CORPORATE UPDATES 13.03.2019

HC ASKS RPL, EDELWEISS TO TRY RESOLVING SHARE SALE ISSUE

The Bombay High Court on Tuesday suggested Reliance Power and Edelweiss Group to resolve their dispute over sale of pledged shares amicably while posting the matter for hearing after two weeks. A division bench of Chief Justice N H Patil and Justice N M Jamdar was hearing a petition by Reliance Power's promoter company Reliance Project Ventures and Management Pvt Ltd. The promoter entity has challenged a single judge bench's order that refused to stop sale of pledged shares by Edelweiss Group or grant any relief to Reliance Power Ltd (RPL). The division bench suggested the parties concerned to try resolving the dispute out of court and said it would hear the petition after two weeks. Such matters can be resolved amicably outside of court consider it, Chief Justice Patil said. RPL argued before Justice Shriram's bench that the sale of its pledged shares byEdelweiss' ECL Finance Limited was illegal and must be stopped. It urged the court to stop such sale as an interim relief and to subsequently declare the sale illegal and void, It also requested the court to direct Edelweiss to pay it a compensation of over Rs 2,700 crore for the fiscal and reputational loss caused by such sale.

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RCOM LENDERS CONTEND TO HAVE FIRST RIGHT OVER IT REFUNDS

Lenders of Reliance Communications (RCom) Tuesday contended before the NCLAT that they have the first right over Rs 260 crore which the debt-ridden company has received as the income tax refund. The SBI along with other members of Joint Lenders' Forum (JLF) said that under the RBI guidelines, they have the right over the retention and trust account in which the refunds have been deposited. Senior advocate Neeraj Kishan Kaul, representing the SBI, submitted before the tribunal that JLF could not be blamed for not recovering Rs 37,000 crore from sales of assets of RCom. Settlement did not fail because of JLF. It failed because Jio declined to pay RCom's past debt, he said. Lenders further said that the retention and trust account had been set up before the insolvency process against RCom, and thus it has to be kept out of the current proceedings. The retention and trust account has separate Reserve Bank of India (RBI) guideline which says that no third party encumbrances can be created RCom cannot saddle the responsibility of paying Ericsson on the banks, he said. On Monday, National Company Law Appellate Tribunal (NCLAT) had pulled up the SBI, the lead lender of debt-ridden Reliance Communications, along with others for giving a 'false impression' to monetise Rs 37,000 crore from asset sales of the telecom company to Reliance Jio. The NCLAT was hearing RCom's plea, which has approached the appellate tribunal, seeking waiver over the moratorium placed by it on February 4. However, its financial creditors are opposing its plea to release the Income tax refunds to clear dues of Ericsson, to whom the company has to pay Rs 550 crore.

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HSBC DAISY MOVES SUPREME COURT IN ANIL AMBANI, RELIANCE INFRATEL’S RS 230 CRORE DEFAULT CASE

Offshore investors led by HSBC Daisy Investments (Mauritius) and other minority shareholders on Monday moved the Supreme Court against the National Company Law Appellate Tribunal (NCLAT) order that deferred hearing on its contempt petitions six times over an alleged default in payment of Rs 230 crore against Reliance Infratel and its promoter Anil Ambani. A bench led by justice RF Nariman refused to interfere in the case, but said that it has no doubt that the NCLAT will take up the case on March 27, the next date of hearing. As per the consent terms of the agreement between Reliance Infratel, HSBC Daisy and others, recorded by the NCLAT in its order dated June 26, 2018, the Anil Ambani-owned firm was to pay the amount within a period of 180 days. After the expiry of the six-month period, HSBC Daisy and other nine minority shareholders holding 4.26% stake in Reliance Infratel have filed contempt pleas against Anil Ambani and other officials of Reliance Infratel, the unit that houses RCom’s towers and fibre assets. HSBC in its appeal before the SC said the NCLAT had been adjourning the contempt petitions despite the firm having intentionally and willfully committed breach of their undertakings before the NCLAT. It said that Ambani and his company has no intention of honouring their undertakings which is clear from the fact that they have neither provided the bank guarantee nor made any payment as per their unconditional undertakings before the NCLAT. HSBC also wants to restrain the Reliance group from withdrawing the appeals filed against the National Company Law Tribunal that commenced the corporate insolvency resolution process. It said that by reviving the insolvency process, the Ambani firm wants to avoid its payment obligations. The Swedish telecom equipment manufacturer had also filed three contempt application seeking freezing and auctioning of personal assets of Ambani for wilfull and malicious disobedience of the Supreme Court’s orders and also the RCom chairman’s detention in civil prison.

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SBI TO AUCTION RS 2,338 CRORE OF NPAS ON MARCH 26

State Bank of India has put on sale six non-performing accounts worth Rs 2,337.88 crore which will be auctioned on March 26. The bank is looking to sell all the accounts on a 100 percent cash basis to banks, ARCs, NBFCs and other financial institutions, according to the auction notice on the lender's website on Tuesday. The accounts are Indian Steel Corporation (outstanding debt Rs 928.88 crore), Jai Balaji Industries (Rs 859.33 crore), Kohinoor Planet Construction (Rs 207.77 crore), Mittal Corp (Rs 116.34 crore), MCL Global Steel (Rs 100.18 crore), Shree Vaishnav Ispat (Rs 82.52 crore) and Gati Infrastructure (Rs 42.86 crore). Last week, the bank had put on block six other NPA accounts worth Rs 1,307.27 crore-- Parental Drugs (Rs 429.72 crore), Kamachi Industries (Rs 365.68 crore), Jain Infraprojects (Rs 361.55 crore), MPK Ispat, MPK Steel and MPK Metals (Rs 53.86 crore), Balmukund Polyplast (Rs 50.12 crore) and Martina Biogenics (Rs 46.34 crore). The auction these accounts will be conducted on March 22.

