CORPORATE UPDATES 08.05.2019

COCS MUST SHARE ALL INFO ON NPA ACCOUNTS WITH BIDDERS: IBBI

The Committee of Creditors (CoC) of a non-performing asset (NPA or bad loan) account must provide all relevant information and share its vision for the company under resolution with the prospective resolution applicants in order to come up with a rescue plan, the insolvency regualtor has said. CoC must provide the resolution applicants all relevant information like a promoter does while making an IPO (initial public offer). In such a case a prospectus is issued, roadshows are organised and promoters share their vision so that people believe in him and subscribe to the issue, M.S. Sahoo told. Similarly, the CoCs have to share its vision for the company under resolution so that RAs (resolution applicants) show interest and come up with a plan if they find the option viable. The IBBI Chairperson said that this is also important to prevent companies from going into liquidation as this should only be the last option when all other efforts fail. I will insist on rescue of a viable company, he said. CoC is the group of financial creditors who take the call on the resolution plan. The regulator said that the CoC must create a favourable impression about the underlying value of the indebted firm, and encourage submission of appropriate resolution plans for reorganisation of the firm by the resolution applicants. Sahoo is of the view that the commercial decisions which a CoC is required to take in a Corporate Insolvency Resolution Process (CIRP) resolution plan is towards reorganising the firm as a going concern so as to maximise the value of its assets. The regulator had recently opined that if an NPA firm is viable, then the CoC must visualise the resolution plan required for its reorganisation. A resolution plan may entail various measures ranging from a change of management, technology or product portfolio to the acquisition or disposal of assets, businesses or undertakings and the restructuring of ownership, balance sheets or organisation, among others.

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INDEPENDENT DIRECTORS FACE MANDATORY E-REGISTRATION

All independent directors may have to register as part of a new initiative by the ministry of corporate affairs (MCA), which also plans to introduce online training modules on various issues that these board members deal with. While registration is proposed to be made mandatory through an online facility, the training through electronic modules, that are being prepared by Indian Institute of Corporate Affairs, will be purely voluntary. The registration process will be in addition to the Directors Identification Number, where a KYC process was recently undertaken. Sources told that a corporate boss or a promoter, who may be an executive director on the board, will also have to register if he or she is an independent director on the board of another company. This will also help create a database that can be used to get the best talent available in the industry, said an official. Sources said that registration is already provided for in the Companies Act. The move follows earlier efforts by the ministry to put in place a screening mechanism for independent directors after several Indian companies led by IL&FS were hit by a series of irregularities and the role of several individual had come under the scanner. In fact, provisions related to disqualification of directors was also discussed. MCA had proposed an overhaul of the process to appoint independent directors, with many agencies also suggesting a review mechanism, but the proposals failed to get the green light from an informal group of ministers that discussed ways to improve corporate governance in Indian companies. In 2013, the government had mandated independent directors for all companies and many believe that the rush to find members resulted in the appointment of several individuals, who were not fully conversant with accounting techniques and basic rules.

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ICSI COUNCIL IN ITS MEETING

Auditing Standards

The Council has approved following four Auditing Standards applicable on recommendatory basis on Audit engagements accepted by the Auditors on or after 1st July, 2019; and mandatory on or after 1st April, 2020:

·       CSAS-1: Auditing Standard on the Audit Engagement

·       CSAS-2: Auditing Standard on Audit Process and Documentation CSAS-3:

·       Auditing Standard on Forming of Opinion

·       CSAS-4: Auditing Standard on Secretarial Audit

Ceiling on number of Annual Secretarial Compliance Reports to be issued by PCS

(i) The ceiling on number of Annual Secretarial Compliance Reports to be issued by PCS is 5 (five) reports individually/ per partner in each financial year w.e.f. April 1, 2020 and an additional limit of 5 (five) Secretarial Compliance Reports individually/ per partner in case the Unit has been Peer Reviewed.

(ii) In this connection, it is also decided as under :

(a) Secretarial Audit / Annual Secretarial Compliance Report under SEBI (LODR) of Top 100 companies as per market capitalisation to be undertaken only by Peer Reviewed PCS w.e.f. April 1, 2020;

(b) Secretarial Audit / Annual Secretarial Compliance Report under SEBI (LODR) of Top 500 companies as per market capitalisation to be undertaken only by Peer Reviewed PCS w.e.f. April 1, 2021;

(c) Secretarial Audit / Annual Secretarial Compliance Report under SEBI (LODR) of all listed companies to be undertaken only by Peer Reviewed PCS w.e.f. April 1, 2022;

(d) Secretarial Audit of all companies to be undertaken only by Peer Reviewed PCS w.e.f. April 1, 2023;

(e) Issuance of Diligence Report for banks in case of Consortium Lending / Multiple Banking Arrangements to be undertaken only by Peer Reviewed PCS w.e.f. April 1, 2020.

Guidance Note on Report of the Board of Directors has been Approved and will be made available to the Members.

Format of the Certificate pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Council has approved the format, which will be communicated to the members in due course.

Format of intimation to be given to the previous incumbent (Company Secretary):

          The Council has approved, format to be issued by Company Secretaries under Clause 8 of the First Schedule of the Company Secretarie Act, 1980.

PAN and Aadhaar by Members/Students

Members shall be required to provide the details of their Permanent Account Number (PAN) mandatorily and Aadhaar Number optionally at the time of making payment of annual membership fee. This shall also be applicable for the students applying for the ACS.

Acceptance of membership fee through online mode only

W.e.f. 1st June 2019, Annual Membership / Certificate of Practice / Restoration Fee etc., will only be made through online mode.

W.e.f. December, 2019 Examination session, the following papers of the Executive Programme (New Syllabus) will be OMR based:

(i) Module – I Paper – 4 : Tax Laws

(ii) Module – II Paper – 5 : Corporate and Management Accounting

(iii) Module – II Paper – 8 : Financial and Strategic Management

One day gap between each Paper/Subject of CS Examinations

In consideration of the multitude of requests received and to provide to the students ease in undertaking the CS examination, the examination schedule from December, 2019 session onwards has been modified.Whereas under the ongoing regime, each paper of one Module of a Programme was held on consecutive days, as per the decision, the new examination schedule shall be introduced wherein for the CS Executive Programme one paper of Module-I shall be followed by one paper of Module-II. Similarly, for the CS Professional Programme, one paper of Module-I shall be followed by one paper of Module-II and one paper of Module-III, and the cycle shall be further repeated across the entire schedule.

