee who was a a
non-executive, non-independent director, told the Kotak board in a
communication. ING Mauritius Investments held about 3.06% stake, or 58,453,476
shares in Kotak Mahindra Bank, as of December 31, 2018.
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SUZLON EXPLORING DEBT REDUCTION OPTIONS WITH LENDERS
Wind turbine giant Suzlon
Energy Ltd said it is looking to reduce debt on its books and is discussing
multiple options. We wish to clarify that the company do explore multiple
options for debt reduction along with its lenders, Suzlon said in a filing at
Bombay Stock Exchange (BSE). The clarification came in response to a new report
on how the company's share price has surged as a Danish firm may buy a
controlling stake in Suzlon.
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BANK WAGE TALKS TO COVER OFFICERS UP TO AGM RANK
Indian Banks' Association
has expressed willingness to expand the scope of bipartite wage talks up to
Scale V officers in public sector banks while suggesting bank-wise and
performance-linked reward structure for deputy general managers and general
managers. Deputy general managers and general managers in state-owned lenders
fall in the Scale VI and VII categories respectively. The updated proposal for
officers means bipartite negotiation will now cover 3.76 lakh officers which is
99.27% of total officers in public sector banks. IBA has come up with the
revised proposal in the last meeting with bank unions held Thursday. However,
the country's largest bank officers union - the All India Bank Officers
Confederation (AIBOC) -- continued to abstain from the negotiation talks
protesting the split mandate, two people familiar with the matter said. The
February 21 meeting remained inconclusive in the absence of two major officers'
group. At a previous meeting, IBA proposed 10% wage revision. The 21 public
sector banks employ over 8.5 lakh people with about 458000 workmen. Their
unions will meet on March 1 to discuss the future bipartite wage settlement
strategy.
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ADANI GROUP EYES NEW VENTURE AS IT JOINS RACE FOR SIX AAI
AIRPORTS
The Adani group, which
straddles the businesses of power, ports, real estate, agriculture and defence,
among others, is moving into airports. A few days ago, the group made an
aggressive entry by bidding for all the six airports put up for privatisation
by the Airports Authority of India, locking horns with big boys in the airport
infrastructure business (the GMR group has thrown its hat into the ring for all
the airports). In its airport venture, it is looking at both options — bidding
for airports being offered under privatisation within the country and acquiring
stakes in existing joint-venture airport companies. The Adanis’ tryst with
airports began some years ago when they set up Mundra airport, which has now
become an important commercial city in Gujarat. It has cobbled up a plan to
invest Rs 1,500 crore to upgrade the airport strip and convert it into a
full-fledged commercial airport with integrated cargo and aerospace operations
to cater to the growing demand from the expats of Gujarat. It is reported to be
in the race to pick 23.5 per cent in GVK-controlled Mumbai International
Airport Ltd (MIAL) by acquiring the equity of Airports Company of South Africa
(Acsa) and Bidvest, which want to pull out. GVK has the first right of refusal
to buy the stake, but the group, which is facing a cash shortage, could find it
difficult to get the cash. A spokesperson for Adani, however, responding to the
possible deal, said it was speculation.
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JET AIRWAYS SHAREHOLDERS APPROVE BAILOUT PLAN
Shareholders of Jet
Airways (India) Ltd have approved banks' bailout plan the airline said in a
statement on the BSE. According to the company's statement, 97.99% of Jet
Airways shareholders approved the allotment of 114 million fresh shares. The
company's proposal to alter the Articles of Association, and 'Object Clause' of
Memorandum of Association of the company were also approved by over 99% of
shareholders. The airline's proposal to let lenders convert debt into equity
was approved by over 97% shareholders, the company said. The voting, which was
held on 21 February, both remotely (e-voting) and physically, at an
extraordinary general meeting (EGM) held in Mumbai, saw the bailout plan
proposed by lenders approved by the majority of shareholders. As a result,
founder Naresh Goyal's stake in the airline will reduce from 51% to around 25%,
while that of Etihad Airways will fall to 12% from 24%. Jet Airways has been
struggling with cash flows for the past six months due to rising fuel costs and
intense competition. It has delayed payments to lessors, airport operators, oil
marketing companies and a part of its staff to keep the airline flying.
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UNLISTED BUT NOT LISTLESS: COMPANIES WITH HIGH INITIAL PUBLIC
INTEREST
Everyone wants a piece of
Chennai Super Kings (CSK), it seems. Unlisted equity shares of the
Chennai-based Indian Premier League (IPL) cricket team are getting traded at
prices ranging from 25 to 32 apiece according to brokers dealing in unlisted
stock. CSK is among the most popular unlisted scrips these days, said Sandip
Ginodia, owner of Abhishek Securities, which specialises in delisted and
unlisted shares. At least 500,000 CSK shares would be getting traded across the
country every day. The buzz around unlisted equities is not restricted to CSK,
according to brokers. Shares of new-age businesses and startups such as Paytm
(One97 Communications), Ola Cabs (ANI Technologies), Oyo Rooms, gaming company
Nazara Technologies, Fino Paytech, unlisted HDFC-affiliate HDB Financial
Services, small finance banks Capital SFB and Suryoday Bank, Swiggy, Hero
FinCorp and Carwale.com, among others, are being traded in sizable lots
everyday through brokers dealing in unlisted equities. We’re seeing buying
interest from HNIs and even small investors, said Rajan Shah. Investors are
looking for new businesses these days. They’re not quite pleased with the way
the listed markets have been faring over the past few months. Unlisted shares enter
trading circles when employees dilute their stock options or through private
placements by promoters or general shareholders. No formal market exists for
unlisted equities. Used for working capital needs
Promoters, especially of
startups, use this route to raise small amounts of working capital without
higher levels of stock dilution, and also get a valuation reference point for
further fundraising, said brokers. I personally can’t digest investing in
startups even now, says Ginodia, adding, But then, investors come to us for
new-age unlisted companies. We try to dissuade them, but they don’t listen to
us. In such cases, we simply play the role of market-makers for such stocks. Apart
from retail investors, financial institutions running portfolio management
services (PMS) and alternative investment funds (AIF) pick up unlisted shares.
Many of these funds invest to capture pre-IPO valuations to take advantage of a
rise in valuations following an initial public offering.
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DIDN'T SIGN UP FOR THIS: MICROSOFT WORKERS PROTEST $480 MN US
ARMY CONTRACT
Some Microsoft Corp
employees on Friday demanded that the company cancel a $480 million hardware contract
to supply the US Army, with 94 workers signing a petition calling on the
company to stop developing any and all weapons technologies. The organizing
effort, described to Reuters by three Microsoft workers, offers the latest
example in the last year of tech employees protesting cooperation with
governments on emerging technologies. Microsoft won a contract in November to
supply the Army with at least 2,500 prototypes of augmented reality headsets,
which digitally display contextual information in front of a user's eyes. The
government has said the devices would be used on the battlefield and in
training to improve soldiers lethality, mobility and situational awareness. In
the petition to Microsoft executives, posted on Twitter, the workers said they
did not sign up to develop weapons, and we demand a say in how our work is
used. They called on the company to develop a public-facing acceptable use
policy for its technology and an external review board to publicly enforce it. Microsoft
said in a statement that it always appreciates employee feedback. It also
referred to an October blog post by its president, Brad Smith, in which he said
the company remained committed to assisting the military and would advocate for
laws to ensure responsible use of new technologies.
#For Source of Information copy and paste the heading in google.
Thanks & Regards,
CS Meetesh Shiroya
Thanks & Regards,
CS Meetesh Shiroya
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