CORPORATE UPDATES 26.04.2019

NOTIFICATION REGARDING COMPANIES (REGISTRATION OFFICES AND FEES) SECOND AMENDMENT RULES, 2019

In exercise of the powers conferred by sections 396, 398, 399, 403 and 404 read with sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Registration Offices and Fees) Rules, 2014, namely:-

1. (1) These rules may be called the Companies (Registration Offices and Fees) Second Amendment Rules, 2019

(2) They shall come into force from the date of publication in the Official Gazette.

2. In the Companies (Registration Offices and Fees) Rules, 2014, in the Annexure, in item VIII. FEE FOR FILING e- Form ACTIVE under rule 25A of the Companies (Incorporation) Rules, 2014., the following shall be substituted namely.

(i) Fee payable till 15.06.2019 on e -form ACTIVE – NIL

(ii) Fee payable (in delayed case) - Rs.10,000

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NOTIFICATION REGARDING COMPANIES (INCORPORATION) FOURTH AMENDMENT RULES, 2019

In exercise of the powers conferred by sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Incorporation) Rules, 2014, namely: -

1. Short title and Commencement.-

(1) These rules may be called the Companies (Incorporation) Fourth Amendment Rules, 2019

(2) They shall come into force on the date of publication in the official gazette.

2. In the Companies (Incorporation) Rules, 2014 , in rule 25A, in sub-rule (1) of for the words and figures 'on or before 25.04.2019 the words and figures on or before 15.06.2019' shall be substituted

3. In In the Companies (Incorporation) Rules, 2014, in rule 25A, in sub-rule (1), in the third proviso, for the words and figures 'on or after 26th April, 2019, the words and figures 'on or after 16th June, 2019 shall be substituted.

4. In the Companies (Incorporation) Rules, 2014, in sub-rule (2), for the words and figures on or after 26th April, 2019, the words and figures on or after 16th June, 2019 shall be substituted.

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RESOLUTION PLANS UNDER IBC HAVE YIELDED 200 PC OF LIQUIDATION VALUE: IBBI CHAIRPERSON M S SAHOO

Resolution plans under IBC have yielded 200 per cent of liquidation value for creditors in addition to rescuing viable firms, IBBI Chairperson M S Sahoo has said. They are realising, on an average, 45 per cent of their claims through resolutions plans under the Corporate Insolvency Resolution Process (CIRP), which takes on average 300 days and entails a cost on average of 0.5 per cent. This is significantly better as compared to the previous regime which yielded a recovery of 25 per cent for creditors through a process which took about five years and entailed a cost of 9 per cent, Sahoo was quoted as saying in a Ficci statement. He noted that the repayment of debt is no longer an option, it is an obligation as tolerance for default has disappeared. A stakeholder may initiate CIRP of the firm when it fails to service its debt for the first time. If process is initiated, the Code shifts control from the debtor to creditors for resolution of insolvency. Through the process of resolution, the ownership often shifts to third parties. Thus, ownership of firm is no more a divine right and equity is no more the only route to own a company, the Insolvency and Bankruptcy Board of India (IBBI) Chairperson said. He said the creditors also need to explain to themselves and their stakeholders why they initiated an insolvency proceeding or why they did not, in case of a default. Consequently, there would never be a high value default if this law exists in the statute book. Sahoo acknowledged the support of the judiciary, government and the regulators in facilitating implementation of the Code, both in letter and spirit. He explained that markets regulator Sebi has exempted acquisitions under resolution plans from making public offers under the Takeover Code. RBI has allowed external commercial borrowing for resolution applicants to repay domestic term loans and the Competition Commission of India has devised a special route for expeditious approvals for combinations envisaged under resolution plans, said Sahoo. He also highlighted that the revenue department has allowed setting off the aggregate amount of the unabsorbed depreciation and loss brought forward against book profits arising from a resolution plan.

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MSMES SEEK SIMPLIFIED NORMS FOR UNLISTED COMPANIES TO CHANGE REGISTERED OFFICE