One day mandatory ‘Orientation Programme’ for students of CS Foundation and Executive Programme. The students registered in Foundation or Executive Programme of Company Secretaryship Course are required to undergo a mandatory ‘One Day Orientation Programme’ in order to enroll for the CS Examinations. This One day orientation programme shall be applicable to all the students registered for Foundation and Executive Programme w.e.f. 1st June, 2019. Those students are advised to complete this programme within 15 days from the date of the registration. The students can undergo this Orientation Programme at Institute’s Regional Offices, Chapters, Study Centres, ICSI-CCGRT, Navi Mumbai and CoE, Hyderabad. The students from the places other than the above, shall have the option to undergo this programme through online mode also.

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PRE-PACKAGED INSOLVENCY: PROCESS SHOULD HELP ACHIEVE THE OVERARCHING OBJECTIVES OF THE IBC

A ‘pre-pack sale’ can be defined as an arrangement under which the sale of all or part of a company’s business or assets is negotiated with a purchaser prior to the appointment of an insolvency professional as administrator, with completion of the SPA being conditional upon the administrator’s appointment. The SPA is held in escrow and the administrator effects the sale immediately on, or shortly after, his appointment. In the UK, pre-packs have become popular since the Enterprise Act 2002, which has made administration the dominant insolvency procedure. In the US, pre-packs are often used in a Chapter 11 filing. The UK is a mature regime and the pre-pack process has been part of an evolution rather than a revolution. The process is used successfully in the UK, although it is not always without controversy. That said, the objectives are clear:

·       Obtain a better return to creditors than would be possible if the company were to be sold through an insolvency process (through the preservation of value that could otherwise be eroded because of a formal insolvency process);

Ø Reduce professional costs associated with an insolvency process by streamlining the process;

Ø Provide certainty of outcome to stakeholders (including creditors and the purchaser).

·       These objectives are aligned to the objectives of the corporate insolvency resolution process (CIRP).

The UK pre-pack process, in most cases, results in a survival of the business, but not the survival of the company. This is because the administration procedure provides for a hierarchical objective of first saving the company. However, if this is not possible, then the goal is to save the business. While the Insolvency and Bankruptcy Code (IBC) in India, in its current form, does not facilitate the pre-pack concept, it’s not difficult to see how the IBC could be amended to introduce pre-packs in a formal way. Point to consider: In the UK, pre-packs are not governed by the insolvency legislation, but by best practice guidelines. The Indian ministry of corporate affairs is exploring the option of introducing pre-packaged insolvencies in India and running the process in a fair and transparent manner. In such a case, the planned scheme, if implemented, will be a pre-IBC window for the resolution of stressed assets, which will complement the existing framework, and not substitute it. Pre-packs could help reduce the significant CIRP and legal costs that are incurred in the 180-day prescribed time period under the IBC, whilst cutting down the time considerably and preserving better value on the assets. By amending the IBC, the perceived concerns of the process can be addressed, thus increasing buy-in to the process. There are obvious challenges around eligibility of corporate debtors, balanced treatment of all the stakeholders and transparency of the marketing process. The implementation will, however, not be without challenges, some of which would entail promoters of businesses not cooperating with the incoming management or the present creditor group so that due-diligence of the asset is stalled, and secondly getting the non-financial creditor classes to agree to the reorganised scheme would have its own difficulties. However, these could be prescribed by the IBC. That said, a balance must be made so as not to regulate too heavily the pre-pack process, thus removing the benefits that are witnessed in other regimes. In more mature markets, the ability of practitioners to exercise judgement and to be able to support their decisions is key to the efficient working of the pre-pack process.

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IRPS OF RCOM, TWO UNITS TOLD TO SUBMIT PROGRESS REPORT

The bankruptcy court has directed interim resolution professionals (IRPs) of Reliance Communications (RCom) and its two units to submit a progress report on the Corporate Insolvency Resolution Process (CIRP) after lead financial lender State Bank of India (SBI) sought to replace the IRPs appointed by operational creditors. Currently, Manish Kaneria, Mitali Shah and Pradeep Sethi of RBSA Advisors LLP are IRPs of three companies Reliance Communications, Reliance Telecom and Reliance Infratel, respectively. They were appointed by the National Company Law Tribunal (NCLT) mid-May 2018 to manage the affairs of the three companies under the insolvency resolution process admitted by the NCLT on Ericsson’s plea. That process was then stayed by the National Company Law Appellate Tribunal (NCLAT) on May 30, 2018. On Tuesday, the Mumbai bench of the NCLT observed that the stay on the insolvency process of RCom and its two units has been vacated by the NCLAT and now the NCLT- appointed IRP will have to file the progress report by May 30. Now, on April 30, 2019, the stay was vacated by the appellate tribunal and hence, the IRP will have to file its progress report, observed the NCLT bench presided over by VP Singh and Ravikumar Duraisamy. Fredun De Vitre, argued that the lenders want to change the resolution professional (RP) of the companies and hence the tribunal should ask current IRP to expedite the process. We are financial lenders of the company and the dues are to the tune of 46,000 crore and hence we want to change the RP from currently operational creditors-appointed IRP, said De Vitre. SBI, a lead banker in a consortium of lenders, wants to appoint a Deloitte team for the CIRP process of RCom and its units, despite opposition from some of the other lenders. The country’s largest lender zeroed on Deloitte from a list of 30 IRPs, which included Duff & Phelps, RBSA Advisors and BDO, among others. Separately, a counsel for the current IRP sought the exclusion of time period between April 30, 2018 and May 30, 2019, from resolution period. This is because insolvency proceedings were stayed by the appellate tribunal and the telco then got embroiled in multiple legal disputes. However, the tribunal asked the IRP’s counsel to file a separate application for the same.

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INSOLVENCY WOES: RCOM RESOLUTION PROFESSIONAL ASKS FOR 13-MONTH EXCLUSION

The interim resolution professional of Reliance Communications (RCom) has sought an exclusion of 13 months (April 30, 2018-May 30, 2019) in RCom’s corporate insolvency resolution process (CIRP). This is because the initial insolvency proceedings against the debt-ridden telecom company was stayed by the National Company Law Appellate Tribunal (NCLAT) and the Supreme Court. The tribunal has asked the interim resolution professional’s (RP’s) counsel to file a separate application The case will now be heard on May 30. Lenders led by State Bank of India (SBI) also appealed to the tribunal that they want to change the RP in the case as the interim RP operating now was appointed by operational creditor Ericsson. The financial creditors have dues to the tune of Rs 46,000 crore. Hence, they have asked the tribunal to direct the interim RP to expedite the process. The Mumbai Bench of the National Company Law Tribunal (NCLT), headed by V P Singh and R Duraisamy, has asked the interim RP to file a progress report on the CIRP process of the beleaguered telecom company. The bench observed that stay on the insolvency process of RCom, Reliance Telecom and Reliance Infratel has been vacated by the NCLAT, and hence the NCLT-appointed interim RP will have to file the progress report by May 30.

