OPINION, P8 COMPANIES, P6 ANWARUL HODA WTO must allow inflation-adjustment of price support INTERNATIONAL, P16 EDITORIAL POOR RESPONSE FACING BACKLASH As Venkaiah Naidu says about warring MPs, all is not well if it ends up in the Well Siddhartha Lal-led Eicher shuts JV operations with Polaris Japanese PM Abe apologises after cronyism allegations MUMBAI, TUESDAY, MARCH 13, 2018 VOLUME XXXXXV NO. 304, 18 PAGES, `6.00 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD 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: 33,917.94 ▲ 610.80 NIFTY: 10,421.40 ▲ 194.55 NIKKEI 225: 21,824.03 ▲ 354.83 HANG SENG: 31,594.33 ▲ 598.12 `/$: 65.04 ▲ 0.13 `/€: 80.02 ▲ 0.15 BRENT: $64.95 ▼ $0.54 GOLD: `30,271.00 ▼ `98.00 INSOLVENCY CODE REVIEW IN THE NEWS SMA details can’t be disclosed under RTI: RBI Exclusion of errant promoters to stay CONTRADICTING ITS reply to an earlier right to information (RTI) query, the Reserve Bank of India (RBI) recently said bank-wise information on special mention account (SMA) 1 and 2 is exempt from disclosure under Section 8 (1) (a) & (d) of the RTI Act, reports Shayan Ghosh in Mumbai. While SMA 1 refers to loans where payments are overdue for 31-60 days, SMA 2 loans are ones where principal or interest is overdue for 61-90 days. Anomalies in related-party definition to go, relief likely for homebuyers, consent threshold for resolution plan to be lowered FE BUREAU New Delhi, March 12 A COMMITTEE EXAMINING whether the 21-month-old Insolvency and Bankruptcy Code (IBC) need more changes — it has been amended twice already — to improve the recovery rates of stressed assetsislearnttohaveresolved not to explicitly dilute the criteria that bar wilful defaulters and errant promoters from bidding for their own and other collapsed companies at auction till they clear their dues.However,the committee, which met here for several hoursonMonday,hasfinalised certain changes in the code, including a few to address the “glaring discrepancies”in Section 29 (A) that defines the exclusion criteria. It could, in all likelihood, address the perceived overreach in defining parties related or connected to the errantpromoter,a move that could help resolution of many cases,including that of Essar Steel. Related par- DGCA grounds 11 Airbus planes of IndiGo, GoAir AVIATION WATCHDOG DGCA on Monday ordered private carriers IndiGo and GoAir to immediately ground 11 of their Airbus A320neos (8 of IndiGo and 3 aircraft of GoAir) fitted with a particular series of Pratt & Whitney (PW1100) engine type, keeping in view the safety of aircraft operations and recent occurrences of inflight shutdown on these engines, report fe Bureaus in Mumbai/New Delhi. This takes the total number of grounded aircraft to 14. Automobile sales grow 23% in February A RURAL recovery and demand for new models aided a strong 23% growth in automobile sales in February this year, over the same month last year, show data from the Society of Automobile Manufacturers, reports fe Bureau in Mumbai. ties are also prohibited from submitting resolution plan for the firm concerned. According to official sources, the committee is favourably inclined to address theissueofhome-buyers(owners of undelivered properties), who currently find themselves We have no plan to dilute Section 29 (A)... However, certain anomalies and glaring discrepancies (therein) may need to get addressed. We have also looked into the demands of homebuyers (for a priority claim on the assets of firms under insolvency resolution process). — INJETI SRINIVAS SECRETARY, MINISTRY OF CORPORATE AFFAIRS virtually nowhere when it comes to laying their hands on the assets of real estate companies in insolvency resolution process. Also likely is a trimming of the share of votes requiredforapprovingaresolution plan by the committee of creditors from 75% to 60% or thereabouts so that the process get initiated more easily. The government and the Insolvency and Bankruptcy Board of India had earlier discussed granting homebuyers the status of financial or operational creditors, but allthattheyhavedoneforthem — who also have statutory and vested rights as consumers — is tocomeoutwithanewformfor stakeholders like them,who do not fall under the categories of financial/operational creditors. Given that the Supreme Courthadrecognisedtheloophole in the Jaypee Infratech case and initiated recovery for home-buyers of Unitech and Supertech through the creation and maintenance of a designated website, the committee, headed by corporate affairssecretaryInjetiSrinivas, could grant home-buyers the status of operational creditors who are usually not secured creditors, sources said. However, Srinivas told media persons just that “homebuyers’ demands are indeed being looked into... That has been deliberated.” Continued on Page 