OPINION, P8 COMPANIES, P6 INTERNATIONAL , P16 DUES TO SEBI PERSONAL DATA Bombay HC judges to facilitate auction of Aamby Valley: SC Uber faces privacy probes into Kalanick-era hacks EDITORIAL An Aadhaar linkage will help identify benami property Indian scientists have done well to find a way that will help in beating malaria NEW DELHI, FRIDAY, NOVEMBER 24, 2017 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM VOLUME XLIII NO. 228, 30 PAGES, `5.00 (PATNA `6.00, RAIPUR `7.00) 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 READ TO LEAD SENSEX: 33,588.08 ▲ 26.53 NIFTY: 10,348.75 ▲ 6.45 NIKKEI 225: 22,523.15 ▲ 106.67 HANG SENG: 29,707.94 ▼ 295.55 `/$: 64.57 ▲ 0.35 `/€: 76.48 ▼ 0.19 BRENT: $63.11 ▼ $0.21 GOLD: `29,499 ▼ `70 INSOLVENCY ORDINANCE PROMOTERS OUT! If promoters want to bid for their companies at NCLT, must bring in funds to make the loans ‘standard’ first FE BUREAU New Delhi, November 23 SIN THE NEWS ThyssenKrupp defends Tata Steel merger GERMAN HEAVY industry giant ThyssenKrupp on Thursday defended its disputed merger with Tata Steel, saying its restructuring plan and the tie-up would help to secure tens of thousands of jobs, reports AFP. The tie-up, announced end-September to form Europe’s second biggest steel works after ArcelorMittal, has sparked fears for 4,000 jobs in production and administration that hang in the balance. Oil, gas PSU mergers exempt from CCI nod MERGER AND acquisition deals involving public sector oil and gas companies have been exempted from seeking the Competition Commission of India (CCI) approval, says a notification, reports PTI. The corporate affairs ministry’s decision to exempt such deals from the ambit of CCI comes against the backdrop of the proposed consolidation and stake purchases among stateowned oil and gas companies. In July, the Cabinet Committee on Economic Affairs approved sale of the government’s 51.11% stake in oil refiner HPCL to ONGC. WITH PRESIDENT RAM Nath Kovind’s assent to an ordinance onThursday,the government has effected sweeping changes to the Insolvency and Bankruptcy Code (IBC), 2016, to prevent wilful defaulters, dubious promoters, undischarged insolvents and other“unscrupulous,undesirable persons” from misusing the law. Infact,thescopeofthechangesis soenormousthatmostofthepromoters of over300 stressed companies, including a dozen large baddebtaccountsrecommended by the central bank where the insolvency resolution process has beeninitiated,willbedisqualified from acquiring assets of such firms, said analysts. Also, the roughly3lakhdirectorswhowere recentlydisqualifiedfollowingthe government’s drive against shell firmswillalsobeineligibletosubmit a resolution plan. According to analysts, the amendments could cause disruption in nearly all pending insolvency proceedings as the eligibility of all bidders will have to be ascertained before examining their bids.Earlier,the resolution plan had to qualify for consideration; now the bidder has also to qualify,they noted. According to the ordinance, the changes also barthosewhose accounts have been classified as non-performing assets (NPAs) for at least a year, or have executed an enforceable guarantee involving a corporate debtorundergoing insolvency resolution Cases before NCLT Gross debt (` cr) Bhushan Steel Lanco Infratech Essar Steel Bhushan Power Alok Industries Monnet Ispat Electrosteel Steels Era Infra Jaypee Infratech ABG Shipyard Amtek Auto Jyoti Structures NCLT branch Lead bank 44,477 43,502 37,284 37,248 23,443 10,333 10,274 8,100 7,922 6,953 3,928 3,387 New Delhi Hyderabad Ahmedabad New Delhi Ahmedabad Mumbai Kolkata New Delhi Allahabad Ahmedabad Chandigarh Mumbai or those who are habitually noncompliant from acquiring stressed assets in insolvencyresolution or liquidation process. BITTER REALTY So, for instance, if the accounts of, say, the Ruias have been classified as NPAs forovera year,they can’t bid for the assets SBI IDBI Bank SBI PNB SBI SBI SBI Union Bank IDBI Bank ICICI Bank Corp Bank SBI of Essar Steel without first clearing the overdue amounts with interests and other charges. Moreover,those who are pro- moters or in the management of controloftheresolutionapplicant, orwillbepromotersorinthemanagement of control of the corporatedebtorduringtheimplementation of the resolution plan,the holdingcompany,subsidiarycompany,associatecompanyorrelated partywillalsostanddisqualifiedto submit a resolution plan. Importantly,thecommitteeof creditors(CoC)willrejectaresolution plan that is submitted before the commencement of the ordinance but is yet to be approved where the resolution applicant doesn’t meet the latest changed criteria.Insuchcases,theCoCmay invite fresh resolution plans. To ensure the changes are enforced effectively, the newly introduced Section 235A provides forfines forthe contraven- CHARITY DRIVE HOME BUYERS LOOKING for relief from the government and courts are unlikely to be given the status of financial creditors, senior officials in government have indicated. While home buyers are petitioning the courts to get errant builders to either complete construction of properties or return their money, a key demand is also that they be given a higher status equivalent to that of financial