RBI'S REVISED DEBT
RESOLUTION RULES LIKELY POST-ELECTION
The
RBI's revised stress assets resolution circular is likely to be out after the
elections to clear the model code of conduct, and also the regulator may need
time to have consultations with legal experts, industry and government before
bringing the framework out, official sources said. This would mean that the
widely anticipated RBI circular would not be issued before June. The delay
could also halt resolution of several stressed assets as lenders are looking
for clear directions from the banking regulator before moving ahead to resolve
accounts. The revised circular on NPAs, however, is unlikely to include the
pre-IBC restructuring tools like Strategic Debt Restructuring (SDR), Corporate
Debt Restructuring (CDR), Sustainable Structuring of Stressed Assets or S4A
that were phased out by RBI earlier.
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MONEY LAUNDERING LAW
PREVAILS OVER BANKRUPTCY ACT, INSOLVENCY CODE: DELHI HC
The
Delhi High Court has held that the money laundering law, PMLA, prevails over
the Bankruptcy Act and insolvency code when it comes to attachment of
properties obtained as proceeds of crime. The court said the Prevention of
Money Laundering Act (PMLA), Recovery of Debt and Bankruptcy Act (RDBA),
Securitisation and Reconstruction of Financial Assets and Enforcement of
Securities Interest Act (SARFAESI Act) and Insolvency and Bankruptcy Code (IBC)
must co-exist and be enforced in harmony with the PMLA. (These laws) or such
other laws must co-exist, each to be construed and enforced in harmony, without
one being in derogation of the other with regard to the assets respecting which
there is material available to show the same to have been 'derived or obtained'
as a result of 'criminal activity relating to a scheduled offence' and
consequently being 'proceeds of crime', within the mischief of PMLA, Justice R
K Gauba said in a 105-page judgement. The court passed the verdict on a batch
of appeals by the Enforcement Directorate (ED) against the orders of PMLA
appellate tribunal on the pleas of various banks. The ED, through central
government standing counsel Amit Mahajan, had challenged the tribunal's orders
on the issue of third party rights over a property attached by the agency. The
tribunal had held that third parties banks in this case, which have
legitimately created rights such as a charge, lien or other encumbrances, have
a superior claim over such properties The high court set aside the appellate
tribunal's order and held that the objective of PMLA being distinct from the
purpose of RDBA, SARFAESI Act and IBC, the latter three legislations do not
prevail over the former. It remanded the matters to the appellate tribunal for
further consideration. An order of attachment under PMLA is not illegal only
because a secured creditor has a prior secured interest (charge) in the
property, within the meaning of the expressions used in RDBA and SARFAESI Act.
Similarly, mere issuance of an order of attachment under PMLA does not ipso
facto render illegal a prior charge or encumbrance of a secured creditor, the
claim of the latter for release (or restoration) from PMLA attachment being
dependent on its bonafides, it said. The court also said that by virtue of
Section 71, the PMLA has the overriding effect over other existing laws in the
matter of dealing with money-laundering and proceeds of crime. The ED had
argued that if the contentions of the banks were to be upheld and the view
taken by the appellate tribunal endorsed, the law under PMLA would stand
defeated because the sovereign authority to take away the property of the
money-launderer free from all encumbrances would stand frustrated. And the
wrong-doer (the borrower who has indulged in money-laundering) would derive
illegitimate pecuniary advantage by getting a discharge for the debt by using
an asset the right to hold which had been forfeited, it had said. The high
court said the empowered enforcement officer has the authority of law in PMLA
to attach not only a tainted property which is acquired or obtained directly or
indirectly from proceeds of criminal activity, but also any other asset or
property of equivalent value of the offender of money laundering. The court
added that if the offender objects to the attachment on the ground that the
property attached was not acquired or obtained from criminal activity, the
burden of proving facts in support of such claim is to be discharged by him.
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FINANCIAL, OPERATIONAL
CREDITORS RECOVER CLAIMS WORTH RS 1.42 TRILLION FROM OVER 85 DEBT-RIDDEN FIRMS
TILL FEB 28
Financial
and operational creditors have recovered nearly half of their total admitted claims
worth over Rs 1.42 lakh crore from as many as 88 debt-ridden companies under
the insolvency law according to official data. Of the total admitted claims, financial
creditors sought to recover dues worth Rs 1.36 lakh crore and operational
creditors Rs 6,469 crore. Financial creditors recovered 48.24 per cent of their
admitted claims and operational creditors got 48.41 per cent of their admitted
claims. Creditors realised Rs 68,766 crore of the total admitted claims in
those 88 cases. The share of financial creditors and operational creditors
stood at Rs 65,635 crore and Rs 3,131 crore, respectively, as per data. In the
88 cases, financial creditors got 100 per cent realisation of admitted claims
in 11 resolution plans, while operational creditors got only full realisation
in only 6 cases. In three cases, financial creditors got more than 100 per cent
realisation of admitted claims.
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DESPITE SC ORDER ON RBI
CIRCULAR, BAD LOAN RESOLUTION UNDER IBC TO CONTINUE
Even
as the Supreme Court has held the Reserve Bank of India’s February 12, 2018,
circular on resolution of stressed assets as ultra vires, the move will not
slowdown the momentum in resolution of non-performing assets (NPAs) that picked
up pace since enactment of the Insolvency and Bankruptcy Code (IBC), which has
permanently changed the creditor-debtor relationship, a senior government
official said. The government expects the bad loan resolution to continue under
the IBC, while the Reserve Bank comes out with revised rule that specifies the
framework under which it can direct banks to push cases for insolvency
resolution.
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IBC BOLSTERS
RESPONSIBLE LENDING, ENCOURAGES DEBTORS TO AVOID DEFAULT: MS SAHOO, CHAIRMAN
IBBI
Bankruptcy
law has been able to bring a behavioural change, feels MS Sahoo.
What’s
the impact of the Supreme Court order quashing the RBI circular on the IBC?
What
has been struck down in the matter of Dharani Sugars is neither a provision of
the Banking Regulation Act nor a provision of the code. The statutory
legislations remain intact, so do subordinate legislations (rules). The
circular, which was struck down, was an initiative of the banking regulator.
That enabled the banks to explore resolution for some time before initiating
insolvency proceedings under the code. However, the right to initiate
insolvency proceedings under the code accrues on the day of threshold amount of
default. (A creditor) may initiate the proceeding at a later date when it
considers it commercially prudent to do so. But it needs to satisfy itself as
also its stakeholders as to why it did not initiate the proceeding on the next
day of default, why it did not initiate despite continuing default, and why it
initiated in case of a default and did not initiate in case of another default.
The code, thus, makes creditors more responsible for their actions and
inactions Banks, which are sophisticated financial creditors and have the
responsibility to take commercial decisions under the code, know what is in
their interest and accordingly when to act and when not to.