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CASH RECOVERY: BANKS OPEN TO BIG HAIRCUTS AS THEY RUSH TO SELL BAD LOANS BEFORE MARCH-END

Bad-loan accounts put up for sale by banks so far in the March quarter have risen to over Rs 27,000 crore as lenders rush to make cash recoveries ahead of the close of the financial year 2018-19. In their anxiety to close out deals, they have been willing to take fairly large haircuts, executives at asset reconstruction companies (ARCs) said. For instance, Central Bank’s reserve price for Alok Industries suggests an 84% haircut and IDBI’s reserve price for RCom implies a 55.5% haircut. Banks are demanding 100% cash payments through ARC sales to try and ensure their provisioning burden does not go up. We are selling NCLT exposures in cases where we get cash , an executive with a mid-sized public-sector bank (PSB) said. We are making it clear to buyers that we want the cash in 60 days, he added. However, a cash deal often means taking a bigger haircut. A senior executive with an ARC pointed out that compared to even 12 months ago, deal-making today was happening much faster. Banks that have gone through the NCLT process have at times got only 60% of what we were offering because they preferred cash, he explained. Delays in resolution through the Insolvency and Bankruptcy Code (IBC) route may have also forced their hand, sector watchers point out. Among the large exposures that have been put on the block are Bank of Baroda (BoB) and IDBI Bank’s exposures to RCom — Rs 1,838 crore and Rs 1,056 crore, respectively. The other large accounts which banks are trying to sell are those of Bhushan Power & Steel and Alok Industries. In March alone, Central Bank of India and United Bank of India have put on sale accounts worth a total Rs 7,777 crore, of which these two assets account for Rs 4,438 crore. The value of NPAs put on the block would have been much higher had State Bank of India (SBI) decided to go ahead with the sale of its Rs 15,431-crore exposure to Essar Steel. The country’s largest lender reportedly shelved its planned sale of the account as it was not satisfied with the sole bid it received. Central Bank has also put up for sale its 424-crore exposure to the steel firm. BoB had already exited Essar Steel in the September quarter of FY19. Interestingly, pools of micro, small and medium enterprises (MSME) loans are also being offered for sale to ARCs. Of the 11,085-crore worth of assets on sale by SBI, Rs 8,453 crore of loans are to individuals or MSMEs. United Bank, too, is selling retail NPAs worth 115 crore in addition to the corporate NPA tranche of Rs 4,405 crore.

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KEY STAKEHOLDERS POINT TO CHINKS IN INSOLVENCY AND BANKRUPTCY CODE

Now that two years have passed since the first major acquisitions under Insolvency and Bankruptcy Code (IBC), several players —buyers, investment bankers and dissatisfied creditors—are slowly opening up about what they see as chinks in India's bankruptcy law. These include repeated litigation —both during and after the process—missing physical assets in plants, the lack of judges and questions over the integrity of promoters of distressed businesses and resolution professionals. The cracks in the resolution process are evident from the following developments:

■ _After acquisition of Monnet Ispat by JSW Steel Ltd in September 2018, operational creditor Bharat Heavy Electricals Ltd (BHEL) and unsecured creditor IFCI Ltd have challenged the resolution plan._

■ _The bidders for Amtek Auto and its unit Metalyst Forgings—London-based Liberty House and US-based hedge fund Deccan Value Investors, respectively—are challenging the information provided to them by the resolution professional during the bidding process._

While Deccan Value Investors has asked NCLT to cancel its resolution plan Liberty house has alleged in court that the contents of a forensic audit conducted. Often, resolution professionals are ill-equipped to fully oversee operations at companies. In other cases, there are serious integrity issues among resolution professionals and promoters, an investment banker said on condition of anonymity. We know of cases where equipment has been stolen from plants during the resolution process. In some cases, promoters litigate to draw out the resolution process while we hear of money being siphoned away from the company during this period. Mahesh Singh, said sometimes assets do go missing at the time of closure of the deal. Buyers should get a chance to do the closing due diligence. Even so, there are legal remedies for when assets are missing because there is always a lag between selling a business and finally getting possession. Adi Godrej said: The bankruptcy code has been very poorly implemented because there have been so many cases of bankruptcy which have not been finalized. We allow them to go from one court to another and then we give them stay order. Our judicial process is very slow. It (IBC) is not being implemented as well as it could have been. That is not perhaps for lack of trying but it is also our legal system and legislation. The major acquisitions under IBC were those of Bhushan Steel by Tata Steel Ltd; Binani Cement Ltd by UltraTech Cement Ltd; and Monnet Ispat by JSW Steel-AION Capital.

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PUBLIC SECTOR BANK INITIATES INSOLVENCY PROCEEDINGS AGAINST STATE TRADING CORPORATION

The NCLT Principal Bench has issued notice issued to Government-owned, State Trading Corporation (STC), in a filing made by Syndicate Bank in its capacity as a financial creditor. STC is an international trading house owned by Government of India. It trades in a variety of products ranging from agricultural commodities to manufactured product. It has availed various credit facilities from 6 banks – Syndicate Bank, IOB, Exim, BOB, UBI and Indian Bank. STC’s account was declared as an NPA on 31.3.2018 due to non-service of interest due since December 2017. As on 31.12.2018, outstanding balance, owed by STC to Syndicate bank, is approximately 700 crores. After being declared as an NPA, Syndicate Bank also wrote to the Ministry of Commerce and Industry alleging that STC is routing the transactions to other banks, which is in contravention of RBI guidelines. While several insolvency applications have been filed against Public Sector Undertakings in the recent past, but none was admitted barring West Bengal Essential Supplies Commodities Corporation. This particular application is unique since it’s a public sector bank filing against a public sector undertaking, essentially making a government dispute inter-se. Even before NCLT issued notice, an Rs. 1,955 crore suit against STC is already pending at DRT, filed by Syndicate Bank along with 5 others. The DRT-II, Delhi issued notice to STC on February 8, 2019, with interim directions and restrained STC from dealing with or disposing of secured assets over which security interest is created.

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RCOM IN DANGER OF LANDING BACK IN INSOLVENCY

An appellate tribunal has warned lenders to Reliance Communications (RCom) that their failure to release tax refunds to clear the telco's dues may force the court to send the operator back into insolvency proceedings If you don’t pay we will vacate the order (staying insolvency proceedings) and ask for insolvency, National Company Law Appellate Tribunal (NCLAT) said on Tuesday. If the payment fails we will pass orders for insolvency, said a two-member bench headed by Justice SJ Mukhopadhyaya. The tribunal will hear the case on Wednesday. The court’s comments come on the back of RCom’s request that Rs 260 crore of tax refunds held in a trust fund by lenders be released on behalf of the telco to pay Swedish telecom gear maker Ericsson. RCom needs to pay Ericsson Rs 453 crore out of its Rs 571 crore dues by March 19, else its chairman Anil Ambani will go to jail for three months. If the tribunal goes ahead with its threat and RCom goes into insolvency — which it had earlier voluntarily applied to the NCLAT for — the payment to Ericsson will be left in the lurch.

