OPINION, P8 ECONOMY, P2 SUNIL JAIN Tesla & WhatsApp forced change like no govt action can INTERNATIONAL, P16 MEGAN MCARDLE ROAD AHEAD SURPRISE EXIT Facebook & Google dominate our lives, ‘net neutrality’ must focus on that, no? Q2 GDP growth likely to be 6.2-6.3%, says NITI Aayog’s Kumar Meg Whitman to step down as HP Enterprise CEO MUMBAI, THURSDAY, NOVEMBER 23, 2017 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOLUME XXXXXV NO. 212, 22 PAGES, `6.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 33,561.55 ▲ 83.20 NIFTY: 10,342.30 ▲ 15.40 NIKKEI 225: 22,523.15 ▲ 106.67 HANG SENG: 30,003.49 ▲ 185.42 `/$: 64.93 ▼ 0.03 `/€: 76.3 ▼ 0.19 BRENT: $63.19 ▲ $0.62 GOLD: `29,429.00 ▼ `5.00 BHAGAWAN SRI SATHYA SAI BABA A RED initiative appears in today’s edition of Financial Express. These pages are an initiative of the marketing solutions team of The Indian Express Group and contain content paid for by advertisers. These pages should be read as an advertisement. IN THE NEWS INS slams killing of Tripura scribe, seeks justice THE INDIAN Newspaper Society (INS) on Wednesday condemned the killing of a 48-year-old journalist in Agartala, and demanded “exemplary punishment” for the guilty, reports PTI. In a statement, INS said: “The killing of a defenceless journalist, allegedly by a member of the state police, is a very serious matter.” Bhaumik was shot dead on Tuesday allegedly by a constable of the Tripura State Rifles, the second killing of a mediaperson in Tripura in two months. “This is the second murder of a journalist in Tripura in two months and has created a great insecurity within the journalistic fraternity. The INS demands that the government of Tripura ensure exemplary punishment to the guilty,” the statement said. The scribe, who worked with Bengali daily Syandan Patrika, was gunned down around 2 pm inside the headquarters of the 2nd battalion of the TSR at RK Nagar, West Tripura superintendent of police Abhijit Saptarshi had said. INSOLVENCY RESOLUTION Bar on wilful defaulters soon Ordinance also to disqualify those convicted of fraud, siphoning off money from mooting plan QuickPicks Union finance and corporate affairs minister Arun Jaitley (right) and Union law & justice minister Ravi Shankar Prasad at a media briefing after a Cabinet meeting in New Delhi on Wednesday PROPOSED CHANGES TO IBC ■ He is a wilful defaulters or convicted of fraud ■ His account is declared NPA by the RBI for a year or more ■ He was found guilty of siphoning money from any firm were recently disqualified following the government drive against shell firms are also disallowed,unless theymanage to get reprieve from the relevant authority (judicial or otherwise). Sources said in the initial phase of Corporate Insolvency Resolution Process (CIRP) under the IBC, a number of cases are eGov P15 SC upholds ban on petroleum coke in New Delhi area The Supreme Court on Wednesday upheld the ban on use of petroleum coke in and around New Delhi as the country battles to clean the air in its capital, one of the world’s most polluted cities, reports Reuters. India is the world’s biggest consumer of petroleum coke — a dirtier alternative to coal composed mainly of carbon — which emits 11% more greenhouse gases than coal, according to the Carnegie–Tsinghua Center for Global Policy. Burning it also emits several times more sulphur dioxide, which causes lung diseases and acid rain. PAGE 14 Indian Oil studies renewed Venezuelan crude purchases INDIAN OIL Corporation (IOC) is considering buying Venezuelan crude for the first time in at least six years, in a move that could help the crisis-struck nation settle unpaid bills with another state-owned energy firm ONGC Videsh, reports Reuters. Venezuela’s economy has collapsed since crude prices plummeted in 2014, forcing it to delay payments for oil services and fuel supplies. Venezuela’s national oil company PDVSA has missed debt payments to ONGC Videsh for six month and wants to settle $449 million dues using existing and new Indian clients. PAGE 14 PTI Since a number of corporate debtors undergoing CIRP are passing the stage of submission of resolution plans and their approval, it has become imperative to take immediate action to prevent undeserving person from taking over the corporate debtors. The sources said the Cabinet approved the proposal to promulgate the ordinance to amend the IBCwith aviewto improving the quality of insolvency resolution byprescribing eligibilitycriteria with respect to prospective resolution applicants and inserting a new section to lay down comprehensive criteria with respect to persons ineligible to be resolution applicants. One can’t bid for stressed assets under IBC, if: Govt sets up task force for Income Tax Act overhaul FOUR MONTHS after the government implemented the new indirect tax regime, it announced on Wednesday