Do
you think this returns discretion to banks?
If
one has a right, he has discretion to exercise it. A threshold amount of
default entitles a creditor to initiate insolvency proceedings. That does not
mean that in every case of default, a proceeding must be initiated. A creditor
needs to apply its mind whether it is the right time to initiate insolvency
proceedings of a defaulting firm after careful analysis of facts and
circumstances, particularly after evaluating other options for rescue of the
firm and options for recovery of default. That is why the code allows discretion
to creditors. Such discretion must be used judiciously and must be explicable.
In fact, discretion under the code is a higher order responsibility.
Are
you concerned about the number of legal challenges that are slowing down the
resolution process in major cases?
When
the law is new, it is natural to face legal and other challenges. A law of such
a significance takes years to settle down. We have passed through two major
phases of economic reforms. The laws supporting these reforms such as the securities
laws and competition law have encountered legal challenges for many years, even
though these laws had a long history in India. We are now passing through the
third phase of reform that focusses on freedom to exit. We must allow
reasonable time to address major challenges in the supporting law.
How
is the IBC affecting borrowing and lending behaviour in the country?
The
code is a proactive, behavioural law. The inevitable consequence of a
resolution process (the control and management of the firm may move away from
existing promoters and managers) deters the management and promoter of the firm
from operating below the optimum and motivates them to make the best efforts to
avoid default Further, it encourages debtors to settle default with the
creditor at the earliest. With the code in place, the defaulter’s paradise is
lost. On the other hand, the creditor knows the consequences of default by a
firm, if insolvency is not resolved.
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SUPREME COURT EMPOWERS
HOME BUYERS TO CLAIM REFUNDS
The
Supreme Court recently paved the way for home buyers to claim refunds from
builders in the case of unreasonable delay in handing over their homes -
Kolkata West International City Pvt Ltd Vs Devasis Rudra. In this case, the
buyer paid Rs 39,29,280 in 2006 to the builder and as per the agreement the
builder had to handover the flat in the last month of 2008, with a grace period
of six months ending in June 2009. Despite the agreement the buyer had to wait
till 2011 when he decided to file a complaint before the West Bengal State
Consumer Dispute Redressal Commission. By 2016, the buyer had waited almost
seven years for possession. The builder sought the builder-buyer agreement to
justify the delay which was rejected in the court. The Apex Court in this case
said, It would be manifestly unreasonable to construe the contract between the
parties as requiring the buyer to wait indefinitely for possession. By 2016,
nearly seven years had elapsed from the date of the agreement. Even according
to the developer, the completion certificate was received on March 29, 2016. This
was nearly seven years after the extended date for handing over of possession
prescribed by the agreement. A buyer can be expected to wait for possession for
a reasonable period. A period of seven years is beyond what is reasonable.
Hence, it would have been manifestly unfair to non-suit the buyer merely on the
basis of the first prayer in the reliefs sought before the SCDRC. There was in
any event a prayer for refund. In the circumstances, we are of the view that
the orders passed by the SCDRC and by the NCDRC for refund of moneys were
justified. However, it is still not easy for home buyers to claim refunds in
case the project gets delayed for a period longer than reasonably expected.
What can buyers do in cases where builders have no money to refund? In such
cases, RERA can mediate and help buyers to either get their homes or refunds to
avoid their loans being declared non-performing assets (NPAs) in the bank. Balvinder
Kumar, says, RERA is a buyer-centric law and there are clear provisions that if
a builder fails to deliver a project within the prescribed time frame then the
buyer has a right to cancel the project and get refund. However, the problem
arises when we pass an order for refund or handover and the builder says he has
no money. We are then forced to issue a recovery certificate and it goes to
district magistrate for compliances. He then takes so many steps to recover
back the amount but again we are not getting success. Kumar further suggests a
solution to this problem, What is feasible as on date is that we have to infuse
additional funds into the system. Whether banks come forward or the State
government or local development authorities or NBCC and create trust funds to
either complete the project or help builders to refund the money. It is not
easy to execute refund orders in cases where a developer does not have money to
complete the project or refund home buyers. Banks and local authorities hardly
do anything to help home buyers, who keep paying EMIs and still keep waiting
for their homes. All stakeholders including banks, local authorities and RERA
need to come forward to resolve cases where buyers are waiting for their homes
for years to complete. They should either get their homes or refunds as the
Supreme Court decided in Devasis Rudra’s case.
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LENDERS HAVING VESTED
INTEREST IN DEBTOR SHOULDN’T BE PART OF CREDITORS’ PANEL: NCLT
In
a judgement of far-reaching implication in the insolvency and resolution
process, the National Company Law Tribunal’s (NCLT) Chennai Bench has held that
a party having a vested interest /relation with a corporate debtor should not
be a part of the Committee of Creditors (CoC). On an application moved by the
Asset Reconstruction Company (India) Ltd (Arcil) in a case relating to
commercial realty firm Anandram Developers Pvt Ltd, a corporate debtor, the
NCLT reasoned that the decisions of the CoC must remain independent. It
observed that the CoC’s decisions will impact the debtor’s survival or
liquidation and the debt realisation of all the creditors. Therefore, the
institution of CoC needs to be completely independent and free from any kind of
influence — either of the promoters or their close relatives who may have
stakes, it said. The Tribunal held that the second respondent, Anandcine
Services Pvt Ltd, is a ‘related party’, which shall have no right of
representation, participation or voting in CoC meetings. The first respondent
in the case is the Insolvency Resolution Profession (IRP). Arcil submitted to
the Tribunal that it has to recovera total sum of ₹120 crorewhich had been determined by
the orders of Debts Recovery Tribunal (DRT), Chennai, and Recovery Certificate
has been issued. It alleged that the IRP did not admit the entire claim in a
bid to ensure that Arcil does not get the required voting percentage; and that he
went by the amount said to be reflected in the corporate debtor’s books, and
failed to recognise the recovery certificate issued by the Debts Recovery
Tribunal after adjudication of the debt. Further, it claimed that 55 per cent
of the shareholders of Anandcine are relatives of the promoters of Anandram, or
shareholders with more than 81 per cent stake.