While the government is in overdrive to weed out ‘fictitious companies’ those who genuinely want to update their registered offices term the process nightmarish and seek a simplified scheme to effect change. After receiving a number of representations from MSMEs, Federation of Indian Micro and Small & Medium Enterprises (FISME) has highlighted the issue before the Ministry of Corporate Affairs. For several decades, address of the registered office was taken rather casually dictated even by factors such as ease of delivery of post. Now with greater scrutiny, a very large number of genuine companies also want their addresses changed. But changing the registered office is arduous, time consuming and costly It is extremely difficult if change involved two different states, mentioned Animesh Saxena. FISME President said, Changing the registered office is arduous and can scare even the bravest. It is particularly difficult if change involved two different states It takes almost an year to complete the formalities and costs anywhere between fifty thousand to one lakh and a half. The list of formalities include, besides the board meetings and the EGMs and filings through a number of Forms MGT-14, INC.23 etc, publishing advertisement in the Form No. INC-26 (vernacular as well as English newspaper), seeking confirmation from the Regional Director, comply that no employee would be retrenched as a consequence of shifting of the registered office from one state to another state; notifying Chief secretary of the concerned State Government or the Union territory etc. While lauding the initiative of the Government to clean up the system, FISME requested the Government to announce a simplified scheme at least for ‘unlisted companies’ (whether limited or private limited) for changing registered office. ‘In an era where the Registrar of Companies today has a number of authenticated identification proof like PAN, DIN, TIN and Aadhaar, prescribing the process used in 1970s cannot be termed either as smart or efficient’, says Saxena.

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MCA

The Ministry of Corporate Affairs has issued much awaited clarification or Advisory on Charge related e-Forms. The Ministry has advised that CHG-1/ CHG-9/ CHG-8 and GNL-5 containing changes of the Companies (Amendment) Ordinance 2019 is under progress. Stakeholders may kindly note that in case charge is created or modified after 02.11.2018 and 120 days have expired there from, the form CHG-1/9 cannot be filed to register such charges and there is no option for condonation of delay Further, changes to CHG-4 based on the Companies (Amendment) Act, 2017 have been made in the form CHG-4 since December 25, 2018. However, the forms filed between 05.07.2018 to 24.12.2018 where condonation is asked for, stakeholders may contact the jurisdictional RoCs to request for an additional resubmission chance. On re-submitting the revised form, there shall be no requirement of condonation to be filed if form is filed after 30 days and within 300 days of satisfaction of charge.

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RBI DUTY BOUND TO DISCLOSE WILFUL DEFAULTERS' INFORMATION, RULES SC

The Supreme Court ruled that Reserve Bank of India (RBI) was duty bound to disclose information related to wilful defaulters. The SC took a serious view of non-disclosure of this information by the central bank and said that any further violation would invite contempt of court proceedings. The SC held that the RBI's non-disclosure policy was in violation of the court's 2015 judgement and ordered it withdrawn. Girish Mittal and Subhash Chandra Agrawal had moved the top court for contempt action against the RBI not complying with the court's direction to disclose information under the Right to Information (RTI) Act. The petitioners had claimed that RBI and its former Governor Urjit Patel had willfully and deliberately disobeyed the top court's judgement asking the central bank to disclose information under the RTI Act. The two petitioners sought initiation of contempt of court action against former Governor for not disclosing information as directed by the top court. One of the contempt petition filed by Girish Mittal said that RBI refused to provide the information sought about the inspection reports of some banks. The petitioner had also sought copies of case files with file notings on various irregularities detected by RBI in case of Sahara Group of companies and erstwhile Bank of Rajasthan by these entities themselves and their known/unknown promoters. However, RBI denied the information in January 2016 that such information is exempted under Section 8(1)(e) of the RTI Act and Section 45NB of the Reserve Bank of India Act.

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INSOLVENCY PROCESS: NCLT ASKS BANK OFFICIALS TO APPEAR IN STERLING SEZ

The National Company Law Tribunal (NCLT) on Thursday asked the committee of creditors (CoC) to file an affidavit in 24 hours detailing the reasons for their acceptance of one-time settlement (OTS) offer from the promoters knowing that they were absconding and were involved in fraudulent activities It also asked the bank executives to be present at the tribunal for the hearing of the matter or else the tribunal would direct an inquiry against the CoC. The Ministry of Corporate Affairs (MCA) had earlier objected to the tribunal’s decision accepting the withdrawal of insolvency plea against Sterling SEZ by Srei Infrastructure Finance but had later stayed the decision as MCA is of the view that Section 12A of the Insolvency and Bankruptcy Code (IBC) cannot be applicable to an absconder. The judges observed it was irresponsible on the part of the CoC to accept an OTS offer from the promoter who is absconding. The Bench will not hesitate to take action against banks if they fail to be present in the NCLT. CoC should have informed the Bench about all frauds conducted by Sterling Biotech founders, the judges said. The ED is trying to declare Nitin and Chetan Sandesara, promoters of Sterling group, as fugitives under the Fugitive Economic Offenders Act. Gujarat-based Sterling SEZ is a subsidiary of Sterling Group, which owes over Rs 8,100 crore to its financial and operational lenders. The Sterling SEZ matter has been listed for April 26. Moreover, Sterling matter is also listed on April 26.

