MCA
Form AOC4-XBRL is likely
to be revised on MCA21 Company Forms Download page w.e.f 09th March, 2019.
Stakeholders are advised to check the latest version before filing.
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TRACKING SHELL FIRMS
The MCA issued the
Companies (Incorporation) Amendment Rules, 2019 which came into force from
February 25. Through these rules, the MCA unleashed e-form 22 on the nation.
E-form 22 has another name — e-form ACTIVE, where ACTIVE translates as Active
Companies Tagging Identities and Verification. The drop-dead deadline to file
the e-form ACTIVE without any fee is April 25, after which it would cost ₹10,000
to fill the form. If the form is not filed by the deadline, the company
concerned would be marked as Active non-compliant. The form is to be filed by
companies incorporated prior to December 21, 2017. Once the ‘active
non-compliant’ tag appears, companies would not be able to intimate the
Registrar about change in authorised share capital, file return of allotment,
providing particulars of directors and key management personnel and inform
about change of registered office. Since the e-form ACTIVE asks for only
general information about the active existence of a company, most of the
content would be pre-filled. Hence, companies that have not complied with the
requirements of the Companies Act, 2013 on matters such as filing of financials
statements and annual returns, appointment of statutory and cost auditors,
having minimum number of directors or has not appointed Key Management
Personnel (KMP), would have difficulties in completing the form. Companies that
have had some experience in complying with the Companies Act would find the
above requirements routine and non-problematical. And then, as is their wont,
the rules pull off a surprise. The rules state that the attachments to the
e-form ACTIVE would be a photograph of the registered office of the company
showing the external building and inside office and also showing therein at
least one director/KMP who has affixed his/her digital signature. Any other
optional attachment may also be provided. While the intention of the MCA to
keep track of active, not-so-active and vanishing companies is laudable the
requirement to upload a photograph of the registered office of the company from
outside, inside and with a KMP is, to say the least, bizarre. Of course, even
the dormant companies would want to comply with this requirement since taking
three photographs and uploading them would cost much lesser than ₹10,000.
While the expansion of the word ACTIVE has words such as tagging and
identification, one is not sure how this would be done Would the MCA seek the
support of Google Maps to tag and identify registered offices of companies?
What would companies do if they are in the process of shifting their registered
office? Since optional attachments are permitted companies can upload multiple
photographs of their registered offices just to confuse the MCA. The government
is on a mission to get details about shell companies and vanishing companies
and these forms are additional requirements towards that cause. The IL&FS
issue has shown that good governance can be given a go-by in front of the
regulators’ own eyes without filing in a single form. The only manner in which
the MCA can get companies to comply substantially with the provisions of the
Companies Act is to implement the draconian penal provisions in the Act.
Implementation of these provisions doesn’t need a form.
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51% REQUIRED FOR INITIATING FORENSIC AUDIT OF CORPORATE
DEBTOR: NCLT
The Hyderabad Bench of
NCLT has ordered a forensic audit for Viceroy Hotels, which runs JW Marriot and
the Courtyard in Hyderabad. Asset Reconstruction Co (India) Ltd (Arcil) had
initiated insolvency against Viceroy in March, 2018. In December, 2018, the
NCLT granted a 90-day extension for consideration of resolution plans. Arcil
along with several other financial creditors had insisted on conducting a
forensic audit in relation to several transactions of Viceroy. The forensic
audit was demanded for transactions including investments in Viceroy Hotel
Bangalore and disclosures pertaining to corporate guarantees. The Bengaluru
property was transferred to Viceroy Bangalore Hotels Pvt Ltd, in which JP
Morgan India Property Mauritius II picked up a significant stake. It appears
that the RP was against such audit and tried to avoid it. Another major
contentious issue was the inclusion of Mahal Hotel’s claims worth Rs. 318.67
crore by the Resolution Professional. Mahal Hotel had given advances to Viceroy
to acquire the latter’s Chennai hotel property. The deal, inked in 2011, didn’t
fructify. The property was subsequently sold to Ceebros Hotels for INR 480
crore. Arcil had alleged that Mahal was hurriedly included among financial
creditors even though its dues were operational in nature and it was done with
a purpose to bring down Arcil’s voting share in the CoC to below 50%. Section
21(8) of the IBC provides that all decisions of the CoC shall be taken by a
vote of not less than 51% and Section 28(3) provides that for matters
enumerated in Section 28(1), the voting requirement will be 66%. During the 5th
CoC meeting, one of the items for consideration was the question of the
forensic audit. 59.21% of the CoC voted in favour of the forensic audit,
however, the Resolution Professional declined to go ahead with it. He claimed
that the requisite 66% vote was not achieved and the audit could not be
conducted. He relied on Section 28(1)(m) which requires 66% for, making changes
in the appointment or terms of contract of statutory auditors or internal
auditors of the corporate debtor. The NCLT had to determine whether conducting
a forensic audit would, in fact, be considered as one of the items which
require the enhanced voting threshold of 66%. The Bench concluded that
conducting a forensic audit of the corporate debtor does not amount to
‘changing terms of statutory auditors’ and requires only 51% vote from the CoC.