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MCA OBJECTS TO STERLING
BIOTECH BEING REMOVED FROM BANKRUPTCY CODE
The
Ministry of Corporate Affairs (MCA) on April 13 has objected to the decision
for Sterling Biotech to come out from the insolvency bankruptcy code (IBC). The
Western Regional Director of the MCA, Manmohan Juneja, moved an application in
the National Company Law Tribunal (NCLT) to stop this application as its
promoters are absconding. Juneja filed a detailed affidavit where he mentioned
the wrong doings of Sterling Biotech. The MCA's argument in court, as stated by
its legal director Sanjay Shourie, is that the company's promoters are facing a
probe from multiple agencies and that its promoters are out of the net of
investigation agencies. Sterling Biotech took loans of over Rs 5,000 crore from
a consortium led by Andhra Bank which had turned into non-performing assets. The
company's absconding promoters, Nitin Sandesara and Chetankumar Sandesara, are
offering to return all the money to the banks. As per the FIR, the total
pending dues of the group of companies were Rs 5,383 crore as on December 31,
2016. The Enforcement Directorate (ED) has taken the FIR into cognisance. The
ED has arrested few people in this case including Delhi-based businessman Gagan
Dhawan, former Andhra Bank director Anup Garg and Sterling Biotech Ltd director
Rajbhhushan Dixit. It had also attached assets worth over Rs 4,700 crore of the
pharmaceutical firm in June this year.
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STERLING SEZ: NCLT
STAYS SREI PLEA TO WITHDRAW BANKRUPTCY
The
National Company Law Tribunal (NCLT) on Friday stayed a plea to withdraw the
bankruptcy proceedings on Sterling SEZ & Infrastructure filed by Srei
Infrastructure Finance, till April 25. At the last hearing on March 26, the
tribunal had sought replies from all stakeholders, including the corporate
affairs ministry, and Friday’s stay order is based on a plea by the ministry as
the promoters are absconding. Sanjay Shorey said, we got stay over withdrawal
of IBC proceedings on Sterling SEZ. He said, they sought a stay as another
bench of the tribunal is hearing a similar settlement plea regarding Sterling
Biotech, which is the flagship company of the Sandesara family’s Sterling
Group. The plea will be heard on April 25, the tribunal said.
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NCLT DIRECTS
LIQUIDATION OF DEVELOPER RRP HOUSING
The
Chennai Bench of the National Company Law Tribunal (NCLT) ordered liquidation
of RRP Housing Private Limited after it was submitted that the company had been
struck off the Registrar of Companies’ list and no proper information regarding
its financials was available. The company was admitted under the insolvency
proceedings, and the 270 days — the maximum period allowed for finding a
resolution — ended on September 26, 2018. Arumugam, the resolution professional
appointed to oversee the insolvency process, submitted that he failed to get
assistance from any of the promoters/directors on the assets of the company,
because the records were not handed over. As on March 22, 2018, the resolution
professional said he had received claims for an amount of ₹18.76 crore. According to the
resolution professional, the average money paid by homebuyers for each project
was about ₹20-28 lakh per villa
and ₹30 lakh per apartment.
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FRANCE WAIVED 144 MN
EUROS TAX DUES OF ANIL AMBANI FIRM AFTER RAFALE ANNOUNCEMENT: LE MONDE REPORT
The
controversy over the Rafale deal took a fresh turn Saturday after French
newspaper Le Monde reported that Anil Ambani’s France-based telecom firm
‘Reliance Atlantic Flag France’ was given tax waivers worth 143.7 million euros
by local authorities just a few months after Prime Minister Narendra Modi
announced the procurement of 36 Rafale fighter jets from Dassault. According to
the report, Ambani’s French firm was initially investigated by local tax authorities
and found liable to pay 60 million euros in taxes for the period 2007 to 2010. Although
Reliance offered to pay 7.6 million euros as a settlement, the French tax
authorities did not budge.
Subsequently,
French tax authorities conducted another another probe for the period 2010 to
2012 and asked for an additional 91 million euros in taxes. Notably, the total
amount owed by Reliance to the French state in taxes swelled to at least 151
million euros when PM Modi announced his plans to buy 36 Rafale fighter jets,
according to the report in Le Monde.
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UNCERTAINTY CONTINUES
OVER ADHUNIK METALIKS: LIBERTY AGAIN SEEKS ADDITIONAL TIME FOR UPFRONT PAYMENT,
LENDERS DON’T AGREE
Uncertainty
continues over the fate of bankrupt Adhunik Metaliks (AML). Stating non-receipt
of requisite regulatory approvals, UK-based Liberty House has not paid the
required upfront cash payment of Rs 410 crore to the lenders by Sunday, the
stipulated deadline set by the National Company Law Appellate Tribunal (NCLAT),
for the acquisition of debt-ridden AML. With Sanjeev Gupta-led Liberty House
Group once again seeking additional one week’s time for making the payment
lenders to the debt-ridden steel manufacturing company have rejected this
proposal. Notably, the NCLAT had given LHG time till this Sunday to pay Rs 410
crore upfront payment to the lenders for acquisition of the company under the
Corporate Insolvency Resolution Process (CIRP). We have not received the
upfront cash payment from Liberty House till Sunday. Liberty House spokesperson
said, We are working on procuring statutory and regulatory approvals which are
a vital part of the implementation plan. She said regulatory approvals from the
stock exchanges are still pending for Adhunik Metaliks in order to receive
money under CIRP from the UK-based group.
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JSPL NOT DISCLOSING
CLOSURE OF AUSTRALIAN MINES TO INVESTORS: GUJARAT NRE EX-PROMOTER TO SEBI
Naveen
Jindal’s Jindal Steel and Power Ltd seems to be facing trouble from Arun Kumar
Jagatramka, the erstwhile promoter of under-liquidation Gujarat NRE Coke. In a
letter to SEBI, Jagatramka has accused Jindal and his company of not reporting
hurdles that JSPL is facing in the Russelvale and Wongawilli mines in New South
Wales, Australia. JSPL operates these mines through Wollongong Coal and
Wongawilli, its main subsidiaries with operations in Australia. In the letter
to SEBI, Jagatramka said: Officers of JSPL India have repeatedly and regularly
assured investors that the mines in Australia are operating well and production
is expected to ramp up in the future. But, in reality, the bigger mine with
newly installed Longwall mining equipment, namely, Russell Vale Mine, is on
care and maintenance since 2014 due to the absence of mining approvals. Prohibition
notices were issued to the mine in February and March 2019 due to serious
breaches of workplace safety laws. Finally, on March 19, 2019, the NSW Resource
Regulator shut down the mine due to continued non-compliance and roof fall.
Surprisingly, none of this has been reported by JSPL India to its shareholders
and bankers who have material interest and a right to be aware of these facts. Arun
Jagatramka, in an attempt to make a backdoor entry (after being barred) under
the Insolvency and Bankruptcy Code, mischievously floated a scheme of
arrangement under the Companies Act, causing a loss of approximately ₹5,000 crore to banks and other
creditors. The same has been challenged by JSPL and the NCLAT has provided a
stay on further proceedings.