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DBS WANTS A HIGHER SHARE IN PATANJALI’S OFFER TO SETTLE RUCHI SOYA DUES

DBS Bank has told the NCLT on Tuesday that it wants a higher share in the amount that Patanjali is offering to settle banks’ dues for the distressed Ruchi Soya. The bank has said that it has an exclusive charge over assets over the company and therefore a higher value of security. It has not opposed the plan but has pleaded that the approval of the plan by NCLT takes into account its claims. DBS is owed Rs 243 crore by the stressed oil-maker and is getting 48% of its outstanding dues, much like other banks. The next hearing in the matter is scheduled to take place on Wednesday. Additionally, the insolvency tribunal on Monday also asked Patanjali to specify its source of funding for the Rs 4,320 crore plan that it has drawn up for the asset.

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ADHERENCE TO IBC TIMELINES STILL A CHALLENGE, SAYS CRISIL REPORT

Adherence to the IBC timeline, burden on NCLT to resolve the large number of cases, clarity on priority of claims, limited number of information utilities and creation of secondary asset market are some of the main challenges that need to be addressed under the Insolvency and Bankruptcy Code (IBC), an industry report said. Stating that it has not been smooth sailing for the IBC which has completed three years, the report highlighted that the average resolution timeline for the resolved 94 cases was 324 days vis-à-vis the stipulated 270 days. Also, there are a few big-ticket accounts for which resolution has not been finalised for over 400 days. As of end March, there were 1,143 cases outstanding under CIRP, of which resolution in 32 per cent of the cases was pending for more than 270 days, which is substantial in number. Of the first dozen cases in the IBC referred by the RBI, the majority have crossed the maximum 270 days of resolution timeline, the report said. However, if a comparison is being drawn, this is considerably faster than the recovery time taken by asset reconstruction companies, which is 3.5-4 years. Also, as per the World Bank’s ‘Doing Business 2019’ report, the recovery timeline for stressed assets in India is 4.3 years. National Company Law Appellate Tribunal (NCLAT) Chairman Justice SJ Mukhopadhaya had a different take on the IBC timeline issue. At an industry event last week, he took a position that none of the cases have proceeded beyond 270 days if one were to exclude the objection period to the parties allowed under the procedures. He compared the situation to a football game where although the playing time is 90 minutes, it is normal to provide extra time of about 3-5 minutes to compensate for injury time during the 90 minutes period. Post enactment of IBC in 2016, there has been a significant rise in number of cases referred to the National Company Law Tribunal (NCLT). From 37 cases till March 2017, as many as 1,858 cases have been admitted through CIRP to NCLT till March 2019. As of March 2019, NCLT benches had approved resolution plans and liquidation orders in 94 and 378 CIRP transactions. Further, 91 cases were withdrawn under section 12A of the IBC. The Crisil report has highlighted the limited number of Information Utilities in the ecosystem. As on date, there is only one information utility— National eGovernance Services Ltd — which was registered with Insolvency and Bankruptcy Board of India (IBBI) in September 2017. The IUs provide access to credible and transparent evidence of default, which helps in expediting the process of ascertaining a default for initiating the resolution process. They also facilitate quick formation of CoC, as all information regarding creditors’ claims required to form the committee can be easily collected from them. The Crisil report has also called for more clarity on creditor classification on the basis of their charge details, stating that there is limited clarity on this front. For example, within secured financial creditors, there is limited clarity on how to prioritise the claims amongst the first charge/exclusive charge and second charge holders, and, subsequently how the distribution of proceeds needs to be done.

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ORCHID PHARMA: POTENTIAL APPLICANTS SEEK FY19 FINANCIALS BEFORE SUBMISSION OF PLAN

According to an Orchid Pharma filing with the stock exchanges, the committee of creditors (CoC) of the company in a meeting held on May 3, 2019, had been informed that the potential applicants want to possess provisional financials for the year ended March 31, 2019 before submission of resolution plans. However, the resolution professional (RP) said the statutory audit for 2018-19 would not be completed before the due date for submission of resolution plans, as the audit is for the entire financial year. As Orchid Pharma is a listed entity and the details sought for are price sensitive, the RP informed the CoC that the financial information requested for would be uploaded on the website of the company. The RP has also informed the CoC that the US Food and Drug Administration had issued a notice on April 24, 2019 for inspection of the company’s facility in Alathur, Kanchipuram, during July 22 to 31, 2019. The National Company Law Tribunal (NCLT) on February 28 had cancelled the resolution plan of US-based Ingen Capital Group, as the investor failed to implement the plan approved by the tribunal earlier. The drugmaker has a total debt of 3,200 crore from a consortium of 24 banks. SV Ramkumar, the RP for the company, had invited resolution plans from eligible participants on April 10, 2019, and the last date for submission of resolution plans is May 10, 2019.

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NCLT EXTENDS RESOLUTION TIME FOR JAYPEE INFRATECH

In relief for homebuyers, the Allahabad bench of the National Company Law Tribunal (NCLT) on Monday directed that the corporate insolvency resolution process (CIRP) in the Jaypee Infratech matter continue till May 21, the next date of hearing The lead lender, IDBI, had sought extension of bankruptcy process beyond the deadline that expired on Monday. Proceedings are still underway to find a buyer for the Jaypee group’s realty firm. The resolution plan presented by state-owned NBCC, which has shown interest in acquiring Jaypee Infratech and completing over 20,000 delayed flats in Noida, is likely to be heard by the committee of creditors (CoC) on Thursday. The creditors, which include banks and homebuyers, on May 3 rejected the bid of Mumbai-based Suraksha group. We have been informed that the resolution plan by NBCC now stands for consideration.

