PRE-PACKAGED INSOLVENCY
RESOLUTION: GOVT SEEKS STAKEHOLDER COMMENTS
The
ministry of corporate affairs (MCA) on Tuesday invited comments from
stakeholders on pre-packaged insolvency resolution and insolvency resolution
for group companies among other issues related to the Insolvency and Bankruptcy
Code, 2016, and the Insolvency and Bankruptcy (Application to Adjudicating Authority)
Rules, 2016. Participants can submit their comments till May 7. The government
has invited comments from corporate debtors, creditor to a corporate debtor,
insolvency professional, industry associations, law firms, investors, etc. MCA
has been mulling introducing pre-packaged insolvency, which is similar to the
practice prevalent in the US and the UK, where creditors and shareholders can
approach bankruptcy courts with a prenegotiated corporate reorganisation plan. Pre-packaged
insolvency resolution scheme allows creditors and shareholders to approach
bankruptcy courts with a pre-negotiated corporate reorganisation plan. Such a
step will aid the existing insolvency framework in India and cut costs as well
as the time of resolution process.
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PARTNERS ACCUSE PRAJAY PROMOTERS OF MISMANAGEMENT; MOVE NCLT
Foreign and local partners
of Prajay Engineers Syndicate have moved the National Company Law Tribunal
(NCLT), accusing the promoters of the real estate and property development firm
of mismanagement and malaise thereby eroding its substratum and raising the
risk of winding up. Global partners Belclare and Whitestock, and a group of
domestic shareholders led by Hymavathi Reddy, widow of its former chief promoter
DS Chandra Mohan Reddy, filed separate petitions in the NCLT. They urged the
tribunal to order a forensic audit of Prajay Engineers and restrain its
management led by chairman and managing director D Vijay Sen Reddy from
alienating any assets. They also sought annulment of contracts entered into by
the promoters against the provisions of foreign investment agreements. Belclare,
a Cyprus-based firm owned by Oman’s State General Reserve Fund, had invested Rs
70 crore in a stepdown property development subsidiaries of Prajay Engineers in
May 2010. It has now accused Vijay Sen Reddy and others in the management of
violating agreements on governance and corporate compliance. Belclare said it
was excluded from the affairs of the entities where it had invested in and that
it had not received any financial statements or information on the progress of
the projects undertaken by the entities ever since it had made the investments.
According to the Cyprus firm, it learnt that its investments into Prajay
Properties were diverted to parent Prajay Engineers through inter-corporate
deposits and then siphoned off. Belclare told the tribunal that it had
appointed PricewaterhouseCoopers to conduct a forensic audit of the books of
the Prajay Engineers entities, but the auditing firm wasn’t allowed to carry
out it despite repeated requests. Belclare alleged that the promoters led by
Vijay Sen Reddy had resorted to making material decisions, including altering
the composition of the board by way of fictitious board meetings. The investor
said Vijay Sen Reddy had repeatedly requested it to retrospectively sign the
fictitious minutes of such board meetings. There was also a request from
respondent No 4 (Vijay Sen Reddy) to backdate minutes of a meeting that in fact
did not take place, it claimed.
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JAYPEE HOMEBUYERS CAN SUE JAIPRAKASH ASSOCIATES AFTER SC ORDER
The Supreme Court has
declined to stay the apex consumer commission's order, which held that home
buyers in Jaypee Infratech Ltd (JIL) can move the consumer forum against JIL's
parent company, Jaiprakash Associates Ltd. (JAL), for compensation and
possession of their respective flats. JIL is undergoing insolvency proceedings.
The Life Insurance Corporation declared JIL as a non-performing account (NPA)
on September 30, 2015, and other lenders declared it as an NPA on March 31,
2016. A bench comprising Justices A.M. Khanwilkar and Ajay Rastogi said: All
contentions available to the respondent (home buyers) in the complaint,
including on the relief of possession and refund against JAL, will have to be
adjudicated by the Commission on its own merits in accordance with law
uninfluenced by the observations made in the impugned judgment. JAL had moved
the apex court challenging the National Consumer Disputes Redressal Commission
(NCDRC) order. Many home buyers had moved the NCDRC about compensation or a
refund with compensation from JIL and JAL. The NCLT appointed an Interim
Resolution Professional (IRP), while declaring a moratorium under the Insolvency
and Bankruptcy Code. The top court observed that the consumer commission will
examine all contentions available to both sides (home buyers and JAL) regarding
the rights and obligations of the parties on the merits in accordance with law.
The apex consumer commission in its order noted that the home buyers cannot
approach the consumer forums against JIL, at this stage, as it is under
insolvency proceedings. The court said : The Commission, however, may give
appropriate directions in the final judgement which obviously will be subject
to the outcome of the proceedings before the NCLT insofar as JIL is concerned
and also subject to the outcome of proceedings against JAL before the NCLT.
Sanjeev Sahani, said: No home buyer will pay installment until a flat is ready
for possession. Each project should be monitored by the home buyers'
association. The company should come out with a project-wise, tower-wise
completion dates.
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BANS WANT 90% LENDERS’ NOD FOR RESOLUTION
Banks have urged the
Reserve Bank of India (RBI) to make only a small relaxation in the new norms
for stressed assets by requiring consent of 90% of lenders for approving a
resolution plan instead of 100% mandated in the last year’s controversial circular,
which was quashed by the Supreme Court recently. The recommendation of the
Indian Banks’ Association (IBA) to RBI about the lenders’ consent clause has
dismayed industry. Companies were hoping for a much bigger relaxation in rules
and many executives fear that the year-long legal battle that culminated in the
Supreme Court’s order this month would fall flat if IBA’s view prevails. IBA
chief executive VG Kannan told that 90% limit is the safest bet as the chances
of the dissenting lenders moving the project to insolvency court will reduce.
The probability of proper resolution is better at 90% limit than at 66%, he
said. IBA’s demand of 90% lenders’ consent is against the requirement of 66%
approval specified in the Insolvency and Bankruptcy Code and the Inter
Creditors' Agreement signed by most big banks last year as a way out against
the February 12, 2018 RBI circular. Many companies are disappointed by the IBA
recommendations. The 90% limit is no better than the 100% consent. The chances
of a resolution process being agreed upon by all the lenders or 90% of lenders
are very low, as we have already seen in most resolution processes over the
past one year, said an industry executive requesting anonymity. The 100%
lenders’ approval clause was considered the most stringent requirement in the
quashed circular as lenders were not able to get all lenders on board for a
resolution scheme. Resolution plans of most projects have been stuck for want
of 100% consent from lenders. A senior official with a public sector bank,
however, said that no major deals were made even prior to the RBI circular when
75% consent was required. We can at least pursue or buy the 10% dissenting
lenders. The 90% limit will also attract investors as they are comfortable with
the resolution process being agreed by a large number of banks, he said adding
that IBA members held long discussions on proposals to RBI. In their letter to
RBI, power companies have sought different treatment in the ensuing circular to
help the sector to revive in 18-24 months. APP has also asked that after
restructuring of an account, it should be upgraded if the company makes regular
payments for one year and 5% of the outstanding debt is paid.