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IL&FS TRANS CANNOT
SERVICE RS 1,050 CR DEBT
After
a month, IL&FS Transportation Networks Ltd will be getting binding bids to
sell 22 of its road assets that are up for sale. Just four of these 22 road
assets have an unserviceable debt of Rs 1,050 crore. The four road assets are
Hazaribagh Ranchi Expressway Ltd, Jharkhand Road Project Implementation Company
Ltd, Moradabad Bareilly Expressway Ltd and West Gujarat Expressway Ltd. As per
the supplementary affidavit filed before the National Company Law Appellate
Tribunal, New Delhi last week, the total serviceable debt of these four
entities stand at Rs 1,132 crore as against the unserviceable debt of Rs 1,050
crore. If all the 13 companies under the amber category are put together, the
senior secured financial debt falling due and the operating expenses falling
due in the testing period amounts to Rs 6,121 crore. On the other hand, the
total unserviceable debt of the 13 companies under amber classification during
this testing period from the disposable cash is Rs 5,309 crore, which comprises
the unsecured financial debt owed.
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BONUS CLAWBACK PLAN FOR
IL&FS EXECUTIVES
The
government is looking to claw back bonuses and other benefits that accrued to
ousted top executives of IL&FS Group, who are accused of failing to
discharge their duties and leaving the entity in a financial mess. The approach
is similar to the one adopted by ICICI Bank against Chanda Kochhar, who was
forced to quit amid serious charges of irregularities, involving her husband
Deepak Kochhar in loans sanctioned by India’s top private bank. She has been
asked to return the bonuses and shares, which were given as part of the ESOP
scheme. The move at IL&FS is part of a drive that will focus on the role of
key management personnel such as former IL&FS chairman Ravi Parthasarthy,
former vice-chairman Hari Shankaran and I-Fin chief Ramesh Bawa, sources told.
While several other executives are under the scanner, Shankaran and Bawa have
been arrested by the SFIO, which has alleged irregularities. In addition, the
sources said, the role of independent directors is also suspect as they are
seen to have played ball with the management and not raised doubts. Besides,
Deloitte is being probed minutely as the auditor had failed to detect any
irregularities. Already some executives have been questioned by authorities.
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‘PENSION, PROVIDENT
FUNDS HAVE ₹9,134-CR
EXPOSURE TO IL&FS’
Pension
and provident funds have an exposure of ₹9,134
crore to debt-ridden Infrastructure Leasing and Financial Services (IL&FS),
but these cannot be repaid immediately as it will impact the IBC-led process. This
disclosure was made by IL&FS to the National Appellate Company Law Tribunal
in an affidavit, which will take up the matter for hearing on April 16. Whilst
the objective of payment to certain categories of creditors (provident funds
and pension funds) is laudable, the Union of India and Respondent No 1 submit
that the same is not feasible for the following reasons: any payment which is
ad hoc in nature will be contrary to the Resolution Framework Report and any
payment which disregards the legal sanctity and priority of payments of
creditors will destabilise the financial market and distort or disarray
borrowings by corporates and lending by banks and financial institutions, said
IL&FS. The NCLAT had, on April 8, sought details of investments by
provident funds and pension funds in amber firms of IL&FS. According to the
affidavit, provident funds had invested ₹6,759.73
crore and pension funds had put in ₹2,374.72
crore in paper of IL&FS and its subsidiaries. Of the money raised, ₹4,278.12 crore was borrowed by
IL&FS, ₹2,940.13 crore was
borrowed by IL&FS Financial Services (IFIN), and ₹1,916.20 crore by IL&FS
Transportation Networks (ITNL) from PF and pension funds. This, in turn, was
invested by IL&FS and intermediate holding company into the project-level
special purpose vehicles. The four firms have disposable cash of ₹ 1,134 crore during the testing period,
while their total debt is ₹2,162 crore. IL&FS
has further submitted that the money being collected for each of the amber
entities is being held in trust, and will be used for discharging the
liabilities of creditors of these entities once they are sold off. Any ad hoc
payments made at this stage will disturb the ongoing resolution process, and
the Union of India opposes any such ad hoc distribution of amounts to financial
creditors, as it will be detrimental to the ongoing efforts, it has said. IL&FS
has already initiated the sale process of 12 of the 13 amber entities,
including these four firms.
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ESSAR CASE: APEX COURT
ASKS ARCELORMITTAL NOT TO DEPOSIT BID AMOUNT
The
Supreme Court has ordered status quo in the long-drawn Essar Steel insolvency
case and directed the winning bidder ArcelorMittal not to deposit the bid
amount of ₹42,000 crore. Hearing a
petition filed by the committee of creditors (CoC) and operational creditors,
the two-member Bench headed by Justice Rohinton F Nariman directed the National
Company Law Appellate Tribunal (NCLAT) to decide on the pending appeals in the
case expeditiously. In a hearing that lasted for a few minutes, the apex court
told ArcelorMittal not to deposit any money in the lenders’ account towards
settlement in the case. The decision of the Supreme Court would further delay
ArcelorMittal’s plan to gain a foothold in the fast-growing Indian steel
industry. Interestingly, in its hearing on Tuesday, the NCLAT had directed
ArcelorMittal to deposit the bid amount into a separate account either with
NCLT, Ahmedabad or the Tribunal. The next hearing in the case is scheduled for
April 23.
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MALVINDER AND SHIVINDER
SINGH AND THE ‘MISSING’ FUNDS OF A BILLION-DOLLAR EMPIRE
Daiichi
Sankyo’s ongoing contempt case against former Fortis Healthcare promoters
Malvinder and Shivinder Singh in the Supreme Court has once again highlighted
the brothers’ financial woes. Once leaders of a flourishing, billion-dollar
empire, the Singhs now seem to be struggling to pay a $500-million arbitration
award to Daiichi for allegedly concealing information regarding wrongdoing at
Ranbaxy, sold to the Japanese drug maker in 2008. The apex court last week
reserved its verdict on whether the Singhs violated its 2017 orders not to part
with unencumbered Fortis shares, earlier expected to be used to help pay this
award. The case took a darker turn last year, when allegations of illegal
diversion of the Singhs’ funds surfaced, some even by the brothers against each
other. Yet, the question still remains—where did the money go? Lawyers for the
Singhs had in 2016 and 2017 verbally assured the Delhi High Court that there
were sufficient funds to satisfy Daiichi’s award Yet, hearings in 2018 raised
questions about these assurances. Soon after, a public rift arose between the Singhs,
with each brother blaming the other for the family’s financial situation. Shivinder,
the first to break his silence through a statement in September 2018, blamed
elder brother Malvinder for oppression and mismanagement of Fortis, Religare
Enterprises and holding company RHC Holding, controlled by both brothers. In a petition
at the National Company Law Tribunal (NCLT) that month, he alleged Malvinder
colluded with ex-Religare chief Sunil Godhwani to take out funds totalling over
Rs 1,200 crore through inter-corporate deposits (ICDs) and loans from Fortis
Healthcare and a Religare Enterprises subsidiary to pay back creditors. He
alleged such actions resulted in value loss to RHC far in excess of the amount
loaned and had put it and several of the brothers’ companies in a debt trap. For
two decades now, Malvinder and I, Shivinder Mohan Singh, have been synonymous
with one another. Though the fact is, I have all along been the publicly
supportive younger brother to Malvinder’s chairmanship of the group, who took
decisions on behalf of the family, Shivinder said in his statement. He later
withdrew his NCLT petition citing his mother’s insistence that the issue be
resolved by mediation. In his 2018 statement and the NCLT filing, Shivinder
said he took public retirement in 2015 to serve in spiritual organisation Radha
Soami Satsang Beas (RSSB) and that, until October 2017, he was not involved in
the strategic operations of companies like Religare or RHC. The deponent
(Shivinder Singh) humbly makes his position clear before this honourable court
that the deponent is not and at all material times was not in control of the
entities against whom any contempt is alleged, his March 2019 affidavit states.