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JAYPEE INFRATECH INSOLVENCY: NBCC OFFERS RS 20 CR TO OPERATIONAL CREDITORS

Seeking multiple concessions for acquiring bankrupt realty firm Jaypee Infratech, state-owned NBCC has offered to pay Rs 20 crore against over Rs 9,712-crore dues of operational creditors, including the income tax department and Yamuna Expressway development authority YEIDA. A Committee of Creditors (CoC) is scheduled to meet on May 9 to discuss the revised offer of NBCC Ltd after creditors, including bankers and home buyers, rejected the offer of Mumbai-based Suraksha Realty. NBCC's revised bid was not considered for voting by the lenders panel, citing lack of approvals from the government departments. Meanwhile, Adani group has shown interest in making bid for Jaypee Infratech, while Jaypee group too has submitted bid for regaining control of its realty firm. According to the revised offer submitted by NBCC, which was submitted to Jaypee Infratech's Interim Resolution Professional (IRP) Anuj Jain, the public sector unit has proposed that the total operational debt aggregating to Rs 9,712 crore would be settled by payment of Rs 20 crore. Among the operational creditors, the IT department has claimed Rs 3,334 crore, YEIDA Rs 6,112 crore and others Rs 267 crore. However, the IRP has admitted claims worth Rs 464 crore only out of total operational debt. NBCC said that the liquidation value would not be sufficient to cover the amounts due to secured financial creditors in full. It further said that the liquidation value owed to the operational creditors is expected to be nil. That apart, NBCC has also sought many relief and concessions including consent from the Yamuna Express Industrial Development Authority (YEIDA) if Jaypee group transfers land and Yamuna Expressway to separate special purpose vehicles (SPVs). On transfer of land to Jaypee Infratech from YEIDA as part of concession agreement, NBCC said the IT department has been making an addition to the income of about Rs 2,950 crore on annual basis, which could result in a tax demand of Rs 33,000 crore for a 30-year period.

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GOVT TO MAKE IT EASIER FOR HOMEBUYERS TO CLEAR BUILDERS’ REVIVAL PLANS

The government is set to provide relief to thousands of homebuyers and bankrupt builders awaiting rescue by preparing a clarification on passing bankruptcy resolutions that are stalled because many homebuyers did not vote. This follows a reference from the National Company Law Tribunal (NCLT) to the ministry of corporate affairs in the Jaypee Infratech Ltd case, where the panel of creditors dominated by homebuyers could not clear a rescue plan from a Suraksha Realty Ltd-led consortium as many homebuyers stayed away. We are exploring all options by simulating various scenarios. The decision will be communicated to NCLT, said corporate affairs secretary Injeti Srinivas. The government will also assess if reinterpreting voting rights needs an amendment to the Insolvency and Bankruptcy Code. The move will stop resolution plans from being rejected because a large number of homebuyers, who could be benami holders or those unaware of the consequences of not asserting their rights, do not cast their votes. Homebuyers have 58% voting share in the panel of creditors of Jaypee Infratech, as they were the biggest source of funds for the firm more than lenders and deposit holders. In such a case, homebuyers not voting en masse makes it impossible for the panel of creditors to clear resolution plans, which require favourable votes from 66% of the creditors by value.

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FUNDS RECOVERED FROM AMRAPALI MAY BE ENOUGH TO COMPLETE STALLED UNITS

After being duped of their money by fraudulent promoters, homebuyers of bankrupt Amrapali group have received fresh hope Forensic auditors examining the case say that Rs 9,590 crore can be recovered from the group, which may solve the problem of raising the funds necessary to complete work on thousands of apartments. Homebuyers in the group’s projects have also met the Secretary of the Ministry of Corporate Affairs (MCA) seeking a probe into the misuse of funds by promoters The company is already under the scanner, but despite gross violations in corporate governance, no concrete action has been initiated so far by investigative agencies. As per the auditors, it is possible to raise the required funds to complete the stuck projects. The money trail is clear and the entire diverted capital can be brought back. The assets of the group can also help raising money. Together, this will come to around Rs 9,500 crore, which is a decent amount to complete stuck projects, a senior official from the NBCC pointed out.

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ESSAR STEEL SHAREHOLDER SEEKS ARCELORMITTAL'S DISQUALIFICATION OVER TIES WITH LOAN DEFAULTING FIRMS

A majority shareholder of Essar Steel Tuesday moved NCLAT seeking rejection of ArcelorMittal's Rs 42,000 crore bid to acquire the bankrupt steelmaker, alleging that its promoter Lakshmi Mittal hid his association with loan defaulting firms run by his brothers. Seeking ArcelorMittal be declared ineligible to bid for Essar Steel, the petition cited Section 29A of the Insolvency and Bankruptcy Code (IBC) which bars promoters of defaulting companies from bidding for stressed assets. The National Company Law Appellate Tribunal (NCLAT) agreed to hear the plea by Essar Steel Asia Holdings Ltd (ESAHL) and asked ArcelorMittal to respond to the plea. It fixed May 13 as the next date of hearing.

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SEBI STILL LACKS INSTITUTIONAL MECHANISM TO TACKLE EXTERNAL INVESTIGATIONS

Even after entering his third and final year as the chairman of Securities and Exchange Board of India (Sebi), Ajay Tyagi is yet to implement an institutional mechanism for handle investigations and queries by external agencies such Central Bureau of Investigation (CBI), income tax. As soon as Tyagi had taken charge as the chairman on 1 March 2017, he had attempted to bridge the gaps on issues that had distanced its employees. The issues ranged from personal promotion to need of an institutional mechanism to handle queries by CBI, IT and enforcement directorate to name a few. The Sebi board led by Tyagi was prompt in ensuring career progression of employees by stopping the practise of hiring from outside and promoting internal candidates for key positions. However insiders say an institutional mechanism is still lacking. Even today the Sebi officers are called for investigations, hearings for institutional decisions on ad-hoc basis, said an officer with the regulator. Sebi employee association (SEA) in a letter to Sebi board in April highlighted this issue. During our interactions with CVO (chief vigilance officer) we were given to understand that an institutional approach to dealing with inquiries by external agencies has been finalised, SEA said in the letter. However, officers are still being directly summoned by various agencies and are being sent to respond on issues emerging out of institutional decision making, SEA added in the letter. In past six years, one out of every 10 Sebi officers has been called in for questioning on cases ranging from MCX-SX license grant case, National Stock Exchange of India's alleged lapses in colocation platform, income tax evasion through the stock exchange platform to name a few. The Reserve Bank of India (RBI) has such an institutional system in place where the decisions taken by institutions are questioned then the institution answers.