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DECCAN VALUE INVESTORS PREPARE FOR A FRESH BID FOR AMTEK AUTO

Even though lenders to the beleaguered auto component maker Amtek Auto are looking for the second highest bidder Deccan Value Investors to stick to their original price of Rs 3,150 crore for the asset, lawyers say that with first bidder Liberty House defaulting, the valuation of the company may also take a hit. Indeed, say sources, the second bidder or H2 is not obligated to honour its earlier bid price for the asset. Liberty House’s allegation that there were discrepancies in the information memorandum is now public knowledge. With Liberty House defaulting on those grounds, the next bidder will also know that the picture is not as rosy as earlier imagined. The possibility is remote that someone in 2019 will bid higher than they did in 2018. So yes, there should be an impact on the price of the asset, said Punit Dutt Tyagi. According to sources with knowledge of the matter, currently the H2 US-hedge fund Deccan Value Investors is doing their due diligence to re-evaluate the asset and resubmit their bid based on latest financial results. Lenders want them to stick to their original price of Rs 3,150 crore upfront but it is not binding on them to comply. The bid is expected to come in the next couple of weeks.

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RAMDEV'S PATANJALI AYURVED UPS OFFER FOR BANKRUPT RUCHI SOYA TO RS 4,350 CR

Baba Ramdev's Patanjali Ayurved has sweetened its offer for bankrupt Ruchi Soya to Rs 4,350 crore as upfront cash to banks. As earlier offered, it will also infuse Rs 1,700 crore into the company. The revised offer will mean the lenders will have to write off 60 per cent of their dues Adani Wilmar had reportedly offered Rs 4,300 crore in August last year, but withdrew this January, citing delay in the resolution process. Patanjali's earlier offer was for Rs 4,100 crore. Adani had proposed an additional Rs 1,700 crore, as Patanjali did, for fund infusion. Adani was declared the highest bidder but Patanjali objected, saying its offer was better. A source said the Adani offer was earlier selected as settlement of bank loans has higher weight in the evaluation (of the lenders) than the infusion of funds into the debtor company. A banking source said with the revised offer, the stage was finally set for acquisition of Ruchi Soya. It had attracted over two dozen bids. These were from private equity majors KKR and Aion Capital, beside consumer goods entities ITC, Godrej Agrovet and Emami, apart from Patanjali and Adani Wilmar.

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IDBI BANK TO SELL BAD LOANS, INCLUDING RCOM’S

In a bid to clean up its book faster and protect its balance sheet from further provisions, IDBI Bank has put on the block several large loans including Reliance Communications (RCom) and Reliance Telecom. The public sector bank, which was recently sold by the government to Life Insurance Corporation (LIC), has put on the block loans of RCom and Reliance Telecom with gross principal outstanding of Rs 1,056 crore. It is also selling loans of Loop Mobile valued at Rs 105 crore. Other NPA assets for sale are Mittal Corp (Rs 73-crore exposure), Amzen Transportation Industries (Rs 79 crore), Nandhi Dal Mills (Rs 32 crore) and Sunrise Pictures (Rs 7.83 crore).According to bankers, until loans are fully written off, lenders have to make ageing provisions, which take a toll on their profits. Bloomberg reported this week that the bank may sell up to Rs 10,000 crore of bad loans in a bid to bring down its NPAs, which are currently 30% of its portfolio. Banks had started classifying RCom as an NPA a year ago. Since they have to periodically make fresh provisions, a large part of the loans would have already been provided for. IDBI Bank has set a reserve price of Rs 470 crore, which is less than 45% of the principal outstanding amount. However, given that the bank would have already provided for a large part of the loan, a sale at even half of the outstanding amount would be positive for the bank. In the case of Loop Mobile, IDBI Bank has chosen to invite offers under the ‘Swiss Challenge’ method. This involves the seller calling for bids from the open market based on an offer that it has already received. The original bidder will then be given an opportunity to match the highest bidder. It is not known which is the company that has made an offer for Loop Telecom.

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TOLL IS LEGALLY SANCTIONED LOOT

It’s a never-ending exposure. No, it is not a defence deal but more serious. The IL&FS exposure is apparently expanding everyday from the initial Rs 91,000 crore. Now, the regulator IRDAI says it is established that insurers are not safe. LIC alone has over Rs 13,000 crore exposure to IL&FS. In other words, this money of insuring people as of now is lost and chances of redemption are thin. The functioning of IL&FS has been queer as it virtually gave unsecured loans to road builders, who were supposed to collect toll and repay it. The toll was collected alright but the loans were never repaid. So much so that now road construction and the toll collected to operate them could emerge to be the largest procedural scam, possibly larger than the 1992 Harshad Mehta stock scam. It thrives on the State acquiring land with public money, building roads with NHAI money in participation with some private agency and then leasing out the public-funded project to the private player for 30 years! Nobody answers why toll is needed for 30 years when not only the Delhi-Noida-Direct flyway but also many others recovered investment in three years. The high toll, parking charges, airport tax and other levies are leading to exploitation of the masses. It helps groups engaged in the collection of all these, who thrive at the cost of public-funded companies or the model called PPP, which simply means private pilferage of public wealth. The toll gates across the country have become exploiters’ den and for unknown reasons, despite those in power knowing it, they are unwilling to remove these in the name of facilitation of development. These, in reality, have become conduits for generating black money through legally sanctioned avenues. That IL&FS and NHAI are not alone is testified by another Supreme Court observation on the Haryana Assembly amending the Punjab Land Preservation Act (PLPA) 1900, removing protection to the forest cover in Aravalli and thus opening up more than 28,000 acres of land in Gurugram and Faridabad to private builders. The court asked the government to not act on the amended provisions and described the move as a misadventure by the State Government. Misadventure it all is, be it the IL&FS, rampant clearance of provisions for road and real estate development, the Haryana amendment of PLPA or Jewar airport-like projects in Uttar Pradesh. The Haryana action was aimed at virtually looting the pristine environmental preserve of the Aravallis for the benefit of a few developers and their cohorts. It is none of their concern that the NCR is suffering severe environmental degradation as aquifers are choked and forests devastated, so long as the sharks benefit. And who pays for it? The common man. He is huddled into this degraded space and his cars and other wealth is confiscated for the benefit of industrialists and auto makers. In fact, the worst is happening in Uttar Pradesh. The entire stretch of Ghaziabad, Bulandshahr, Noida, Hapur, Meerut, Agra and Aligarh are being turned into desert as a mesh of roads, highways, expressways and airports are constructed. No lesson has been taken from the collapse of the Jaypee group which took loans of over Rs 95,000 crore in building Yamuna expressway and large townships. Now it is in trouble looking for an exit through acquisition again by government agencies. In monetary terms alone, the nation has lost over several lakh crore in such ill-thought of non-projects. If the GDP is today shrinking to 6.7 per cent, these mega failures are responsible for it. IL&FS does not have the money to pay back. Rating agencies have classified the equity of IL&FS as junk, which means it is absolutely unredeemable. But in February, the National Company Law Appellate Tribunal ordered that IL&FS and its group companies will not be classified as NPAs as that allows the company to look for write-offs. There have been many defaults by the company in the past with its Managing Director (MD) and many directors resigning. The equity structure of IL&FS is that of LIC and two foreign investors from Japan and Abu Dhabi, who own about 36 per cent of equity. While ways are being found to protect the funds of foreign investors, the common man’s money deposited with LIC and SBI is virtually lost. It is strange that major stakeholders like LIC, SBI and Central Bank did not see the warning signs or act to stop this. Financial analysts estimate that Rs 57,000 crore is the NPA or money virtually lost. In the case of the Jaypee group, the exposure is Rs 75,000 crore. The RBI in 2016 found an over Rs 5 lakh crore exposure in the real estate and infra locked in NPAs. A big group alone has Rs 1.21 lakh crore unredeemable debts. Many of these have linkages with IL&FS. So be it Uttar Pradesh, Haryana, the NCR and many other large metros across the country, irregularities are being allowed without a check. A national discussion is needed to stop perpetual loot and regression of the development process.