that it has appointed a task force to draft a new direct tax law after reviewing the over 50-year old Income Tax Act, 1961, reports fe Bureau in New Delhi. The proposed direct tax code is expected to simplify and consolidate existing laws into a single legislation. The task force has been given six months to carry out the exercise. Arbind Modi, member of central board of direct taxes, has been named as convener of the sevenmember group. PAGE 2 Mistry seeks nominee director on board of Tata Sons FE BUREAU Mumbai, November 22 FE BUREAU New Delhi, November 22 THE CABINET ON Wednesday decided to bring in a crucial ordinance to amend the Insolvency and Bankruptcy Code (IBC), 2016,which will likely bar wilful defaulters,including such promoters, and persons convicted of fraud, among others, from submitting resolution plans for a stressed firm. Official sources told FE that the proposed changes are aimed at tightening the IBC further to prevent unscrupulous elements, including dubious promoters,from bidding for assets of stressed companies.However,promoters in general won’t be barred from participating in bidding for now. The sources said the proposed changes that were placed before the Cabinet for approval include barring wilful defaulters,undischarged insolvents and those whose accounts have been declared non-performing assets (NPAs) bythe Reserve Bank of India for a year or more from becoming a resolution applicant. Even those convicted of fraud or found guilty of siphoning off money earlier from any company, disqualified directors and people who were found to have been indulged in “preferential” and/or “undervalued” transactions will be ineligible to submit resolution plans.This means the roughly 3 lakh directors who ● LEGAL BATTLE ■ He is a disqualified director of a company or an undischarged insolvent ■ But all promoters of stressed firms won’t be barred, only the unscrupulous elements will be disallowed likely to have long-pending defaults requiring deep haircuts for the creditors. It is, therefore, necessary to ensure that promoters of the corporate debtor who are found to have contributed to the default need to be prevented from regaining control through the back doorin the garb of a resolution applicant. Continued on Page 2 ■ Plan to set up 15th Finance Commission gets nod, P2 State of the wallet OUSTED TATA SONS chairman CyrusMistry’scounselonWednesdaytold the Mumbai bench of the National Company LawTribunal (NCLT)thathe’snotseekinghisreinstatementasthechairmanofthe holding company but wants a nomineedirectorofhisfirmstobe on the board to protect the interestsofminorityshareholders.Mistry’s family firms — Cyrus InvestmentsandSterlingInvestments— havean18.4%stakeinTataSons. Arguing for Mistry’s firms, senior counsel C Aryama Sundaram told NCLT,“I am not seeking that Cyrus Mistry be made chairman,not seeking that relief at all. I am just bringing to the fore acts of oppression towards me the minority shareholder.” The Mumbai bench of the NCLT started hearing Mistry’s plea alleging mismanagement andoppressionofminorityshareholders upon direction of the National Company Law Appellate Tribunal(NCLAT)inSeptemberto hearthepleaonmeritsanddecide the matterwithin three months. The hearing is slated to continue over the next few days. Sundaram said they are seeking protection as minorityshareholders by asking minimal relief which includes bringing into place corporate governance and transparency with regard to the governing of Tata Sons and corporate governance and transparencyinhowTataSonsinvolves itself with other group firms. Continued on Page 2 ANUSHREE BHATTACHARYYA Paytm outpaces competition Telangana govt launches interactive study tool The digital study kit developed by CloudEdz for intermediate students in the state can be accessed via a web portal and an app that needs one-time internet connectivity Mobile wallet Paytm continued to grow month-on-month in July-September while competitors like Freecharge and Mobikwik lost pace. Number of apps installed PayTM Freecharge Mobikwik Market share (%) 68.3 67.5 Jul '17 15.6 13.8 69.3 14.9 Aug '17 Sep '17 13.9 14.2 13.6 Source: Kalagato JAYPEE INFRATECH CASE No asset transfer: SC to JAL board TOUGH TERMS Violation will lead to criminal prosecution, contempt of court proceedings JAL deposits `275 cr, gets time till Dec 31 to pay another `275 cr of `2,000 cr dues SC says JAL’s wealth has gone up at the cost of home buyers Asks them to mortgage, sell everything including jewellery to pay dues Applies to all 13 directors, close relatives; however, court sets easier terms to pay `2,000-cr dues FE BUREAU New Delhi, November 22 THE SUPREME COURT on Wednesday restrained all 13 directors — including five promoter directors — of Jaiprakash Associates (JAL) and their “immediate and dependent family members”from transferring any