OPINION, P8 COMPANIES, P7 DEBT PAYDOWN EDITORIAL Don’t dilute IBC, use a panel to clear exceptional cases SC has done a great job to legalise passive euthanasia, lots of checks put in place too INTERNATIONAL, P16 DIPLOMATIC OVERTURE Chandrasekaran-led Tata Sons plans first overseas loan in over a decade Trump accepts offer of nuclear talks from North Korea’s Kim NEW DELHI, SATURDAY, MARCH 10, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 7, 24 PAGES, `8.00 (PATNA `9.00, RAIPUR `10.00) 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: 33,307.14 ▼ 44.43 NIFTY: 10,226.85 ▼ 15.80 NIKKEI 225: 21,469.20 ▲ 101.13 HANG SENG: 30,996.21 ▲ 341.69 `/$: 65.17 ▼ 0.02 `/€: 80.17 ▲ 0.43 BRENT: $64.38 ▲ $0.77 GOLD: `30,369.00 ▼ `90.00 IN THE NEWS Govt to split Air India debt ahead of stake sale THE GOVERNMENT will transfer part of Air India's $8.5-billion debt pile to a special purpose vehicle before selling a stake in the state-owned carrier, junior civil aviation minister Jayant Sinha told Reuters on Friday. Sinha said the government had already decided to split the debt into sustainable and unsustainable debt. Feb fuel demand rises 7.7% y-o-y INDIA'S FUEL demand rose 7.7% in February compared with the same month last year, reports Reuters. Consumption of fuel, a proxy for oil demand, totalled 16.73 million tonnes, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed. Sales of petrol were about 9.4% higher than a year earlier at 2.08 million tonnes. Tata Steel arm for US levy waiver THE DUTCH arm of Tata Steel said on Friday the United States should exempt it from new import tariffs on steel and aluminium, as it products were vital for the American economy, reports Reuters. "We don't dump our steel on the American market, our products are no threat to American national security and many American companies depend on our products," Tata Steel Netherlands director Theo Henrar said in a statement. INSOLVENCY RESOLUTION Promoters of stressed MSMEs to get relief Such promoters could be allowed to bid for toxic assets without first clearing dues NOT A SMALL MATTER BANIKINKAR PATTANAYAK New Delhi, March 9 INAMOVE aimed at providing relief to the micro, small and medium enterprises (MSMEs), a panel set up to look intovariousissuesrelatingtotheInsolvency and Bankruptcy Code (IBC) is considering allowing promoters of MSMEs to bid for theirstressedassetsevenwithoutclearingduesiftheyarenot wilful defaulters, official sources told FE. Aspartofitseffortstoexpeditetheinsolvencyprocess,the panel is also examining the possibility of trimming the share of votes required for approving a resolution plan by the committee of creditors to anywhere between 60% and 66%,againstthecurrent75%. It is also considering relaxing the related-person criterion without diluting the soul of it to enable a smoother implementationofthelaw,the sources said. The 14-member InsolvencyLawCommittee,chaired by corporate affairs secretary Injeti Srinivas, will meet on Monday to deliberate on some of these issues. “These issues are being discussed but a final decision will Science & Tech P15 Passenger drones: More than just a flight of fancy Developments in power, batteries and autonomousflight systems have led to a boom in sales of drone aircraft. Several entrepreneurs want to scale these up to the point that people can fit inside them QuickPicks Gadkari warns steel, cement firms against cartelisation UNION MINISTER Nitin Gadkari on Friday warned companies, especially in the cement and steel sectors, of stern action if they form cartels to increase prices of key infrastructure commodities, reports PTI. With the infrastructure sector witnessing an upswing in activities in recent years, Gadkari said the emphasis of new technologies should be to reduce costs of projects without compromising on quality. Gadkari observed that there was no increase in the royalty and labour charges, yet costs spiralled. PAGE 3 Mumbai airport: Civil aviation ministry caps UDAN flights PUTTING TO rest the tussle between regional airline operators and GVK-operated Mumbai International Airport (MIAL) over availability of slots for more flights under the government's regional connectivity scheme (RCS), the ministry of civil aviation (MoCA) said that no more slots will be awarded to operators offering connectivity between Mumbai and Tier II and Tier III cities till Mumbai's second airport at Navi Mumbai becomes operational, reports Manisha Singhal in Mumbai. Mumbai airport is capacity constrained, located in the heart of the city with no land to expand. PAGE 2 Union Bank exposure to Nirav Modi, Gitanjali firms UNION BANK of India has direct credit exposure of about `120 crore to companies controlled by jeweller Nirav Modi, and another `175 crore to the Gitanjali group of companies, its chief executive Rajkiran Rai told Reuters on Friday. Companies belonging to Modi and his uncle Mehul Choksi, who heads the Gitanjali group, have been accused by Punjab National Bank of defrauding the bank of over $2 billion. Both Modi and Choksi have denied wrongdoing, and so have two key accused PNB employees in the case. PAGE 10 60 Firms that are going for liquidation, all MSMEs 590 Firms where insolvency proceedings have been initiated, 80% of which are MSMEs Panel mulls trimming vote share to approve a plan by CoC to 60-66% from 75% ■ ■ Related-person criterion may be relaxed without diluting the soul of the Section 29A of IBC betakenonlyafterdeliberations are over,” said a senior governmentofficial.