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NCLT PULLS UP LENDERS OF STERLING SEZ

The bankruptcy court asked the lenders of Sterling SEZ & Infrastructure to explain why it should not order an inquiry into their conduct in accepting the settlement offer from the company’s promoters when they were absconders. The Mumbai bench of the National Company Law Tribunal (NCLT) on Thursday gave 24 hours to the committee of creditors (CoC) to file its response. Why the CoC should not be held responsible for not informing competent authorities before accepting the settlement offer from the promoters who are absconders, asked the bench comprising Bhaskara Pantula Mohan and V Nallasenapathy. We are directing all the members of the CoC who have approved the settlement offer to come to the tribunal, failing which, we will direct an inquiry into the conduct of the lenders. As much as about 92% of the creditors had agreed to accept Sandesaras’ offer to pay about half the dues to settle the dispute. The NCLT stayed the order after the Ministry of Corporate Affairs informed it that a similar application was pending before another bench of the NCLT, for withdrawing proceedings on the Sterling Group's flagship company Sterling Biotech, and that the government was keen to intervene in the matter. The Gujarat-based Sterling Group’s three companies — Sterling Biotech, Sterling SEZ and its trading arm Sterling International — are facing insolvency cases. The group owes about Rs 15,000 crore to its financial and operational creditors. Sterling SEZ owes more than Rs 4,500 crore. In the case of Sterling Biotech, the promoters have offered to pay as much as Rs 3,100 crore to settle outstanding dues of around Rs 8,100 crore and more than 90% of the lenders have agreed to withdraw the case. However, since the promoters are absconding, and various investigation agencies are probing allegations of fraud against them raised by lenders, the tribunal directed regulators, including the Reserve Bank of India and Securities and Exchange Board of India, and investigation agencies such as the Enforcement Directorate, CBI, incometax department and also the ministry of corporate affairs to file their response before allowing lenders to settle and withdraw the case.

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MCA MOVES CONTEMPT PLEAS AGAINST AXIS, STANCHART CHIEFS AND RAMESH BAWA

The Ministry of Corporate Affairs (MCA) on Thursday moved contempt pleas in the Mumbai Bench of the National Company Law Tribunal (NCLT) against former managing director (MD) and CEO of IL&FS Financial Services (IFIN) Ramesh Bawa, Axis Bank MD and CEO Amitabh Chaudhry, and Standard Chartered Bank India CEO Zarin Daruwala. The contempt pleas have been filed by the government against the two bank CEOs and Bawa, alleging they violated the NCLT order that restrained top officials of IL&FS — which included Bawa — from disposing of their personal assets. The matter could not be heard on Thursday because of paucity of time and has been listed for hearing on April 26.

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STRESSED ASSETS RESOLUTION: RBI MULLS GIVING UP TO 60 DAYS ADDITIONAL TIME FOR REPAYMENTS

The Reserve Bank of India (RBI) is working on revising the framework for resolution of stressed assets including providing additional 60 days to borrowers to repay dues, as part of efforts to mitigate hardships faced by genuine businesses, sources said. Against the backdrop of the Supreme Court quashing an RBI circular, issued on February 12, 2018, a revised set of rules is under works and would be released soon, they added. Sources said various options are being explored for rejigging the NPA framework. One of the option is giving 30-60 days more time in addition to existing 90 days before initiating resolution process for stressed accounts, they added. While the 90-day period for recognising an account as NPA would remain, the central bank would be looking at providing more leeway for the entities concerned to repay the loans, they said. Sources said that providing additional time for repayment would help in mitigating hardships faced by Micro, Small and Medium Enterprises (MSMEs) to some extent. The committee expects that clarity of thought and transparency in approach should be the guiding factor to streamline and strengthen the sector squirming under ineluctable hardships, it had said.

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MCA READY TO STRIKE AGAINST IL&FS TAINTED DELOITTE

The Ministry of Corporate Affairs is ready to strike against Deloitte Haskins and Sells in the murky IL&FS case. IANS learns that MCA has taken an aggressive view over malpractices by Deloitte over the last decade which have led to papering over the large cracks in its finances Misrepresentation, cooking of books by auditors and malafide practices with respect to the web of subsidiaries are at the kernel of Deloitte's architecture for IL&FS for which MCA will disbar them. On Wednesday, Serious Fraud Investigation Office (SFIO) questioned Deloitte's former Chief Executive Officer Udayan Sen and two others over alleged audit lapses in the books of IL&FS.