Yet, it is Shivinder’s involvement with RSSB that Malvinder alleges is the main
cause of the depletion of the Singhs’ wealth. Malvinder’s affidavit filed in
the Supreme Court this year claims over Rs 6,000 crore in loans and advances
are to be recovered from various individuals and entities belonging/controlled/linked
to a few major companies and individuals, not a party to the arbitral award.
These include companies like Prius Real Estate and Prius Commercial Projects,
Sunil Godhwani as well as the RSSB head himself, it alleged. Show me the colour
of money, Daiichi’s senior lawyer often told the high court during proceedings
to enforce its award. The Japanese firm had constantly moved court since 2017
to block the Singhs from closing a deal for Fortis while it was still under
their control and has argued they have no intention to pay up, despite
submissions by the brothers stating otherwise. In a separate application, it
alleged that the Singhs used their jointly-owned entity, Shimal Healthcare, to
divert funds through preference shares and debentures and that the brothers,
through fraudulent conduct, diverted an enormous sum of Rs 1,407.33 crore to
entities in the Shimal group. Shimal had been used to siphon large amounts of
monies to various entities related to the Singhs, including Fern, Best and
Modland, which further routed the funds to other entities, alleged Daiichi.
Parts of several charts submitted by Daiichi in court have been reproduced in
this article. It is an undeniable fact that a large sum of money to the tune of
several thousand crores has been extended to various group entities. This is a
clear act of fraudulent diversion and/or siphoning of funds, Daiichi alleged,
adding that the Singhs were operating through a web of companies to shield
their assets.
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MARQUEE MNC NAMES
TRAPPED IN IL&FS BOND SQUEEZE
Amazingly,
the allure of the triple A rated IL&FS bonds now toxic was such that while
both Indian private and public sector got sucked into the honeycomb, a vast
swathe of top rated multiple national corporations also decided to invest their
employees hard earned savings in them. Ministry of Corporate Affairs supplementary
affidavit filed with NCLAT on April 8 has revealed a treasure trove of fresh
information. While IANS has been at the vanguard of exposing the extent of
malfeasance at IL&FS, as also naming the companies and entities which have exposure
to the virus infected bonds the real size, scope and magnitude has now been
revealed -- provident and pension funds of 1,400 firms, lakhs of employees and
Rs 9,700 crore at stake and no real attempt either to cauterise the festering
wound or begin a repayment process barring the recent April 8 order, which says
that some element of prioritisation needs to be factored in for the hapless
working class caught out of their comfort zones. However, the government does
not want preferential treatment for Provident and Pension Funds for it will
upset the other equally huge clutch of creditors. So, in the catch 22 that
prevails, everybody loses. Over 150 intervening petitions have been filed with
NCLAT seeking resolution of this matter for it is the working class -- blue and
white collar -- which is directly impacted by this malaise. Investment banks,
tech companies, pharma giants, airline heavy hitters, the list is long and the
amounts large. On scouring through the long lists which run over pages and
pages, IANS has now discovered that Bata India employees statutory PF, Glaxo
India, Otis Elevator, Sumitomo Indian Staff PF, McCann Erickson India EPF, Lufthansa
German Airlines employees local PF, Philips Electronics India, BASF, Novartis,
Pernod Ricard, Bechtel India, JP Morgan, Nestle, shockingly Canadian High
Commission India Staff, British Airways pls staff, Texas Instruments India,
Volvo India, Cisco Systems India, Sanofi India, Sapient Consulting, BBC
Worldwide India, McKinsey Knowledge Centre and Shell India. Many of these
companies have multiple exposure, for instance, Otis has several entries with
different amounts varying from Rs 55 lakh to Rs 1 to 2 crore over different
years, 2012 and then again in September 2015. What is perhaps even more
pertinent is that slapbang in the middle of an ongoing election, the emergence
of such sloth on the part of an entity like IL&FS where the government is unable
to ring fence the savings of common working class folk is something that
requires urgent attention. Imagine the staff of American Embassy School PF,
Barclays Bank Plc India, American Express India, Societe Generale EPF, British
Airways has many entries ranging from Staff Pension Fund to Cabin Crew Pension
Fund, ditto for Philips, Alcatel Lucent, Mercedes Benz R&D India, Procter
& Gamble Executive Pension Plan, Adobe Systems, HP Globalsoft,
Schlumberger, CapGemini, Cadbury India, Goodricke Group, Gillette, et al. As
one turns page after page, many of these entities have multiple entries with
enhanced exposure. Caught in a maelstrom which is growing exponentially, what
should be worrying for these MNCs and their employees is that they fall in the
category of unsecured creditors and their money is not at all safe due to the
level of toxicity. This list compiled by MCA is as recent as December 31, 2018.
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TCS GAVE RS 220 CRORE
TO ELECTORAL TRUST IN JAN-MAR
TCS
said it gave Rs 220 crore ($31.2 million) to an electoral trust in the fourth
quarter ended March, which it accounted under other expenses in its profit and
loss account. This appears to be one of the highest donations the company has
ever made towards electoral funding. It is not clear which parties benefited
from the contribution. Tata group companies, including TCS, have in the past
given money to electoral trusts. TCS previously gave money to the Progressive
Electoral Trust, which was set up by Tata Trusts in 2013. The Trust has funded
multiple political parties and between April 1, 2013, and March 31, 2016, it
had funded Congress the most, followed by Biju Janata Dal. During that period,
TCS had contributed only Rs 1.5 crore. The biggest of these is the Prudent
Electoral Trust, where the biggest contributors are the Bharti Group and DLF.
In 2017-18, Prudent gave almost all the money it generated – Rs 144 crore of Rs
169 crore – to the BJP. As per the latest annual report filed by the Tatas’
Progressive Electoral Trust with the Election Commission of India, it made no
contribution to any political party during fiscal 2017-18 and has a deficit of
Rs 54,844.