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SUPREME COURT STAYS HC ORDER ALLOWING HANDING OVER OF LA-FIN
MGMT TO JIGNESH SHAH
The Supreme Court has
stayed the Bombay High Court order that allowed handing over of the management
of embattled investment firm La-Fin Financial Services back to its erstwhile
management led by the former MCX promoter Jignesh Shah group. Financial
creditor IL&FS Financial Services had moved the apex court against the HC
orders of March 4 and April 9 that stalled the insolvency proceedings initiated
against La-Fin by National Company Law Tribunal, Mumbai, on August 28, last
year. IL&FS had moved the insolvency plea in May 2017, in respect of a debt
of `97.79 crore and default of payment of a financial debt of `266.39 crore. A
bench led by Justice RF Nariman stayed a part of the HC judgment that gave back
charge of the corporate debtor to its suspended board of directors. It also
asked IL&FS to serve copy of the appeal to the government. Besides, it also
sought a copy of the winding up suit filed by IL&FS against La-Fin for
examining it. The National Company Law Appellate Tribunal had in January dismissed
the petitions filed by Jignesh, his mother Pushpa Shah and others challenging
the NCLT order that allowed insolvency proceedings against La-Fin. The
appellate tribunal said that IL&FS is the ‘Financial Creditor’ and there is
a debt and default, thus the insolvency plea had been rightly admitted. It had
rejected Shah group’s stand that there was no financial debt and there was no
relationship of debtor and creditors between La-Fin and IL&FS. Soon after
the NCLAT order, Shah, instead of moving the apex court, filed a writ petition
before the HC against the appellate tribunal’s January order. The HC should not
have entertained the petition as it undermines the statutory framework and
encourage forum shopping by unscrupulous litigants, IL&FS said in its
appeal filed through counsel Liz Mathew before the SC. According to the
financial creditor, the HC had given in to a delay tactic to thwart and delay
the CIRP of the debt-laden firm which is at an advanced stage of completion. NK
Kaul argued that IL&FS suit was filed well in time in June 2013 and the
winding up plea was within a limitation period. The management of the company
can’t go back to Shahs. The RP has been there since 2018, he said. The issue
dates back to August 20, 2009, when IL&FS Financial Services purchased 5%
equity shares (4.42 crore) of Multi Commodity Exchange of India (MCX) at 36 per
share for total consideration of 159.12 crore.
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BALLARPUR GROUP FIRM TO FACE NCLT OVER BANK DEFAULT
ALLEGATIONS
Private lender Kotak
Mahindra Bank has taken Ballarpur Industries arm BILT Graphic Paper Products to
the National Company Law Tribunal (NCLT) for default of Rs 218 crore An NCLT tribunal
of VP Singh and Ravikumar Duraisamy adjourned the matter to May 8 when they
will decide on the admissibility of the bankruptcy petition. The respondent
(BILT Graphic) can file its response during that time, the court added. BILT
Graphics owes over Rs 6,000 crore to lenders. The company was on the second
list of 29 defaulting companies of RBI, recommending that these firms be
referred for resolution through the bankruptcy code. In February 2018, IDBI
Bank took the company to NCLT after an RBI direction to do so as the regulator
rejected its debt recast package as only 70 per cent of the lenders had signed
it. However, in March 2018, the company challenged the RBI directive in Delhi
High Court, which ordered the lender to maintain status quo at NCLT. Later, the
company moved the Supreme Court, where the matter is still pending.
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FUNDING TECH INCUBATORS CAN QUALIFY AS CSR SPEND
India Inc looking to lend
a helping hand to the startup ecosystem will soon be able to use its corporate
social responsibility corpus for the same. The government panel on corporate
social responsibility (CSR) is likely to suggest tweaks to the CSR framework to
allow funding to all incubators to be counted towards CSR spend, a government official
privy to the deliberations said. As per the current provisions, contributions
or funds provided to technology incubators located within academic institutions
and approved by government qualify as CSR. The Department for Promotion of
Industry and Internal Trade (DPIIT) had sought widening of this definition to
include other incubators as well, and it is likely to be part of the changes
being considered for the CSR framework, the official said. Only about Rs 54
crore was spent on technology incubators under CSR during 2014-17, which is
meagre compared to spend on education, at Rs 10,651 crore, and healthcare, at
Rs 6,671 crore. The panel is also expected to look at other changes based on
stakeholder feedback. and experience. The report is expected soon and could be
taken up for implementation post elections. The government had set up a
high-level committee headed by corporate affairs secretary Injeti Srinivas in
September, 2018 to review the existing CSR framework and make a road map for a
coherent policy. The panel includes Tata Sons chairman N Chandrasekaran,
sportsman Prakash Padukone and HelpAge India CEO Mathew Cherian. It was tasked
with not just looking at CSR laws, but also at rules and circulars issued from
time to time and analyse outcomes of CSR activities, programmes and projects,
and suggest measures for effective monitoring and evaluation of CSR by
companies. It could also propose steps for use of technology and social audits.
The provisions of Section 135 of Companies Act, 2013 pertaining to CSR came
into force on April 1, 2014. This section requires every company above the
specified thresholds of turnover, or net worth, or net profit to spend at least
2% of its average net profits earned during the three immediately preceding
financial years on specified CSR activities. According to government records,
the total CSR spend has risen from Rs 10,066 crore in FY15 to Rs 13,464 crore
in FY17.
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NBCC TO SUBMIT REVISED
BID TO ACQUIRE JAYPEE INFRATECH BY APRIL 25
State-owned
NBCC Ltd is likely to submit revised bid by April 25 for acquiring debt-ridden
Jaypee Infratech and complete the housing projects. Lenders of Jaypee Infratech
met on Tuesday and asked NBCC to submit their plan by April 25 as requested by
the public sector firm, sources said. NBCC and Suraksha Group are in race to acquire
bankruptcy -bound realty firm Jaypee Infratech. Separately, Jaypee group
promoters have submitted over ₹10,000 crore offer to
settle lenders debt and complete projects but the same is not being considered.
NBCC had even suggested that it was ready to work as project management
consultant and charge fees for completing the stalled projects.
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LIBERTY HOUSE NOT
LOSING HOPE FOR ADHUNIK METALIKS
In
spite of failing to pay up ₹410 crore obligation
within the deadline for the takeover of the debt-ridden Adhunik Metaliks, the
Liberty House is hopeful of striking the deal, even as the issue will be heard
in the Cuttak bench of the National Company Law Tribunal on April 30. The
Liberty House Group has sought fresh extension of time citing pending
regulatory and statutory approvals but creditors apparently remained reluctant.