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RUCHI SOYA INSOLVENCY: LENDERS TO MEET FRIDAY TO CONSIDER PATANJALI'S REVISED OFFER

Lenders of debt-ridden Ruchi Soya will meet Friday to consider the revised bid of Baba Ramdev's Patanjali Ayurved to acquire Madhya Pradesh-based edible oil firm, according to sources. Patanjali had last month increased its bid value by around Rs 200 crore to Rs 4,350 crore for bankruptcy-bound Ruchi Soya. According to sources, a meeting of Committee of Creditors (CoC) is scheduled on Friday to discuss the revised bid of Patanjali.

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TV9 DEAL: SAIF PARTNERS MOVES NCLT AGAINST SRINI RAJU, OTHERS

A fund of SAIF Partners has moved the National Company Law Tribunal (NCLT) with a contempt case against venture capitalist Srini Raju and others, accusing them of selling TV9 and violating interim orders of the tribunal After a complaint from SAIF Partners, the Tribunal had on September 4 last year passed an order restraining Associated Broadcasting Company (ABCL), the operator of the TV9 bouquet of satellite television channels, from selling its shares or assets until further directive from the bankruptcy court. While a senior official at ABCL refused to comment on the allegations of SAIF Partners as the matter is pending before a court, Raju denied any wrongdoing or violation of interim orders, claiming that he had completed the stake sale before the bankruptcy court passed the interim orders. Having invested Rs 50.37 crore for an 80% stake in IVision Media in August 2008, SAIF claimed it was assured that IVision Media would be merged with ABCL and that it would get a 14.29% stake in the merged entity. Further, claiming that Raju and associates had agreed to provide an exit option if the merger wasn’t completed within 24 months, the Mauritius fund said neither the proposed merger went through nor did IVision Media’s business take off.

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GOVT TO CHARGE AXIS, STANC, BAWA & WIFE WITH CONTEMPT OF NCLT

The corporate affairs ministry will Friday file contempt of court petitions against Axis Bank and Standard Chartered Bank for their alleged role in ex-IL&FS Financial Services managing director Ramesh Chander Bawa and his wife disposing off a portion of their assets which were frozen by the NCLT. The ministry is filling two applications and a petition against Bawa and his wife and the banks after it has come to light that the parties have broken the orders of the bankruptcy tribunal. A bench of VP Singh and Ravikumar Duraisamy had on December 3, 2018 had restrained the former directors of the crippled IL&FS group from mortgaging/selling, or creating third-party interests or in any way alienating movable or immovable or jointly held properties. However, the NCLT had allowed the former directors of the crippled group to withdraw Rs 2 lakh each per month from one of their bank accounts after intimating the tribunal.

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JM FIN ARC CONDUCT IN LEELA SAGA QUESTIONABLE

With SEBI stopping the Hotel Leelaventure takeover bid in its tracks, several questions have cropped up. A combination of two minority investors -- ITC and LIC -- jointly owning a tad over 10 per cent petitioned both NCLT and SEBI to prevent this takeover from going ahead, citing oppression and mismanagement against the company. IANS now learns that a Middle Eastern billionaire along with an Indian arms dealer had jointly bid for Leelaventure company and their bid at $600 million was higher than any other bid. Further, they had offered to pay every cent of the outstanding loans for the entire company, including the Mumbai Leela property (which is under legal dispute with AAI). The Leela saga has seen many twists and turns and the flawed takeover is now under the microscope. It is believed JM Financial excluded this bid deliberately on purpose by asking them to deposit $90 million in Earnest Money Deposit (Rs 630 crore) with JMF, whereas they did not ask for a single penny from Brookfield. Moreover, a reputed Thai hotel chain, Minor Hotels, also bid for Leela Group and they too were asked to deposit 15 per cent of the bid value, as JMF wanted to block them from entering the fray against BF (Brookfield). JM Financial, which has been pushing this deal is equally under the cosh for pushing this flawed acquisition. The fact that Brookfield was made to pay Rs 150 crore each to the Nair brothers for branding and Intellectual Property Rights is another facet of this deal which is seriously questionable. JM FIN ARC conduct is now being examined by the SEBI. ITC has also separately moved the National Company Law Tribunal (NLCT) along with two applicants, asking for an urgent hearing and also waiver of 10 per cent shareholding as minimum threshold to have a say in the management decisions. ITC has alleged that minority shareholder rights are being suppressed. NCLT will hear the matter on June 18. The ITC which owns 7.92 per cent has alleged that the Leela-Brookfield deal violated provisions of related-party transactions. LIC's (with 2.36 per cent) objections have not been ascertained immediately. The company's board had sought shareholders' approval through a postal ballot on April 24, for the sale of its assets to Brookfield for Rs 3,950 crore. While Sebi is examining the representations in view of paucity of time and interest of investors in securities, you are advised that none of the transactions proposed in the PBN (post ballot notice) of March 18, are acted upon till further directions from Sebi, the market regulator said in its letter to Hotel Leela.

