OPINION, P8 ECONOMY, P2 IN THE FAST LANE Media gag-plan goes, but how was it cleared initially? Binani Cement case suggests IBC working well and new tweaks proposed are good EXITING EASY POLICY Construction of highways hit 27 km a day in FY18: Gadkari EDITORIAL INTERNATIONAL, P14 Bank of Japan governor Kuroda says politics won't get in way NEW DELHI, WEDNESDAY, APRIL 4, 2018 WWW.FINANCIALEXPRESS.COM FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE READ TO LEAD VOL.XLIV NO. 28, 20 PAGES, `6.00 (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: 33,370.63 ▲ 115.27 NIFTY: 10,245 ▲ 33.20 NIKKEI 225: 21,292.29 ▼ 96.29 HANG SENG: 30,180.10 ▲ 86.72 `/$: 65.01 ▲ 0.17 `/€: 79.95 ▲ 0.86 BRENT: $67.99 ▲ $0.35 GOLD: `30,684 ▲ `241 BINANI CEMENT Appellate tribunal for ‘amicable’ settlement IN THE NEWS IISc ranked best institution, IIT-M best engg college THE INDIAN INSTITUTE of Science in Bengaluru was adjudged the overall best institution in the country by the HRD ministry's national ranking framework, reports PTI. IIT-M was ranked the best engineering college and IIM-A the best management institution. Miranda House was named the best college, AIIMS the best medical college and NLSIUBengaluru the best law school in the country. Grofers India losses widened by 19% in FY17 GROFERS INDIA SAW its losses widening by 19.2% in FY17 at `268.3 crore, according to filings with registrar of companies and data platform Tofler, reports Anushree Bhattacharyya in New Delhi. The online firm's revenue from operations during the year increased 65% to `13.2 crore. Move seen strengthening UltraTech Cement bid in acquiring company FE BUREAU Kolkata, April 3 ATWO-MEMBERBENCHofthe National Company Law Appellate Tribunal (NCLAT) on Tuesdayaskedthepartiesinvolvedin theresolutionprocessofBinani Cementtoconsideranamicable settlement.Thebenchwashearing an application filed by Binani Industries, promoter of the debt-laden cement maker, against the resolution professional (RP),Vijaykumar V Iyer. This direction by the appellate bodyshouldfurtherstrengthen theprospectsoftheAdityaBirlaled UltraTech Cement in the acquisition of the beleaguered cement maker. In his submission before the appellate tribunal, Binani Industries counsel Ratnanko Banerjee said, “We have moved an application before the NCLT (National Company WITH THE KOLKATA bench of the National Company Law Tribunal (NCLT) asking lenders of Binani Cement to I&B cancels fake news norms after PM order CASE SO FAR UltraTech Cement moved NCLT alleging that the CoC meet lacked transparency CoC declares Dalmia Bharat as H1 bidder Feb 27 Mar 19 Agreed to buy Binani Cement for `7,266 cr if insolvency process ended Binani Industries moved tribunal, seeking termination of insolvency proceedings Mar 27 NCLT reiterated that bankers could consider outof-court settlement within the deadline of April 9 NCLT asks CoC to consider out-of-court settlement Apr 2 Apr 3 CoC scheduled to meet to consider out-of-court settlement offer NCLAT asked parties involved to consider an 'amicable' settlement Apr 4 Law Tribunal), Kolkata, for an out-of-tribunal settlement for making 100% payment to creditors. We are willing to settle with everyone with 100% payment.” After hearing the submissions,theNCLATbenchallowed the parties in dispute over sellingofBinaniCementtoamica- bly settle the matter.“We give liberty to parties to reach settlement and approach appropriateforumforapprovalofthe settlement,” the bench added. The matter is scheduled for hearingonApril19.TheRPwas not available for a comment. Continued on Page 2 Binani Cement lenders to meet on April 4 MITHUN DASGUPTA Kolkata, April 3 ● MEDIA RIGHTS consider an out-of-tribunal settlement within the deadline of April 9, the committee of creditors (CoC) of the insolvent steel maker is scheduled to hold a meeting on Wednesday. Smriti Irani, I&B minister PRESS TRUST OF INDIA New Delhi, April 3 PRIME MINISTER NARENDRA Modi on Tuesday ordered the information and broadcasting ministry to cancel its contentious guidelines on fake newsafterwidespreadcriticism and outcry by journalists and opposition who dubbed these normsanattempttomuzzlethe media.Soon after,the I&B ministry issued a statement,saying the press release regarding fake news put out by it on Monday night“standswithdrawn”. Inthepressrelease,theministryannounced punitive measures like cancellation of accreditation to contain fake news, a decision that was dubbedbyjournalistandopposition parties as an attempt to curbpressfreedomaheadofthe general elections due by2019. Continued on Page 2 IBC REVIEW Road cleared for UltraTechtype plans in future Home-buyers to be financial creditors, window for MSME promoters to bid for own firms FE BUREAU New Delhi, April 3 A14-MEMBER PANELsetupto review the Insolvency and BankruptcyCode (IBC) has recommended some sweeping changes to the IBC, ranging from the grant of the financial creditorstatustohome-buyers