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NHPC TO BID FOR RANGIT HYDRO PROJECT IN SIKKIM UNDER IBC

Buoyed by the winning bid for Lanco's Teesta VI, state-owned NHPC will bid for Jal Power Corporation's Rangit hydro project in Sikkim, which is undergoing insolvency proceedings, NHPC Chairman and MD Balraj Joshi said. The Rangit Stage IV 120 MW project is a stressed asset and is undergoing insolvency proceedings in the National Company Law Tribunal (NCLT). We are also looking at another project which is also in Sikkim again. We are just waiting for the (commercial bid to open). This is a Jal Power project. This is also at the same status as Teesta VI. They are yet to call for EoI (expression of interest). NCLT will hear the case on March 15, Joshi told. M K Mittal said this is the first time a public sector firm is buying a private entity through NCLT. We have been a frontrunner in buying one project through NCLT. No other PSU has been able to do so. We have been very aggressive, Mittal said.

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SHAKTI SCHEME: MOST POWER UNITS BARRED FROM BIDDING FOR COAL

The second round of coal auction under the Shakti-B scheme may see far fewer bidders than the first one held in 2017 because of an exclusion criterion. Analysts. see power utilities with combined capacity of 407 MW could place their bids for coal in the forthcoming Shakti-B second round, which is just 5% of 8,440 MW capacity that vied for fuel in 2017. KSK Mahanadi’s (Akaltara plant), Adani Power’s Tiroda and Kawai plants, GVK’s Goindwal plant and GMR’s Kamalanga unit, Bajaj Power, Adhunik Power, ACB and Inland Power had participated in the first round. All these players will not be eligible to participate in the second round to secure the balance fuel requirement. Industry sources said the bidders participated in the auction thinking that it will only be a one-time process wherein the maximum allocable quantity would be restricted to 80% of maximum eligible quantity of all eligible bidders If the maximum allocable quantum under second round of B (ii) auction was made available in the first round itself, the maximum allocable quantum i.e. in tonne would have increased, thereby the earlier bidders would have had opportunity in first round itself to avail more quantum against their requirement, the Association of Power Producers said in a letter to coal minister Piyush Goyal in February. If the second window is now being contemplated to allow participants who have resolved issues related to non-submission of Discom certificates due to litigated/revision in PPAs, prevailing coal block litigations then not allowing earlier bidders to avail their balance shortfall quantities will be a loss of opportunity for them. Further, to avoid any litigation issues arising out of loss of opportunity to earlier bidders, it would be prudent to allow their participation in subsequent rounds of B (ii) auction, the letter said. Ashok Khurana, told although the companies are not looking at any legal action as of now, they would request the government to come out with a procurement policy that is not based on shortage of coal. Unless there is certainty of coal supply, certainty of prices and quality, the bid becomes speculative, so that bidders either make windfall profits or a complete loss. Our request to the government is to create a sustainable model of coal procurement that is not speculative in nature, Khurana said. The government came out with the Scheme for Harnessing and Allocating Koyala Transparently in India (SHAKTI) to address the key challenge of coal linkage for around 40,000 MW stressed assets getting resolved under the NCLT.

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SEBI'S KYC DATABASE PLAN FACES DATA PRIVACY CONCERNS

Large overseas fund managers like Templeton, Fidelity and BlackRock have expressed privacy concerns on Securities and Exchange Board of India (Sebi)'s KYC database plans. According to the new idea, Sebi proposes to create a central database containing the personal information of all beneficial owners of offshore funds, as reported from reliable but unnamed resources. The argument is that a database like this, held by an external agency in India would violate the law in their home countries. The Know Your Customer (KYC) data that Sebi holds will ask for and hold direct information on ownership and benefits for overseas investors. Under the new rule, FPIs will have to submit KYC documents of beneficial owners to custodian banks. These banks will share them with registrars. Sebi’s request for registrars to create a centralized database of documents that can be accessed even by other market intermediaries (with consent from the FPIs), was met by no response from Templeton, Fidelity and BlackRock. The main reason for this seems to be the privacy laws in many countries - where employee data cannot be saved outside the home country. This is specially for investors from Europe, where the General Data Protection Regulation (GDPR) have come into effect, and data privacy is taking centrestage for all discussions. These funds have complied with this requirement from Sebi in some other countries, so there seems to be no move from Sebi to back down on these requirements. They have also assured offshore funds that their data will be safe. Stiff penalties will be imposed against entities or individuals trying to access confidential information without the regulator's approval, and the license of such violators could also be revoked, Sebi has assured. Given the distinct rise of data privacy in global subjects of concern, Sebi and RBI will need to provide better assurance and ensure they meet international privacy requirements and act upon more stringent laws, before this kind of data will be shared.

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KOTAK BANK PROPOSES TO REDUCE PROMOTER STAKE TO 20% BY MAY 2020

Seeking interim protection by Bombay High Court, counsel of Kotak Mahindra Bank on Tuesday proposed to reduce promoter holdings in the lender to 20 per cent by May 2020. The court adjourned the Kotak Mahindra Bank vs the Reserve Bank of India case to April 1, 2019 Kotak Mahindra Bank in December had approached Bombay High Court against an RBI order that had disallowed the use of preference shares to reduce promoter shareholding in India’s second most valuable private lender. However, the Reserve Bank of India (RBI) had said that the preference share allotment route did not meet its promoter holding dilution requirement. Promoters were holding 30.01 per cent stake in the bank as of December 31, 2018, whereas public held 69.99 per cent stake.