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NCLT ALLOWS 90 DAYS EXTENSION IN CASE OF DEFAULTING RESOLUTION
APPLICANT
In another case of a
defaulting resolution applicant, the Chennai Bench of the NCLT has passed an
order allowing an extra period of 90 days to the Resolution Professional (RP)
for attracting more buyers. Ingen Capital Group was the successful resolution
applicant for corporate debtor, Orchid Pharmaceuticals Limited. As per approved
resolution plan, Ingen was required to deposit a sum of Rs. 1,000 crore within
five days of approval of the Resolution Plan by NCLT; Rs. 1,000 crores being
the approved sum due to secured financial creditors. The NCLT approved the plan
on September 17, 2018. However, Ingen did not deposit the promised sum The
Creditors’ Committee had also granted a waiver from depositing earnest money of
Rs. 5 crore, and a performance guarantee of Rs. 50 crore, to Ingen. The Creditors
and RP of Orchid Pharma then approached the NCLT seeking directions against
Ingen. The NCLT passed an order directing Ingen to deposit one-third of the
promised sum (Rs. 1,000 crore) within 5 days of its order. The said order was
passed on October 10, 2018. Despite the direction, Ingen did not deposit any
amount. Between the time Ingen’s resolution plan was accepted by the Creditors’
Committee till the time it received NCLT’s approval, Ingen sought for extra
information from the RP. However, these talks concluded. After the approval by
the NCLT as well, Ingen raised the issue of incomplete information It was
Ingen’s claim before the NCLT that since the RP denied them access to
information in respect of debt towards J.M Financial, it was unable to raise
funds and close the transaction. The NCLT in its order has recorded strong
disapproval over the conduct of the Ingen The NCLT noted that the resolution
plan did not provide for any caveat stating that the implementation is
dependant upon supply of further information to Ingen by the RP. While the case
was pending before the NCLT, an appeal was filed with the NCLAT. The NCLAT
passed an order directing the NCLT to pass appropriate orders with respect to
the insolvency resolution process i.e. if further plans need to be considered. Based
on the aforesaid order, the NCLT has allowed a 90-day extension period to the
RP and Creditors’ Committee to call for fresh resolution plans. Furthermore,
the NCLT has excluded the time between invitation of ‘expression of interest’
till the time the resolution plan was submitted with the NCLT. The NCLAT,
meanwhile, is conducting proceedings to take action against the defaulting
resolution applicant, Ingen.
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ESSAR STEEL CASE: NCLT REJECTS KARUR VYSYA BANK’S PLEA
The Ahmedabad Bench of the
National Company Law Tribunal (NCLT) on Thursday rejected two pleas by lender
Karur Vysya Bank (KVB) which sought to reject ArcelorMittal's resolution plan
for Essar Steel India Limited (ESIL) citing pending dues from ArcelorMittal in
KSS Petron. KVB, which was asked last month to make written submissions on its
plea before the NCLT Ahmedabad, had claimed dues worth over ₹3
crore accruing out of KSS Petron where ArcelorMittal was a related party. In
its plea, the lender had sought the quashing of ArcelorMittal’s takeover bid of
₹42,000 crore for ESIL on the grounds of non-payment of dues
accruing to itself. The two-member Ahmedabad bench of NCLT comprising Harihar
Prakash Chaturvedi and Manorama Kumari said, (KVB) did not fall under the
category of a financial creditor of the Corporate Debtor ESIL. KVB did not file
its plea within the deadline set by a Supreme Court (SC) order of October 4,
2018. The Ahmedabad bench of NCLT also maintained that the tribunal was bound
by the deadline set by the Supreme Court and also found KVB ineligible to claim
a copy of the resolution plan submitted by the ArcelorMittal for Essar Steel,
as it did not fall under the financial creditor category of the distressed
steel player.
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NCLAT ALLOWS WITHDRAWAL OF LIBERTY HOUSE BID FOR ARGL
The National Company Law
Appellate Tribunal (NCLAT) on Friday allowed the withdrawal of UK-based Liberty
House bid for ARGL on the plea of resolution professional of the debt-ridden
company. A two-member bench, headed by Justice S J Mukhopadhaya, also pulled
Liberty House for not pursuing the corporate insolvency resolution process
after being selected as the highest bidder. You are a failure party all the
time dragging your feet. You are in bad reputation. We would not allow you to
take advantage of the appellate tribunal the bench said. The appellate tribunal
also directed to deduct the time period between December 14, 2018, and Friday
from the resolution process.
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MAXIMISING VALUE OF ASSETS! JIL COC TO FORM CORE GROUP TO WORK
WITH NBCC, SURAKSHA
The Committee of Creditors
(CoC) of Jaypee Infratech (JIL) will form a core group of its members, who will
hold deliberations with resolution applicants — NBCC and Suraksha ARC — on
various modalities of their plans and will work with both the companies to
explore avenues to maximise the value of assets of the debt-laden real estate
developer. This group will have meetings with the resolution applicants and
also assist the CoC for making modifications in the resolution plans with the
intention to enhance the value of assets of JIL. A decision on the same is
likely to be taken soon, one of the sources said. Another source said the CoC
also requested the resolution professional, Anuj Jain, to include expenses
incurred by members in finalisation of resolution plan as part of the corporate
insolvency resolution process (CIRP) costs, as the endeavour is to maximise the
value of assets.
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A NEW RULING ON FORENSIC AUDITS JUST GAVE BANKS MORE POWER TO
CORNER STUBBORN BORROWERS
The Hyderabad bench of the
National Company Law Tribunal (NCLT), a special body set up under the Companies
Act in 2013 to oversee insolvency disputes, has ordered a forensic audit
against Viceroy Hotels, the owner of two JW Marriott hotels in Hyderabad,
following pressure from Asset Reconstruction Co (India) Ltd (Arcil). In doing
so, the NCLT established a significant precedent for future cases: a 51% vote
by a company’s Committee of Creditors is enough to initiate a forensic audit. Arcil
had taken Viceroy Hotels to court over unpaid dues of around ₹5.3
billion and had asked for an audit of several transactions. A forensic audit is
an exhaustive review of a company’s financial accounts and
fraudulent transactions and can be used as evidence in a court when prosecuting
a defaulter. The NCLT specifically cited a section under the Insolvency and
Bankruptcy Code - 21(8) - which provides for a 51% approval in certain cases.
The resolution professional handling the Viceroy Hotels case had originally
declined the audit, explaining that a 66% approval by its creditors would be
required as per Sec 28 (3) of the code, which relates to changes in the
appointment or the terms of contract of auditors of the defaulting company.
Only 59.2% of the creditors had voted in favour. The NCLT then had to determine
whether a forensic audit required a 66% vote or not. It concluded that a
forensic audit did not equate to changing the terms of auditors and hence,
didn’t require a 66% approval. By clarifying this, the NCLT’s ruling will make
it a lot easier for creditors to initiate forensic audits against large loan
defaulters.