creditors under the Insolvency and Bankruptcy Code, 2016 (IBC). Under Section 53(1) (f) of the IBC, home buyers’ claims would Home buyers are petitioning the courts to get errant builders to either complete construction of properties or return their money Another key demand is also that they be given a higher status equivalent to that of financial creditors under the Insolvency and Bankruptcy Code, 2016 rank below those of workmen, secured creditors, employees, unsecured creditors and so on, just ahead of the preference and equity shareholders. In other words,theywould be among the last to receive theirdues.Though a task force is examining how to deal with home buyers, sources said the government is not keen to allowthis since this could lead to other creditors making similar demands, in the process undermining the IBC’s legal foundation. In a letter to the ministry of corporate affairs dated September 29, the ministry of housing and urban affairs had sought a review of the IBC to help home buyers recover as much as possible in the event the builder went bankrupt. Continued on Page 2 CLEARS LIQUIDATION Special Feature Mahindra plant is latest sign of Detroit comeback While the planned production volume pales in comparison with the output of mainstream auto plants, the factory underscores that Detroit is again attracting automotive investment ■ Motobahn, P15 QuickPicks S&P to announce outcome of India’s sovereign rating today GLOBAL RATING agency Standard & Poor’s (S&P) will announce the outcome of its sovereign rating review for India on Friday, exactly a week after Moody’s raised its rating for the country by a notch to Baa2, reports fe Bureau in New Delhi. S&P had last upgraded India’s rating from junk grade “BB+” to lowest investment grade “BBB-” on January 30, 2007 and has since retained it. PAGE 2 Lotte, Peugeot propose to invest up to $6 bn in India SOUTH KOREAN conglomerate Lotte Group and French carmaker PSA Group have separately $ discussed proposals to invest as much as $6 billion combined in India, a move that would boost the government’s attempts to attract foreign capital, a source said, reports Bloomberg. Lotte may invest between $3 billion and $5 billion in the next five years, the source said, asking not to be identified as the proposals are preliminary. PAGE 6 $850/tonne MEP on onion to boost local supplies THE GOVERNMENT on Thursday imposed a minimum export price (MEP) of $850 per tonne on onion to increase domestic supplies and check rising prices, reports PTI. MEP is the minimum rate below which exports are not allowed. Onion MEP was scrapped in December 2015. Concerned over the rise in onion prices, consumer affairs minister Ram Vilas Paswan in August had sought that MEP be imposed on its exports by the commerce ministry. PAGE 14 NCLT throws out Innoventive pleas FE BUREAU Mumbai, November 23 THE MUMBAI BENCH of the National Company Law Tribunal (NCLT) on Thursday dismissed separate petitions by the promoter, two workers’ unions and a resolution applicant of Innoventive Industries, paving the way for the company’s liquidation. The com- Going for broke pany owes lenders `955 crore. After resolution plans by the company’s promoter Chandu Laxman Chavan and by a resolution applicant — Suyash Outsourcing — were not approved by committee of creditors, they had decided to approach the NCLT. Continued on Page 2 ■ Innoventive was the first company to be referred by lenders to the NCLT under IBC ■ ICICI Bank had referred it to bankruptcy court in December 2016 following repayment defaults ■ Earlier this year, Innoventive had filed a petition in Bombay High Court challenging the validity of IBC ■ Its petition was dismissed by HC and later by SC also Bharti Enterprises founder and chairman Sunil Mittal (C) with vice-chairman Rajan Mittal and Rakesh Mittal after announcing an educational project, in New Delhi on Thursday FE BUREAU New Delhi, November 23 THE BHARTI FAMILY, led by Sunil Mittal,has pledged `7,000 crore — 10% of their family wealth, which includes 3% of their stake in the country’s largest telecom firm BhartiAirtel — to the Bharti Foundation,their philanthropic arm.The foundation,which runs the Satya Bharti schools in northern India forunderprivileged children, now plans to set up the Satya Bharti University,which would provide free education in science and technology to deserving youth from economically weaker sections of the society. The pledged amount of `7,000 crore would mostly go intosettingupoftheuniversityin northernIndia,closetoDelhiand Chandigarh on 100 acres of land, Bharti Enterprises chairman Sunil Mittal said onThursday. “We are not in this for business,”Mittal said at a conference along with his brothers Rakesh Continued on Page 2 ● DIGITAL EFFECT Home buyers not to get Bharti family pledges to give financial creditor status `7,000 crore to philanthropy SURBHI PRASAD New Delhi, November 23 tion of the law,whichwould be at least `1 lakh but may extend up to `2 crore.The amendment also provides certain checks by specifying that the CoC ensure theviabilityand feasibilityof the resolution plan before approving it. The analysts said such changeswillalsoleadtoalitanyof legaltussles,especiallyovertheissue