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PE/VC INVESTMENTS IN AI
SPACE GROWS FIVE-FOLD TO $359 MILLION IN FY19
Private
equity/venture capital investments in the Artificial Intelligence (AI) segment
in the country grew over fivefold in 2018-19, to $359 million (nearly Rs 25,000
crore) from $63 mn (Rs 440 crore) in FY18. Led by one of $140 million in
September 2018 by Mithril Capital, Blume Ventures, Tiger Global and others into
Grey Orange Robotics. According to data from research firm Venture
Intelligence, there were 38 such deals in FY19, compared to 25 the previous
year. In 2016-17, investment into AI totalled $50 million via 19 deals; the
year before, $51 million in 13 deals. Other top deals during the year included
Wavemaker Partners, Denso Corporate Ventures, Vertex and others investing $65
million in semi conductor firm ThinCI, in September 2018. Jungle Ventures,
SoftBank Corp and others put $30 million in enterprise software firm
Engineer.ai in November 2018. Rocketship.VC, Sequoia Capital India and others
invested $20 million in enterprise software firm Mad Street Den in September
2018. SBI Venture Capital invested $15 million into robotic process automation
firm AntWorks in July 2018.
The
tremendous growth in AI interest from investors is expected to grow. They note
the potential it offers in the market, in the retailing, e-commerce, health care,
travel, banking and logistics sectors, among others. Experts say big companies
are also tapping into the technology to prepare for the future. AI has,
according to an Accenture analysis in 2017, the potential to add $957 billion
or 15 per cent of the then gross value added, to India’s economy in 2035,
compared to a scenario without AI. However, to avoid missing this opportunity,
policy makers and business leaders must prepare for, and work toward, an AI
revolution, it said. It recommends an innovative private sector, with a
supportive policy and regulatory framework. The Union government’s Budget for
2018-19, mandated the NITI Aayog to establish a national programme on AI, aimed
to guide research and development in new and emerging technologies. Last June,
the Aayog issued a report on a national strategy for the sector. In the interim
Budget announced this February, it was announced that the government would
launch a national programme. This was to be catalysed by the establishment of a
National Centre on AI as a hub, along with Centres of Excellence. Nine priority
areas were identified and plans to develop a National AI portal announced.
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FOREIGN INVESTORS'
BULLISH STANCE CONTINUES; PUMPS IN RS 11,096 CRORE IN APRIL SO FAR
Foreign
investors have pumped in a net sum of Rs 11,096 crore into the Indian capital
markets in April so far, driven by global and domestic factors. Foreign
portfolio investors (FPI) were net buyers for the previous two months as well,
infusing a net sum of Rs 11,182 crore in February and Rs 45,981 crore in March.
Prior to that, FPIs had pulled out a net Rs 5,360 crore from the capital
markets (both equity and debt) in January. As per depositories data, FPIs
invested a net amount of Rs 13,308.78 crore in equities and pulled out Rs
2,212.08 crore from the debt segment during April 1-12, taking the total net
investment to Rs 11,096.70 crore.
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POST-ELECTION
INHERITANCE OF RS 2.17 CRORE HOUSING STUCK IN MUMBAI
If
there is one 'inheritance' that the government in power post the upcoming
elections will not look forward to, it is tackling the issue of the massive
burden of stuck housing in the city. Of the total 5,61,100 delayed housing units
(launched before or during 2013) in India, 1,92,100 are from the Mumbai
Metropolitan Region. While the total worth of the delayed units is Rs 4,51,750
crore, the figure in MMR stands at Rs 2,17,550 crore — the highest in the
country showed a report by Anarock Property Consultants. As per ANAROCK data,
the top 7 cities currently have a total of 5.6 lakh delayed housing units worth
a whopping Rs 4,51,750 crore. These units were launched either in 2013 or
before that. Lakhs of buyers across top cities — particularly MMR and NCR —
have been left in limbo. The report further states that top cities like NCR and
MMR collectively account for 72 per cent of total delayed housing units across
the top 7 cities worth Rs 3,49,010 crore – nearly 77 per cent of the total
worth of the stuck projects. In comparison, the southern cities of Bengaluru,
Chennai and Hyderabad together account for a mere 10 per cent of the overall
stuck housing units of a total worth of Rs 41,770 crore. The southern cities
have predominantly been driven by service-class end-users, leaving limited
scope for developers to be unprofessional. Puri, Chairman, said, If there is
one 'inheritance' that the Government in power post the upcoming elections will
not look forward to, it is tackling the issue of the massive burden of stuck
housing across the top Indian cities. Despite the setting up of a regulatory
mechanism, countless homebuyers have been left in the lurch by their builders.
Sadly, most of these stuck projects do not fall within the RERA ambit as they
were launched years before it was implemented. Also, with many states having
diluted the Centre's original RERA rules, homebuyers have only the courts to
approach — a notoriously tedious task in India. One of the major reason behind
the dealy is lack of will to complete their projects and preference for funds
diversion in developers. Buyers have understandably stopped releasing funds to
builders, and builders claim they have no funds to complete construction. Lack
of project clearances also contributes to the piling up of housing stock. In
the pre-RERA era, many builders launched greenfield projects without the
requisite approvals in place, resulting in their projects getting stuck. The
report also talks about solutions, one being the Government-owned NBCC that has
been roped in to complete some stalled projects in NCR. This is a significant
move which, if applied in larger numbers, can have a real impact.
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JAYPEE HOME BUYERS PLAN
HUNGER STRIKE FROM APRIL 19
Over
1,000 homebuyers of Jaypee Wish Town are planning to stage a hunger strike on
April 19 after Jaypee Infratech’s former chairman and managing director (CMD)
Manoj Gaur sent them a letter on Sunday expressing his anguish at the delay in
delivery of their homes and invited them for a conversation on that day. No
bidder has been announced for the completion of 22,500 flats in the township
even after 18 months of insolvency proceedings. Gaur, who has ceased to hold
his office due to the insolvency resolution process, sent buyers an e-mail on
Sunday wishing them a happy Ram Navami and invited them to a day-long
interaction at Jaypee Business School in Sector 62. Gaur also expressed his
anguish and sorrows for homebuyers who have been waiting for their flats for
years. Buyers, however, were not impressed with Gaur’s proactive gesture. We
were surprised to receive an e-mail from Manoj Gaur as the insolvency
proceedings are still in motion. How can he reach out to buyers when the legal
proceedings are in place and the appointed insolvency resolution professional
(IRP) is now the CMD of the company? Thousands of buyers have received this
invitation. We will stage a hunger strike on that day, because we have not only
been cheated, but are even now being persuaded to be patient, Pramod Kumar, who
bought a flat in the township, said. Of the two construction companies who
submitted bids to complete the pending flats, it seemed likely that state-owned
National Building Construction Corporation Limited (NBCC) had a clear advantage
over Suraksha Asset Reconstruction Company. The final decision on whether NBCC
will be awarded the bid and right to complete the project, however, has not
been announced so far.