The deadline for the payment was April 14. We are working on procuring
statutory and regulatory approvals which are a vital part of the implementation
plan, a Liberty House statement said. Sources in committee of creditors (CoC)
have indicated that they are not keen to extend the deadline any further and a
fresh round of bidding could be a possibility, if things do not work out
amicably in the interim period. The options before the CoC is to invite a fresh
bid or allow time hoping to get funds The CoC may think for a fresh bidding if
interest for the asset could improve compared to the ₹410 crore offer where haircut had been
92 per cent against outstanding dues of ₹5,370
crore in this round of resolution plan. But, this would be a time consuming
affair. However, it needs to be seen if NCLT entertains LHG plea to extend
timeline for the payment or not.
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JET PILOTS MAY APPROACH
NCLT FOR RECOVERY OF DUES
Faced
with no other options, Jet Airways’ pilots are considering filing a plea with
the National Company Law Tribunal (NCLT) to recover salary. The pilots have not
been paid since January. If the interim funding comes in, the salary may come
in by tonight or tomorrow morning. We need more than Rs. 1,000 core. The
aviation industry has perishable assets and the airline needs to be saved. If
the funding does not include salaries, then the operations might get suspended.
Then we will consider the option to approach the NCLT, said a representative of
the National Aviator's Guild (NAG), the Pilot body of Jet Airways.
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ELIGIBLE NBFCS CAN GET
LICENCE TO OFFER FOREX TRANSACTIONS TO INDIVIDUALS: RBI
The
Reserve Bank of India (RBI) Tuesday said systematically important non-deposit
taking NBFCs offering foreign exchange transactions on individual accounts will
be eligible to obtain Authorised Dealer (AD) Category-II licence from it. AD-Cat
II means entities that are authorised by the RBI to deal in foreign exchange
for specified purposes. These include upgraded full-fledged money changers
(FFMCs), select regional rural banks, select urban cooperative banks and
certain other entities. The RBI noted that a large segment of population is
increasingly getting connected with forex transactions on individual accounts. To
increase the accessibility and improve the efficiency of services extended to
the public for their day-to-day non-trade current account transactions, the RBI
said it has been decided that systemically important non-deposit taking
investment and credit companies shall be eligible for Authorized Dealer-
Category II (AD-Cat II) licence. The central bank further said NBFCs having a minimum
investment grade rating are eligible for the licence It also said NBFCs offering
forex services should have a board-approved policy on managing the risks
(including currency risk) and handling customer grievances arising out of such
activities. A monitoring mechanism, at least at monthly intervals, shall be put
in place for such services, it added. The eligible NBFCs desirous of
undertaking AD-Cat II activities should approach the RBI for the licence.
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RERA DOES NOT BAR HOMEBUYERS' COMPLAINT UNDER CONSUMER
PROTECTION ACT AGAINST BUILDER/DEVELOPER: NCDRC
The National Consumer
Disputes Redressal Commission (NCDRC) has held that Real Estate (Regulation and
Development) Act 2016 (RERA) does not bar filing of a complaint under the
Consumer Protection Act 1986 against a builder/developer. The bench headed by
Justice R K Agrawal was dealing with a batch of complaints filed by homebuyers
for compensation from Today Homes & Infrastructure Pvt Ltd for not
delivering possession of flats within the stipulated time. The
builder/developer raised preliminary objections against the maintainability of
complaints on two grounds :
·
After the commencement of
RERA, consumer complaint was not maintainable, as Section 79 of RERA bars
jurisdiction of civil courts.
·
The arbitration clause in
the agreements with buyers excluded jurisdiction of consumer forum.
Rejecting these
objections, the Commission held that Consumer Protection Act was a special
enactment which provided a special remedy to an aggrieved consumer. The
authorities under Consumer Protection Act cannot be regarded as civil courts
and hence Section 79 of RERA did not apply.
It was held
Section 79 of RERA only
prohibits the jurisdiction of Civil Court from entertaining any suit or
proceeding in respect of any matter which can be decided by the Authorities
constituted under the RERA. As the Consumer Fora are not Civil Courts, the
provisions of Section 79 which bar the jurisdiction of Civil Courts, will not
be attracted. So far as to grant injunction is concerned, only that power has
been taken away by Section 79. But, it does not, in any manner, effect the
jurisdiction of the Consumer Fora in deciding the Complaints. Both, the
Consumer Protection Act, 1986 and the Real Estate (Regulation and Development)
Act, 2016 are supplemental to each other and there is no provision in the
Consumer Protection Act which is inconsistent with the provisions of RERA. The
summary of conclusions of the NCDRC are as follows : The Consumer Protection
Act, 1986 is a supplement Act and not in derogation of any other Act; The
Consumer Fora constituted under the Consumer Protection Act, 1986 are not Civil
Courts. A Consumer cannot pursue two remedies for the same cause of action.
However, if a Consumer has not approached for redressel of its grievance under
the particular Statute, the Consumer can approach the Consumer Fora under the
Consumer Protection Act. But, if the Consumer had already approached the
Authority under the relevant Statute, he cannot simultaneously file any
complaint under the Consumer Protection Act. Mere availability of a right to
redress the grievance in a particular Statute will not debar the
Complainant/Consumer from approaching the Consumer Fora under the Act Even
though under Sections 14, 15, 18 and 19 of RERA, various provisions have been
made which are to be followed by the Developer/Promoters and the rights and
duties and the return of amount as compensation as also rights and duties of
Allottees, yet same cannot mean to limit the right of the Allottee only to
approach the Authorities constituted under the RERA, he can still approach the
Consumer Fora under the Consumer Protection Act. Section 71 of RERA which gives
the power to adjudicate, does not expressly or impliedly bar any person from
invoking the provisions of the Consumer Protection Act. It has also given a
liberty to the person whose Complaint is pending before the Consumer Fora to
withdraw it and file before the RERA Authorities. Arbitration agreement does
not bar consumer complaint. Referring to the recent SC decision in Emaar MGF
Land Ltd. vs. Aftab Singh, the Commission held that the fact that Arbitration
can be proceeded under the Arbitration and Conciliation Act, 1986 is not a
ground to restrain the Consumer Fora from proceeding with the Complaints.
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SEBI BARS BENGALURU-BASED SIYARAM DEVELOPMENT &
CONSTRUCTION, EIGHT DIRECTORS FROM MARKET
Sebi has barred
Bengaluru-based Siyaram Development and Construction and its eight directors
for at least four years from the securities market for illegally raising funds.