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SEBI PLANS CHANGES IN DEBT FUND NORMS TO PROTECT INVESTORS

In the wake of partial and delayed payments by various mutual funds in their fixed maturity plans (FMPs), the Securities and Exchange Board of India is expected come out with fresh guidelines to curtail excessive risk-taking by fund houses. The planned changes in rules are aimed at ensuring that mutual funds act as investors on behalf of the unit-holders, and not as lenders or bankers as has been found in recent cases. The changes will pertain to fund houses having clear and enforceable collateral on their books when they invest in secured debt, lower exposure limits in single company and corporate group among others. Unlike mutual funds, banks have capital adequacy norms and they have the capacity to absorb losses in an event of a default. But when fund houses get into lending activity in the garb of investment, it exposes their investors to risk in an event of default by the investee company, as has been seen in recent cases of default (by Essel Group companies and IL&FS Group). The government and the regulator are working on three key issues to ensure effective regulation: the issue of collateral, adequate ratings of debt papers and appropriate exposure to a single company or a group, a government official familiar with the discussions said. In the case of Essel Group companies where three top mutual funds had exposure of over Rs 950 crore, the fund houses have been stuck with their investments. One FMP of Kotak Mahindra Mutual Fund had over 19 per cent exposure to the two companies putting a significant portion of the scheme AUM at risk. The Indian Express earlier reported that while the two Essel Group companies that mutual funds had invested into were loss-making and had no capacity to repay, the funds were given against collateral provided by the promoters on their holding in Zee Entertainment. Now with Zee Entertainment working out a stake sale (expected to be completed by September 30, 2019), the fund houses took a call to not encash the collateral till the resolution is attained. SEBI is looking into these nuances of how collateral is created and its enforceability, sources said. The regulator is also expected to review investment restrictions imposed on funds at the issuer level and sector level. The limits on the exposure that funds can take in debt securities issued by a single company and a corporate group could be reduced to provide higher diversification. As per existing SEBI rules, asset management companies need to ensure that the total exposure of debt schemes of mutual funds in a group does not exceed 20 per cent of the net assets of the scheme, which can be extended to 25 per cent. Over the last month, there has been a debate on mutual fund exposure to illiquid debt papers. Though MF exposure to IL&FS Group companies in 2018 came as a setback to investors, missives from Kotak Mutual Fund and HDFC MF to their investors, last month, created a scare in the market. Kotak Mahindra Mutual Fund acknowledged that its FMP Series 183 had almost 27 per cent of the scheme corpus invested in IL&FS Transportation Networks Limited and two Essel Group companies – Edisons Utility Works and Konti Infrapower & Multiventures. It said that as on September 9, 2018, the scheme had 7.37 per cent of AUM invested in papers of ITNL and as on March 29, 2019, the scheme had 19.24 per cent of AUM invested in papers of Konti and Edisons. While the fund house had already written off investment in ITNL, it looked to assure the investors that it said that the fund house is working towards optimal recovery from two Zee Group companies. In the meantime, while HDFC Mutual Fund was working hard to reassure its investors over exposure to Essel Group companies, the fund house reported fresh concerns on exposure of over Rs 230 crore in Hazaribagh Ranchi Expressway Limited, which defaulted on its debt obligations and forced the fund house to take a mark down of 37 per cent on its investment and accrued interest.

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SEBI DISPOSES OF DISCLOSURE LAPSES CASE AGAINST SBICAP TRUSTEE

Sebi Tuesday disposed of allegations of disclosure lapses made against SBICAP Trustee Company with respect to pledging of shares of Empee Sugars and Chemicals. SBICAP Trustee is a wholly-owned subsidiary of SBI Capital Markets Ltd. The view that the delayed disclosure in this case was in good faith and the same is venial and not blameworthy so as to impose monetary penalty under section 15A (b) of the Sebi Act, the regulator said in an order. Section 15A pertains to imposition of penalty for violations. In July 2018, proceedings were initiated against SBICAP Trustee for allegedly making delayed disclosures to the BSE with respect to creation of pledge shares by four promoters of Empee. With regard to the NSE, the trustee said the scrips of Empee are not listed on the exchange due to which there was no requirement of making disclosures. According to the trustee, since the scheduled banks are exempted from making disclosure of pledge in their favour under the SAST norms, as it is acting as trustee of such scheduled banks, it was not required to make such disclosure. However, by way of caution, the disclosure was made to Empee and the BSE on July 17, 2015, it added. There is no material to suggest that the alleged delayed disclosure in this case had any impact on price of the shares of the company or to indicate deliberate concealment of any material information by the Noticee, (SBICAP Trustee Company) Sebi noted.

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NSE WIDENS PROBE TO FIND OUT IF MORE BROKERS GAINED PREFERENTIAL ACCESS

The National Stock Exchange (NSE) is investigating whether more broking firms apart from the three penalised by Sebi gained preferential access to the exchange’s trading platform. In a sign that the enquiry into the co-location scam is being extended to cover more firms, the country's largest bourse is looking into the role played by 26 other brokers such as SMC Global, Shaastra Securities, Advent Stock Broking, PRB Securities, Crimson Financial and Jaypee Capital. The NSE believes that some of these brokers allegedly gained access to secondary server of the exchange between 2010 and 2014, helping them gain an advantage. Sebi has asked NSE to probe all those brokers which have accessed the secondary server and if these firms violated fraudulent and unfair trade practices norms, said one person with knowledge of the development. The examination and investigations by NSE and regulator are in process, many of them have been issued notices and rest will be issued soon, said another person familiar with the development.

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SEBI FINES RANKLIN SOLUTIONS, DIRECTORS RS 62.5 LAKH FOR VIOLATING NORMS

Sebi Tuesday levied a total fine of Rs 62.5 lakh on Ranklin Solutions and its seven directors for misleading corporate announcements and disclosure lapses. A penalty of Rs 10 lakh was imposed on Ranklin Solutions, while the seven directors -- MJVVD Prakash, Venkateswara Rao, Jyotsana Lakshmi, JVV Raghava Kumar, M Satish Kumar, K S Chakravarthi and K VijayaRama Raju -- were fined Rs 7.5 lakh each. The regulator during its investigation between February 2010 and January 2011 found that Ranklin in a corporate announcement to the BSE informed that board of directors proposed to raise funds up to Rs 100 crore by issuance of Global Depository Receipts (GDRs). The firm, however, failed to come out with the issue. Besides, the firm in its corporate announcements recommended dividend of 10 per cent per equity share for the year 2009-10 and 5 per cent per share for 2010-11 but did not implement the same, the market watchdog noted. Sebi observed that Ranklin induced the investor by fraudulently planting a misleading announcement on issuance of GDRs or ADRs (American depositary receipt) and declaration of dividend. Further, Ranklin failed to make disclosures with respect to non-implementation of these announcements to the exchange.

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BRITANNIA VIOLATED SEBI LISTING NORMS ON WADIA ARREST: INGOVERN

Proxy advisory and corporate governance firm InGovern on Tuesday said that Britannia Industries Ltd violated market regulator Sebi's listing regulations by not reporting the recent arrest in Japan of its promoter Ness Wadia. Ness Wadia, was handed a two-year prison sentence for drugs possession while on a skiing holiday in Japan. The sentence was suspended for five years. Britannia is in violation of Sebi's listing obligations and disclosure requirements (LODR). The arrest of the promoter should have been disclosed by the company to the exchanges, which was not done, InGovern founder Shriram Subramanian told IANS.