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ONLY ONE OF 176
MAHARERA WARRANT ORDERS EXECUTED
MahaRERA
has issued 176 recovery warrant orders against erring developers across the
state in two years since its inception, but only one has been executed in the
city. Delay in the execution of Maharashtra Real Estate Regulatory Authority
(MahaRERA) orders — particularly related to refund recovery from developers —
in their favour has left many homebuyers miffed. Incidentally, MahaRERA
completes two years this May. Only one case in Pune has been executed, in which
the collectorate attached a property and ensured the refund. The home buyer
received the money after the collector auctioned the property. But this is very
rare, a complainant said. Senior revenue officials, however, said there were several
technical issues related to the attachment of properties that have the mutation
extracts and not property cards. The Pune collectorate officials have written
to the MahaRERA on this issue, an official said. The MahaRERA officials said the
rate of the recovery warrant orders’ execution was less than the 5% of the
total complaints registered with it. We have resolved more than 4,000
complaints registered with us, an official said.
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BSNL, MTNL 4G LAUNCH
BACK TO SQUARE ONE
The
Telecom Regulatory Authority of India (Trai), the sector watchdog, has lobbed
the ball back into the government’s court on the fourth-generation or 4G
spectrum allocation sans auction to state-owned operators Bharat Sanchar Nigam
Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL). Early this week,
the Trai in a letter to the telecom department said that the allocation of the
spectrum to public-owned entities is an administrative matter and the
government would be in the best position to dispose of the matter, a DoT
official said. The development has, however, put the Prime Minister Narendra
Modi-led NDA government in a fix, which was also considering to seek approval
from the Election Commission of India (ECI) to take the radio waves allocation
proposal to the Cabinet, following the growing pressure from nearly 2 lakh
employees of the two service providers. In the absence of 4G spectrum, the two
already-stressed telecom carriers say that they couldn't compete with the
private sector rivals such as Reliance Jio, Bharti Airtel and Vodafone Idea. The
non-availability of 4G airwaves to public sector companies, at a time when the
private sector is closer to embracing the next-generation 5G technology, is
bleeding the companies further as subscribers desert the state-run carriers for
rivals, putting their revival at risk.
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RCOM ASKED TO PAY
BHARTI INFRATEL RS 39 CRORE FOR EARLY INFRA SITE EXIT
An
arbitration tribunal has ordered Reliance Communications (RCom) to pay Bharti
Infratel Rs 39.22 crore for prematurely exiting the tower sites of the Sunil
Mittal-led telecom infrastructure company, a ruling that adds to the financial
woes of the Anil Ambani-owned bankrupt telco. The claimant is held entitled to
a sum of Rs 39,22,48,384 as exit amount from December 12, 2015, along with
applicable taxes, said the arbitration tribunal in its award dated April 13.
Bharti Infratel is claimant and RCom respondent. The tribunal has also levied
an interest amount that the telco has to pay to the infrastructure player. The
claimant shall be entitled to interest on the awarded amount at 9% p.a. from
December 12, 2015, till realisation, said the tribunal. The arbitration
tribunal’s decision will be another blow to RCom that faces debt ofRs 46,000
crore and has been fending off many legal battles with its operational
creditors, including Bharti Infratel, and the telecom department, among others.
According to the arbitration tribunal, the Anil Ambani-owned telco, in its
defence, said it did not exit the sites voluntarily but was forced to do so
because of unforeseen circumstances that made it impossible for it to continue
with the sites. The unforeseen circumstances referred to the 2012 Supreme Court
verdict on the 2G spectrum case wherein the court quashed 122 telecom licences
granted by the then central government to operators.
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JIO'S FIBRE BUSINESS
RAISING RS 27,000-CRORE LOAN
Reliance
Jio Infocomm’s fibre network unit is raising about Rs 27,000 crore in
syndicated loans from a group of banks, three executives aware of the financing
plans told, as the newly created infrastructure business expands to meet
expected demand for its assets from sectors such as power besides telecom and
internet services providers. Lenders in the consortium include ICICI Bank, Axis
Bank, State Bank of India (SBI) and Punjab National Bank, said industry
executives dealing with the fund-raising. Jio, which had more than 300 million
subscribers in March, has demerged its fibre and tower business into two units
— Jio Digital Fibre Pvt Ltd and Reliance Jio Infratel Pvt Ltd. Jio Digital
Fibre would use the dedicated credit line. These loans, maturing in two years,
would cost about 8.35-8.85%. SBI is said to be advancing Rs 10,000-11,000
crore. ICICI Bank and Punjab National Bank have offered Rs 5,000 crore each.
Axis Bank has committed Rs 6,000 crore. These loans would also burnish credit
growth profiles for the banking industry, which is seeking to extricate
billions of rupees stuck in bad assets.
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RELIANCE JIO CROSSES
300 MILLION CUSTOMERS MARK
Telecom
operator Reliance Jio has crossed the 300 million customers mark in
two-and-a-half years of its operations, sources said. The milestone was reached
on March 2, they added. Jio became the fastest company in the world to achieve
100 million telecom subscribers in 170 days of starting commercial operation. In
its earnings report for the quarter ended December 2018, Bharti Airtel had
disclosed that it had 284 million customers. However, as per regulatory
filings, Bharti Airtel reported having 340.2 million customers on its network
in December and 340.3 million customers at the end of January.
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TCS HUNGRY FOR ACQUISITIONS,
SCOUTING FOR ASSETS TO BOOST GROWTH, SAYS COO
India's
largest IT services firm Tata Consultancy Services (TCS) is hungry for
acquisitions and is scouting for assets that can bring in intellectual property
and widen market reach to further accelerate growth. N Ganapathy Subramaniam
said TCS had acquired two entities -- W12 and BridgePoint Group -- last year
and both of them have been integrated well with the Mumbai-based firm. We
continue to remain open and hungry for acquisitions. We have one of the best
track records in terms of acquiring companies and integrating them the approach
is that clearly, we are in the market looking for the right asset which will
add certain amount of IP (intellectual property), market reach or client
addition, he said. TCS, which had acquired French SAP service provider acquire
Alti SA for 75 million euros (about Rs 533 crore) in 2013, has been focussing
on organic growth even as its global and domestic rivals went on an acquisition
spree.