Besides, the regulator directed the entities to refund the money collected by
the company along with 15 per cent interest. Based on a complaint by an
investor regarding non-payment of maturity amount of his investment, Sebi
conducted a probe to ascertain whether the firm had made any public issue
without complying with the relevant provisions of Sebi and the Companies Act. During
the probe, the regulator found that the firm had allotted secured redeemable
debentures (SRDs) between financial years 2010-11 and 2012-13 and raised at
least Rs 4.22 crore from more than 49 allottees. Moreover, the firm created a
charge for an amount of Rs 70 crore and appointed Kalpana Guha as its debenture
trustee. As the number of allottees was more than 49, it was deemed to be a
public issue and required a compulsory listing on a recognised stock exchange.
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ISSUANCE OF GOVT BONDS JUMPS TO RS 64K CR FROM RS 15K CR IN
FY19: REPORT
The issuances of
government-fully serviced bonds (GoI-FSBs) rose to Rs 64,192 crore in the
year-ended March 2019 as compared to Rs 15,095 crore during the last fiscal,
says a report. These borrowings are estimated to have accounted for 0.34
percent of GDP for FY19 as compared to 0.09 percent of GDP for FY18. The total
outstanding value of these GoI-FSBs stood at Rs 88,454 crore at the end of
FY19, according to Icra.
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MINDTREE'S RS 530-CR DIVIDEND PAYOUT TO MAKE ITS TAKEOVER
COSTLIER FOR L&T
Amid L&T takeover bid,
Mindtree on Wednesday announced interim, final and special dividends for its
shareholders, totalling Rs 27 per share This move may push up the acquisition
cost for the engineering major. This will result in an outgo of around Rs 530
crore, including dividend distribution tax (DDT), from the company’s kitty. The
cash reserves stand at around Rs 1,100 crore by end of March 2019. The dividends
have been declared to commemorate completion of 20 years of the company’s
operations apart from crossing the $1 billion revenue milestone in the last
financial year, the IT services company said. According to the company, while
the interim dividend of Rs 3 per share will be payable to its shareholders with
a record date of April 27, final and special dividend of Rs 4 and Rs 20 will be
given after receiving shareholders’ approval in its next annual general meeting
(AGM). While the company argued that declaration of these dividends has been
done in normal course of action, corporate governance experts said a status quo
would have been more desirable. It doesn’t take anything whatsoever from our
governance processes. This special dividend is to commemorate Mindtree’s
achievement, which is subject to approval of shareholders in the forthcoming
AGM. It continuously upholds the standards of governance that Mindtree has,
said Rostow Ravanan. The move, Ravanan said, was not intended to hurt or
benefit any shareholder. When the AGM is held in July, all the shareholders
will get a chance to cast their votes. It is in line with our capital
allocation policy, he added.
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FOUL PLAY BEHIND SKIPPING RELIGARE OFFER: SUNIL GODHWANI
Sunil Godhwani, former CMD
of Religare Enterprises (REL) has alleged that Siddharth Mehta of Bay Capital
was in connivance with erstwhile promoters – siblings Malvinder Mohan Singh and
Shivinder Mohan Singh — and Shyam Maheshwari of SSG Capital to acquire
substantial stake in the company without giving a mandatory open offer as
stipulated by market regulator Sebi. Bay Capital and its associate companies
are significant minority shareholders of REL. Mehta was appointed non-executive
non-independent director of Religare Enterprises in February 2018. In a letter
to the ministry of corporate affairs dated April 6, Godhwani alleged that Bay
Capital, India Horizon Fund, IDBI Trustee Company, Resilient India Growth Fund
(SSG group company), SSG Capital and others acquired more than 26% shareholding
in REL in connivance, without an open offer Religare Enterprises and its
subsidiary Religare Finvest (RFL) had filed a complaint against the Singh
brothers and Godhwani under the Companies Act with the ministry of corporate
affairs in December 2018. It said RFL had sanctioned loans to companies known
to the brothers but was never repaid. Loans stand at Rs 2,397 crore, with Rs
415 crore as interest to 19 entities. It is apparent that the price was
deliberately battered down to Rs 52.50 per share from a high of Rs 250 per
share. And the said price was reached upon taking into account the aspect of
corporate loan book (CLB) which stood at about Rs 2,300 crore) and the same was
written off, as this was the money which was taken by the erstwhile promoters,
Godhwani alleged in his correspondence, copies of which was also sent to RBI
and Sebi. The market cap of REL at Rs 52.50 per share was Rs 800 crore when the
embedded value was over Rs 3,000 crore. Why and under what circumstances an
open offer was prevented? This requires investigation by Sebi for insider
trading and it will expose the entire nexus. The underlying value of asset is
much more than the value of holding company, which explains the modus operandi
between Siddharth Mehta and the erstwhile promoters, Godhwani further writes.
Godhwani further alleged that Mehta through India Horizon fund had bought 52.2
lakh shares of Religare Enterprises in 2013 at about Rs 352 per share. In
September 2017, SSG Capital of Shyam Maheshwari invoked pledged over 17% equity
shares of REL which were held by IDBI Trustee (custodian of SSG Capital), he
added.
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M&A ACTIVITIES SLUGGISH IN JAN-MAR; 33 PC DECLINE IN DEAL
VALUE TO USD 12.5 BN: REPORT
The first quarter of 2019
recorded 110 merger and acquisition deals worth USD 12.5 billion (about Rs
86,500 crore), a 33 per cent fall in value terms as against the year-ago
period, due to factors such as global economic conditions and uncertainty around
Brexit, according to a report. As per Grant Thornton's quarterly deal tracker
report released Wednesday, This drop (in value) can be attributed to delays in
execution of deals, growing complexity in deal structures and macro-economic
factors like upcoming elections, global economic conditions, and uncertainty
around Brexit dampening investor sentiment. However, the quarter recorded a
marginal increase in deal activity as compared to the fourth quarter of 2018,
owing to encouraging factors such as proceedings under the Insolvency and
Bankruptcy Code, divestments of non-core assets that have no synergies with
larger group firms, drive in stressed asset space and cleaning up of bad loans.
The deal volume witnessed seven per cent decline as compared to first quarter
of 2018 when it stood at 118, the report added. This quarter witnessed an
encouraging trend with 2 per cent increase in deal value and 7 per cent
increase in volume as compared to the fourth quarter of 2018, demonstrating a
positive and promising deal sentiment. Although we entered 2019 with
substantially less momentum with 110 M&A deals worth USD 12.5 billion
compared to 118 deals worth USD 18.7 billion in Q1 2018, some big deals
announced this year have provided some encouragement that the outlook for
M&A will be healthy despite a drop, said Pankaj Chopda. The announced deals
include Arcelor Mittal's acquisition of Essar Steel for USD 7.2 billion,
Radiant Life care's merger with Max healthcare for USD 1 billion, he said. Deal
value increased exponentially in March 2019 with over 5 times as compared to
March 2018. The month recorded the highest value in the past seven months on
the back of eight high-value transactions despite a 6 per cent fall in volume.