and allowing promoters of micro, small and medium enterprises who are not wilful defaulters to bid for stressed assets to offering a conditional chance to unsuccessful players to sweeten their offers. The panel, headed by corporate affairs secretary Injeti Srinivas,also suggested that a case admitted for resolution can be withdrawn (before the plan is approved) by the appellate bodyif 90% of creditors agree. Since the recommendation is unlikely to be made into law until the next session of Parliament, it may not be applicable to the current legal tussle involving the KEY RECOMMENDATIONS Home-buyers to be financial creditors MSME promoter can bid if not a wilful defaulter NCLTs can halt insolvency before a plan is approved No suspension of trading in the stock during insolvency Financial creditors no related party for debt-to-equity conversion Vote share for CoC to approve a plan: 66% Taxes, other dues are claims on debtor Regulatory debt isn't operational debt Moratorium limited to asset of corporate debtor, not guarantor sale of Binani Cement, where the promoter company, backed by UltraTech Cement, wants to terminate the insolvency proceeding, even though the Dalmia Bharat-led consortium has been declared the highest bidder. However, in future, unsuccessful bidders may stand a chance to bid for a stressed asset if they come up with better deal, which could ultimately lead to a lower haircut bycreditors.Thepanelalsorecommended that thevote share required for approving a reso- lution plan by the committee of creditors be reduced to 66% from the current 75%. A top government official told FE that the amendments to the IBC, based on the panel’s report, are unlikely to be placed before this session of Parliament that is ending on April 6. The government will first finalise the draft amendments,based on the reports, which will then be sent forvetting by the law ministry. Continued on Page 2 ● BOND MARKET “The CoC has decided to hold a meet on Wednesday (April 5) on the Binani Cement case,” one of the major creditor to the debt-laden company told FE on condition of anonymity. FPI interest can lower yields again Special Feature Manufacturing PMI BHAVIK NAIR Mumbai, April 3 Buying a health plan? Check these five points Growth lowest in 5 months BOND YIELDS, ALREADY down from a high of 7.78% on March 6 to 7.33% on Tuesday, could fall further with foreign portfolioinvestors’(FPIs)interest in Indian bonds continuing toremainintact.Tuesday’sauction of investment limits for central government securities fetched bids worth `14,003 crore against the notified amount of `11,045 crore. Aggressive bids took the cut-offto0.86basispoint(bps) this time compared with the 0.31bpsseenduringtheprevious auction held on March 13. Market participants attribute the success of Tuesday’s auction to the positive sentiment prevailing in the market after the government announced on March 26 that it intended to reduce its borrowings dramatically in the first half of the year as well as the Reserve Bank of India's (RBI) changed stancewhen,on April 2, it allowed banks to spread their mark-to-market (M2M) provisioning over four quarters. With this changed stance,PSU bankswill get back to buying bonds — they were on a virtual strike due to high M2M losses. Gross market borrowings of the government will now touch `2.88 lakh crore in the April-September period, against `3.72 lakh crore ayear earlier,economic affairs secretary Subhash Chandra Garg had said. Bond yields rose from 7.22% to 7.40% when, in late December, the government said it planned to borrow an additional `50,000 crore through dated securities in fiscal year 2018. The next shocker came in January this year when RBI deputygovernorViralAcharya indicated in his speech that interest rate risk of banks couldnotbemanagedoverand over again by the regulator. Thisspookedthemarketpushing the benchmark yield up by 11 bps to 7.38%. You can buy a health policy of up to the age of 65 years. Once the proposal is accepted, there is no exit age provided the policy is continuously renewed ■ Personal Finance, P13 India's manufacturing activity continued to grow for the eighth month in March but the expansion fell to a five-month low in the month. New business orders rose at a slower pace and firms showed little appetite for recruitment. 