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SEBI HALTS RS 4,000 CRORE SALE DEAL BETWEEN LEELA, BROOKFIELD

The assets sale deal between Hotel Leelaventure and private equity major Brookfield faced new hurdles on Wednesday as markets regulator Sebi halted the transaction over allegations of oppression of minority shareholders’ rights. Additionally, government-run life insurance major LIC, which holds 2.4% in the hospitality chain, joined ITC in expressing its objections to the planned transfer of the properties. The developments came even as the Mumbai bench of the National Company Law Tribunal (NCLT) asked Hotel Leela to respond to ITC’s allegations relating to oppression of minority shareholders’ rights and mismanagement by the promoters of the hospitality chain while executing the deal with the Canada-based private equity major, worth Rs 3,950 crore. The NCLT has given Hotel Leela’s management two weeks to respond to ITC, after which the tobacco-to-hospitality major will have to respond to the hotel chain’s replies. The next hearing in the case is expected to be in June this year, sources said. Sebi said that it had received two complaints against the company’s deal with Brookfield — one from ITC and another from LIC, both shareholders of the company. The representations and allegations against Hotel Leela concerns the interest of the investors in securities market, Sebi said in its letter. The allegations may attract charges of violation of Sebi’s rules and regulations and other provisions of securities law. Hence, the regulator asked the hotel chain to ensure that none of the transactions proposed in the postal ballot dated March 18 are acted upon till further directions from Sebi.

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JAYPEE INSOLVENCY: LENDERS TO MEET ON APR 26 & 30 TO CONSIDER REVISED BIDS OF NBCC, SURAKSHA

Lenders of debt-ridden Jaypee Infratech will meet on April 26 and 30 to discuss revised bids submitted by state-owned NBCC and Suraksha Realty to acquire the realty firm and complete over 20,000 delayed apartments in Noida. NBCC and Suraksha group, which are in the race to acquire the Jaypee Group firm, were asked by the lenders to sweeten their offers and both the potential buyers have submitted their revised offers under the Insolvency and Bankruptcy Code (IBC). Revised resolution plans have been received from NBCC and Suraksha Realty-led consortium and will be placed for discussion amongst CoC (committee of creditors) members on resolution plans received from resolution applicants in the meetings to be held on April 26 and April 30, respectively, Jaypee Infratech Interim Resolution Professional (IRP) Anuj Jain said in a regulatory filing. The details of revised plans were not disclosed.

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NBCC SWEETENS BID FOR JAYPEE INFRATECH, OFFERS LENDERS LAND PARCELS WORTH RS 5K CRORE

State-owned NBCC has sweetened its bid to acquire debt-ridden Jaypee Infratech and has now offered to give lenders Rs 5,000 crore worth land parcels, sources said. The public sector enterprise, which is also completing some projects of Amrapali Group on the Supreme Court's direction, had offered lenders land worth Rs 3,000 crore in its earlier resolution plan submitted a couple of months back. It had also offered the Yamuna Expressway that connects Noida to Agra in Uttar Pradesh. NBCC and Suraksha Realty group-led consortium, which are in the race to acquire Jaypee Infratech, were asked by the lenders to sweeten their offers. Both the potential buyers have submitted their revised offers under the Insolvency and Bankruptcy Code (IBC). According to sources, NBCC has offered to pay Rs 500 crore upfront to lenders and would invest about Rs 2,000-2,500 crore as funding gap to complete delayed housing projects of Jaypee Infratech comprising over 20,000 flats in Noida. The revised resolution plans of NBCC and Suraksha Realty would be considered by the lenders on April 26 and April 30.

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SEBI MOVE OPENS UP REITS AND INVITS TO RETAIL INVESTORS

A Sebi circular issued on 23 April reduced the minimum lot size for Real Estate Investment Trusts from ₹2 lakh to ₹50,000 The regulator also reduced the minimum lot size for Investment Trusts (InVITs) from ₹10 lakh to ₹1 lakh In doing so, Securities and Exchange Board of India (Sebi) has opened up both products to retail investors. Those with investments worth less than ₹2 lakh are considered retail investors in India’s capital markets. With the Real Estate Regulation and Development Act, 2016 (RERA) in place, the sector as whole, is regulated properly. REITs and InVITs are long term assets which can serve retail investors well, he said. The minimum ticket size was a constraint for retail investors earlier. The reduction in the ticket size opens up an opportunity for them to take exposure to the real estate market through an efficient financial vehicle, said Prakash Praharaj. A REIT has to distribute 90% of its cash flows to investors at least once in six months. Investors also benefit from capital appreciation in the underlying assets. An Infrastructure Investment Trust (InVIT) invests in infrastructure projects and has a similar structure. The income earned by a REIT/InVIT is taxed in the form in which it is received.