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COMPANIES HUNT FOR CEOS
WITH HIGH EQ AND HUMILITY
While
talking to students recently, Procter & Gamble India Madhusudan Gopalan
highlighted empathy and emotional quotient (EQ) as new age leadership
attributes. At Indian Hotels Company (IHCL), two among the four qualities defined
in its leadership programmes are ‘humility’ and ‘humanity’. Organizations are increasingly
looking for leaders with traits such as empathy and humility. Gone are the days
when companies scouted for the archetype ‘A’ kind of leaders who were aggressive
and had risen in the organisation riding roughshod over colleagues. CEO
mandates being given out to executive search firms are seeking qualities
contrary to the archetype ‘A’ leader. More than skills and experience, boards
and organizations are asking search firms to hunt for leaders who believe in
collaboration and are not afraid to admit weaknesses which can be overcome with
the requisite talent from team members. Boards and Chairs are increasingly
prioritising personality attributes such as humility, inclusivity and ability
to bring as much of the heart as head, over past experiences and skills in CXO
mandates across industries. Motivations, identity and inherent traits of
leaders are getting higher weightage than past metrics achievements in leader
selections, said Pallavi Kathuria, managing partner, Egon Zehnder in India. The
new style of leadership is emerging with the changing dynamics in the external
environment and the arrival of the millennial generation. The ability and the
willingness to listen, the willingness to operate with heart and mind, is going
to be a critical determinant of success moving forward. That’s an area that we
invest a lot in our people, to equip them with the right skillsets to act with
empathy, said Gopalan. Apart from humility and humanity, the other two elements
in IHCL’s leadership programme are ‘humour’ and ‘hope’. Humility is
non-negotiable. A person may be very ambitious, but if he/she is not humble, it
would not work and we would not consider such a candidate for a leadership
post. If you show aggression there would be 10 people immediately following
you. But it is not sustainable in any sphere. What is long lasting is humility,
said P V Ramana Murthy. Of 110 placements of CEOs and CXOs by Executive Access
India in 2018-19, 70% were based on clear mandates given by companies for a
leader who is humble, has high EQ with good people skills. These traits in
leaders are today the most sought-after. One thing that really puts off people
is arrogance in a leader. Clients tell us they don’t want a leader who is a
bull in a china shop, said Ronesh Puri, MD, Executive Access India. As part of
Egon Zehnder’s ‘Leaders & Daughters’ initiative, which convenes both
experienced and emerging female leaders to explore professional opportunities
and obstacles, the top three most desired characteristics in leaders were
ethical (45%), strategic (45%), and humility (43%).
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PEPSICO CHAIRMAN INDRA
NOOYI SAYS SHE HAS NO PLANS TO RUN FOR OFFICE
Indra
Nooyi says she has no plans to run for office but in her post-retirement time
she will focus on finding systemic solutions to address an impending care
crisis due to a shortage of caregivers to look after young children and the
elderly. Nooyi, warned that there is going to be a massive shortage of about a
million caregivers for young children and the elderly in the US in the next
couple of years. She said the problem has to be addressed and solutions worked
on really fast because everyday there are 10,000 baby boomers retiring, using
the term to describe the demographic born worldwide between 1946 and 1964. Many
of these boomers are going to need care going forward and the millennials are
going to have to care for these boomers because they are the sandwich
generation between the (baby boomers) and the kids. How are you going to make
it all work, Nooyi said. How are we going to redefine what is family, how we
share each others' time to create a more nurturing environment, she said. This
is going to require a symposium of the kind we have never had to talk about
these issues, put a cost to it and figure out how to address it because if we
don't, we are going to be facing a major care crisis which we won't know how to
address in the next 24-36 months. That's what worries me, she said to a huge
applause from the audience. When asked how she would take the idea and put it
to work and whether one should expect her to run for office, Nooyi replied, No.
Nooyi stressed that care workers, who typically earn less per hour than they
would working at a local convenience store, are opting to work in a more social
environment as opposed to doing care work for children and elderly people. That's
going to create a massive care shortage for us. We are going to have a million
caregiver shortage - between aging care and child care - in a couple of years.
What are we going to do. If we don't come with up some systemic solutions to
address this issue, there is going to be a crunch, she said. She added that she
is trying to bring people together to write something about the issue in a way
that is clear and crisp and everybody can understand what the problem and the
solution is.
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3 IN 4 PHONES TO HAVE
DEDICATED AI CHIPS BY 2022
Three
out of four smartphones are forecast to have dedicated Artificial Intelligence
(AI) processors by the end of 2022, a Counterpoint Research report said on
Friday. Sales of AI smartphones would increase to 1,250 million units in 2022
from 190 million in 2018, representing more than three-quarters of all
smartphones shipping in that year. We see voice assistants as one of the first
applications to benefit from device-based processing, Gareth Owen, Associate
Research Director at Counterpoint Research, said in a statement. Huawei and
Apple were the first original equipment manufacturer (OEMs) to include
dedicated AI processors in their system on chips (SoCs) (Kirin 970 and A11
chips, respectively) launched in their flagship handsets in September 2017. Two
years on, virtually all other SoC vendors are following suit. For example,
Qualcomm is offering an AI Tensor Accelerator in the Snapdragon 855's Hexagon
DSP for the first time, the report said. The key benefits of this are higher AI
processing performance and lower power consumption. However, this must be
balanced against the actual need for AI processing, which until recently has
been limited, it added. As AI becomes part of the mobile experience, smartphone
system-on-chip (SoC) vendors are racing to improve the machine learning (ML)
capabilities of their chips by integrating dedicated AI processing cores into
their designs.
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WORK 12 HOURS A DAY, 6
DAYS A WEEK: JACK MA DEMANDS OF HIS STAFF AT ALIBABA
To
survive at Alibaba Group Holding you need to work 12 hours a day, six days a
week That’s what billionaire Jack Ma demands of his staff at China’s biggest
e-commerce platform. Later as controversy brewed over his remark, Ma defended
overtime work culture at many of China’s tech companies, calling it a huge
blessing for young workers. Ma told an internal meeting that Alibaba doesn’t
need people who look forward to a typical eight-hour office lifestyle,
according to a post on Alibaba’s official Weibo account. Instead, he endorsed
the industry’s notorious 996 work culture — that is, 9 am to 9 pm, six days a
week. To be able to work 996 is a huge bliss, China’s richest man said. If you
want to join Alibaba, you need to be prepared to work 12 hours a day, otherwise
why even bother joining. China’s tech industry is littered with tales of
programmers and startup founders dying unexpectedly due to long hours and
grueling stress. The comments from Ma elicited some intense reaction. A load of
nonsense, and didn’t even mention whether the company provides overtime
compensation for a 996 schedule, wrote one commenter on the Weibo post. I hope
people can stick more to the law, and not to their own reasoning. The bosses do
996 because they’re working for themselves and their wealth is growing, another
comment read. Ma’s comments come amid a fierce debate. Programmers in China
protested their labour conditions on the online code-sharing community Github
in March under the banner 996. ICU, a topic that quickly became the site’s most
popular, with more than 211,000 stars.
#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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