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32 MUTUAL FUND SCHEMES HAD EXPOSURE TO YES BANK'S NOW DOWNGRADED DEBT PAPERS

Around 32 debt mutual fund schemes held now downgraded debt papers of Yes Bank worth around Rs 3,632 crore, in their portfolios in March revealed. The rating agency ICRA downgraded the ratings on long term bonds of Yes Bank with a negative outlook on May 03. ICRA in a release stated with a sizeable increase in the share of BB and below rated advances and the weakened capital cushions, the outlook on the ratings remains Negative. ICRA had earlier downgraded the long-term ratings of Yes Bank Limited (YBL), on November 28, 2018, and kept them on ‘watch’ with Negative Implications. IDBI Credit Risk Fund held 9.57 per cent of its total assets in Yes bank’s debt securities in March. However, the fund is a very small one with an AUM of Rs 96 crore. Reliance Strategic Fund, a medium duration fund with an AUM of Rs 5,870 crore, had invested 8.93 per cent of its total assets in Yes Bank papers. Yes Bank is the scheme’s top holding. Another scheme from Reliance Mutual fund, Reliance Credit Risk Fund with assets worth Rs 9.602 crore, had 6.23 per cent of its total AUM in Yes Bank papers. Reliance Credit Risk Fund is the third biggest fund in the category. Reliance Equity Hybrid Fund, an aggressive hybrid fund, held 5.71 per cent of its total assets of Rs 12,812 crore in corporate bonds of Yes Bank. Franklin Short Term Income Plan, the biggest fund in the short duration debt funds category, held 2.60 per cent of its total assets worth Rs 12,866 crore in Yes Bank papers. ICRA further stated that the bank’s ability to resolve these advances in a timely manner will remain a key driver of its asset quality, profitability and capital position. YBL’s ability to reduce BB and below rated advances and improve the CET-I capital cushion and diversify the advances and liabilities will result in a change in the outlook to Stable from Negative.

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PE-VC APRIL FLOWS PAUSE AT $2.3 BILLION

Private equity (PE) and venture capital (VC) investments in the month of April took a breather after an exceptional performance in March, due to a tepid deal flow in infrastructure and financial services. Data from research firm Venture Intelligence (VI) shows that April saw $2.3 billion in PE-VC investments compared to over $6 billion in March, when large-value infrastructure and NBFC deals made up over 60%, making the earlier month an outlier. The number of PE-VC deals in April rose marginally to 68 from 58 deals in March. However, on a year-on-year basis, April saw a 35% rise in total PE and VC investments from the same month in the previous year. VI data also shows performance in April matching that of February, when total PE and VC investments were $2.1 billion across 42 deals. While March was an outlier for private markets, bucking the elections trend, investment activity in infrastructure and NBFC sectors has not kept pace in April, VI founder Arun Natarajan said, noting that March recorded large deals of over $4 billion from infrastructure and financial services space. The peak elections season has not dented the PE-VC market in the month, he added. PE firm Baring Asia’s investment of $381 million to acquire 30% stake in NIIT Technologies, $310 million invested in Essel Propack by Blackstone, and Everstone’s $145-million funding to acquire a controlling stake in Sahyadri Hospitals were a few top deals that helped keep up the momentum in April. April was a good month for early stage startups with seed investments almost tripling from last month. As many as 17 seed-stage funding deals, totalling $27 million, were reported in the month. Series-A investment, however, saw a marginal fall. Among internet companies and tech startups, fantasy gaming startup Dream11 entered the elite unicorn club with an investment of around $60 million from Steadview Capital. The deal involved secondary sale of shares by existing investors Kalaari Capital, Think Investments and Multiples Equity. Artificial intelligence enterprise Mad Street Den’s $17 million in series-B funding from Falcon Edge Capital and digital lender ZestMoney’s $20-million investment from fintech investor Quona Capital, Reinventure and others were a few other top deals. The value of exits in April zoomed 80% from March on the back of Malaysia’s Petronas acquiring Amplus Energy in a $350-million deal. PE major KKR also offloaded shares worth almost $300 million in HDFC in an open market sale.

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MCDONALD'S TO TAKE OVER 165 VIKRAM BAKSHI’S OUTLETS

Next time you walk into a McDonald’s branded outlet in a city in North or East India, you could actually be biting into a genuine McDonald’s burger with the global fast-food giant set to settle its long drawn dispute with its estranged Indian partner Vikram Bakshi. The US burger chain is set to secure full control of the operations of around 165 outlets in North and East India that are currently being run by Bakshi’s Connaught Plaza Restaurants (CPRL), sources said. The handover process is in progress. McDonald’s will look to renovate and refurbish the outlets and rework the supply chain, said a senior industry executive aware of the development.

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APPELLATE AUTHORITY REDUCED NAME REMOVAL PERIOD OF CA FOUND GUILTY OF MISCONDUCT CONSIDERING AGE & FINE

Disciplinary Committee of ICAI, in terms of the provisions of Section 21B(3) of the Chartered Accountants Act, 1949 read with Rules 18(17) and 19(1) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, had held CA. Purushottam Shivdas Sakhalkar (Membership No. 035808), 4C, Jape Chawl, RR Thakur Road, Jogeshwari –E, Mumbai as guilty of Professional Misconduct falling within the meaning of Clauses (5),(6), (7) & (8) of Part I of the Second Schedule to the said Act. Consequently, the name of CA Purushottam Shivdas Sakhalkar was removed from the Register of Members for a period of two years with effect from 7th September, 2018. and was also imposed with a penalty of Rs. 50,000/-. This entire case was based upon statement made by the appellant before SFIO wherein he had admitted, having not factually audited the books of account of the company of which he was an Auditor but merely signed the papers. Aggrieved by the order, the said CA (the appellant) filed an appeal before the Appellate Authority. The appellant made a statement that he was not disputing the facts of the case and admitted his guilt, but only prayed that the sentence awarded to him be reduced, keeping into consideration that he had already paid fine of Rs. 50,000/- and suffered his name removal from the register of members for a period of seven and half months out of two years punishment as awarded by the Disciplinary Committee of the Institute.

