OPINION, P8 COMPANIES, P7 EDITORIAL RBI needs to get its CPI-forecast right, rate cuts will follow INTERNATIONAL, P14 EDITORIAL GOING GLOBAL UNDER INVESTIGATION Bihar’s prohibition, politicians must note, has led to a surge in use of drugs Thng-led Vistara adds 20th aircraft to fleet; can now fly overseas Biggest ad firm WPP probing CEO Sorrell for alleged misconduct MUMBAI, THURSDAY, APRIL 5, 2018 VOLUME XXXXXV NO. 324, 22 PAGES, `7.00 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: 33,019.07 ▼ 351.56 NIFTY: 10,128.40 ▼ 116.60 NIKKEI 225: 21,319.55 ▲ 27.26 HANG SENG: 29,518.69 ▼ 661.41 `/$: 65.15 ▼ 0.14 `/€: 80.06 ▼ 0.11 BRENT: $66.85 ▼ $1.27 GOLD: `30,844.00 ▲ `160.00 OIL REGULATOR Petroleum and Natural Gas Regulatory Board has changed the bidding parameters to get a licence to retail CNG and piped cooking gas in cities, reports PTI. PNGRB said now auctions would be conducted by asking companies to quote the number of CNG stations to be set up and number of domestic cooking gas connections to be given in the first eight years. 164 152 Iron & steel Vehicles (excl. railway/tramway) 48 Pharmaceutical products 47 Industrial technology categories dominate the USTR's planned list of 1,333 tariff items 38 Organic chemicals 27 Aluminium-based items Railway vehicles & equipment 17 Aircraft & spacecraft Number of items by Harmonised Tariff Schedule category 16 Source: Bloomberg, Office of the US Trade Representative Note: HTS categories exclude certain products as listed in the full Chapter descriptions on the US International Trade Commission's website “China’s response was tougher than what the market wasexpecting —investorsdidn’t foresee the countrylevying additional tariffs on sensitive and important products such as soya beans and airplanes,” said Gao Qi, Singapore-based strategist at Scotiabank. “Investors believe a trade war will hurt both countries and their economies eventually.” Asian stocks fell, with the MSCIAsiaPacificIndexdeclining 0.6% to the lowest in almost eight weeks. The yen advanced and futures on the S&P 500 Index tumbled. Beijing’s proposed targets strike at the core of commercial relations between the two countries, and at some of the most politically sensitive goods in core Trump constituencies.Forexample,China is theworld’s largest soya bean importer and biggest buyer of US soy beans in trade worth about $14 billion last year. Both sides have calibrated Trade war spooks equity markets Bank Nifty Intra-day, April 4 24,800 24,502.5 33,019.07 Close 32,800 Open Close 24,000 Fall (%) Close 2.2 KOSPI 29,518.69 -661.41 24,600 24,200 Previous close 33,370.63 Points HANG SENG 24,129.5 24,400 33,200 Jakarta Comp 6,157.10 Previous close 24,510.60 -71.92 Taiwan TAIEX Open Close 10,821.53 -66.74 Fujifilm sees huge potential in professional photography The wedding market, advertising, broadcast and digital mediums are evolving fast in India pushing demand for high image quality, says Fujifilm India MD Haruto Iwata ■ eFE, P13 0.6 QuickPicks Bad loan write-off by PSBs hit `2.42 lakh crore in over 3 years STATE-RUN lenders wrote off almost `2.42 lakh crore worth of bad loans between April 2014 and September 2017, the government has informed Parliament, reports fe Bureau in New Delhi. The amount is higher even than the government’s plan for unprecedented capital infusion of `2.11 lakh crore into PSBs over two years through FY19. However, the share of such write-offs in total gross NPAs dropped to 13% in March 2017 from 25% in March 2011, an official said, quoting RBI data. PAGE 2 India likely to offer $4-bn plan for giant Iran gas field INDIA IS set to offer a $3-4-billion development plan for the Farzad B gas field to Iran next week after Tehran reduced the scope of the project, two sources familiar with the matter said, reports Reuters. Relations between the two countries, which have long held deep trade ties, were strained last year after Iran sought other investors for the field and media reports suggested Tehran would award it to Russia’s Gazprom. PAGE 12 FIU slaps `9-crore fine on BoB in 2015 forex remittance scam case THE FINANCIAL INTELLIGENCE Unit (FIU) has slapped a `9-crore penalty on Bank of Baroda (BoB) for ‘failing’ to adhere to anti-money laundering norms and not having an effective system to report suspicious transactions linked to the `6,000-crore scam in its Delhibased branch, reports PTI. The FIU has levied the maximum fine of `1 lakh, as stipulated under the Prevention of Money Laundering Act, for each instance of ‘delayed’ filing. PAGE 10 BOOSTING THE PROSPECT of robust foodgrain production in the 2018-19 (July-June) crop year — the last two years saw record output — private weather forecaster Skymet on Wednesday predicted a ‘normal’southwest monsoon with nil chances of a drought. The agency was spot on when it forecast last year’s monsoon rainsat95%ofthebenchmark long period average (LPA). If the latest forecast turns out to be correct, the country will have near-normal to normal monsoon forthe thirdyearin a row, after two successive drought years. Almost 55% of the country’s agricultural land is rainfed; while the monsoon has a significant impact on key kharif (summer) crops,distributionofrainfallacrossregions, sownarea,temperatureduring