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RBI EXPERT COMMITTEE TO UNDERTAKE COMPREHENSIVE REVIEW OF MSMES FOR BENEFIT OF THE SECTOR

The RBI's Expert Committee is undertaking a comprehensive review of the Micro, Small and Medium Enterprises (MSME) sector for proposing long term solutions for the economic and financial sustainability. A press release by RBI issued earlier had said, Considering the importance of the MSMEs in the Indian economy, it is essential to understand the structural bottlenecks and factors affecting the performance of the MSMEs. It has, therefore, been considered necessary that a comprehensive review is undertaken to identify causes and propose long term solutions, for the economic and financial sustainability of the MSME sector. The Expert Committee was constituted by RBI on January 2, 2019 and U.K. Sinha, has been elected as the Chairman of the committee. The Committee will review the current institutional framework in place to support the MSME sector, study the impact of the recent economic reforms on the sector and identify the structural problems affecting its growth, examine the factors affecting the timely and adequate availability of finance to the sector and study the global best practices with respect to MSMEs and recommend its adoption in India, wherever appropriate. Further the Committee will also review the existing MSME focused policies and its impact on the sector, propose measures for leveraging technology in accelerating growth of the sector, and suggest long-term solutions for the economic and financial sustainability of the MSME sector. The Expert Committee has invited representatives from MSME associations to send reviews on behalf of MSMEs.

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INSURANCE COMPANIES SHOULD REACH OUT TO REMOTE AREAS TO INCREASE HEALTH COVERAGE: IRDAI

Raising concerns over low penetration of health insurance, especially in the hinterland, and high ‘out of pocket’ expenditure on health, the insurance regulator has urged private insurance providers to reach out to the uninsured in remote areas and asked healthcare providers to devise mechanisms to keep cost of treatment in check. Currently 62% of the average health expenditure in India is borne out of pocket against the world average of 18%, Insurance Regulatory and Development Authority of India (IRDAI) chairman Subhash Chandra Khuntia said. He emphasised that standardisation of rates and procedures offered by healthcare providers was necessary and for this self-regulation was imperative till such time a regulator for healthcare services was in place. The overall insurance penetration in India continues to be abysmally low. Merely 43 crore individuals or 34% of the country’s population was covered under any health insurance in 2016-17, according to the National Health Profile (NHP)-2018, compiled by Central Bureau of Health Intelligence. Experts say though the situation has improved after the launch of the government’s flagship health insurance scheme under Ayushman Bharat, the total insurance coverage is still estimated to cover over 40% of the total population. We are still far from achieving universal health cover that is critical to achieve. There is need to develop innovative products tailored to individual needs at an affordable premium to help the middle class that’s left out from Ayushman Bharat to get health protection, says Shobha Mishra Ghosh. Private sector coverage is largely limited to urban households. Even among those who have some coverage, 67% were covered by public insurance companies. Currently, Indian health insurance industry is pegged at Rs 37,500 crore, and is expected to grow to Rs 48,000 crore by the end of 2019-20.

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L&T PREPARES FOR HOSTILE TAKEOVER OF MINDTREE

Larsen and Toubro Ltd (L&T), which has been in talks to buy Cafe Coffee Day founder V.G. Siddhartha’s stake in Mindtree Ltd, is set to sign a binding agreement to close the deal, two people directly aware of the development said. The deal, which is likely to be announced in the weeks ahead, could trigger a hostile takeover bid, leading to an open offer by L&T, India’s largest engineering company, to increase its stake to 51%. The move, if successful, could see Mindtree’s current management losing control of the company. Siddhartha was one of Mindtree’s early investors and bought a 6% stake in 1999, the year it was founded. Over the years, he has increased his holding, giving an exit to existing shareholders, including Mindtree’s former chairman, Ashok Soota, who left in 2011. Siddhartha said that Siddhartha had in several tranches pledged almost the entire holding held by him and his two affiliate firms in Mindtree to several domestic and foreign lenders to borrow close to ₹3,000 crore—equivalent to the current value of his 20.4% stake in Mindtree. He (Siddhartha) is, however, behind schedule on repayments for several of these loan facilities taken by pledging shares, one of the two people cited earlier said, requesting anonymity. If he is unable to regularize the accounts, it could lead to invocation of the share pledge by the lenders. L&T is closely working with the lenders and Siddhartha to work out a solution and has offered a letter of comfort for a two-month moratorium on invocation of share pledges by the lenders, the second person cited earlier said, also requesting anonymity. L&T is seeking a moratorium because it hopes to obtain antitrust approvals in key markets such as India, Europe and the US, where both Mindtree and L&T Infotech (a unit of L&T) are currently present. Invocation of the share pledge by lenders would dampen L&T’s chances of taking control of Mindtree, the second person added.

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SEBI LIFTS FOREIGN INVESTMENT CAP IN CORPORATE BONDS

Markets regulator Sebi on Tuesday withdrew the 20 percent limit on investments by Foreign Portfolio Investors in corporate bonds of an entity. In a notification, the regulator said the restriction is being withdrawn in accordance with a circular issued by the Reserve Bank of India (RBI). In June last year, the Securities and Exchange Board of India (Sebi) had mandated that no Foreign Portfolio Investors (FPIs) shall have an exposure of more than 20 percent of its corporate bond portfolio to a single corporate. However, the central bank in February lifted the restriction in view of market feedback.bTo give effect to the directions of the RBI, the regulator said provisions of its June 2018 circulars with respect to exposure of more than 20 percent stands withdrawn with immediate effect.

