OPINION, P8 COMPANIES, P6 BID LOWERED EDITORIAL Scrapping slaughter rules for cattle will help dairy farmers Global warming is now a certainty, so focus on mitigating its effects is as critical INTERNATIONAL, P16 BIG BLOW TO TRUMP Subrahmanyan-led L&T gets Shivaji memorial contract Hope Hicks quits as White House communications chief NEW DELHI, FRIDAY, MARCH 2, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO.1 , 18 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 SENSEX: 34,046.94 ▼ 137.10 NIFTY: 10,458.35 ▼ 34.50 NIKKEI 225: 21,724.47 ▼ 343.77 HANG SENG: 31,044.25 ▲ 199.53 `/$: 65.17 ▲ 0.01 `/€: 79.40 ▲ 0.26 BRENT: $64.24 ▼ $0.49 GOLD: `30,269.00 ▼ `129.00 UTTAR PRADESH Power Corporation has cancelled Anil Dhirubhai Ambani's Reliance Power's Chitrangi power project in Singhrauli and seized its bank guarantee of `74 crore as it allegedly did not fulfil its commitment of setting up the project on time, reports Deepa Jainani in Lucknow. UPPCL had issued a letter of intent (LoI) to Reliance Power for the supply of 2456 MW power from the 3960 MW Chitrangi power project near Sasan in Madhya Pradesh after it had emerged as the lowest bidders in a competitive bid for purchase of power by the UP government in 2011. Cabinet also approves setting up of NAFRA to oversee conduct of auditors of listed, large unlisted firms FE BUREAU New Delhi, March 1 THE CABINET ON Thursday approved a crucial Bill to confiscate assets of fugitive economic offenders like jeweller NiravModi and also decided to tighten the scrutiny of auditing firms by setting up an “oversight body”, effectively strippingtheInstituteofChartered Accounts of India (ICAI) of some of its precious regulatory functions. The government will now place the Fugitive Economic Offenders Bill (FEOB), 2017, which was cleared by the Cabinet, in Parliament as soon as the Budget session reconvenes on March 6, finance minister Arun Jaitley said Fugitive Economic Offenders Bill NAFRA Will be an oversight body for auditors of all listed and large unlisted firms ■ Offences of `100 crore or more to be covered ■ All assets of fugitive offenders to be attached, even without conviction ■ Current PMLA allows confiscation of assets generated from only crime proceeds ICAI will remain watchdog of auditors of smaller unlisted firms and discharge other regular functions NAFRAwill comprise a chairman and a maximum of 15 members after the Cabinet meeting. Once cleared by Parliament,the law will make it easier to attach all the assets of economic offenders fleeing India to escape the reach of law,evenwithout a conviction. Offences with a value of `100 crore or more will be covered ● PNB CASE by this law. While the existing PreventionofMoneyLaundering Act (PMLA) has provisions for the confiscation of an offender’sassets,itcanhappen only after his conviction, and the confiscation is also limited to the proceeds of the relevant crime. However, the new Bill provides forthe attachment of all the assets of offenders,irrespective of whether these are the proceeds of crime or not, Jaitley said. The Cabinet’s clearance to the National Financial Reporting Authority (NAFRA), as envisaged in the Companies Act, 2013, will see the body working as a regulator for auditors of all listed and large unlisted firms above a certain threshold. The ICAI, the apex bodyof chartered accountants that currently functions as a self regulator,will continue to be the watchdog of other smaller unlisted firms. Moreover, ICAI’s other functions, including conducting examinations for CAs, will continue to bevestedwith it.NAFRAwill comprise a chairman and a maximum of 15 members. “We can’t allow people to make a mockery of law — that you first indulge in loot and then refuse to submit to our legal system,” Jaitley said, in a veiled reference to businessmenlikeModiandVijayMallya. ● LENDING CREDENCE PSBs to consolidate 35 overseas operations FE BUREAU New Delhi, March 1 total debtwas `1,021.11 crore on March 31,2017. The document says PNB Investment Services has been mandated by PNB on behalf of the consortium to identify a strategic investor for the company, which operates a coalbasedthermalpowerprojectof 300 MW in Thoothukudi district in Tamil Nadu. Continued on Page 2 Continued on Page 2 ● 100% STAKE