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DEUTSCHE BANK & SC LOWY BID FOR CENTRAL BANK LOAN AUCTION
Distressed asset funds of
Deutsche Bank and Hong Kong's SC Lowy have bid for the Essar Steel and Bhushan
Power & Steel loan accounts put up for sale by Central Bank of India, said
two people familiar with the matter. Both Deutsche Bank and SC Lowy have
submitted expressions of interest on Tuesday for the two accounts, said one of
the persons cited above. Those are unbinding bids. Central Bank has unpaid dues
of Rs 423.61 crore for the Essar Steel loan, and its exposure is Rs 1,550 crore
to Bhushan Power & Steel. Reserve prices were pegged, respectively, at Rs
415 crore and Rs 709.50 crore, below which no unbinding bid would be accepted.
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GENCO TO PRESS FOR RECOVERY OF DUES FROM TS UTILITIES
AP-Genco is going to press
for the recovery of ₹5,732 crore, including a penal interest of approximately ₹605
crore, from the Telangana power distribution companies (Discoms) when the case
comes up for hearing at the Hyderabad Bench of the National Company Law
Tribunal (NCLT) on March 20. The AP-Genco filed petitions against the northern
and southern Discoms of Telangana in June 2018 seeking payment of ₹5,127
crore excluding the penal interest, and stopped short of supplying power to
Telangana as the dues remained uncleared. At the time of bifurcation, the units
of AP-Genco were divided on the basis of the geographical location of the power
plants, and power had to be distributed to Telangana and A.P. in the 53:47
ratio as per the A.P. Reorganisation Act, 2014. The AP-Genco later knocked on
the door of the NCLT when the dues from Telangana started mounting. The
Telangana utilities had originally contended that the NCLT had no jurisdiction
over the issue as they were governed by the Electricity Act, 2003. On its part,
the A.P. government stated that it was not in the purview of the APERC either,
as the dispute was not about tariffs. AP-Genco MD K. Vijayanand is monitoring
the case as the dues are to be settled in compliance with the Reorganisation
Act.
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SEBI EXEMPTS FAMILY TRUST LINKED TO SUPRAJIT ENGINEERING FROM
MAKING OPEN OFFER
Sebi Thursday exempted a
private family trust related to the promoter group of Suprajit Engineering from
the obligation of making an open offer following its proposed acquisition of 38
per cent stake in the firm. Supriyajith Family Trust had sought exemption from
the obligation of making open offer post acquisition of over 5.31 crore shares
in Suprajit Engineering, a leading automotive supplier. Under the proposed
acquisition, the trust would be acquiring 38 per cent shares of the firm from
its promoters Ajith Kumar Rai and Supriya Ajith Rai, who are also trustees of
the Supriyajith Family Trust. The proposal has been made following a private
family arrangement to provide for family succession and to ensure seamless
transition in the future. Besides, the proposed acquisition will not affect the
interest of the public shareholders and there will be no change in control of
the company pursuant to the proposed acquisition, noted Sebi.
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SEBI TURNS DOWN AMFI’S REQUEST TO DO AWAY WITH DAILY AUM
DISCLOSURE
The Securities and
Exchange Board of India (SEBI) has said that mutual funds will have to disclose
assets under management of their schemes on a daily basis coupled with an
additional benchmark and product labelling. In a clarification letter to the
Association of Mutual Funds India (AMFI) on March 7, the market regulator said,
The AUM of all schemes except liquid schemes has to be disclosed on daily basis
on AMFI website. SEBI said that in case of liquid schemes the closing AUM, and
the AUM of the previous month has to be disclosed on the AMFI website on a
daily basis. However, if the AUM movement of the schemes is over 10 percent
from the previously disclosed AUM, fund houses will have to disclose the AUM of
that day. AMFI had asked to do away with the requirement to prevent unhealthy
competition. At the same time, SEBI accepted AMFI’s request on the performance
disclosure of short term schemes such as overnight fund, liquid fund,
ultra-short duration fund, low duration fund, and money market funds. SEBI said
that mutual fund houses will have to disclose the performance for a period of
seven days, 15 days, one month, three months and six months. In the same
letter, SEBI said it has modified the formula of calculating the total expense
ratio (TER) for beyond 30 (B30) cities.
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IL&FS BOARD ASKS SFIO, ED TO PROBE 14 IFIN DIRECTORS
With fresh revelations of
fraud, the government-appointed Board of Infrastructure Leasing & Financial
Services Ltd (IL&FS) has approached the Serious Fraud Investigation Office
(SFIO) and Enforcement Directorate (ED) to initiate criminal proceedings
against 14 former directors of IL&FS Financial Services Ltd (IFIN). The
report by Grant Thornton LLP clearly establishes money laundering. The Board
has already informed the Ministry of Corporate Affairs, SFIO and the ED to
initiate criminal proceedings against the culprits. The report submitted on
February 27 highlighted multiple irregularities in the operations of IFIN, one
being that loans were provided to firms, in which an existing director of one
of the IL&FS group companies was the promoter. The report had charged 14
former IFIN directors of facilitating money laundering and sanctioning loans
without any security.
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RIGHT PRODUCT, TEAM AND MARKET VITAL FOR BUILDING SCALABLE
STARTUPS
It is important to take
the right call on the product, the team, the market trend, and the timing in
early-stage investments to find the right investment bet to help startups scale
up to become billion-dollar ventures, said senior venture capital investors.
The tech or product, team and the market, these make a great business. India
grows at 7-7.5% real GDP, which comes to a nominal GDP growth of about 11%. You
pick up consumption, you get another 3% kicker. You pick up a sector inside
consumption, whether its retail, healthcare, FMCG, and you get another 2-3%,
and then you get another 3-4% by picking the right company. That CAGR in a 7-8
year cycle gives you an outcome that is very large, said Gaurav Sachdeva. The
product, team, and market are important, but early-stage investments also mean
lack of enough credible data to analyse these aspects. Thus, betting on the
right founder is critical, said panellists. In the early-stage business, there
is not a lot of data to depend on. So, a lot of it comes down to being able to
perceive whether the person sitting across you, the founder, is a money maker.
There are different types of opportunities in the world so there is no one type
of person that can be the cookie cutter answer to where money making is done, said
Mohit Bhatnagar. One has to also evaluate the sustainability of the business
model to achieve that scale, while one is looking for scalable businesses,
according to Rajesh Sehgal.