ofwilful and otherdefaulters, and maydelaythe insolvencyresolution process. Importantly, since it could potentially disqualifyawholecross-sectionofpeople from making resolution applicationsunderIBCandparticipating in competitive bidding,the value of stressed assets that are put on theblockcouldremaindepressed orlowerthan expected. FOR A CAUSE Bharti Foundation currently runs schools for underprivileged children SCHOOLS SCIENCE & TECH SEATS The proposed science & tech university will also be for them If seats are left, will be offered to general candidates at govt fees andRajanMittal.Hesaidthatdiscussionsareonwithvariousstates including Punjab and Haryana to finalisethelocation.Mittalsaidhe expectedthegroundbreakingceremony to take place by early next year and the first academic sessionwould commence by2021. The proposed university would focus on advanced technologieslikeartificialintelligence, robotics, augmented reality and virtual reality and internet of things in addition to offering degrees in electrical and electronics engineering and management. “Given our attachment to technology,we would like it to be very significantly focused on technology on the lines of MIT, Stanford, Berkeley..,” Mittal said. Thenewuniversitywillseekpartnerships and industry linkages with tech giants like Facebook, Microsoft,Google andApple. Overa period of time the fully residential university will have 10,000 students,Mittal said. The setting up of the university will require `1,000 crore initially and a large amount will be needed to run it thereafter, he said. While courses will be free for meritorious students who belong to economicallyweakersections of the society,in case of any unfilled vacancies that would be offered to general candidates, the fee charged by government universities would be levied. State Bank to reduce headcount FE BUREAU Mumbai, November 23 STATE BANK OF India (SBI) chairman Rajnish Kumar on Thursday said the lender is likely to end FY18with a smallerworkforce thanwhat it began theyear with.“Whenyou have such avast and diverse client base as SBI,the need forhuman interfacewill always be there.But,if you ask me, it (employee count)was 278,000 at the beginning of this year,will it remain 278,000? It is unlikely,” Kumar said, adding,“Some cost efficiencies have to definitely come in as a result of whatever we are doing on the technology and digital front.” SBI spends around `4,000 crore a year on technology; this does not include ATM expenditure.The spend has been increasingyear-on-year,Kumarsaid. SBI is not the first bank were jobs have been hit by technology. Between September 2016 and September 2017, HDFC Bank’s headcount dropped to 86,543 from 95,002.Paresh Sukthankar, deputy MD, said on October 24 that the September 2016 figure was a peak and the bank had cut its workforce in later quarters. Q2FY18 actually saw headcount rise from end-June’s 83,750. Continued on Page 2 TECH NOTE SBI likely to end FY18 with a smaller workforce than what it began the year with because of technological development Employee count was 278,000 at the beginning of the year Lender spends around `4,000 cr a year on technology ANTI-PROFITEERING MECHANISM Consumers across states appear not in a hurry to lodge complaints SUMIT JHA New Delhi, November 23 THE RECENTCABINETdecision to set up a National Anti-profiteering Authority (NAA) and the message given to industrybypolicymakers that the benefits of the goods and services tax (GST) in the form of lowertax rates and higher input tax credits must reach the final consumers may have created the impression that consumers have inundated the respective authorities with pleas to crack down on non-compliant businesses.Far from it. FE spoke to eight state tax departmentsonhowbusytheirantiprofiteering machineryhas been, and it is clear that except in some states like Kerala, the number of serious actionable complaints have been fewand farbetween. Several states like Tamil Nadu and Gujarat are yet to receive any complaint against profiteering, even though the GSTCouncil had initslatestmeetingheldatGuwahati cut the tax rates on over 200 items,includingalargenumberof fast-movingconsumergoods,and ILLUSTRATION: ROHNIT PHORE reducedthetaxliabilityofrestaurants, especially the relatively smaller ones.While the GST rate for restaurants except those at five-star hotels was cut to 5% (sans input tax credit orITC) from 12% (non-AC) and 18% (AC) earlier, the industry is divided on whether this will reduce its tax liability.While the larger eateries that pay high rentals say the removal of ITC would pinch them, smalleroutletsseescopeforsome price cuts.Even Maharashtra,the most industrialised state in the country, has received only a few complaints against eaterieswhile none of the petitions filed with the state’s tax department had a primafaciepan-Indiaimportand needed to be transferred to the standingcommitteeatthecentral level. “We have received two to three complaints against restaurants in the last 10 days, after which we have deployed inspectorstoverifytheseclaims, ”anofficial at Maharashtra’s anti-profiteeringscreeningcommitteesaid on condition of anonymity. 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