SALE ED attaches `1,217-cr PNB invites bids for assets of Mehul Choksi Ind-Barath Thermal PRESS TRUST OF INDIA Mumbai/New Delhi, March 1 THE ENFORCEMENT DIRECTORATE (ED) on Thursday said it has attached 41 properties valued at over `1,200 crore in connection with its money laundering probe in the Punjab Nation Bank (PNB) scam against Gitanjali Gems and its pro- moter Mehul Choksi. It also examined PNB’s managing director and CEO Sunil Mehta at its zonal office in Mumbai. The ED had early this week examined state-owned bank’s executivedirectorKVBrahmaji Rao to understand how the alleged fraudwas detected and other banking procedures. Continued on Page 2 SHAYAN GHOSH Mumbai, March 1 LED BYPUNJAB NationalBank (PNB), the consortium of 18 lenders to Ind-BarathThermal Poweris looking to sell a 100% stake in the project for at least `823 crore. The lenders are seeking a mix of upfront payment and a structured instrument for the sale, a bid document showed. The company’s ‘ONGOING PROBE’ Special Feature Luxury-car ranks upended: It’s a Hyundai Hyundai’s luxury line Genesis bumped Audi from top billing to the number 2 spot in the US, with premium mainstays BMW, Toyota’s Lexus and VW’s Porsche rounding out the top five Page 15 QuickPicks CAPA tweets Etihad to divest its Jet stake, airline denies ABU DHABI-BASED airline Etihad may divest its 24% stake in Jet Airways by the year-end, said aviation consultancy CAPA in a tweet on Thursday, reports Manisha Singhal in Mumbai. "This could lead to a rationalisation of capacity between India and the Gulf, particularly Abu Dhabi. #indianaviation,” the India Twitter handle of the Sydney-based consultancy said. However, the emirati airline said the “claims made in the CAPA report are false”. PAGE 6 Reliance Power seeks shareholder approval for `2,000-crore QIP RELIANCE POWER is seeking shareholders’ nod to raise up to `2,000 through a qualified institutional placement (QIP), reports fe Bureau in Mumbai. The company further said the funds raised through the QIP would be used to reduce the debt of the company, its subsidiaries and for general corporate purposes. Reliance Power had a total debt of `29,935 crore for the year ended March 2017. Reliance Power got listed on February 2008, and the stock has fallen by 84.6% since then. PAGE 11 BoB cries foul as cash frozen in South Africa’s Gupta case BANK OF Baroda has objected to the freezing of some of its funds in South Africa after it was alleged to have helped transfer money meant for the development of a government-backed dairy farm to the politically connected Gupta family and its associates, reports Bloomberg. The 30-million-rand ($2.5 million) preservation order was wrong because the money due to clients had already been withdrawn and an equal amount attachment of BoB’s own funds was ‘unsustainable’, its lawyer told a court. PAGE 10 Fortis results come under auditor cloud BLOOMBERG Mumbai, March 1 THE AUDITOR OF Fortis Healthcare, the embattled company whose founders are alleged to have improperly taken money out of it, said it can’t reach a conclusion about the hospital operator’s results because of ongoing investigations into its finances. Deloitte Haskins & Sells,in a statement accompanying Fortis’ financial results, said because of probes by the governmentandmarketsregulator, aswellasunsecuredadvancesto vendors,“we have not been able toobtainsufficientappropriate evidence to form a conclusion on the statement”. Fortis’ directors said the effect of investigations on its results will be dealt with when the probes are completed. The hospital operator has come under scrutiny after ■ Fortis’ directors said the effect of investigations on results will be dealt with when the probes are completed ■ It came under scrutiny after Bloomberg News reported money was taken from the firm by Malvinder and Shivinder Singh, who are part of the founding family of Fortis Bloomberg News reported money was taken from the company by Malvinder Singh and Shivinder Singh, who are part of the founding family of Fortis, according to people with knowledge of the matter. Continued on Page 2 8.32 8.24 8.16 (%) 8.3 8.3 8.2 8.08 SBI HDFC ICICI Bank Bank PNB Bank of Baroda FE BUREAU Mumbai, March 1 THREE OF THE country’s largest banks, State Bank of