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PE/VC INVESTMENTS HIT RECORD HIGH OF $7 BILLION IN MARCH: REPORT

Private equity (PE) and venture capital (VC) investments hit a record monthly high of $7 billion in March, growing more than twice compared to the same period last year, according to EY’s Private Equity Monthly Deal Tracker. March 2018 had witnessed PE/VC investments of $3 billion. At $7 billion, the deal activity last month was 30% higher compared to the previous high of $5.4 billion recorded in August 2017. The number of deals in March 2019 increased by 44% against a year ago, with 89 deals in March 2019 compared to 62 in March 2018. There were 13 large deals (deals of value greater than $100 million) aggregating to $6 billion in March 2019, compared to four large deals worth $3 billion in March 2018, with Brookfield’s $1.9 billion buyout of RIL’s east-west pipeline being the largest deal during the month and also the largest ever in the Infrastructure sector, the report said. As a result of the exceptionally high level of PE/VC investments in March 2019, the first quarter emerged as the best-ever quarter for PE/VC investments, with investments worth $11.4 billion, 37% higher compared to the same period last year and almost a third of the value recorded in the whole of 2018. The Indian PE/VC industry is off to a very strong start with $11.4 billion of PE/VC investments in Q1, eclipsing the previous Q1 high (2018) by 37% on the back of strong investment flows recorded in March 2019 at $7 billion (61% of all investments received in Q1 2019). March 2019 saw hectic deal activity both in investments and exits in infrastructure and real estate asset. Exit activity, however, showed signs of slowing down March 2019 recorded 13 exits worth $465 million, 34% lower compared to last year and the lowest monthly value of exits in 2019. The decline was mainly on account of fewer large deals. There was only one large exit worth $131 million in March 2019 compared to four large exits worth $626 million in March 2018. Overall, in Q1 2019, PE/VC exits declined by 30% on a year-on-year basis and by 48% compared to 4Q2018 to $1.3 billion, recording the lowest quarterly value of exits in over 11 quarters. One notable exit event in March 2019 is the successful IPO of India’s maiden REIT offering, backed by Embassy / Blackstone consortium. This is a ‘Lighthouse Event’ for the Indian real estate private equity sector, which over the past 3-4 years, has seen significant amount of PE investment into portfolios of rent generating commercial properties such as office, retail malls and industrial warehousing. Should public market investors continue to show interest in this REIT security that represents a new asset class, it could pave the way for many more REIT listings, according to Soni.

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RBI SELLS ENTIRE STAKE IN NHB, NABARD TO GOVT. FOR ₹ 1,470 CR. IN TOTAL

The Reserve Bank of India (RBI) has divested its entire stake held in National Housing Bank (NHB), the regulator for housing finance companies, and National Bank for Agriculture and Rural Development (Nabard) to the government, which now holds 100% in these entities. The transactions were completed on February 26 (Nabard) and March 19 (NHB). RBI had 100% shareholding in NHB, which was divested for ₹1,450 crore. The Nabard stake was divested in two phases — RBI had 72.5% stake in Nabard amounting to ₹1,450 crore, out of which 71.5%, worth ₹1,430 crore was divested in October 2010 and the residual shareholding was divested on February 26 this year for ₹20 crore.

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IF INDIA IS GROWING AT 7% THEN WHY IS RBI ACTING SO JUMPY?