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NEW SAT BENCH MAY SPEED UP CASE DISPOSALS
The government has
notified setting up of an additional bench in the Securities Appellate Tribunal
(SAT), potentially leading to speedy clearance of backlog of cases. Justice M T
Joshi's appointment and announcement for creation of technical member post for
an additional bench will mean speedy disposal of heap of pending appeals at
SAT, said Sumit. There are many questions which are unanswered in law such as
limitations of Sebi's powers or time limit for passing an order by Sebi or
streamlining processes followed by the insurance regulator Irdai. Having an
additional bench will redress some of these issues.
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CREDIT RATING FIRMS CAME UNDER CRITICISM FROM RBI
Credit rating firms came
under sharp criticism from the Reserve Bank of India (RBI) for failing to
identify financial troubles in various companies, especially in the case of
IL&FS. In a meeting with top credit ratings officials on Thursday, central
bank governor Shaktikanta Das and the deputy governors expressed concerns over
rating agencies’ inability to assess credit risk and take timely rating
actions, said people who attended the meeting. RBI said that ratings are
supposed to be forward-looking, but they are always a laggard, said one of the
people quoted above. The central bank is said to have told credit ratings
officials that the abrupt ratings downgrades in recent months have hurt
investors and banks. RBI said one third of the total NPAs (non-performing assets)
in the system stemmed from investment grade ratings, said one of the persons
quoted above. Total stressed assets are about Rs 12 lakh crore in the banking
system. Das was concerned over the conflict of interest in the country’s credit
rating agencies, the person said. Globally, rating agencies limit themselves to
ratings and research related to credit ratings. All other businesses like
market research, training, risk solutions are carried out under separate
entities with no common directors, employees and shareholding from the rating
entity. In India, the same rating agency rates and provides valuation opinions
to the same set of securities to investors like mutual funds and provides
advisory services. In many instances, the business origination employees are
also common. In RBI’s view, this is conflict of interest and RBI is looking at
suitable regulations to address this issue, said one of the persons quoted
above. The central bank governor disapproved of the practice of rating
shopping— where companies migrate from one rating agency to another for better
ratings. RBI was also concerned about issues such as rating agency CEOs being
part of rating committees and rating advisors who promise better ratings to an
issuer due to their special relationship with rating agencies, said the second
person quoted above. RBI is examining the matter and along with Sebi, it will
bring out regulations to address this, the person said. Though credit rating
agencies are registered with the capital market regulator Sebi, they are
jointly regulated by both Sebi and RBI as these firms rate bank loans which
constitute 70% of their business.
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RBI NOTIFIES 2% INTEREST SUBSIDY SCHEME FOR SHORT-TERM CROP
LOANS
The Reserve Bank of India
(RBI) Thursday notified the norms for banks with regards to two per cent
interest subvention or subsidy for short-term crop loans during 2018-19 and
2019-20. The Centre has already approved the scheme. To provide short-term crop
loans up to Rs 3 lakh to farmers at an interest rate of 7 per cent, the RBI
said it has been decided to offer interest subvention of 2 per cent per annum
to lending institutions. This interest subvention of 2 per cent will be
calculated on the crop loan amount from the date of its disbursement/drawal up
to the date of actual repayment of the crop loan by the farmer or up to the due
date of the loan fixed by the banks whichever is earlier, subject to a maximum
period of one year, it said in a notification. Under the scheme, an additional
2 per cent interest subvention is provided to farmers repaying loans promptly.
For such farmers, the effective rate of short-term crop loans works out to be 4
per cent per annum.
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DEMAND FOR COMMERCIAL REAL ESTATE WILL CONTINUE TO PICK UP:
EXPERTS
At a time when India’s
housing market is yet to recover from a prolonged slump, demand for commercial
real estate has continued to grow with several large institutional investors pouring
big investments into the segment. India is a multi-decade story for Brookfield
and not a five year story. We have a large footprint in India but we still call
ourselves a start up in the larger context of the Brookfield platform we have
globally. Real estate houses the economy and the economy is doing well, said
Ankur Gupta. India is an important market for the Canada-based investment firm
and its presence would not be restricted just in the office market but would
look at expanding into other emerging real estate segments. Rajesh Agarwal,
added that with the advent of long term investors that commercial real estate
market has significantly evolved over the last decade. The attractiveness of
commercial sector is relatively higher. There is a lot of maturity in terms of
how investors look at commercial as compared to residential. Capital has been
flowing far maturely to a select set of investors and select of operators, he
said. According to Vinod Rohira, the residential segment is away from recovery by
another 12-15 months when consumer sentiments start to pick up. He said the
slowdown of residential market primarily due to inefficiency and lack of
prudence on capital investment. Because of easy capital you went on signing on
MoUs and went on creating new assets on paper. Developers were not sensitive to
consumers. And then it was hit by demonetisation, new regulations and GST.
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NEW HEADACHE FOR INDIAN BIZ TITANS: HARDER TO GET LOANS BY
PLEDGING STAKES
Company founders have long
fueled dreams to expand their business empires with loans they get by pledging
stakes in their firms. But recent scares have prompted at least two major
shadow banks to turn off the faucet in the past month, the longest dry spell in
six years, people familiar with the matter say. Observers say the amount of
such share-pledged loans, currently at about 1 trillion rupees ($14 billion),
will shrink further, raising risks of a broader fallout. Business chiefs around
the world including Elon Musk at Tesla Inc. and Larry Ellison at Oracle Corp.