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PAYMENTS BANKS: HOW RBI'S MOVE FOR FINANCIAL INCLUSION QUICKLY WENT DOWNHILL

Durable relationships are rarely transactional but frequent transactions could form the bedrock of solid relationships – and help achieve the federal objective of financial inclusion. In theory, the central bank was doing what was needed to extend organised banking services to those left unbanked by traditional lenders. In practice, however, business models of these new-age entities were not defined with sufficient clarity to underpin sustainable operations. Such was the fog on the windshield that four of the 11 original licence holders returned the permits within months after the Reserve Bank of India (RBI) offered them. Others are back to the drawing board, trying out several revenue streams to build cash flows that would last. These include transaction support, cash management, and cross-selling of other financial products, such as insurance and mutual funds. To be sure, payment banks begin with a distinct regulatory handicap. Unlike traditional lenders, payment banks cannot keep public deposits of more than Rs 1 lakh with them. They cannot lend money either, but must invest 75% of their demand deposits in government securities. Of the seven that now have the licence to run the business, Fino Payments Bank, India Post Payments Bank and Airtel Payments Bank have started fullfledged operations. In comparison, NSDL Payments Bank, Jio Payments Bank and Aditya Birla Payments Bank (ABPB) have operations that are limited in scale. Vodafone was also among the companies that secured a licence, but its merger with Idea Cellular resulted in regulatory complications for the entity as Idea had 49% stake in ABPB, a stake preventing the Vodafone payments bank from starting out. The objective of giving out payment bank licences in 2015 was to further financial inclusion by providing small savings accounts and payments/remittance services to migrant labour force, low income households, small businesses, other unorganised sector entities and other users, according to the relevant RBI circular. For example, Fino Payments Bank, which was earlier running a successful banking correspondent business, has moved totally to a commission-based model, riding on transactions from small shops. Its branches have remained at 425 while more merchant outlets have been added to collect and disburse cash. We started with 25,000 merchant outlets and have now increased to more than 1 lakh, but our branches have remained at around 425. There are another 1,20,000 to 1,50,000 third-party merchant points under partnerships. It is a variable model that pays for itself. The merchant gets commission on micro ATMs and CMS, so the merchant economy is better and customer loyalty is superb. We can also earn on both side on supply and demand, said Rishi Gupta, CEO at Fino Payments Bank. These new banks have also had to learn the hard way to keep within the regulatory ambit. Last year, Fino was barred from opening any new accounts after the total balance in certain accounts went above the Rs 1 lakh limit. The bank has since tied up with Suryoday Small Finance Bank to automatically transfer funds in accounts exceeding Rs 1 lakh to the small finance bank, which has no such restrictions. Paytm and Airtel payments banks also had to suspend new account openings after they were accused of violating the KYC process mandated by RBI. Last year’s Supreme Court judgement, which denied private companies the right to seek a person’s Aadhaar number to use the network for e-KYC, has hit these banks hard since most of them had built processes around this low-cost system. The difference between e-KYC and manual KYC is at least three times in terms of cost. Right now, we are doing 70% of KYC manually and we hope to be gradually able to do 90% of KYC electronically by June, said Satish Kumar Gupta.Payment Bank CEOs say the future of the business will be based on transactions, including cash withdrawals though their network of small stores across the hinterland. Fee income generated by selling financial products should be another revenue stream. However, profits are still not in sight. We have not broken even yet as have none of the other payment banks. The initial costs of investments and limitations on business operations have limited our operations but as more and more people start availing our services, we expect revenue growth. Talking about the future is futile, but in time our business will expand and evolve, said Sethi from India Post Payments Bank.

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IDBI SEES EARLY SYNERGIES WITH LIC

IDBI Bank is targeting Rs 500 crore in revenue this fiscal through cross-selling opportunities and expects to double that in the next financial year, a top executive said, as the purchase of a majority stake earlier this year by Life Insurance Corporation (LIC) shows signs of success, especially on the retail front. The bank is using its network to sell insurance policies and in turn planning to offer home loans to LIC’s customers. In March, IDBI Bank sold 26,116 policies worth Rs 160 crore from across 1,800 branches, raising hopes that other retail products of both could be cross-sold to their respective customers. We have had a big-bang start in bancassurance. This even surprised LIC and is a kind of a record, said Jorty Chacko, executive director in charge of retail assets and thirdparty distribution at IDBI. We have identified over 100 such synergies in corporate and retail segments and will slowly roll them out. IDBI Bank is already offering a 15 basis point discount to LIC employees on their home loans and plans to offer a 10 basis point discount on home loans for LIC policy holders, said Chacko, who heads a special implementation team created by IDBI to look at synergies with LIC and is also the member of a 12-member task force set up to oversee the execution of that process. IDBI also plans to offer cash management and payroll products to the insurance behemoth. LIC collects Rs 1.35 lakh crore in premium and redeems Rs 1.24 lakh crore worth policies each year, according to the bank’s estimates. These large withdrawals and disbursements will give us float money. Then, there are 12 lakh LIC agents and crores of policy holders we can tap, besides the more than one lakh employees, Chacko said. The synergies are more in retail, which we want to tap to the fullest, but we also can extend our services to the corporate side, like investments and broking. In January, LIC completed the acquisition of a 51% controlling stake in the bank.

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PUNJAB RERA CRACKS DOWN ON PLOT SALES WITHOUT APPROVALS

The Real Estate Regulatory Authority (RERA) of Punjab has penalised Chandigarh-based Gupta Builders & Promoters (P) Ltd for selling real estate inventories at two of its projects without having even the basic statutory approval such as Change in Land Use (CLU), forget about registering with the RERA. The full Bench of RERA has imposed a penalty of Rs 1.5 crore on the developer for its project. This is highest-ever penalty imposed by the authority against any developer in the state.

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REALTY DEBT COULD BE NEXT FLASH POINT IN INDIA'S CREDIT MARKET: ICICI PRU

The next flash point in India’s credit markets could be real-estate debt. That’s the view of ICICI Prudential Life Insurance Co., a major corporate bond buyer and one of India’s top life insurers The firm avoided investing in debt of stressed companies before credit market strains spread last year. That crisis was triggered by shock defaults by major infrastructure financier IL&FS Group, and its fallout pushed up financing costs for a range of borrowers including wealthy property tycoons struggling to roll over debt. The country hardly needs more stresses now just as credit markets regain some normalcy after policy makers took steps to inject more liquidity into the financial system. While most of the credit market is healthy, one needs to be cautious on NBFCs having large exposure to the real-estate sector, said Manish Kumar, who oversees Rs 1.1 trillion ($15.8 billion) at ICICI Prudential Life. Pressure may rise at non-bank firms, raising the need for lenders to liquidate assets or for stronger developers to buy up projects, he said. Indian shadow banks lent heavily to the property industry in recent years, helping to fuel a construction boom. They now face rising risks that weaker developers may struggle to repay those borrowings, as housing sales have failed to keep pace with debt expansion. Teetering economic activity also isn’t helping. An analysis of about 11,000 home builders by research firm Liases Foras in February showed that developers on average have to repay twice as much in debt each year as the income they generate that can be used to service it. Property prices in India’s biggest cities have been flagging -- home values in Mumbai sank 11 percent last year. That all means property debt investors need to be extra cautious, but there are still pockets of opportunity, according to ICICI Prudential. The firm has raised corporate bond holdings to 33 per cent from 31 per cent since the IL&FS crisis, mainly by increasing investments in notes issued by top-rated housing finance firms and bonds that will be serviced by the government.