Two deals of USD 2 billion each were recorded in manufacturing and
pharmaceutical sectors in the first quarter of 2019 and 15 deals valued and
estimated at and over USD 100 million each together contributed 93 per cent to
the total M&A deal value and 15 per cent to the M&A volume, thus demonstrating
an appetite for big-ticket deals and an uptick in deal activity amid other
uncertainties.
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INDIA INC FOREX
BORROWING TO PICK UP PACE IN FY20: IND-RA
If
foreign portfolio investment inflows continue and hedging costs remain subdued
by way of the Reserve Bank of India’s actions or otherwise, foreign currency
borrowings could pick up considerable pace during FY20, easing the
demand-supply gap in the domestic credit markets, according to India Ratings
and Research (Ind-Ra). The recent softening of the Indian rupee-US dollar
(INR-USD) forward rate, if sustained at least in the foreseeable future, is
likely to provide a fillip to Indian borrowers who plan to raise foreign
currency-denominated capital, the credit rating agency said. A change in the
global monetary policy conditions, along with the first round of the three-year
swap auction, has already moderated the three-year cross-currency swap rate by
30 basis points (bps) on April 15, 2019, from the January 2, 2019, level. Meanwhile,
during this period, the INR-USD forward premium moderated by 71bps, driven by a
marked improvement in the domestic market’s dollar liquidity conditions, the
agency elaborated. One basis point equals one-hundredth of a percentage point. Ind-Ra
said that considering the moderation in the London Inter-Bank Offered Rate
(LIBOR) and the softening hedging costs while domestic interest rate
transmission remains muted, cost savings on foreign currency borrowings are
likely to materially improve over the near to medium term. The spread between
the SBI marginal cost of funds-based lending rate (MCLR) and the all-in
LIBOR-linked cost (after accounting for hedging cost) increased to 2.48 per
cent on March 29, 2019, from 1.28 per cent on September 28, 2018. The agency
assessed that the interest outgo of the top-500 debt-heavy corporate borrowers
could cumulatively reduce by ₹4,000-7,000 crore,
assuming a 0.50-0.75 per cent reduction in the cost of forex borrowings, and a
50bps-200bps rise in the share of forex borrowings in the outstanding debt of
these corporates.
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TIME FOR RBI TO CHANGE
APPROACH; COMMUNICATION CAN BE USED AS POLICY IN ITSELF
Shaktikanta
Das has sparked a debate on moving away from the conventional method of
changing monetary policy interest rate in multiples of 25 bps. Instead, the size
of the rate change could be calibrated in small or larger magnitudes to
indicate policy stance, he suggested. This thinking indicates the RBI intent to
use communication as the policy in itself rather than the policy statement just
being a vehicle for communication, SBI said in its Ecowrap report this week. Shaktikanta
Das said this against the background of several limitations imposed by the
conventional and unconventional monetary policy tools in the aftermath of the
global financial crisis. Monetary policy must touch the real economy, spur
investments and maintain fiscal and monetary stability, he said. However, some
economies have turned to the heterodox evolution of ideas that are being
practiced as modern monetary theory, he noted. Although the intent of the RBI
Governor looks positive, there remains concerns on the efficiency of an
indicative rate cut of 10 or 15 basis points given the weak monetary
transmission in the economy where even 25 or 50 basis points cut do not work,
said SBI report. Moreover, rate changes of odd magnitude could be difficult to
connect with markets unless properly decoded, the report added. The report
suggested the RBI to provide second generation signals in its policy statement
in order to reduce the disconnect with market expectations. This includes
phrases indicating that policy accommodation can be maintained for a
considerable period or can be removed at a pace that is likely to be measured.
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WILL FORMER DENA,
VIJAYA BANK HEADS EXPLORE ANOTHER MERGER IN PSB SPACE?
Having
successfully piloted the merger of Vijaya Bank and Dena Bank with Bank of
Baroda, will the erstwhile chiefs of the merged banks moved recently by the
government to helm Canara Bank and as a Whole-Time Director in Indian Overseas
Bank, respectively, take a stab at another merger in the public sector banking
space? Banking industry experts feel this is within the realm of possibility as
both top bankers are unlikely to face any difficulty in replicating their
learning from putting through a complex merger. Putting two and two together,
the experts say that RA Sankara Narayanan, and Karnam Sekar, may be asked to explore
another merger involving their respective banks and one more state-owned bank
(possibly Oriental Bank of Commerce) by the government that takes power after
the ongoing general elections. They reasoned that Sankara Narayanan and Sekar,
both veteran bankers with collective experience of close to seven decades in
commercial banking, have gained a wealth of knowledge and experience with the
amalgamation of their erstwhile banks with BoB, and now are well-positioned to
set the ball rolling on another merger in the state-owned banking space. Sankara
Narayanan was appointed MD and CEO of Canara Bank with effect from April 1,
2019, till his superannuation on January 31, 2020. Sekar has been appointed as
Officer on Special Duty and Whole-Time Director in Indian Overseas Bank, with
effect from April 1 till the time of his taking charge as MD and CEO on July 1,
2019. He will superannuate on June 30, 2020. Merger in the public sector
banking space is expected to gather steam as the main national parties – the
BJP and Congress – are on the same page regarding consolidation among public
sector banks (PSBs). During its five-year tenure, the BJP-led NDA government
kickstarted the amalgamation process in the public sector banking space, with
the five associate banks within the State Bank Group, and the Bharatiya Mahila
Bank getting merged with State Bank of India in 2017, and Vijaya Bank and Dena
Bank merging with BoB with effect from April 1, 2019. The Congress party, in
its 2019 Lok Sabha election manifesto, said it will amalgamate two or more
PSBs, so that there will be only six to eight PSBs with a national presence.
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INDIVIDUAL SETTLES CASE
WITH SEBI IN CRISIL MATTER, PAYS RS 26 LAKH
Markets
regulator Sebi has settled a case of alleged insider trading by an individual
after paying over Rs 26 lakh towards settlement charges in the matter of Crisil
Ltd. Besides, individual Priyanka Pathak disgorged illegal gains worth Rs 7.92
lakh along with an interest of Rs 5.15 lakh, Sebi said. In an order, the
regulator said it conducted probe regarding the corporate announcement of voluntary
open offer for acquisition of up to 1.56 crore equity shares of Crisil Ltd from
public shareholders by McGraw-Hill Asian Holdings (Singapore) along with its
persons acting in concert (PACs) on June 3, 2013. The probe observed that
Pathak had purchased the shares of Crisil during the period when
price-sensitive information was not public (May 1, 2013 to June 2, 2013) and
sold the same immediately on the date of corporate announcement. By doing so,
Pathak made profit of 7.84 lakh and thereby prima-facie violated insider
trading norms, Sebi said. Pathak filed an application under settlement
mechanism and proposed to pay Rs 26.28 lakh towards settlement charges along
with disgorgement of illegal gains with 12 per cent annual interest. Accordingly,
Pathak remitted Rs 26.55 lakh along with illegal gains of 7.92 lakh and an
interest of Rs 5.15 lakh and thereby proceedings initiated against Pathak are
settled, the regulator said in the order on Monday.