2 Special Features When negative working capital is not a bad thing The biggest advantage of negative working capital is that it ensures a holiday from bank financing as it saves a company from interest costs by getting the current assets financed by the suppliers ■ Personal Finance, P15 Beyond vanilla ads: How ‘branded’ is your ‘content’? With emphasis on branded content growing by the day, in India and across the globe, what is the best way for marketers and advertisers to approach this form of, well, ‘non-advertising’? QuickPicks IIP growth touches 7.5%; retail inflation drops to 4-month low INDUSTRIAL PRODUCTION grew at a high rate of 7.5% in January 2018, while retail inflation fell to a four-month low of 4.44% in February, according to data release by the Central Statistics Office (CSO) on Monday, reports PTI. Retail inflation, based on the Consumer Price Index (CPI), was at 5.07% in January. Meanwhile, the robust growth of the Index of Industrial Production (IIP) in January this year was mainly on account of uptick in the manufacturing sector, which constitutes 77.63% of the index. PAGE 2 Govt to take action against those who relaxed gold import norm STEPPING UP the heat on former finance minister P Chidambaram, the government on Monday said it will take action against those who relaxed gold import norms for private trading houses during the dying days of the UPA regime, resulting in a windfall of `4,500 crore to 13 such entities in just six months, reports PTI. Faced with the Congress’ attack over the `12,700-crore fraud at the Punjab National Bank, the BJP had earlier this month accused Chidambaram of aiding accused jewellers Mehul Choksi and Nirav Modi through an 80:20 gold import scheme. PAGE 3 One for the road: Agitating farmers of the All Indian Kisan Sabha (AIKS) at Azad Maidan in Mumbai on Monday. The Maharashtra government accepted all their demands, including their right to till forest land ‘LONG MARCH’ Farmers end protest after state gives in Signals a big win for the farmers who had marched 180 km from Nashik to Mumbai SHUBHANGI KHAPRE Mumbai, March 12 WITH A SEA of protesting farmers swamping Mumbai and political pressure mounting, the BJP-led Maharashtra government on Monday accepted the demands of the farmers, including their right to till forest land. Emerging from a threehourmeetingwithrepresentatives of the All India Kisan Sabha (AIKS) at Vidhan Bhawan — Radhakrishna Vikhe-Patil of the Congress and NCP’s Dhananjay Munde and Ajit Pawar were also present at the meeting — chief minister Devendra Fadnavis said: “The government has agreed to enforce all demands made by the AIKS. The state government will accord forest land rights to tribals. It is a legitimate demand of the tribalswhichwill be strictlyimplemented within six months.” The 12-memberAIKS dele- TO RAISE $1.2 BILLION ● BUILDING WAR CHEST SHUBHRATANDON Mumbai, March 12 FE BUREAU New Delhi, March 12 gation expressed satisfaction and called off the protest.“We expect the government to implement all promises made in a time-bound manner,” the delegation said. This signalled a major victory for the farmers who had marched 180 km from Nashik to Mumbai over six days to press their demands. The major demands conceded include the tribals’right toforestland,loanwaiversince 2008,minimum support price for farm produce, the NarparDaman Ganga river-linking project,31waterconservation projects,among others. The government has TATA SONS, THE promoter of Tata Consultancy Services (TCS), is planning to sell a 1.48% stake in the IT behemoth through a block deal to raisenearly$1.2billiontomeet thegroup’sinvestmentrequirements, sources close to the development said on Monday. The funds are expected to be deployed towards repaymentoftelecom-relateddebts, simplifying of cross-holdings in group companies by buying stakes,possible acquisitions of assets under insolvency Price expected to be in range of `2,870-`2,920 per share Transaction expected in next few days Citibank, Morgan Stanley are advisers process in the National Company Law Tribunal (NCLT) by Tata Group companies and any other investment Tata Sons last sold TCS shares in a bulk deal in Feb 2007 raising `886.65 crore requirements that the group envisages. Continued on Page 2 IN ITS ONGOING efforts to raisefundstoreducedebtaswell as meet the competitive challengesposedbyRelianceJio,the Bharti Airtel board on Monday approved a proposal to raise up to `16,500 crore through a combinationofprivatelyplaced non-convertible debentures and foreign currency bonds for conductingtreasuryoperations. Though Bharti has been raising funds for the last one year, Monday’s enabling approval to raise funds is its largest in a single meeting. “Subject to approval of shareholdersandotherrequisite approvals,theboardofdirectors