“Therearedeliberations on how MSMEs can be given some relief, whether we can have a separate window to address theircases,” he said. In November last year, the government disallowed wilful defaulters and dubious promoters from submitting insolvency resolution plan. It also barred those whose accounts have been classified as nonperforming assets forat least a year.However,such defaulting promoters can bid for their companiesonlyaftertheyclear the overdue amounts with interests and other charges. The government also restricted the participation of those related to orconnected to promoters in some way or the otherin the resolution process. The latest move comes amid the realisation that MSMEs are mostly driven by promoters, who are the ones that are interested in bidding for their stressed firms in an insolvency resolution process. Since there is hardlyanythirdparty interest in a stressed MSME, unlike large companies,almost all of them are set to go for liquidation. This will result in job losses, a scenario the government wants to avoid. As such, all the 60-odd companies that are going for liquidation are MSMEs. By contrast,the large sick companies, including Bhushan Steel and Essar Steel, have gathered interests. Of close to 600 firmswhere insolvency proceedings have so far been initiated, around 80%areMSMEs,saidanalysts. According to the new classification, firms having annual turnover up to `5 crore fall underthe‘micro’category.Units having turnover between `5 crore and `75 crorewill be classified as small enterprises, whereas those having turnover between `75 crore and `250 crore will be classified as medium enterprises. ● VIOLATING NORMS RBI fines Airtel Payments Bank `5 cr PRESS TRUST OF INDIA Mumbai, March 9 THE RESERVE BANK of India (RBI) has imposed a penalty of `5 crore on Airtel Payments Bank for violating operating guidelines and know your customer (KYC) norms. The fine wasimposedaftertheRBIscrutinised the bank’s documents relating to opening of accounts without any specific or clear consent from the customers. “The Reserve Bank of India (RBI) has imposed,on March 7, 2018, a monetary penalty of `50milliononAirtelPayments Bank Limited (the bank) for contravening the ‘Operating GuidelinesforPaymentsBanks’ and directions issued byRBI on Know Your Customer (KYC) norms,”it said in a statement. Based on complaints and reports the bank opened customer accounts without specific consent, the RBI conductedasupervisoryvisitfrom November 20 to 22,2017. Continued on Page 2 DOWNBEAT Indices lose 2.2% in week Markets on Friday dropped for seventh session in eight, driven down by the banking sector FE BUREAU Mumbai, March 9 EQUITIES IN INDIA on Friday lost value for the seventh time in eight sessions with benchmarkindicesclosinginthered. The Sensex and Nifty ended the session down 0.15% and 0.13%,respectively,at 33,307 and 10,227 points. Over the week, the indices gave up 2.2%, leaving India the worst performing major market afterIndonesia,which lost 2.3%. The markets were driven down by the steep fall in prices of state sector banking stocks; the Nifty PSU Bank index plummeted 5.4% during theweek.The nervousness around the future prospects of state-owned banks in the wake of the fraud at Punjab National Bank has shattered investor confidence in all but the largest few banks. 35,000 SENSEX 34,346.39 34,000 33,307.14 33,000 32,000 Feb 27, 2018 Mar 09, 2018 BANK NIFTY 25,600 25,383.6 24,800 24,000 23,200 24,296.45 Feb 27, 2018 Mar 09, 2018 BSE MIDCAP 16,800 16,601.05 16,400 16,000 15,600 15,987.27 Feb 27, 2018 Mar 09, 2018 The sentiment swing also manifested in institutional flows into equities in India with both foreign investors and domestic institutions sell- Asia-Pacific trade deal unlikely to dent India’s exports Continued on Page 2 BANIKINKAR PATTANAYAK New Delhi, March 9 instruments, over 80% of which are wallets, was 113.14 million in February, while all mobile wallets together recorded288.37milliontransactions in December2017,the last month forwhich such data is available. HarshilMathur,co-founder at payment solutions provider Razorpay, told FE that the fall has been quite pronounced compared to the last week of February. THE MEGA ASIA-PACIFIC tradepactsignedby11nations, includingJapanandSingapore, is unlikely to dent India’s exportprospectsmeaningfully due to the absence of its key market—theUS—init,official and trade sources said on Friday.Butthedealcouldseemore pressurebeingpiledonIndiato help conclude the 16-nation Regional Comprehensive Economic Partnership (RCEP) agreementattheearliestwithout being too emphatic about its own demands in services sector,theyadded. However, in the absence of the US, the Comprehensive andProgressiveAgreementfor Trans-Pacific Partnership (CPTPP) has lost much of its potential clout, as it will cut tariffs in nations that together make up for just over 13% of the global economy (with the US, it would have represented 40% of world GDP). “The new trade deal is unlikely to damage our export prospects. However, a precise assessment of the impact on India will be known once it’s ratified by individual members,” an official source said here.