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INVESTMENTS THROUGH
P-NOTES JUMP TO RS 78,110 CR TILL MARCH-END
Investments
through participatory notes in domestic capital market rose to Rs 78,110 crore
at the end of March, amid positive market sentiments. As per the latest Sebi
data, the total value of P-note investments in Indian markets -- equity, debt,
and derivatives -- stood at Rs 78,110 crore till March-end. The increase in
P-notes investment is in line with the higher net inflows of FPIs in the cash
segment, which increased from Rs 13,500 crore in February to Rs 32,000 crore in
March, Vinod Nair, said. Of the total P-note investments made till March-end,
Rs 56,288 crore was in equities, Rs 20,999 crore in debt and Rs 119 crore in
derivatives markets.
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ON NOTICE: CENTRAL PSUS
GET 12 MONTHS TO SELL NON-CORE ASSETS; FAILURE MAY LEAD TO BUDGET CUTS
Central
public sector enterprises (CPSEs) will now be denied budgetary support while
their staff will lose on their performance-linked pay, if these firms fail in
meeting the goals of monetising their assets. The Department of Investment and
Public Asset Management (DIPAM) has issued guidelines which said state-run
companies will have 12 months to monetise non-core assets identified by a
ministerial panel headed by the finance minister, without having to forgo
Budget funds. DIPAM also included asset monetisation as one of the targets in
the customary MoUs that the CPSEs sign with the Department of Public
Enterprises (DPE). This means that a slippage in the performance on this count
could result in a firm’s rating downgrade and consequent reduction in variable
pay of its staff. Currently, performance-related pay can be as high as 150% of
basic pay for CMDs while it is 40% for the lowest grade officers if the rating
of the PSU performance is ‘excellent’. A downgrade would bring down MoU rating
from ‘excellent’ to ‘very good’ and ‘very good’ to ‘good’, resulting in
reduction from 100% eligibility of performance-linked pay to 80% and 60%,
respectively. The Department of Expenditure and Department of Economic Affairs
may consider any proposal from the CPSE/administrative ministry for budgetary
support only after looking at the achievement of asset monetisation target by
the CPSE. Performance of contract management will be considered before
sanctioning any government budgetary support, the DIPAM said. The assets to be
monetised by PSUs include land and buildings, brown-field operational assets
such as pipelines (like that of GAIL), roads (NHAI) and mobile towers
(MTNL/BSNL). It would also include financial assets like equity shares, debt
securities and other hybrid instruments that are in the possession of the
CPSEs. While the Centre would retain 100% of the proceeds from monetisation of
non-core assets of units identified for strategic sale and enemy properties, it
could share a large chunk of the proceeds with CPSEs in case operational assets
are monetised. The proceeds to the Centre from asset monetisation would be
counted as disinvestment receipts, which so far only included receipts from
equity sales in CPSEs and other entities.
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MINDTREE DEAL A HURDLE
IN L&T'S ROAD TO 18% ROE BY FY21
Larsen
and Toubro Ltd’s (L&T’s) shares are down about 5% this year, even as the
Nifty 50 index has risen by over 8%. The fall in L&T’s shares come despite
the positive news on order flows and improving fundamentals in its core
business. Worse, its one-year forward price-to-earnings multiple of 19 times is
way below the levels of 24 times a year ago as well as the five-year average of
23 times earnings. The first dampener for the stock came early this year when
the Securities and Exchange Board of India (Sebi) rejected its share buyback
offer which was meant to return excess cash and boost return ratios. Investors
have also perceived the decision to acquire software firm Mindtree Ltd as a
negative in the near term because of a worry about using cash in non-core
businesses. Some analysts also said it can weigh on near-term return on equity
(RoE) of the company. Investors are not happy with L&T’s capital allocation
to MindTree, especially in context of RoE being sub-5% at the acquired
valuation multiple (of about 20 times), said Jefferies India Pvt. Ltd. L&T
has set a target of achieving 18% RoE by FY21, which is now under question,
given the Mindtree deal and the rejection of the buyback offer. The overhang of
the general elections will also limit government capex until the second half of
FY20. We do not expect the strong 15% CAGR seen in FY08-FY13 to repeat,
especially as power will not be a major capex driver ahead. However, from
negative growth, we expect to move to 10%+ CAGR over the next four years, said
Jefferies India. However, L&T’s efforts to contain working capital should
bring down interest cost as a percent of sales. Meanwhile, the March quarter is
usually robust on execution, translating into better conversion of orders into
revenues. Also, analysts say L&T’s order flows for FY19 will top its
guidance of 10-12% growth over a year ago. Investors will hope that improved
fundamentals in the company’s core business will offset the negative investor
sentiment due to recent developments.
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TRAI FINDS SIX CABLE
FIRMS VIOLATING NEW TARIFF ORDER, SEEKS COMPLIANCE IN 5 DAYS
Regulator
Trai Tuesday said six cable TV players including GTPL Hathway and Siti
Networks, violated several rules especially those related to new tariff order,
and directed them to ensure compliance within five days The other players are
Fastway Transmissions Private Ltd, Den Networks, and IndusInd Media and
Communications Ltd (IMCL) and Hathway Digital. The Telecom Regulatory Authority
of India (Trai) found that GTPL Hathway, Siti Networks, Fastway Transmissions
Private Ltd, Den Networks, and IMCL are forcing channels and package schemes to
the consumers, and subscribers are not able to exercise their choice till date.
Trai has unveiled the new tariff order and regulatory regime for the broadcast
and cable sector to facilitate consumers to opt for channels they wish to view
and pay only for them. The rule has been effective since February 1. It had
said every channel should be offered a la carte, with a transparent display of
rates on electronic programme guide. The regulator also clarified that DTH and
cable operators cannot force consumers to go in for only predefined packages or
bouquets. Trai said it has received consumers' complaint that GTPL Hathway,
Siti Networks, Fastway Transmissions Private Ltd and Den Networks are not
providing bill receipt of the payment made in printed form to the consumers. In
case of Hathway Digital, Trai found that it is offering a bouquet of TV
channels which contain both free-to-air and pay channels. It found that Hathway
Digital has disconnected pay channels of customers who have paid advance amount
for one year without their consent and only showing them FTA channels. Also,
Hathway Digital subscribers are unable to re-excercise their choice through
website or toll-free number of the company. Trai asked all the six firms to
report compliance as per the new regulatory framework within 5 days from the
date of issue of this direction.