India’s Prime Minister Narendra Modi has an election to fight. So naturally, his government is touting statistics that show 7 percent GDP growth in the fiscal year that ended last month, despite skepticism from the International Monetary Fund among others. As for jobs, the official version is that since there’s such high growth in output, they must exist They just aren’t getting counted properly, argued a touchy Modi government after it quashed the publication of an unfavorable employment survey by the statistics department. If things are going so well, though, why is India’s central bank acting so jumpy? What’s more concerning is the way in which the RBI is opening the floodgates to liquidity. In a highly unusual step, Das has snapped up $10 billion in two auctions over a month, buying the U.S. currency for reserves and agreeing to reverse the trade in 2022. When the RBI buys dollars from banks, it gives them rupees. The additional liquidity should, in theory, make banks more confident to lend. However, lumpy dollar purchases by the central bank distort traders’ price expectations. And just in case wheels of commerce require even more lubrication, the central bank has also agreed to take 250 billion rupees ($3.6 billion) worth of sovereign Indian government securities from banks next month and give them cash. At one level, the central bank is simply being proactive. Shadow banks have to repay nearly $19 billion to India’s mutual funds between April and June, according to Credit Suisse Group AG, and domestic refinancing costs have been elevated since last September’s sudden collapse of financier IL&FS Group. Shadow banks lend for everything from trucks and two-wheelers to homes. If their financing problems get worse, the ultimate borrower would feel the heat. And that’s unacceptable to Das’s political bosses during India’s five-week-long national election currently underway. Still, the risks the Indian central bank is taking smack more of desperation than prudence and preparedness. Take, for instance, its bold leap into the market for dollars. Unlike Indian government bonds, whose prices it can influence, the RBI has no control over the greenback. While buying or selling little bits to manage day-to-day volatility in the rupee’s exchange rate is one thing, going headlong into the dollar market can have unintended consequences. Forward premiums in the onshore foreign-exchange market crashed when the RBI started its dollar-rupee swap, but are now spiking up. Large Indian borrowers appear to be locking in the cost of their future dollar requirements by cornering the RBI’s swap window. If the rest of India Inc. want dollars one year from now, they’ll have to pay an annualized 4.4 percent -- 1 percentage point more than when the RBI announced its first dollar-rupee swap in March. Nobody knows what will happen if the RBI keeps pressing ahead with this unusual liquidity tool, which seems to be causing more of a dollar glut in the country than anything else. A permanent increase in hedging costs for Indian borrowers would be the opposite of what the RBI may have intended. As for the central bank’s bond-buying, it’s managing to keep a lid on the government’s borrowing costs in the debt market -- but only just. Given the extra money that’s going to be needed to pay energy subsidies if global oil prices turn decisively higher, not to mention fulfill all the expensive poll promises being made by candidates now, even more rate cuts — and bond purchases by the central bank — may not prevent a hardening of the 10-year Indian government bond yield to more than 7.5 percent. In trying to hold down both the risk-free rate and the premium that riskier borrowers have to pay, the RBI is effectively dispensing a very large dollop of stimulus. If the economy was doing as well as the government would like voters to think, this kind of simultaneous fiscal and monetary easing would hardly be necessary. Raghuram Rajan, shaping up as a critic of the Modi administration: How can we be growing at 7 percent and not have jobs? he asked. Well, one possibility is that we are not growing at 7 percent. One is inclined to agree. The way Rajan’s former institution is leaping to douse flames, there must be a fire somewhere.

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FILE CRIMINAL CASE AGAINST FINANCIERS: HRERA

The Haryana Real Estate Regulatory Authority (HRERA) on Wednesday directed the Gurugram police to register a criminal case against financiers of construction projects in the Aravalli region. The authority initiated the action over the issue of misappropriation of the allottees' money by the promoter in connivance with the lenders and financiers of the real estate project. K.K Khandelwal said that directions have been issued to the Commissioner of Police, Gurugram to register criminal case. He said that the authority has taken a serious note of the fact that India Bulls Housing Finance Limited, Industrial Finance Corporation of India Limited and PNB Housing Finance Limited have fraudulently and arbitrarily withdrawn entire amount of the receivable deposited in the 'RERA Account', which is a flagrant violation of section 4(2)(l)(D) of RERA, 2016. According to Dr Khandelwal, this provision has been incorporated in law to address the mischief earlier being committed by unscrupulous builders to divert amount realised from the allottees to other projects or for different purposes other than the project for which amount has been deposited by the allottees. As of now, the law provides that 70% amount realised for the real estate project from the allottees has to be kept as a reserve and can only be utilised after the promoter has paid and incurred expenditure on cost of construction and land cost. In case of any complaint the authority may prohibit use or withdrawal of this money for any other purpose under the circumstances where there is an apprehension of misappropriation of allottees money, said Dr Khandelwal. Further, there cannot be any lien on this account and if any such charge is created by the promoter then in that condition the allottee shall under no circumstance bear the burden of that charge. It shall solely be the duty of the promoter to clear the encumbrances, he said.

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NFRA ENGAGING UPTO 10 CAS/ CMAS/COMPANY SECRETARIES ON CONTRACTUAL BASIS

The applicant should possess the following qualification:

(i) He/she should be a qualified Chartered Accountant/Cost Accountant/Company Secretary having passed the final examination of the Institutes concerned;

(ii) He/ she should have minimum two years of experience post-passing their final examination; candidates with greater experience would be given preference.

(iii) He/ she should have good communication skills, both written and oral;

(iv) Experience in conducting/ participating in audits of large or listed companies is desirable.