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SEBI’S MOVE TO ALLOW MUTUAL FUNDS, PMS IN COMMODITY TRADING A MASTERSTROKE

Globally, total commodity asset under management has crossed USD 300 billion and India’s contribution to this is anything but negligible. In most parts of the world commodity derivative indices are traded by institutional investors, however, India is just getting started. Despite the fact that commodity derivative markets have been functioning now for decades most retail investors have maintained arms-length from this asset class. Gold and silver have been the only two commodities Indians have heavily invested into owing to a deep-rooted cultural practice. With SEBI making it possible for mutual funds and PMS to trade in commodities, a significant step has been taken to help retail investors leverage returns from this asset class in a safer manner. This is possibly the masterstroke that could turn tables for the markets. The commodities markets have had a strong speculative aspect to them since the beginning. Globally, commodities have increasingly become a significant part of the asset allocations of institutional investors. These investments in commodities take a variety of forms, including those in precious metals, agricultural products, futures, indexes and hedge funds. In portfolio management commodities can serve a variety of functions from volatility and/or inflation hedges to purely speculative plays. It is to be noted with utmost importance that now with MFs and PMS been provided a route into the commodity space in India, there is still need to bring in further efficient and representative indices for the purposes of trade and hedging. It is imperative to build on indices which would allow for long and short term investments and help investor’ benchmark commodities across categories on real time basis. Needless to say participation of mutual funds and PMS in commodities trades will enable investors to leverage the asset class under professional guidance and through structured product. The inroads, mutual fund industry has made in equity markets is now well known, making it one of the most preferred investment vehicles for retail clients. The AUMs of Indian MF industry grew at a notably higher compounded annual growth rate (CAGR) of 27% from FY13-14 to FY17-18 and during FY18-19, it grew to Rs 22.85 lakh crore as of December 2018, registering 7% growth over March 2018. A similar trend in commodity derivative, even though now a long journey away, seems plausible now.

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STABLE INFLATION, SLOWER INDUSTRIAL PRODUCTION RAISE CHANCES OF RBI RATE CUT

India’s retail inflation quickened in February but remained within the central bank’s comfort zone, while factory output weakened in January, leaving enough space for the Reserve Bank of India (RBI) to cut its repo rate on 5 April for the second straight time this year. Data issued by Central Statistical Organisation (CSO) shows retail inflation accelerated to a four-month high of 2.57% in February from a revised 1.97% a month ago, while factory output slowed to 1.7% in January from 2.5% in the previous month. Though deflation in vegetables, pulses and sugar is waning slowly, pushing up retail inflation, core inflation softened to 5.55% in February from its peak of 6.13% in June last year. Among use-based groups in the Index of Industrial Production (IIP), output of capital goods contracted, suggesting weak investment demand. Electricity output growth slowed to a 43-month low of 0.8% in January. With inflation remaining below RBI's target, decline in inflationary expectations and weakening of growth profile, the central bank might front-load its monetary easing in the beginning of 2019-20, said Devendra Kumar. However, with capacity utilization still low at 74.8% and pending elections in April-May, it is unlikely to spur investment demand in the economy.

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FROM TATA TO AMBANI, INVESTMENTS BY INDIAN CONGLOMERATES ARE ON THE WANE

India’s largest conglomerates are investing far less in the country than they used to. The top 20 conglomerates, based on aggregate turnover, contributed less than a third to overall private sector investments in the three years from fiscal years 2015-16 to 2017-18.;These companies accounted for more than half of all new project announcements at the turn of the century The categorization of business groups by CMIE is largely based on the 1966 R.K. Hazari Committee report. Data for business houses that have split in the period under consideration (including the Ambanis, the Jindals, and the Bajajs) have been merged to ensure comparability across the time period. Although growth in fresh investments recovered in the last three years after hitting a record low in 2013-15, the improvement is largely due to the low base and the growth rate is still much lower than what it was in the early 2000s. The 2012-15 period actually saw negative growth for this set of conglomerates, primarily because several of the large conglomerates were deep in debt during that period. According to a 2015 report by Credit Suisse titled Still in the Woods, total debt at 10 of the biggest business groups climbed seven times in the eight years leading up to that year, adding up to 12% of the loans in the banking system and 27% of corporate loans. The Essar Group, Larsen and Toubro (L&T) and Godrej saw the sharpest declines in new investments during this period. L&T also witnessed the sharpest improvement in the subsequent three years, from FY2016-2018. Even so, among the top 20 Jindals and Ambanis remained the biggest contributors to fresh investments in India. In fact, a comparison of the performance of new conglomerates (founded after 1970), such as Vedanta, Adani and the Ambani group, with older conglomerates (those founded before 1970), including the Tatas, Jindals and Godrej, shows that the contribution of the older conglomerates has fallen more in recent years. The analysis also shows that manufacturing investments by the top conglomerates have been far more volatile than investments in services, which have been led by groups such as Larsen and Toubro, the Jindals, and the Ambanis.

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JET AIRWAYS DENIES REPORT OF ₹2,050 CRORE LOAN FROM PNB

Debt-laden Jet Airways Ltd denied a media report on Monday that it had secured a ₹2,050 ($293 million) loan from state-owned Punjab National Bank (PNB) to help pay overdue plane leasing fees and salaries. The airline, which has had to ground planes after failing to make payments to leasing companies and is behind on paying pilots' wages, said in a statement to the stock exchange that it has an existing credit facility of $300 million from PNB and that the bank has not provided any fresh credit.

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INCOMPLETE PROJECTS GET RERA BREATHER

Over a dozen real estate projects led by Indore and Bhopal have sought extension from MP Real Estate Regulatory Authority (RERA) after they failed to complete project as per proposed deadline at the time of registration. At the time of registration of project under RERA, promoters have to propose deadline for completing the project and if deadline is breached, promoter has to take extension from the authority or else the project will fall in illegal category. Anthony De Sa said, There are over a dozen projects that have asked for extension. Extensions are being granted so that they do not become illegal projects. In case of illegal the project will be of no use to the allottee and the builder. The authority is giving extensions after promoter pays a certain fee and project remains under regular monitoring. De sa said extensions are given with mandatory condition that it does not any way affect right of allotee and they get compensation for delay. According to Rera, extensions can be given for a maximum one year in phased manner while under certain circumstances considering interest of allottees, extensions can be above a year. Recently at a hearing in Indore, an Indore based commercial project costing around Rs 13 crore has been granted an extension of 3 months over an year.

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FRAUD ALERT! SBI WARNS ABOUT FAKE OFFERS ON WHATSAPP, SOCIAL MEDIA

SBI has issued a warning for all its bank holders to be aware of the Whatsapp and fake social media messages. The largest lender State Bank of India (SBI) took to Twitter to issue the warning. The bank noticed that few customers had been receiving fake messages where they are being asked to share financial credentials. The bank has been taking various measures to ensure the safety and security of its customers, and thereby it is of utmost importance to stay alert and vigilant. SBI has also directed its customers for not sharing their details to anyone in the wake of this fraud. Stay alert to stay safe! Fake offers on messages via WhatsApp and social media could lead you astray. Report any untoward incident by calling at 1-800-111109, SBI tweeted.