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MERGER OF TELCOS TO
EASE COMPETITION, SHIFT FOCUS TO QUALITY: REPORT
The
merger of two telecom giants – Vodafone and Idea Cellular — imply that the
Indian mobile market will soon be paired down to four major national mobile
operators. There are now hopes this will ease the fierce round of mergers and
acquisitions in the market and ease the ferocious price war in the country,
says a report by Opensignal. The merger of Vodafone and Idea Cellular is set to
create India's biggest operator with around 387 million subscribers across the
country. It plans to extend its 4G network to over 80 per cent of Indian users,
wireless service mapping company Opensignal said. The report has considered
Vodafone and Idea as individual operators. The focus is already shifting
towards service quality, with both Airtel and Vodafone Idea talking up their 4G
network improvement plans. On the other hand, Jio has gone one step ahead with
a pledge to bring 5G to India before its rivals. It said that Jio's rivals
haven't been complacent. In terms of 4G availability in India’s telecom sector,
Jio continues to astound, growing its 4G availability to 97.5 per cent — the
highest national score we have ever recorded. But Airtel showed the greatest
growth in this category, as its average score jumped by over 10 percentage
points to cross 85 per cent. A recent report from Deloitte has estimated that
the total investment required to cover India with 5G would be a staggering $70
billion — partly because the country lacks widespread fibre backhaul infrastructure
necessary for high-capacity networks.
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TATAS PAY GOVERNMENT
FOR TELE BUSINESS MERGER WITH AIRTEL
Tatas
have paid Rs 3,100 crore to the telecom department towards spectrum payment
liabilities in line with their deal to sell ailing telecom business to Bharti
Airtel. Airtel and the loss-making Tata Teleservices (TTSL) had announced their
deal in September 2017, as part of which the former took over the consumer
mobility business of the Tatas in 19 telecom circles. The deal, which allowed
Tatas to exit the difficult telecom business, will bring in an additional
178.5MHz of spectrum for Airtel in three bands that are widely used for 4G.
This will help Airtel tackle competition from Reliance Jio more effectively. Apart
from this, the DoT has demanded bank guarantees of around Rs 7,500 crore
towards one-time spectrum charge (OTSC) liability. However, it is expected that
this will be challenged in Telecom Disputes Settlement and Appellate Tribunal
(TDSAT) by Airtel, similar to a precedent it had done in the case of merger of
Telenor.
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AIRTEL TO CHALLENGE DOT
DEMAND OF RS 8.2K CR GUARANTEE FOR TATA TELE DEAL
Bharti
Airtel will soon move the appellate tribunal challenging the telecom
department’s demand of Rs 8,200 crore in bank guarantees as a condition for
giving its final nod to the merger of the consumer mobility business of Tata
Teleservices with itself. Airtel will appeal in the Telecom Disputes Settlement
and Appellate Tribunal (TDSAT) against the demand of bank guarantees of about
Rs 8,200 crore from the government, which are for one-time spectrum charges
(OTSC), said a person familiar with the development. There is another Rs 800
crore worth of deferred spectrum charges that has been demanded, which the
operator will pay.
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JIO HAS BEST 4G
AVAILABILITY AND AIRTEL TOPS DOWNLOAD SPEED: STUDY
At
97.5% 4G availability in India, Jio's 4G users enjoy the best connectivity
among all countries analysed by UK-based analytics firm Opensignal’s Mobile
Network Experience Report. Advanced mobile markets like South Korea, Japan, and
the US have highest 4G availability ratios of around 95%. The report notes that
Bharti Airtel is giving Reliance Jio a tough fight, as the former jumped 10% in
the last six months to achieve 85.6% 4G reach- thereby narrowing its gap with
Jio from 22% in November to 12% now. At 8.7 Mbps (megabits per second),
Airtel’s download speed is 2.4 Mbps faster than rival Jio, and the company also
pulled ahead of Idea, Vodafone, and BSNL by a wide margin. Airtel is also
offering the most seamless video experience among its peers, as the telco
jumped over five points to score 44.4 (out of 100), taking the pole position in
the ‘Video Experience’ category. Netherlands, a leader in the category, has a
score of 73%. In case of upload speeds (a factor crucial for social media use),
Idea dominated the category at 3 Mbps. Vodafone came second with a score of 2.6
Mbps. Jio continued its command over network latency at 62.5 milliseconds,
leading rival Airtel by 13%.
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SAUDI ARAMCO IN TALKS
FOR 25 PER CENT OF RELIANCE'S REFINING, PETROCHEMICAL UNITS: REPORT
In
what is shaping up into a mega-deal between two corporate behemoths, Saudi
Aramco, the world's most profitable company in history, is learned to be in serious
discussions to acquire up to 25% in the refining and petrochemicals businesses
of Reliance Industries Ltd, India's largest company. While Saudi Aramco, which
is also the world's largest oil exporter, is known to have first shown interest
in Reliance about four months ago, talks gathered momentum following the visit
of Saudi crown prince Mohammed bin Salman (MBS) to India in February, during
which he met RIL chairman and India's richest man, Mukesh Ambani. There might
be an agreement on valuation around June this year, people with knowledge of
the development said. A minority stake sale could fetch around $10-15 billion
valuing RIL's refining and petrochemicals businesses at around $55-60 billion.
Goldman Sachs, the storied investment banker, is said to have been mandated to
advise on the proposed deal. RIL has grown too big - from energy to retail to
telecom. It needs to compartmentalise. It makes sense to spin off some of its
verticals. It'll help raise funds and unlock shareholder value, said a highly
placed person in the financial sector who didn't wish to be quoted since he
didn't have direct knowledge of the matter. It was after he attended Mukesh
Ambani's daughter Isha's pre-wedding festivities in Udaipur in December that
Saudi oil minister Khalid al-Falih publicly signalled Aramco's interest in
forming joint ventures, including with RIL, to expand India's refining
capacity, which is currently straining at around 4.6 bpd. Domestic crude oil
consumption is expected to more than double to 10 million bpd by the year 2040.
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IBBI TO CONDUCT
ROADSHOW IN HONG KONG TO HIGHLIGHT OPPORTUNITIES IN STRESSED ASSETS
Continuing
with its efforts to build awareness on investment opportunities in the
burgeoning stressed assets market in India, insolvency regulator IBBI, in
association with FICCI, will hold a roadshow in Hong Kong next week. It is
reckoned that greater participation of investors in stressed assets will make
the resolution process more competitive and ensure sustainable turnaround of
stressed assets. The roadshow — to be held during April 24-26 — follows the one
held in New York and Toronto in December last year, official sources said. In
India, the huge potential for resolution of stressed assets through the
Insolvency and Bankruptcy Code (IBC) has been attracting interest from domestic
and global investors. Already within a short span of time about 1,600 companies
have been admitted into the corporate insolvency resolution process. About 400
of them have completed the process, either yielding resolution plans or ending
up in liquidation.