The terms and conditions of the appointment will be-

i. Selected candidates shall not practice as Chartered Accountants/ Cost Accountants or Company Secretaries during the period of their engagement in NFRA.

ii. He/ she would be engaged for a period of initial three months. Further extension may be considered on the basis of output of selected candidate.

iii. The selected candidates would be assigned tasks, at discretion of the NFRA, in areas such as preparation of inspection and training manuals, conduct of audit quality reviews, review of company financial statements etc.

iv. NFRA would pay consolidated remuneration of Rs 40,000/- per month+ Rs 1,000/­- as conveyance charges

v. All the selected candidates will have to provide declaration of fidelity and secrecy certified as prescribed by NFRA.

vi. No TA/DA will be given to the candidates for attending the interviews, if held

vii. The service of the selected candidate may be terminated by NFRA by giving a 30 days’ notice in case of the following eventualities-

a. The selected candidate is unable to address the assigned works.

b. Quality of work performed is not to satisfaction of NFRA.

c. The selected candidate fails in timely achievements of the worked plan.

d. The Selected candidate is found lacking in honesty and integrity.

viii. The selected candidate may also terminate the engagement by serving a notice period of 30 days or one month remuneration in lieu thereof.

Interested persons may apply in the proforma prescribed latest by 27.05.2019 to

Secretary,

National Financial Reporting Authority,

8th Floor, HT House, 18-20, KG Marg,

New Delhi -110001

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FACEBOOK ACTIVELY WORKING ON WHATSAPP PAY IN INDIA

Facebook is upbeat on the growth of digital payments in India and is actively working on launching WhatsApp Pay soon, CEO Mark Zuckerberg has said. In an earnings call with analysts late Wednesday, Zuckerberg said the company is building out Payments for the global market. We have a test that is running in India for WhatsApp now, we're hoping to launch in several other countries at some point, but I don't want to put a timeframe on that here, but it's something that we're actively working on, he said. WhatsApp Pay, stuck owing to India's demand to store data locally, has not gone beyond the beta testing it did with nearly one million users last year. In Instagram and Facebook, you have shopping, and you have Marketplace and you have all the tens of millions of small businesses that use pages and a lot that use Instagram for sharing their inventory and being able to help people discover and pay. When you're using a messaging service, that everything there is very intimate and private so it feels like a more natural space to be interacting with a business in a private way for doing transactions, Zuckerberg added. You should have simple, intimate spaces where you have complete confidence that what you say and do is private. Encryption. Your private communications should be secure, and end-to-end encryption prevents anyone - including even us - from seeing what you share, Zuckerberg added. You shouldn't have to worry about what you share coming back to hurt you later, so we won't keep around messages or Stories for longer than necessary, he noted.

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FACEBOOK KEEPS ASIDE $3 BN AHEAD OF US FTC FINE

Battling several privacy violations, Facebook has kept aside $3 billion anticipating a record fine coming from the US Federal Trade Commission (FTC) related to the Cambridge Analytica data scandal that involved 87 million users. In the first quarter of 2019, we reasonably estimated a probable loss and recorded an accrual of $3 billion in connection with the inquiry of the FTC into our platform and user data practices, the social networking giant wrote in its earnings statement late Wednesday. We estimate that the range of loss in this matter is $3 billion to $5 billion, added Facebook. We had a good quarter and our business and community continue to grow, said Mark Zuckerberg. We are focused on building out our privacy-focused vision for the future of social networking, and working collaboratively to address important issues around the Internet, he added in a statement. The daily active users (DAUs) hit 1.56 billion on average for March, an increase of 8% year-over-year. Monthly active users (MAUs) on Facebook reached 2.38 billion - also an increase of 8% year-over-year. Mobile advertising revenue represented approximately 93% of Facebook's advertising revenue for the first quarter — up from approximately 91% of advertising revenue in the first quarter of 2018. In addition, we estimate that more than 2.1 billion people now use Facebook, Instagram, WhatsApp, or Messenger every day on average, and around 2.7 billion people use at least one of our family of services each month, said the social networking giant.

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TWITTER ADDS WAY TO REPORT VOTER-TRICKING TWEETS

Twitter on Wednesday began making it easier to report tweets aimed at interfering with people voting, starting first in Europe and India. An option to report Twitter messages as being misleading about voting was being added to the one-to-many messaging service's app in India and Europe, with a promise it would be expanded globally through the year. Any attempts to undermine the process of registering to vote or engaging in the electoral process is contrary to our company's core values, the Twitter safety team said in an online post. Twitter teams entrusted to review reported content have been trained as part of an enhanced appeals process in the event tweet removal decisions are challenged, according to the San Francisco-based company. You may not use Twitter's services for the purpose of manipulating or interfering in elections, the safety team said. Examples of misleading information fired off in tweets included falsely asserting people could vote by email, phone, text messages or even using Twitter messages. Tweets have also been used to trick people into going to the polls on the wrong days or times, missing opportunities to cast ballots.

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Thanks & Regards,
CS Meetesh Shiroya