“The absence of the US in the new deal is a relief for India’s garment industry.” Continued on Page 2 Continued on Page 2 Apex court upholds passive euthanasia RECOGNISING RIGHTTO die with dignity, the Supreme Court on Friday in a landmark judgement allowed people to drawup their“livingwills”and authorise someone to withdraw his/her medical treatment including life support in case he/she went into a persistentvegetativestatebecauseof an incurable and irreversible medical condition. This means passive euthanasia can be allowed to hasten such terminally ill patient’s death after a medical boardapprovesitandalsoafter following strict guidelines laid down by the apex court. Passiveeuthanasiarelatestowithdrawal of life support measures or withholding of medical treatment meant for artificially prolonging life. A five-judge Constitution bench led by Chief Justice of India Dipak Misra in four but concurringjudgmentsheldthat ■ SC recognises the right to die with dignity; allows people to write 'living wills' ■ Doctors bound by the choice of selfdetermination made by the patient provided he is satisfied that illness is incurable ■ SC authorises relatives, friends of terminally ill patients to withdraw medical treatment ■ SC guidelines to remain in force till govt frames law on the subject therighttodiewithdignitywas afundamentalrightandthatan advancedirectivebyapersonin the form of a living will can be approved bythe courts. Continued on Page 2 Continued on Page 2 ● TPP REDONE RIGHT TO DIE FE BUREAU New Delhi, March 9 ing and buying in two sessions each of the week, during the first four sessions for which data was available. While foreign investors brought in a net $148 million, domestic institutions infused a net $30 million overthe first foursessions of the week. Institutional flows into equities were tepid; both foreign and local institutions were circumspect stepping in to buy only selectively. Mahesh Patil, co-chief investment officer at Aditya Birla Sun Life Asset Management Company, said the correction had not been very large and since even bull markets have seen corrections of excess of 10%,it would be too early to call an end to the fall. “We can’t rule out further downside. But with stronger domestic outlook,I thinkwith every correction, valuations will start looking attractive and market will find support,” Patil said. He pointed out that there had been a fair bit of a fall in individual stocks,especially in mid- and small-caps, leaving them looking attractive. Change of guard Prime Minister Narendra Modi escorts former Tripura chief minister Manik Sarkar off the stage after the swearing-in ceremony of new chief minister Biplab Deb in Agartala on Friday EXPRESS PHOTO: ABHISEK SAHA ● KYC COMPLIANCE Wallet volumes nearly halve SHRITAMA BOSE Mumbai, March 9 FEARS OF A sharp decline in wallet usage are coming true, with a near halving of transactions through mobile wallets inthefirstweekafterthedeadline to become KYC-compliant expired. According to players in the payments business, the first week of March saw wallet transactions drop by 40-45%. According to data from eight non-banks released by the TOUGH TIME ■ The first week of March saw wallet transactions drop 4045%, said players in the payments business ■ People have been using their existing wallet balances for purchases ReserveBankofIndia(RBI),the volume of transactions made through prepaid payment BIG DEAL Uber could pay `4.5-5 crore for its brand new posterboy Kohli FE BUREAU Mumbai, March 9 RIDE-HAILING APP UBER has roped in Indian cricket team captainVirat Kohli to promote the brand. The 29-year-old cricketer will be the first to endorse the Uber brand in the country and this will be the 16th brand he endorses. Kohli will be involved in multimedia marketing initiatives by Uber. It is a multi-year deal. AsperDuff&Phelps’Riseof Millennials: India’s MostValuable Celebrity Brands report (December 2017), Kohli pipped Shah Rukh Khan as the most sought-after brand ambassador, moving up from numbertwoin2016,clinching an overall brand value of $144 million. As per reports, the Indian cricket team captain earns `3.2 crore per brand with 17 million followers on Instagram, as of December 2017. He is the only Indian athlete to command such a high fee. On his own personal experiences with Uber, Kohli said, “As a crick- eter,ItravelalotandIhavepersonally enjoyed the seamless experienceofbookinganUber. It’s great to see how the company is using technology to revolutionise the way people move around cities and is empowering millions bycreating economic opportunities.” According to Sanjay Gupta, head, marketing, Uber India and South Asia, Kohli personifies dynamism, integrity, grit,abilityandpassion. “He is the embodiment of India’sambitionsontheworld’s stage; he anchors the aspirations of billions,and it’s the littlethingshedoesthatbringjoy to theirlives.It’s this balance of purposewith a larger responsibility to citizens of the world that makes him the perfect partnertorealisingUber’scommitment to India,”he said. Besides Uber, Kohli is associated with brands like Puma, Tissot,Manyavar,Audi,Herbalife, American Tourister, MRF and Vicks,to name a few.Early last year, FE had reported that after becoming captain of TeamIndia,Kohli’sbrandvalue had soared to `4 crore a day. Sources indicate that this figure has increased further and currently stands at `4.5-5 crore per day. Normally, an annual endorsement contract includes the celebrity’s availabilityfora two- to four-day period (eight hours a day), during which timetheadvertisermayschedule an event,photo-shoot orad shoot, as per campaign requirements. Continued on Page 2
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