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AHEAD OF ETAIL LAUNCH,
RELIANCE INDUSTRIES PULLS OUT BRANDS FROM RIVALS
As
a precursor to the launch of its own business-to-consumer (B2C) marketplace
that will sell everything from food to fashion, Mukesh Ambani’s Reliance
Industries has started withdrawing its clothes, shoes and lifestyle products
from would-be rival marketplaces like Amazon and Flipkart. These include its
own as well as global brands for which the group has selling rights in India.
The process of withdrawals has gathered pace in recent months as RIL prepares
for its major online initiatives later this year, according to three people
aware of the development. RIL has the highest number of global fashion and
lifestyle brands in its stable with around four dozen joint ventures or master
franchisee arrangements with international labels. Many of these brands are
sold online on Amazon, Flipkart, Myntra, Jabong and Tata Cliq, among other
sites. Reliance wants to create exclusivity for global as well as its own
brands to attract consumers to its portal. Reliance Trends and Reliance Brands
have been asked to expedite the phasing-out process from non-Reliance
marketplaces in the coming weeks, sources said. Reliance has stopped taking new
orders Whatever is available on the third-party marketplaces will be sold till
the stocks are exhausted, said a person with direct knowledge of the
development. Another person said Reliance Brands, the flagship subsidiary that
holds rights for the majority of global brands, has been instructed by the head
office to stop supplies to third-party marketplaces from this month. They have
been told to sell only on Ajio-.com and through their own monobrand sites for
different labels, the person said, asking not to be identified. Reliance Brands
clocked revenue of Rs 336.41 crore in FY18.
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RIL TO SELL STAKE IN 6
VERY LARGE ETHANE CARRIER COMPANIES TO JAPAN’S SHIPPING MAJOR
Mukesh
Ambani-led Reliance Industries announced on Wednesday that its wholly owned
unit Reliance Ethane Holding has struck a deal with Japan’s shipping major
Mitsui OSK Lines for a strategic investment into Reliance’s six ‘very large
ethane carriers.’ Notably, Reliance Ethane Holding has a 100% holding in six
limited liability companies (LLCs) which own Very Large Ethane Carriers (VLEC).
REHPL, Mitsui O.S.K Lines of Japan and a strategic minority investor have
signed binding definitive agreements for a strategic investment by MOL and
minority investor in the six special purpose limited liability companies
(SPVs), each owning a VLEC, Reliance Industries said in a press release. The transaction
is subject to regulatory approvals. Further, post closing, the SPVs shall be
jointly controlled by REHPL and MOL. Taking stock of the strategic rationale,
PMS Prasad, Executive Director, RIL said that the deal will improve efficiency
of the VLECs. Given MOL is currently the operator of all the six VLECs,
investment by MOL will deepen our relationship with them and ensure continued
safe and efficient operations of the VLECs. We welcome MOL as a atrategic
partner into the SPVs as they move beyond the current operator role to joint
owner and operator role in the SPVs, Prasad said.
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NIPPON PAINT OFFERS $
2.7 BN BID FOR AUSTRALIA'S DULUX GROUP
Japan's
Nippon Paint Holdings Co Ltd has proposed buying Australia's biggest paint
maker Dulux Group Ltd for A$3.8 billion ($2.7 billion), expanding its global
footprint though entering Australia just as a housing boom there falters. The
cash deal was recommended by the Dulux board and sent its stock soaring 28 per
cent to the offer price, a record high. It would catapult Nippon Paint, the
world's fifth-largest paint maker, from a bit player to the biggest paint
seller in the region. It also offers investors in Dulux, whose paint colours
more than a quarter of Australia's homes and buildings, a chance to cash out at
the end of a long construction boom. The price point that they've paid is quite
incredible, said Portfolio Manager Jun Bei Liu at Tribeca Investment Partners,
a fund manager which exited Dulux Group stock ahead of a slowdown in the
building materials sector. The proposal comes after Nippon Paint has scoured
the globe for big deals to buy growth away from its stagnant home market.
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AMAZON PLANS TO SHUT ITS CHINESE E-COM MARKETPLACE TO FOCUS ON
INDIA
In a rare retreat for
Amazon.com Inc., the e-commerce giant plans to shut down its Chinese
marketplace business in July as it shifts its focus to offering mainland
consumers overseas products rather than goods from local sellers. Amazon will
keep running its other businesses in China, including Amazon Web Services,
Kindle e-books, and cross-border operations that help ship goods from Chinese
merchants to customers abroad. Starting on July 18, customers logging in to
Amazon’s Chinese web portal, Amazon.cn, will only see a selection of goods from
its global store, rather than products from third-party sellers. Pulling out of
Chinese e-commerce represents a setback for the company in the world’s largest
retail market and for Chief Executive Officer Jeff Bezos, known for his
willingness to weather losses to achieve long-term gains. It’s also the latest
example of an American tech company in China struggling to contend with local
leaders like Alibaba Group Holding Ltd and JD.com Inc., as well as group buying
app Pinduoduo Inc., which went public in New York last year. The pullback is
the latest sign that Amazon is ceding China so it can focus on India, where it
stands a better chance of becoming a dominant player. The company has plowed
billions of dollars into the India business since opening its website there in
2013, building more than 50 warehouses to support the business. But Amazon
still has to contend with Chinese e-commerce players in India, where Alibaba
and others are building up operations or investing in local startups such as
Paytm E-commerce Pvt and BigBasket.
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WALMART CEO SAYS
COMMITTED TO INDIA, A YEAR INTO FLIPKART DEAL
Almost
a year into writing a $16 billion cheque for Flipkart, Doug McMillon Tuesday
said the US retail firm continues to be committed to the Indian market given
the huge opportunity that the country presents. McMillon, also highlighted that
a level-playing field is important to ensure growth for businesses operating in
the country. McMillon expressed satisfaction at the progress made by Flipkart
and said Walmart is aggressive on the Indian market given the size of the
opportunity. Asked about the recent regulatory challenges in the Indian market,
McMillon said Walmart has operations across multiple countries and complies
with local laws in individual markets but asserted that a level-playing field
is important and that is what businesses seek. The government had tightened
norms for e-commerce firms with foreign investment with effect from 1 February.
These regulations barred online marketplaces like Flipkart and Amazon from
selling products of companies where they hold stakes and banned exclusive
marketing arrangements that could influence product price. A separate
e-commerce policy is also in the works.
#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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