have used their shares to access cash for personal ventures. In China, the
practice has led to margin call-induced stock routs and lenders fighting in
courts to reclaim funds in the case of defaults. Lenders sold shares in tycoon
Anil Ambani’s companies after the value of collateral plummeted The
billionaire’s conglomerate called the sales illegal, motivated and wholly
unjustified, and filed a suit against one of the lenders. Media tycoon Subhash
Chandra’s Essel Group signed a pact with its lenders last month that prevents
them from selling shares of the group’s listed firms until Sept. 30. Lenders
won’t classify the group’s borrowings secured by shares as bad debts even if
the stock prices fall, according to the pact. Offering stock as collateral for
loans can be an easy way to obtain cash in good times when stock prices are
rising. But when shares fall, and lenders seek additional collateral to cover
the declines, owners who have most of their wealth tied up in their companies
may not be able to meet those calls. Two lenders who frequently extended loans
to founders backed by pledged shares haven’t done any for at least the last
month, according to people with knowledge of the matter, who asked not to be
identified because the details are private. The last time they went so long
without doing such loans was in 2013, they said. The total outstanding amount
of such share-pledged loans has dropped 20 per cent from a year ago to Rs 1
trillion, according to Edelweiss Financial Services. It’s set to shrink another
30-40 per cent in the coming year, said Ajay Manglunia, head of fixed-income at
the firm. If the funding channel keeps drying up, one silver lining could be
less damage from margin calls. There’s currently still a lot at stake. Founders
at 820 companies have pledged Rs 2.3 trillion of shares as collateral against
their borrowings, according to the latest data. I hope founders of Indian firms
learn a lesson from this and only look to this mode of raising funds as a last
resort as it has implicit risk, said Manish Sonthalia.
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DIAGEO SEEKS FIRST ACCESS TO MALLYA SHARES IN UBHL
British spirits maker
Diageo, the majority owner of United Spirits, has sought first access to and
restoration of attached shares of Vijay Mallya in United Breweries Holdings and
Watson to recover dues from its former joint venture partner, two people with
direct knowledge of the plan said. The company has written to the Enforcement
Directorate with this request, they added. ED officials confirmed the receipt
of the letter but said the court will take a call on the request We have given
the go-ahead to secured lenders like banks the court will decide the intervention
plea by others and we will look into the matter after that, an ED official
said. PSU banks have been given priority as the money sought to be recovered
was public money. Diageo’s request comes less than a week before the Prevention
of Money Laundering Act (PMLA) court meets on March 13.
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CHANGING YOUR JOB? SHIFTING PF HOLDINGS TO SOON BE HASSLE-FREE
Employees who either shift
jobs or move to new locations may soon be able to transfer their provident fund
corpus with little interference from their employers. The Employees’ Provident
Fund Organisation (EPFO) is working on a so-called anywhere service plan to
upgrade service delivery to its 60 million active subscribers. Once it is
implemented over the next six months, organized sector employees moving across
locations are unlikely to face any problem in unifying their PF corpus,
according to at least two government officials and documents reviewed by Mint. EPFO,
with an endeavour to improve the quality of service wishes to launch an
ambitious ‘anywhere service’ for its members, said one of the two officials,
who declined to be named. The official said that though the universal account
number (UAN) was already in place, it had several limitations as the back-end
service delivery such as claims settlement and pension calculations were still
handled at field offices..
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RBI PENALTY: SWIFT BLAMES SHORT-COMINGS IN AUTOMATED PAYMENT
PROCESSES AT BANKS
Global financial messaging
cooperative Swift said on Thursday blamed the shortcomings in banks' automated
payment processes and also reconciliations for the regulatory penalties on 19
of them over the past few past week and said it's not their job to police the
lenders. Over the past week, the Reserve Bank has penalised 19 banks including
SBI and ICICI Bank, for non-compliance with the Swift system-- the virtual
connection between India and the rest of the world when it comes to financial
messaging. The penalty amounts ranged between Rs 1 and Rs 4 crore and the
overall penalty totals Rs 40 crore. It's about STP (straight through
processing) automation within a bank's operations, which has nothing to do with
us, and also reconciliation, Raes told. He also stressed that none of these
shortcomings are Swift's own doing and expressed their inability to police all
the members. Whenever we find a shortcoming in any member institution, we flag
the same to the respective regulator and it's up to the regulator to take a
call on how to tackle the issue, he said. Raes, however, conceded that the
aspects on automation are fairly expensive for the lenders, but its country
head Kiran Shetty was quick to add that the cost of a fraud will be much
larger. It can be noted that the modus operandi of over Rs 13,000 crore fraud
at state-run Punjab National Bank, allegedly perpetrated by diamond traders
Nirav Modi and Mehul Choksi, rested on the abuse of the Swift system. In the
absence of an integration between a bank's core banking system and the Swift
platform, a PNB official connived with the fraudsters to send several payment
messages to dubious foreign entities, defrauding the bank. Raes parried a
question on whether all the institutions served by them have their CBS
platforms integrated with Swift but said they have been insisting on reducing
manual intervention in transactions as much of the frauds have happened due to
manual interventions. He also said it will be unfair to blame Swift for frauds
being perpetrated at member-banks as their role is limited to flagging concerns
as a hygiene policy. He said the agency has listed down 16 principles which are
mandatory for every institution connecting with the world, adding all its
Indian clientele are in compliance with them from a self-attestation
perspective. It is also adding two more principles as part of its ongoing
efforts to make the security architecture more robust, he said, adding these
two are derived from the list of 11 principles which are a part of an advisory
list at present. Shetty said SBI will soon be joining a list of 11 Indian banks
using the modern GPI (global payments initiative) platform aimed at making
payments more efficient, fast, transparent and cheaper.
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STATE BANK OF INDIA TO JOIN SWIFT'S GLOBAL PAYMENT INTERFACE
State Bank of India will
soon sign up with the Society for Worldwide Interbank Financial Transactions’
(SWIFT) Global Payment Interface (gpi), adding to the list of Indian banks that
have subscribed to the interbank communication channel’s new payment interface
which is set to make cross-border transactions much more secure and transparent
a top official said. We are in the final stages of approval with SBI and we
hope to announce the partnership soon, said Kiran Shetty. India’s largest
lender will join 11 of its counterpart banks that will have subscribed to this
payments platform which comes with features such as such as end-to-end payment
tracking, access to unaltered remittance information, faster and more
transparent transactions. SWIFT said that they want to make gpi a universal
payments interface by partnering with all major global banks by 2020. We want
to make each bank gpi-compatible. We are also looking to integrate with
different domestic real-time payment platforms across the globe such as FAST in
Singapore, NPP in Australia, TIPS in Europe and UPI in India such that gpi
becomes the lowest common denominator in all global transactions, said Alain
Raes. Currently, SWIFT gpi is being used by 3500 banks across the globe
carrying transactions worth over $300 billion daily. The interbank messaging
channel which is owned by all major international banks said that banks across
the globe, including Indian banks have increased their impetus on protecting
themselves against cybercrimes. One doesn’t need guns or tanks to rob a bank
anymore top management of Indian banks have realised this and they are adopting
steps to protect themselves, Raes said. A total of 44 Indian banks are subscribers
of SWIFT’s messaging services which is a secure line to send information
domestically and internationally between banks. However, over the last week, 19
of these banks have been fined a combined Rs.40 crore by the RBI for
non-compliance of SWIFT norms. Raes said that the non-compliance might be due
to banks not automating their protection chain and other internal
reconciliations.