55 53 Manufacturing PMI Services PMI 51 49 QuickPicks SC/STAct: SC says those agitating may not have read judgment REFUSING TO stay its March 20 order that laid down stringent ‘safeguards’ on automatic arrest of individuals under the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, the Supreme Court on Monday said its judgment only ensured that innocents were not punished, reports fe Bureau in New Delhi. Alluding to the Dalit agitation, the SC said “those agitating on streets may not have even read our judgment. Vested interests are also involved. We are only concerned about innocent people being put behind bars. We are not against the Act at all”. PAGE 18 Jubilant gets GST notice for not cutting Domino’s Pizza price THE DIRECTORATE General of Safeguards (DGS) has served a notice to Jubilant FoodWorks under the GST anti-profiteering rules for allegedly not passing on tax reduction benefit to consumers of its Domino's Pizza, reports PTI. Jubilant is among the 15 companies to have got notice from DGS so far since the implementation of GST regime. “There were complaints from two consumers to the standing committee regarding over-charging by Domino's Pizza even after the GST rate was cut to 5% from 18%,” a source said. PAGE 7 RBI drops Axis Bank from list of bullion importers this fiscal THE RESERVE Bank of India (RBI) has dropped Axis Bank from a list of banks it has cleared to import gold and silver in the current fiscal that began on April 1, in the latest setback for the country’s thirdbiggest private sector lender, reports Reuters. It was unclear why Axis, a leading gold importer, was not on the list released on Monday. An RBI spokesman did not have an immediate comment. An Axis Bank spokesman declined to comment. The removal from the import list is a new blow for Axis, which has faced increased regulatory scrutiny in the last few months because of bad loans. PAGE 12 51 49.6 47 47.8 Feb 46.8 45 Dec 2016 Mar 2018 Note: Reading below 50 suggests contraction and above it indicates expansion Source: Nikkei, IHS Markit Fuelling fire Nationalist Congress Party workers protest against the BJP government’s decision to hike petrol prices in Thane on Tuesday EXPRESS PHOTO: DEEPAK JOSHI PNB FRAUD VIDEOCON LOANS CVC Chowdary says RBI did ICICI Bank misses out Vaghul defence again not do proper auditing RBI lists steps for banks PRESS TRUST OF INDIA New Delhi, April 3 CENTRAL VIGILANCE COMMISSIONER KV Chowdary on Tuesdaysaid the Reserve Bank of India (RBI) had apparently not conducted an audit during the period of time when a `13,000-crore scam hit the Punjab National Bank. Chowdary stressed the need to put into place a more robust auditing system. “They did not do this (an audit),”the head of the probity watchdog told PTI. The CVC exercises superintendence over the Central Bureau of Investigation (CBI) which is looking into the over `13000-crore PNB fraud case. The RBI had the regulatory responsibility for the banking sector but any lack of integrity would be looked at by the Central Vigilance Commission, he added. Chowdary said according to the RBI it had switched over from a periodic audit to a“risk- BANIKINKAR PATTANAYAK New Delhi, April 3 CHECK BOOK based”auditwhichisconducted when there is a financial risk involved. “To determine risk, they must have some parameters. Based on that they would have done that (auditing).(But) there was no apparent audit by the RBI during this period (of fraud),” Chowdarysaid. THE $2-BILLION FRAUD at Punjab National Bank (PNB) involving jeweller Nirav Modi has prompted the Reserve Bank of India (RBI) to read the riotacttobankstobolstertheir fraud prevention and detection framework. The central bank has directed all banks to implement as many as 29 measures — from creating an alert system by June 30 on breach of any control limits to linking of SWIFT system (which was abused by some PNB employees causing the fraud) with Privileged User Management Systems as well as core banking solutions (CBS) — within set deadlines. Continued on Page 2 Continued on Page 2 ■ CVC holds superin- tendence over the CBI which is looking into the PNB fraud case ■ Chowdary stressed the need to put into place a more robust auditing system FE BUREAU Mumbai, April 3 ICICI BANK, IN its statement to the stock exchanges on Tuesday, appears to have missed highlighting a critical point in its defence, articulated first byformerchairman and managing director N Vaghul in an interview to CNBC-TV18 on Monday. While most believed ICICI Bank’s`3,250-croreloantothe Videocon Group in 2012 followed a `64-crore loan from Videocon chairman Venugopal Dhoot to ICICI Bank MD Chanda Kochhar’s husband Deepak Kochhar, Vaghul pointed out that no fresh loans were given in 2012. Vaghul told CNBC-TV18 that, like many other banks, ICICI Bank too had given many loanstovariousVideocongroup firms. In 2012, the lead bank, State Bank of India, asked all consortiummemberstoconsolidate their loans into one big loan. The `3,250-crore loan, Vaghul said, resulted from this Chanda Kochhar, ICICI Bank MD & CEO consolidation and that no new loanswere given in 2012. In its original press release onMarch28,ICICIBanknoted, “In 2012,a consortium of over 20banks…sanctionedfacilities to Videocon Group … for a debt consolidation programme … aggregating approximately `40,000 crore … ICICI Bank’s current exposure … is part of this syndicated consortium arrangement.” Continued on Page 2 Related reports on Page 2 & 10 Continued on Page 2
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