India (SBI), ICICI Bank (ICICI) and Punjab National Bank (PNB),onThursdayraised their marginal cost of funds-based lending rates (MCLRs) in a widely anticipated move. The one-year MCLR at SBI was raised by 20 basis points (bps) to 8.15%, at ICICI by 10 bps to 8.3% and at PNB by 15 bps to 8.3%. In the past few months, large lenders like HDFC Bank andAxisBankhaveraisedtheir MCLRs (HDFC on February 7 and Axis on January 16 and February 17, respectively), in whathasbeenthefirstseriesof hikes in lending rates ever since the MCLR framework came into effect inApril 2016. SBI and PNB are the first among public-sector banks (PSBs) to raise loan rates in this round of hikes. SBI saw its MCLR rate trend down from 8.9% in April 2016 to 7.95%, where it remained till last month. Karthik Srinivasan, senior FE BUREAU The Jan Dhan Yojana, coupled with a focus on unbanked areas, has given extra impetus to India’s financial inclusion agenda over the last three years. Up to 336 of the country’s 666 districts tracked by Crisil have scored "above-average" on its unique index. FY13 FY14 50.1 53.2 FY15 58 *Index rebased to include Jan-Dhan accounts and life insurance data. Else, FY16 index would have been 62.2 Credit penetration 70 56.2 FY16 Deposit penetration Branch penetration 60 50 70.5 57.2 62.1 60.3 53.5 55.4 49.9 52.4 45.7 40 78.3 50.4 56.0 54.3 Insurance penetration (Index prepared only for FY16) FY13 FY14 FY15 FY16 CRISIL Inclusix is a composite index measuring financial inclusion as an aggregate of four key dimensions: branch, credit, deposit and insurance penetration; score between 50.1–65.0 indicate aboveaverage level of financial inclusion Toppers among big states 90.9 82.1 78.4 THE RESERVE BANK of India (RBI) on Thursday brought foreign banks with at least 20 branches in India under the ambit of compulsory targeted lending to small farmers and SALES OF AUTOMOBILES in February continued to maintain their strong momentum, driven by growth in rural sales and strong demand for new modelslaunchedinthemarket. Be it passenger vehicles (PVs), commercial vehicles (CVs) or two-wheelers, every segment witnessed double-digit growth in the month compared to the same period lastyear. SalesinthePVsegmentgrew 1,20,735 1,37,900 Maruti Suzuki 42,327 44,505 Hyundai M&M (PV) Tata Motors (PV) Honda Cars 20,717 22,389 8 5 Sales (units) 14 Feb 2017 Feb 2018 % change 12,272 45 17,771 14,249 11,650 18 Baleno models grew by 39% in the month,whilevolumes of its utilityvehiclesErtigaandVitara Brezza grew14%. Mahindra & Mahindra’s (M&M) automotive business Ant takes $150-m size bite into Zomato FE BUREAU New Delhi, March 1 Continued on Page 2 Continued on Page 2 Auto sales speed on,with double-digit growth all round 11% in February,based on volumes of the top six carmakers thataccountformorethan90% of the PV market. This was despite the impact on retail demandinthemonthduetothe inauspiciousdaysofHolashtak, which is the seven days that come before Holi,when buyers generally avoid purchases, said analysts at Motilal Oswal. ThelargestPVmaker,Maruti Suzuki,said its sales grew 14% inthemonthonstrongdemand for its compact cars and SUVs. Sales of its Swift, Dzire and ● NEW FUNDING Continued on Page 2 foreign banks to lend to small farmers and micro-enterprises was first mooted in April 2015 aspartoftherecommendations ofaninternalworkinggroupset up by the RBI to revisit existing prioritysectorlending norms. FEBRUARY NUMBERS FE BUREAU Mumbai, March 1 Continued on Page 2 posted strong growth in PVs as well as CVs.PV sales rose by 8% in the month while CV sales jumped 28%.The company is confidentthatthismomentum will continue. Rajan Wadhera, president, automotive sector, M&M, said,“This performance comesonthebackofasustained momentum and demand,both inthepersonalandcommercial vehicle segments, which we believe will also continue in the month of March.” Foreign banks now in priority sector ambit micro-enterprises. The directive is likely to apply to Standard Chartered Bank (with 100 branches in India), Citibank (35 branches) and HSBC (26 branches), according to September-end figures released by the RBI. The proposal to mandate vice-president, Icra, said, “While the data on the share of base rate-linked loans is not readily available, my guess is