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FRESH INVESTMENTS ATTRACTED BY STATES RISE 8% IN VALUE TO RS
3.35 TRILLION
Fresh investments
attracted by states has grown eight per cent in value during April-December of
this financial year as against the comparable period of FY18. The investments
are premised on the Industrial Entrepreneurs Memorandum (IEMs) filed. The
proposed investments totaled to Rs 3.35 lakh crore at the end of December 2018
rising from Rs 3.15 lakh crore in the year-ago period. There was a marked
increase in the number of IEMs, rising from 1443 to 1735, data sourced from the
Department of Industrial Policy & Promotion (DIPP) showed. Data on
investment intentions based on IEMs filed shows a positive trend. For the period
April to December there was an increase in the number of IEMs filed as well as
the proposed investment. While these refer to only intentions, it is still
positive from the point of view of reflecting potential investment, a report by
CARE Ratings stated. For calendar year (CY) 2018, metals sector grabbed the
highest share of proposed investments at 20.8 per cent followed by electrical
equipment (12.5 per cent), chemicals (10.9 per cent), textiles (5.4 per cent)
and food processing (5.1 per cent). Among states, Karnataka leads with 19.8 per
cent share of the investments drawn with Maharashtra following closely at 18.8
per cent. IEMs implemented in CY 2018 were the highest at Rs 2.55 lakh crore in
the last three years. They were Rs one lakh crore in 2016 and Rs 0.71 lakh
crore in 2017. Maharashtra dominated among the states with a share of 51 per
cent while electrical equipment, chemicals and metals accounted for a little
over 25 per cent of total IEMs implemented, the report noted.
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DOT PANEL DIVIDED ON E&V BAND SPECTRUM ALLOCATION
It seems that a decision
over allocation of spectrum in E and V band carriers is turning out to be a
Herculean task for the Department of Telecommunications (DoT). An internal
committee, formed to examine the issue, has given a divided opinion with one
member supporting auction as the desired route while two others favouring that
spectrum should be given administratively for a fixed charge as recommended by
the Telecom Regulatory Authority of India (Trai). The regulator had given its
recommendations in November 2015 and even after more than three years, no
decision has been finalised The Trai had recommended that both E (71-76
gigahertz frequency and 81-86 Ghz) and V (57-64 Ghz frequency range) bands
should be opened up in the country for acceleration of broadband penetration
and DoT should accelerate the process of opening these bands in line with other
technologically developed countries of the world. It must be mentioned that V
band has been delicensed in countries like USA, UK, Canada, China, Australia,
Japan etc. However, in India no decision has been taken so far, primarily
because there is no consensus among the industry. Trai feels that higher prices
for E and V band airwaves would not help in popularising these bands as only
short distances can be covered using the airwaves.
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GENDER PAY GAP STILL HIGH, WOMEN IN INDIA EARN 19% LESS THAN
MEN: REPORT
Gender pay gap is still
high in India, as women in the country earn 19 per cent less than men and wage
inequalities in favour of men are present in all the relevant sectors, a survey
said Thursday. According to the latest Monster Salary Index (MSI), the current
gender pay gap in India stood at 19 per cent where men earned ₹46.19
more in comparison to women. The median gross hourly salary for men in India in
2018 stood at ₹242.49, while for women it stood at around ₹196.3.
According to the survey, the gender pay gap spans across key industries.
IT/ITES services showed a sharp pay gap of 26 per cent in favour of men, while
in the manufacturing sector, men earn 24 per cent more than women. Surprisingly,
even in sectors like healthcare, caring services, and social work, men earn 21
per cent more than women, even as notionally these sectors are more identified
with women, the survey said. Financial services, banking and insurance is the
only industry where men earn just 2 per cent more, it added. For those with
over 10 years of experience, the gender pay gap in favour of men reaches the
peak, with men earning 15 per cent more than women. Monster.com has also
conducted the Women of India Inc survey aimed at understanding the working
women of India and their workplace concerns which noted that 71 per cent men
and 66 per cent women feel that gender parity needs to be a top priority for
their organisations. As high as 60 per cent of the working women felt that they
are discriminated at work. The most notable form of discrimination is
perception that women are less serious about work once they are married. About
46 per cent women feel that maternity leads to a perception that they will
quit. About 46 per cent women also believe that there is a notion that women
can't put the same number of hours as men.
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RISING UNEMPLOYMENT, FALLING LABOUR FORCE: IS INDIA IN A BIG
TROUBLE?
With various reports
showing rise in unemployment, the debate around job creation vs job loss has
been gaining steam. Moreover, there has been a fall in labour force, show
recent data. This seems a serious concern in an economy whose working age
population is expected to grow to over a 100 crore people by 2050, as estimated
by the Regional Human Development Report of the United Nations Development
Programme (UNDP). Mahesh Vyas had told that while the job losses could have
been at least 35 lakh due to note ban, the reduction in the labour force was to
the tune of 150 lakh. That means people who were unemployed just before
demonetisation stopped even looking for jobs and the labour force shrank.