in its meeting held on Monday has approved the issuance of NCDsofupto`10,000croreon a private placement basis in suchtranches/seriesandatsuch rates as may be approved from time to time on a cumulative basisalongwithallNCDsissued by the company, and the issuance of foreign currency bonds up to a limit of $1 billion (`6,482 crore) or equivalent in one or more tranches,” it said in a filing. Continued on Page 2 PMSBY ● REALTY BITES SC hints at auctioning Insurers lose 80-100% on it, seek Unitech’s assets at least doubling of premium FE BUREAU New Delhi, March 12 REITERATING ITS EARLIER order asking embattled real estate company Unitech to give complete details of its unencumbered properties, including promoters’ personal assets, the Supreme Court on Monday said that it will considerauctioning these assets to raise money to refund homebuyers. While the SC had on March 5 asked Unitech to submit an affidavit with the complete details of its and its subsidiaries’ unencumbered assets in India and abroad,the company on Monday sought more time to do so. It also warned that if any false declaration with regard to its properties in the affidavit is made, contempt proceedings will be ■ SC asks Unitech to give list of unencumbered assets in India and abroad; wants to auction them to raise refund money ■ SC fines JM Financial ARC for diversion from the homebuyers’ refund issue ■ 4,688 homebuyers are claiming refund of `1,865 cr from Unitech initiated against the company and its promoters. Continued on Page 2 CHIRAG MADIA Mumbai, March 12 GOVERNMENT-OWNED INSURANCE companies, mainly, are incurring losses of 80-100% on the prime minister’s accident insurance scheme, Pradhan Mantri Suraksha Bima Yojana (PMSBY). Compared with a premium of `161 crore collected this year, insurance firms have disbursed claims of around `290-320 crore. While they are planning to ask for doubling the premium levels for now — from `12 per annum to around `20-30 — even this may not be enough since similarinsurance sold by these insurance companies can cost up to `80 fora similar `2 lakh cover albeit for individuals, and around `45-50 for group insurance. Sensex rises the most in two years S&P BSE SENSEX Intra-day, March 12 33,917.94 34,000 33,850 33,468.16 33,700 33,550 33,400 Open Previous close 33,307.14 Close Nifty 50 Intra-day, March 12 10,421.4 10,450 10,400 10,301.6 10,350 10,300 10,250 Open Previous close 10,226.85 Close PRESS TRUST OF INDIA Mumbai, March 12 “In the past three years, claims from PMSBY have remained in the same range and the government had said that premium rate revision would be taken after three years,”said a seniorofficial of a leading insurance company THE BSE SENSEX on Monday spurted by 611 points — its biggest single-day gain in two years — to finish at one-week high of 33,917.94 points following a global relief rally as trade war fears abated on growing optimism over the US economy. After opening strong, the Sensex advanced to hit a high of 33,962.48 on fresh buying by domestic funds and retail investors. However, later it gave up some of the gains but still ended up by 610.55 points, or 1.83%, at a one-week high of 33,917.94. This was the biggest single-day gain since March 1, 2016, when it had jumped 777.35. The broader Nifty finished at 10,421.40, up 194.55 points,or1.90%,with 47 of its components closing with gains. It touched a high of 10,433.65 points in intraday trade. Continued on Page 2 Details on Page 11 SEEKING COVER ■ General insurers see 180-200% claims ratio in PMSBY ■ Will seek increase in premium to `20-30 per subscriber ■ Present premium is `12 per subscriber for a year ■ Insurers fear losses will swell as subscribers grow ■ Presently 13.4 crore persons are covered under PMSBY Atotalof13.4crorepersons have availed the PMSBY and, till March 5, a total of 20,249 claims were received; of these, 15,727were settled.Launched in 2015,the insurance scheme gives a `2-lakh cover for accidental death/permanent disability and `1 lakh for partial disability. Continued on Page 2 ● RELIEF RALLY Tata Sons to sell 1.48% in TCS Bharti board’s nod to to finance group investments `16,500-cr fundraise Tata Sons to sell 1.48% stake in TCS to raise nearly $1.2 billion through block deal agreed to implement the right to forest land to tribals within six months.Aspecial task force will be constituted to implement the decision in a timebound manner. It will apply to all tribals who have been dwelling in the forest areas up to year 2005. Another important decision taken was to waive loans oftribalswithagriculturaldebt between 2001 and 2008. The Chhatrapati Shivaji Shetkari Sanmaan Yojna loan waiver, announcedbythegovernment earlier, was for farmers with debts from 2009 to 2016.
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