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INDIAN M&E INDUSTRY TO REACH RS 2.3 TRILLION MARK BY 2021: FICCI EY

Indian media and entertainment (M&E) industry grew at a strong 13.4% in 2018, beating GDP growth rate, and reached Rs 1.67 trillion. Increasing disposable income and economic growth and India having second highest number of internet users after China with ~570 million internet subscribers, have worked in the favour of the industry in 2018, and poised to reached Rs 2.35 trillion by 2021 Traditional media including television, music, and films continued to show double digit growth. The growth of digital infrastructure is further enabling Indians to fulfil the need for personal content consumption, across languages and genre. There is a large shift in consumer behaviour from mass produced content to specific content defined to audience segments. The sector has an opportunity to serve a billion screens in India and globally, said Ashish Pherwani. As per the report, online gaming saw maximum growth, but the real money was in real money games, including fantasy and e-Sports. While gaming sector grew by 52% number of online gamers has reached 278 million as of 2018. The report also noted that advertising budgets continued the shift towards digital media despite fears of advertising fraud. While the sector now commands 21% of total advertising, it was the digital subscription which witnessed a massive growth on a smaller base. On the back of subscription-led services like Netflix, Amazon Prime, Hotstar and more, subscription revenue grew by over 262% to Rs 1,420 crore, from just Rs 390 crore in 2017. Television grew at 12% to Rs 74,000 crore while print sector reached Rs 30,550 crore in 2018. Also, 2018 was the first year when the film sector crossed Rs 100 billion in domestic theatrical revenues. The sector also witnessed growth in Indian film exports, led by China, where 10 Indian films were released in 2018.

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RCOM’S MUMBAI DATA CENTRE GETS CERTIFICATION

Reliance Communications Ltd (RCom) on Monday said its IDC-4 data centre in Navi Mumbai has received Tier III certification from Uptime Institute. The certification is an endorsement of RCom’s capabilities for optimised, dependable and secure service delivery in the data centre domain, the company said in a statement. Our IDC business continues to operate at industry-best levels of growth and profitability. Given our additional capabilities in the sub-sea cables domain, our Managed Services business and our capabilities around the Cloud, we have all the fundamental growth engines in place for future growth and profitability, said Bill Barney.

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DIFFERENTIATE BETWEEN CONSUMER & BIZ DATA: GINNI ROMETTY, IBM CEO

India must differentiate between rules that govern privacy of consumer data and that of data generated by business users while drawing up new regulations for a digital economy, said IBM CEO Ginni Rometty. Emphasising the need for free flow of data across borders, Rometty said there should be no unintended consequences that hurt economic growth as India seeks to police its burgeoning internet economy. We believe strongly in consumer privacy and you have to be careful to not conflate consumer data issues with business-to-business data issues. Because of the mishandling of consumer data by a very small number of companies, it is clearly a heightened issue on everyone’s mind and we need to have a set of regulations — voluntary or otherwise — around consumer privacy, said Rometty. India is at a crossroads on this. Its decision will have a large impact on its role in a global economy, she said. The country is debating a draft data protection bill that recommends locating critical personal data of users — to be defined by the government — within India, while also storing a copy of all personal data. India has also raised concerns over Facebook and its messaging platform WhatsApp being used to spread rumours in the country. I have the right to know (from consumer-facing technology companies) what data you have of mine, Rometty said. Data flow across borders is important to sustain (India’s) exports industry, according to Rometty, who pointed to India’s claim to fame as a destination for work from other countries.

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AS GOVERNMENT TIGHTENS DATA RULES, IT FIRMS FLAG RISKS

Indian IT and business process management companies such as Cognizant and Genpact are flagging risks related to the prospect of data protection policies in the country, saying it could impact their businesses and expose them to increased regulatory scrutiny. India is considering a draft data protection bill that suggests critical personal data of Indian users held by digital and global firms be stored and processed only in the country. The draft was part of the recommendations made by a panel on data protection led by former Supreme Court judge Justice Srikrishna. The suggestion has concerned global giants which say the cost associated with collecting and managing the user database will be considerable. IT and BPM firms possess data from employees and clients in the country, and stricter rules governing their location and storage could raise their costs, they have warned. The Digital Information Security in Healthcare Act (DISH) is under consideration in India, which proposed legislation including significant penalties related to disclosure of healthcare data. Other countries have enacted or are considering enacting data localisation laws that require certain data to stay within their borders, Cognizant said. The DISH Act, which was discussed last year, is expected to provide for establishment of National and State eHealth Authorities and Health Information Exchanges and to standardise and regulate the processes related to collection, storing, transmission and use of digital health data. This is separate from the data protection and localisation it is proposing. IT firms already comply with US laws governing healthcare data.

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GOVT WARNING: TWITTER EXECS TO BE JAILED IF OFFENSIVE CONTENT ISN'T REMOVED

Top Twitter executives could not only face financial penalties but also face upto seven years in jail if they fail to remove content and accounts that are 'objectionable and inflammatory. Twitter has been asked to comply with the provisions under the Indian IT Act or else it would face action under Section 69A of the IT Act which gives the government power to seek the blocking of content or accounts that carry information seen as detrimental to the sovereignty and integrity of the country, or has potential to create public disorder. The warning from the IT ministry comes just as the micro-blogging site faced the heat from a parliamentary standing committee over perceived biases in blocking accounts ahead of elections. As India heads for national elections, social media giants like Facebook and Twitter have been asked to not undermine or influence the political process. In fact earlier this week, Twitter went live with its 'Ads Transparency Centre' for India, that would allow people to view details of political advertisements in the country, including advertiser spends and impressions data.

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FACEBOOK LAUNCHES 'FACEBOOK HUBS' TO FOSTER INNOVATION, SUPPORT STARTUPS

Social media platform Facebook Tuesday launched 'Facebook Hubs' an initiative to foster innovation and offer support for budding entrepreneurs. Facebook Hubs will extend support for startup community by hosting mentor hours and conducting trainings, workshops, discussions across 20 locations. The locations would be in Delhi, Gurugram, Noida, Bengaluru, Mumbai, Hyderabad, Pune, Navi Mumbai and in Goa, it said in a statement. The social media platform said it has partnered with 91springboard for a year-long programme to help startups and entrepreneurs scale their businesses. The initiative includes co-working community hosting, planning and organising structured activities like learning and skill development programmes for budding entrepreneurs. We have already worked with hundreds of startups through our various programmes and by teaming up with 91springboard we hope to reach out to more, to fuel India's startup ecosystem with a vision to build businesses of tomorrow, Satyajeet Singh, said.