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NO IMPROVEMENT IN WORK-RELATED GENDER GAP IN LAST 30 YEARS:
ILO
The most dynamic economies
in the Asia-Pacific region, India and China, have seen women’s employment rates
fall more markedly than men’s. This is despite women being better educated,
having fewer children and being more likely to live in urban areas than 30
years ago, the International Labour Organization (ILO) said in a report on
Thursday. Pointing to demographics as one factor for falling women’s employment
rates, the report said other causes at play were the rapid transition from
agricultural to industrial sectors and the lack of care services and
infrastructure. The report highlighted that women are still underrepresented at
the top, a situation that has changed very little in the last 30 years.
Globally, less than a third of managers are women although they are likely to
be better educated than their male counterparts. The report shows that education
was not the primary reason for lower employment rates and lower pay of women.
Rather, women do not receive the same dividends for education as men. The
report incorporates findings from ‘real time’ data, gathered by the
professional networking website LinkedIn from across five countries, covering
22% of the global employed population in three different regions. The joint
ILO-LinkedIn collaboration found that women with digital skills–currently a
requirement for the most in-demand and highest paying jobs in science,
technology, engineering and maths (STEM)–are only between one-third and
one-quarter of LinkedIn members. However, it also revealed that the women who
reach director-level positions get there faster—at least a year before their
male counterparts. Painting a grim picture of gender gap in employment in
India, the report said that currently only 86,362 women LinkedIn members have
reached director-level positions in India, while the number of men is 407,316.
Besides, in India, only 23% of LinkedIn members with digital skills were women.
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WORKING WOMEN LAG BEHIND IN FINANCIAL PROTECTION: SURVEY
Working women in India are
grossly under-protected as only 70 per cent have life insurance as compared to
83 per cent of their male peers, says a survey. According to a survey done by
Max Life Insurance, the ownership of term insurance plans among women in metro
cities stood at just 19 per cent, as compared 22 per cent men who own the pure
protection insurance scheme. With 42 per cent of their earnings being diverted
to basic expenses as against working males in metros who spend 38 per cent of
their earnings to basic expenses, working women in metros tend to spend less on
savings and investments, the report said. It further added that the savings
objectives of working women in metros are more focused on saving for kids'
education and less on old age security and untimely death of a breadwinner
(only 33 per cent saved for this). According to the report nearly 68 per cent
women feel that term plans are merely designed for the breadwinner. Ensuring
financial protection of women is an extremely important concern considering
they make up almost half the country's population, Max Life Insurance managing
director Prashant Tripathy said. Aside from lack of awareness, the uptake of
term insurance is relatively lower in women, due to the way they often approach
insurance and investment. What is required is a fundamental shift in their
savings and investments patterns and a greater realisation of benefits of term
plans to empower a sense of financial protection, he said. It also highlighted
that Indian women are yet to go online to buy life insurance. Only 3 per cent
buy insurance online compared to 7 per cent urban men.
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CORPORATE INDIA TWEAKS VARIABLES FOR SOLVING GENDER DIVERSITY
EQUATION
India Inc is working hard
to improve the gender diversity equation especially at the top deck.
Conglomerates such as Mahindra & Mahindra and Vedanta and ecommerce
companies like Droom, among others, are seeking women to fill leadership roles.
While gender parity is distant, some progress can be reported in this regard on
International Women’s Day. Such is the push being given to diversity that
executive search firms, including the likes of Korn Ferry, EMA Partners, INSIST
Consulting and Egon Zehnder, said clients were increasingly rolling out roles
exclusively for women. Others are insisting on having higher female representation
when it comes to considering candidates for any mandate. What was initially
being driven by multinationals has taken off in a big way in Indian companies
as well, said A Ramachandran. Every search these days is a gender diverse
search and there are even companies specifically looking to hire only women for
certain roles. There has been a 50-60% increase in roles where companies are
looking to hire only women. Clients, both Indian business houses and
multinationals, are asking for at least one female candidate’s resume for all
mandates, said Navnit Singh. Vedanta is looking to increase the representation
of women in its workforce to 30% by end 2020 from about 11% at present. Roles
earmarked for women at Vedanta are primarily in areas such as in HR, finance
and other enabling functions, besides those based in metros. We tend to choose
roles where talent is available, and location is not a problem, said
Srivastava.
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FEWER WOMEN WORKING IN INDIA: LABOUR PARTICIPATION DOWN TO 26%
IN 2018
The female labour force
participation in India has fallen to 26 per cent in 2018 from 36.7 per cent in
2005, amid lack of access to quality education and underlying social, economic
barriers limiting the opportunities for women, says a Deloitte report. 95 per
cent or 195 million women are employed in the unorganised sector or are in
unpaid work. According to the report, the education ecosystem needs to go
through a set of system strengthening initiatives, including the introduction
of digital and STEM (science, technology, engineering and mathematics)
education in schools, which in turn will introduce girls to various career
choices. Specifically in the India context, the female labour force
participation has had a decadal fall from 36.7 per cent in 2005 to 26 per cent
in 2018, with 95 per cent (195 million) women employed in the unorganised
sector or in unpaid word, the Deloitte report noted. The range of challenges
for women and girls echoes across Asia and India - lack of education, access to
quality education, digital divide, which limits them from gaining employable
skill sets and entering the workforce or establishing an enterprise, the report
said. It further added that a set of underlying social, economic and political
barriers limits opportunities for women.
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50% POLITICAL AD SPEND ON FACEBOOK LAST MONTH CAME FROM BJP
BACKERS
Advertisers in India spent
over ₹4 crore for political ads on Facebook last month and more than
half of the amount came from the ruling Bharatiya Janata Party (BJP) and its
backers, according to data from Facebook's Ad Archive report. A pro-BJP page,
Bharat Ke Mann Ki Baat, alone spent over ₹1 crore for political ads
on the social networking platform last month. While regional parties spent just
around ₹20 lakh on Facebook, the Congress Party and its backers spent
just around ₹10 lakh for political ads on Facebook during the same period.
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IL&FS YET TO PAY SALARIES TO 44 EMPLOYEES OF ETHIOPIAN JV
IL&FS may have finally
secured the release of its four Indian captive employees in Ethiopia, but the
ITNL-Elsamex JV imbroglio is still marred by the plight of its 44 employees.