personal assets orpropertywithout the court’s permission. Any violation of the apex court’s orders would see them being held liable for criminal prosecution and contempt of the court. “Your wealth has gone up at the cost of home buyers... You had a pleasant journeyriding the top... but you will have to now come down in the interest of the home buyers...You can’t destroy the life savings of home buyers... Mortgage, sell everything including jewellery to pay the home buyers.We will also attach your personal properties,” a bench led by Chief Justice Dipak Misra told Manoj Gaur and 12 directors who were personally present in the court. The bench, however, allowed JAL to pay dues of `2,000 crore in easier instalments. The amount is being paid by JAL on behalf of its subsidiaryJaypee Infratech, which has a liability towards 32,000 home buyers.Earlier on November 6, the apex court had rejected JAL’s offer to Directs amicus curiae to set up web portal for hassled buyers within a week All directors asked to be present in the court on Jan 10 deposit `400 crore towards the dues of `2,000 crore and had asked it to deposit a“substantial amount such as `1,000 crore”to prove its bona fides. Home buyers raised a demand fora forensic audit of both JAL and Jaypee Infratech. Attorney general KK Venugopal told the bench he had learned from newspaper reports about the diversion of `10,000 crore and called for a forensic audit of the two companies. Senior advocates Mukul Rohatgi, Kapil Sibal and Ranjit Kumar, appearing for the directors and promoters,said they had no problem with the forensic audit. However, they asked for more time till June to deposit the money as JAL was under a debt restructuring process. The firm handed over a demand draft for `275 crore on Wednesday and must deposit `150 crore by December 14 and another `125 crore by December31.While maintaining that it had nothing personal against the promoters and directors,the CJI advised Gaurs to“pay up like good boys (achhe bachon ki tarah paise jama kar dein)”. The bench further said the circumstances warranted that not onlythe top officials but also theirfamilymembers,including wife and children, should be restrained from transferring rights in the assets. “Any violation of this order would make them liable for contempt and criminal prosecution,” it warned.The court also directed amicuscuriaeandadvocatePawan Shree Agrawal to set up within a weekawebportalthatwouldcontain all details including grievances of the hassled home buyers. Continued on Page 2 COURT RULINGS, OWN LAPSES Provident fund organisation stares at mammoth pension outflow SURYA SARATHI RAY New Delhi, November 22 THE EMPLOYEES’ PROVIDENT Fund Organisation (EPFO) may find it impossible to resist attempts by subscribers to inflate theirpensionentitlementstolevels far beyond its capacity to provide these, raising the spectre of bankruptcyandagraverisktothe monies deposited by millions of workers in the assorted schemes administered by the body. The concern follows not only a host of court verdicts, including two by the Supreme Court in 2016, but also the EPFO’s own Can’t give higher pension to those who hadn’t made EPS contributions on actual salary on a monthly basis. Such cases we will fight in courts... Have urged SC to club all of them — VP JOY, CHIEF PROVIDENT FUND COMMISSIONER internal circulars,its otherlapses and innumerable precedents. A proviso introduced in the Employees’ Pension Scheme (EPS) 1995, in as early as March 2016, gave members the option to contribute 8.33% of one’s higher actual salary towards EPFO TO REGIONAL OFFICES ON MARCH 23, 2017 “The (labour ministry) vide letter dated 16.03.2017 has conveyed its approval to allow members of the EPS, 1995 who had contributed on higher wages exceeding the statutory wages ceiling of `6,500 in the Provident Fund to divert 8.33% of the salary exceeding `6,500 to the Pension Fund with up to date interest as declared under EPF Scheme 1952 from time to time to get the benefit of pension on higher salary on receipt of joint option of the employer and employee.” pension rather than on a salary ceiling. Since September 2014, the salary for this purpose was capped at `s15,000 a month and the ceiling was even lower before that. Former Central Provident Fund commissioner KK Jalan said around 1-2 lakh people are already receiving pension based on contributions as a share of their higher actual salaries. “Some PSU unions succeeded in getting court orders to the effect employees can even opt for higher contributions to the EPS from a back date,”he said. Jalan added the PSU staff might have received higherpensions without even making the required contributions. The EPFO staff, he said, computed the amounts (to be paid by the PSU staff) to be lower. Continued on Page 2
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