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PAKISTAN SPEAKS BROTHERHOOD BUT SENDS TERRORISTS: AFGHANISTAN

Stepping up pressure on Pakistan ahead of March 13 deadline to declare Masood Azhar as a global terrorist Afghanistan's National Security Adviser Hamdullah Mohib has pulled up Pakistan for providing support to terror and for not abiding by its United Nations Security Council commitments by allowing free rein to terrorists on its territory. Mohib said, Until we see willingness to take action we are not going to buy any more words from Pakistan on what they are and willing to say. They are always very nice. They speak about brotherhood, historical linkages, then all we see is terrorist coming our way and no brotherhood. He said that the Afghanistan Pakistan Action Plan for Peace and Solidarity (APAPPS) which was agreed by the governments of the two countries for peace has not been implemented by the current administration in Islamabad. The plan in Pakistan was agreed under the leadership of former Prime Minister Shahid Khaqan Abbasi. Mohib who was earlier Afghan envoy to Washington said, There hasn't been action from Pakistan and there hasn't been any interest from Pakistan to implement. There is no cooperation with Afghanistan in any aspect. He also highlighted how Pakistan blocked landlocked Afghanistan's trade routes due to which Kabul diversified its routes --in the north via Uzbekistan and Turkmenistan and via Chabahar in Iran connecting to India. Hailing India Afghanistan air corridor launched in 2017, the NSA said, it has opened opportunities for Afghanistan not only to increase our trade but also to give us more options to import.

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CHINA SAYS TAIWAN MOVES LIKE 'STRETCHING ARM TO BLOCK A CAR'

Attempts to block Beijing's goal of bringing Taiwan under its control are like stretching out an arm to block a car, China said in its latest rhetorical broadside against the self-governing island republic's independence-minded president. The statement issued late Tuesday takes aim at Tsai Ing-wen's recent announcement of measures to counter China's one country, two systems framework for political unification with the island. Spokesman for the Chinese Cabinet's Taiwan Affairs Office An Fengshan accused Tsai of harming relations between the sides and using the welfare of the Taiwanese people as a poker chip for the sake of electoral gains. Such actions stand in opposition to the interests and welfare of our Taiwan compatriots, and endeavor to block progress by compatriots on both sides to progress, An said. All it is, is stretching out an arm to block a car, he said, using a common Chinese expression to describe a futile action.

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BRITISH PARLIAMENT REJECTS THERESA MAY'S BREXIT DEAL FOR SECOND TIME

British Parliament on Tuesday rejected Prime Minister Theresa May's Brexit deal for a second time plunging the UK into a state of uncertainty just two weeks ahead of the country's divorce from the European Union. The House of Commons voted against the deal by 391 votes to 242. Seventy-five Conservative MPs rebelled against their party's position by rejecting May's deal. Three Labour parliamentarians rebelled against their leader by voting in favour of the agreement. There will now be a debate on Wednesday on whether the UK should leave the EU without a deal. In her address to the parliament after the defeat, May said she profoundly regrets MPs decision. May said she is conscious of the potential damage leaving the EU without a deal would do and the lawmakers now face an unenviable choice of what to do next. Declaring May's Brexit deal as dead, opposition leader Jeremy Corbyn called on the government to adopt his proposals for a softer Brexit. Their deal, their proposal, the one the prime minister's put is clearly dead, the Labour Party leader told parliament.

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$25 MN US COLLEGE SCAM: HOLLYWOOD ACTORS, CEOS ACCUSED OF PAYING BRIBES

Nearly 50 people, including actors Felicity Huffman and Lori Loughlin were charged on Tuesday in what federal authorities say was a $25 million scam to help wealthy Americans get their children into elite universities like Yale and Stanford. The most sweeping college admissions fraud scheme ever unearthed in the United States was masterminded at a small college-preparation company based in Newport Beach, California, prosecutors said. It relied on bribes to coaches, phony test takers and even doctored photos misrepresenting non-athletic applicants as elite competitors to gain admissions for the offspring of rich parents. These parents are a catalog of wealth and privilege, Andrew Lelling, the US attorney in Boston, said at a news conference. For every student admitted through fraud, an honest, genuinely talented student was rejected. William Rick Singer, 58, pleaded guilty on Tuesday to charges related to running the scheme through his Edge College & Career Network, which charged from $100,000 to as much as $2.5 million per child for the services, which were masked as contributions to a scam charity Singer runs. I was essentially buying or bribing the coaches for a spot, Singer said as he pleaded guilty to charges including racketeering, money laundering and obstruction of justice. And that occurred very frequently. Dressed in a dark sweater blazer, wearing glasses, her hair in a ponytail, Huffman, best known for her role in the TV series, Desperate Housewives, was among around 20 defendants who appeared in a Los Angeles court. Many were slumped in chairs and one woman tried to hide her face. Huffman's actor husband William H. Macy, known for roles in movies such as Fargo and the hit TV series Shameless, sat in the front row of court wearing a gray sweater coat. Magistrate Judge Alexander MacKinnon ordered Huffman's release on a $250,000 bond before a March 29 hearing in Boston. All the defendants who appeared in the US District Court in Los Angeles were likely to be released on bond, Thom Mrozek, a spokesman for the US Attorney's Office, said in an email. Macy has not been charged in the case, but Assistant US Attorney Adam Schleifer told the court he was a subject of the investigation. Some 300 law enforcement agents swept across the country to make arrests in what agents code-named Operation Varsity Blues. Prosecutors have so far named 33 parents, 13 coaches and associates of Singer's business.

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ELON MUSK SHOOTS DOWN US REGULATOR'S COMPLAINT ABOUT HIS TESLA TWEET

Tesla Inc Chief executive Elon Musk shot back against US securities regulators on Monday, arguing in a filing that his recent tweet about the electric vehicle maker's production volume did not violate his fraud settlement and he cannot be held in contempt. Musk's single, immaterial tweet to his more than 24 million twitter followers claiming the electric vehicle-maker would produce around 500,000 cars in 2019 also complied with company's communication policy for senior executives, a condition of the settlement, lawyers for the Tesla chief wrote in a filing in federal court in Manhattan. The US securities and exchange commission had asked the court to hold Musk in contempt, saying his February 19 tweet violated a September fraud settlement barring him from sharing material information about Tesla on social media without the company's pre-approval. This contempt action, following Musk's sincerely-held criticism of the SEC on 60 Minutes, also reflects concerning and unprecedented overreach on the part of the SEC, the filing said. As part of that settlement, Musk stepped down as the company's chairman and he and Tesla agreed to pay $20 million each in fines. Moreover, Musk has exhibited self-censorship in dramatically reducing the volume of tweets since the settlement, they wrote, adding that the SEC's request, if granted, would raise free speech issues.

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CS Meetesh Shiroya