about 25-30% of the credit is stilllinkedtobaserate,”hesaid. What this implies is that a significant proportion of corporate loans and a fair chunk of retail loans may be impacted by the increase in MCLR rates. SBI had signalled a rate hike on Wednesday, when it raised interest rates on retail deposits for the first time in three and a half years. Over 90% of SBI’s term deposits are of under `1 crore. Interestratesinthebanking systemareexpectedlyrising,following months of hardening in bondyields.Corporates are also returningtobanksforfinancing asaresultoffundsgettingmore expensive in the money markets. Indeed, Reserve Bank of India (RBI) executive director MichaelPatranotedintheminutes of the monetary policy committee(MPC)meetingheld onFebruary6-7thattheregulatormayhavelaggedthemarkets in hiking rates. FOOD-TECHNOLOGY FIRM Zomato on Thursday said that it has raised $150 million in a fresh round of funding from Alibaba-owned Ant Financial Services.In a separate transaction,Ant Financial has bought $50 million worth of shares from Info Edge,taking its total investment in Zomato to $200 million.Following the transaction, Zomato is valued at around $1 billion. “The partnership with Ant Financial will significantly accelerate our journey. We believe that Ant is the right strategic partner for our business at this stage.We can gain tremendously by learning from them and leveraging theirglobal network,scale and technology,” said Zomato founder and CEO Deepinder Goyal. According to the food-tech firm, the investment will be used to furtherbuild the product and technology to provide a seamless experience. The company also plans to strengthen its payment options in partnership with Ant Financial. “Through our strategic mobile wallet partners in India and across Southeast Asia, we see immense opportunities to collaborate with Zomato to bring a much improved user experience around dining, food ordering and delivery,” said Douglas Feagin, president of Ant Financial International. ● ‘LEVEL PLAYING FIELD’ FE BUREAU Mumbai, March 1 Source: Banks First time under MCLR regime; move was widely expected on hardening bond yields A JAM fillip 80 8.3 8.15 Financial inclusion Overall score UNHEALTHY One-year MCLR 8.00 THE MASSIVE FRAUD at Punjab National Bank (PNB) seems tohaveinfusedarenewedsense of urgency in the government to ensure public-sector banks (PSBs) carry out the reforms directed by it at the earliest. PSBswill“consolidate”35overseasoperationsandalsoexplore the possibility of undertaking such an exercise in another 69 operations that have already been identified, financial services secretary Rajeev Kumar said onThursday. In fact,all the 216 overseas operations of PSBs will also be examined to see if furtherconsolidation is possible. The plan to rationalise overseas operations was a part of the reform measures PSBs were directed to initiate as one of the conditions to get `2.11 lakh crore in capital infusion by the government. In a tweet on Thursday, Kumar said: “PSBs to consolidate 35 overseas operations without affecting international presence of PSBs in these countries; 69 ops identified for further examination. Move towards cost efficiencies and synergies in overseas mkt.” The operations includes bank branches, joint ventures, subsidiaries, remittance centres and representative offices. Continued on Page 2 SBI, PNB, ICICI up MCLR rates Andhra UPPCL cancels Reliance Power's Chitrangi project Fugitive Bill gets Cabinet nod Karnataka INDIA'S THIRD-LARGEST IT services exporter Wipro has announced an investment of $8.8 million to pick up 33.3% stake in Denim Group, a USbased application security firm, reports fe Bureau in Bengaluru. Through this investment, Wipro now plans to jointly leverage along with Denim Group to address the cybersecurity market. According to notices issued to the stock exchanges, Wipro said, “This partnership will bring together Wipro’s strong digital transformation and cybersecurity capabilities with Denim Group’s application security consulting, assessments and implementation services including DevSecOps and secure development training services.” CYCLE TURNS CRACKING DOWN Kerala IN THE NEWS Wipro invests $8.8 m for 33% stake in US firm
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