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HACKERS STEAL BITCOINS WORTH $41 MN FROM BINANCE CRYPTOCURRENCY EXCHANGE

Hackers stole bitcoin worth $41 million from Binance, one of the world's largest cryptocurrency exchanges, the company said on Wednesday, the latest in a string of thefts from cryptocurrency exchanges around the world. The 7,000 bitcoin were withdrawn by hackers using a variety of techniques, including phishing, viruses and other attacks, according to a post on Binance's website by chief executive officer Zhao Changpeng. The post said user funds would not be affected because the company would use its secure asset fund for users to cover the loss. Bitcoin's price dropped by as much as 4.2 per cent in early Asian trading as news of the hack broke, although it later recovered some of its losses. Zhao said on Twitter other crypto exchanges, including Coinbase, had blocked deposits from addresses linked to the hack.

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BITCOIN PRICES JUMP, HIT FRESH 2019 HIGH

Bitcoin climbed to a fresh 2019 high, approaching the $6,000 level for the first time since November. The largest digital coin climbed as much as 4.7 percent to $5,961 as of 9:25 a.m. in London, according to Bloomberg composite pricing. Most of the other highly traded tokens were up as well, though they lagged Bitcoin. The world’s most-followed cryptocurrency has been drawing attention from technical analysts and conventional investment firms as it claws its way back from last year’s 74 percent plunge that took it below $4,000.

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NEW GOVERNMENT TO TAKE UP BSNL, MTNL REVIVAL PLANS: SOURCES

The Finance Ministry has asked the Department of Telecommunications (DoT) to re-examine the revival proposals for the telecom firms BSNL and MTNL and submit these to the new government that will take office after the ongoing general elections, a senior official source said on Tuesday. This implies, according to the source, that there is no immediate move, in the next few months till a new government settles down, to revive both central public sector enterprises (CPSEs). In response, the Finance Ministry has now asked the DoT to rework the proposals, indicating both the steps and the financial outgo involved and submit these to the new government. The two key issues in the revival proposal are the voluntary retirement scheme (VRS) and allocation of 4G spectrum. According to the source, both Finance Ministry and DoT are of the view that there may not be any need to consider financial support to the companies for VRS since the employees of these telcos are covered by the government pension rules relevant for CPSEs carved out of ministries. Both BSNL and MTNL have been carved out of DoT. The issue of allocation of 4G spectrum has also been left for consideration of the next government at the Centre, the source added. Another key component of the revival proposal concerns the monetisation of the assets of BSNL and MTNL. According to the source, it is to yet to be decided as to who, between the Department of Investment and Public Asset Management (DIPAM) and the DoT, will carry out the mutation process involved in monetising assets. Mutation is the recording of a transfer of title of a property from one person to another in the revenue records. The documentation procedure to be followed and the fee payable in mutation varies from state to state. DIPAM has a asset monetisation framework which lays down the procedures for the administrative ministries to follow in selling off CPSE assets. The titles to the lands and buildings of BSNL and MTNL are still with the DoT.

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5G SPECTRUM TRIAL BEGINS NEXT MONTH FOR 3 MONTHS

The much-awaited network trial for 5G services in the country is slated to start from June, with a Telecom Ministry panel recommending spectrum for the test run to the incumbent telcos for a three-month period. The panel which deliberated on the quantum and duration of the spectrum trial has recommended 5G spectrum to Airtel, Vodafone Idea and Reliance Jio initially for three months which can be scaled up to one year in case they need more time for network stabilisation. The three equipment vendors who have got the green signal from the panel are Samsung, Nokia and Ericsson, sources said. The allocation will take place in the next 15 days and telcos could start intial 5G run in June itself. The network trial licenses will be issued in a few days' time.As of now, Jio is likely to partner with Samsung, Nokia with Airtel and VIL with Ericsson for the trial. The Department of Telecom so far has not taken any call on Chinese company Huawei if it will be part of the trial for any telecom services company. After 5G trial takes place, the spectrum auction comes up in October where telcos will be in better position to judge the network requirements and shortcomings. By the time the telcos start the trial, it may be July-August, they said. If this is the tentative timeline of 5G trial, then spectrum auction may take place September onwards, the sources added.

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JET’S 26TH ANNIVERSARY ON MAY 5 SADDEST WITH NO FLIGHTS: NARESH GOYAL

Describing Jet Airways’ 26th anniversary on this May 5 as saddest of all days with no flights Naresh Goyal says he made Rs 250 crore available to banks from a group company. Goyal wrote a mail to employees on Monday — which was not sent to all on their official mail ids — says he now hopes there will be a positive outcome on May 10 as per the BLRP (bank-led provisional resolution plan) deadline wish to witness the blazing sun reappear from behind the dark clouds of the past weeks, on a canvas of never ending blue. Jet suspended operations on the midnight of April 17-18. The airline’s taking to the skies again is now considered very difficult given its huge debt-cum-liabilities - payables to the tune of over Rs 25,000 crore. A significant number of Jet’s trained crew members, including pilots, have joined other airlines; its planes have been repossessed by lessors and many of them are now flying for other airlines like SpiceJet and Jet’s domestic slots have already been given to others and international will also go the same way by this weekend. Goyal’s reported unwillingness to give up control of the airline when a couple of big players like Tatas and Delta were last year willing to take over Jet — minus him as a precondition — is now being increasingly blamed for the carrier’s current state. But the founder maintains he did all to ensure Jet lived. From a group company I have made Rs 250 crore available to banks. I have pledged my shareholding in 9W; stepped down as your chairman (and) Neeta (wife) has stepped down from board of directors, his letter says. For Neeta and me it has been an extremely emotional and difficult period, most particularly about the non-payment of your hard-earned salaries. I cannot even begin to describe how terrible it is for me to contemplate the difficult situation each of you and your dear families are going through and cannot find the words to explain my deep personal anguish. I have been in Mumbai and have been watching and closely monitoring the untiring efforts and sacrifices you are all making, he says. 

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Thanks & Regards,
CS Meetesh Shiroya