IL&FS hasn’t paid their salaries yet, despite repeated assurances from the
company. One of the employees tried to commit suicide due to the non-payment of
salaries, and the consequent piling up of debts. Thirty-six haven’t been paid
their salaries since July 2018, while four haven’t been paid since May 2018,
and another four since April, said Rajesh Davuluri. Now that MCA/NCLT is taking
up the resolution of Indian companies only, the fate of overseas companies that
can’t meet operating expenses like salaries is uncertain, especially Indian
expatriate employees who worked or are still working in those companies, said
Davuluri. According to a PTI report citing the Solicitor General of India, out
of IL&FS’ 302 companies, 169 companies are incorporated in India and the
remaining 133 are outside India. The company had told the employees that
part-payment of salaries till August 2018 would be made once the four employees
held hostage in Ethiopia returned to India, said Davuluri. The four Indian
employees returned to India on February 24. This is even as IL&FS met the
additional months’ salary demand of the Ethiopian employees to secure the
release of the four held hostage for over three months. The IL&FS management
assured us the disbursement of salaries up to August 2018, within seven days
post the return of the four captives back to India. But, just like all the
other promises, this one also remains unfulfilled, said an employee, who did
not wish to be named.
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MARKETS ARE ALREADY FACTORING IN MODI'S VICTORY IN ELECTIONS,
SAY ANALYSTS
The events of the past
eight weeks on the political front including various pre-poll formations, the
farmer cash transfer scheme and the military action across the border may cause
polarisation in the forthcoming general elections and increases the probability
of a stronger government, says Ridham Desai. Oil prices and political
uncertainty – the two main reasons why the Indian bourses underperformed in the
calendar year 2019 (CY19) – have already hit a peak in terms of negativity,
they believe. Growth is moving higher with PMIs in clear expansion zone, credit
growth at multi-year highs, corporate revenue growth at almost a 20-quarter
high and corporate profits at 25-quarter highs. In summary, the Nifty could be
looking to break its 10,500 – 11,000 range to the upside, Morgan Stanley says. Thus
far in CY19, the S&P BSE Sensex and the Nifty50 have gained 1.5 per cent
and 1.7 per cent, respectively. S&P BSE IT, Consumer durable, Oil &
Gas, Realty and Bankex have outperformed with a gain of 1.9 per cent – 7.8 per
cent during this period. For the markets, the fact that Narendra Modi will
return to power is a given. There is no doubt about it. That’s one of the
reasons why we have seen the recent readjustment, especially in the mid- and
small-caps. If reports are to be believed, all is going well for the ruling
dispensation and things have started to look up after the recent military
action. The markets will look for further direction from the opinion polls once
the alliance formation is complete and poll dates are announced. The Nifty50
can hit 11,500 levels going ahead, says U R Bhat, managing director at Dalton
Capital.
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MORE THAN 80% WEBSITES OF INDIAN POLITICIANS INSECURE AND
RISKY, SHOWS GLOBAL ANALYSIS
Politicians are
increasingly turning to digital platforms, such as websites, apps and social
media, to reach out to the internet-savvy voters. However, there are doubts
about how secure these websites are. More than 60% of global politicians do not
use the essential Hypertext Transfer Protocol Secure (https) standard when it
comes to their personal websites, according to a new study, published by online
portal Comparitech on 6 March. Official websites of Congress president Rahul
Gandhi and Prime Minister Narendra Modi were found to be using the https
standard. However, the websites of BJP president Amit Shah, Congress MP Shashi Tharoor
and Odisha chief minister Naveen Patnaik did not. The study was based on an
analysis of personal and campaign websites of more than 7,500 politicians in 37
countries, including India, where the percentage of politicians not using the
standard, at 83.87%, is higher than the global average. The study covered 887
Indian politicians and found that 217 of them have personal websites and of
them 182 don’t use the security standard In developing countries, 74.98% of
such websites did not use https, compared to developed countries where 64.46%
didn’t use it, the study said. A countrywide breakup shows that the US
(26.22%), UK (30.65%) and Germany (31.92%) had the lowest number of websites
without https, while in countries such as South Korea (92.31%) and Poland
(91.16%) the numbers were highest. Half of these websites asked users to share
personal information, such as name and email to register, log in, send comments
or subscribe for newsletters. In the absence of https, users face risks of
getting their data intercepted by third parties such as ISPs, government
agencies and hackers. Websites where users can make donations, making online
payments, can be very risky.
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FACEBOOK, INSTAGRAM TO REMOVE VACCINE MISINFORMATION CONTENT
As part of their effort to
reduce the spread of vaccine hoaxes on its platform, Facebook and its
photo-messaging app Instagram will no longer allow advertisements that include
misinformation about vaccines. The company has decided to take action against
accounts which are promoting vaccine hoaxes that have been publicly identified
by the World Health Organisation and Centres for Disease Control and
Prevention, US. We want to give people more accurate information from expert
organisations about vaccines at the top of results for related searches, on
Pages discussing the topic, and on invitations to join groups about the topic,
Monika Bickert, wrote.
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APPLE WANTS TO FRONT OEMS FOR DIRECTLY NEGOTIATING SOPS WITH
INDIAN GOVT
Having failed to secure
sops for retailing and manufacturing its products in India in the past two
years, California, US-based tech giant Apple has now decided that further
discussions with the government should be left to original equipment
manufacturers (OEM). Senior industry department officials said the company had
decided to change its stance after the smooth approval of Wistron Corporation's
Rs 5,000-crore investment in a manufacturing facility in Karnataka. The
information technology ministry and an inter-ministerial panel have given their
green light to the Taiwanese OEM's proposal. Though the proposal is currently
pending with the Cabinet, it is expected to sail through. The fast pace of
talks has found favour with Apple, which now feels its major component
suppliers should strike separate deals at the central and state government
levels to quickly establish themselves in India. The country remains a
lucrative market and Apple is keen to break into it as a serious contender,
said an industry insider. Despite a significant ad spend in the country,
Apple's market share in India remained at a low 1.2 per cent at the end of
2018. Its sales also halved to almost 1.7 million units, even as its returns
from the Chinese market continued to diminish.
#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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