harvest,etc,tooimpactoutput. A bumper harvest could positively impact farmer incomes, especially since the government is rolling out price-support schemes. This time around, while Skymet said there were 55% chances of monsoon to be normal,it predicted the rainfall to be 100% of the LPA (‘normal’ is defined as average rainfall between 96% and 104% of the LPA, which is 89 cm), with an error margin of +/- 5%. According to the agency, there is a 20% chance of ‘above-normal’(105-110% of LPA) monsoon rain and a 20% chance of‘below-normal’rains (90-96% of LPA). However, the agency said southern peninsula and major portions of northeast India are likely to witness ‘below normal’ rainfall this season — though this could potentially impact pulses, coarse cereals and plantation crops cultivated in these regions,since last year’s monsoon rains in most of these areas except in Tamil Nadu was satisfactory, no major adverse impact on crop is seen even if the rainfall turns out to be slightly below normal this season. Some analysts however expressed concern over the low storage levels in key reservoirs. Continued on Page 2 Monsoon rains Foodgrain output (% of LPA*) Actual (million tonne) Forecast by Skymet 2013-14 265.04 2014-15 252.02 2015-16 251.57 2016-17 2013 2014 2015 2016 2017 Points Fall (%) -34.37 Nifty 50 10,128.40 -116.60 - Shanghai Comp 3,131.11 -5.52 1.4 1.1 0.2 275.11 2017-18 277.49 *LPA is long period average of 89 cm; 96-104% of LPA is considered 'normal,' 105-110% is 'above-normal,90-96% is 'below normal,' and below 90% is ‘deficient’ Jyoti Structures (standalone), ` crore Rich pitch 3,000 3,661 FY17 THE UNIQUE IDENTIFICATION Authority of India (UIDAI)haseffectivelyshutout several fintech players from carrying out Aadhaar-based eKYC through entitieswho use sub-AUA (authentication user agency) licences.A sub-AUA is an entity that uses Aadhaar authentication for its services through an existingAUA. This has been done by disabling the application programme interface (API) through which the sub-AUAs used to carry out Aadhaarbased eKYC. Jitendra Gupta, MD, PayU India, told FE that there had beennocommunicationtothe sub-AUAs that assisted PayU India from the UIDAI on this matter. “This seems to have impacted only private fintech players and not banks orinsurers.Thishasbeenthecasesince yesterday,” he said. Gupta tweeted,“Aadhaar stopped all KuAand sub-KUAto dovalidations!! Suddenly, all fintech businesses banking on Aadhaar left scrambling!! Indiastack story will crumble very soon if it continues in this manner.” According to sources familiar with the development, the displeasure of the Supreme Court on Aadhaar data being accessed byprivate parties has prompted the UIDAI to disallow the sub-AUAs from doing Aadhaar-based eKYC. They explained that once the UIDAI introduced facial recognition, Virtual IDs andTokenAadhaar numbers, this decision could be reversed. Continued on Page 2 Normal rain expected, ups farm prospects FE BUREAU New Delhi, April 4 2,408.06 1.2 SKYMET FORECAST Special Feature Continued on Page 2 4,000 FY18 (9months) 2,000 1,000 0 Net sales Source: Capitaline Interest cost SHAYAN GHOSH Mumbai, April 4 THE BANKRUPT JYOTI STRUCTURES might find a buyer and not go into liquidation as feared with the committee of creditors (CoC) having sought a grace period. While 73% of lenders believed to have approved a resolution plan, the resolution professional (RP) has requested the National Company Law Tribunal (NCLT) for an extension since the 270-day deadline expired on March 31. Sources said there was a glitch in the e-voting mechanism on March 26 and 27, when the voting was scheduled. Moreover, they said one bank needed to get a final approval from its top management. Under the Insolvency and Bankruptcy Code (IBC), a company has to be liquidated if it fails to complete the insolvency resolution process within 270 days of its admission to the bankruptcy court. “The consent letter should be received any moment and FE BUREAU Board on a wealthy wicket At the end of the second day of bids, BCCI was set to earn nearly twice what it did in the last cycle of media rights for the next five years of Indian cricket Bidding for media rights for BCCI's bilateral series during April 2018 – March 2023 Day 1 The e-auction will continue on Thursday, April 5 `4,176 cr Closing bid: `4,442 cr Day 2 Starting bid: `4,442 cr Closing bid: `6,032.5 cr THE WAY AHEAD ■ Lenders ask Binani Industries to make partpayment in cash and provide assurance for remaining amount via bank guarantee ■ Bankers said the final decision on out-of-tribunal settlement must come from NCLT or NCLAT ■ Binani Industries sought shareholder approval to sell its 98.43% stake in Binani Cement make the same presentation that it had made before the NCLAT (National Company Law Appellate Tribunal) on ● CABINET DECISIONS Burn Standard being shut, CCI to be ‘right-sized’ FE BUREAU New Delhi, April 4 Continued on Page 2 Binani Industries offers payment assurances to settle out of NCLT BINANI INDUSTRIES, THE parent of the loss-making Binani Cement, which has been pushing for an out-ofcourtresolution,isunderstood to have offered the committee of creditors (CoC) of Binani Cement an assurance on swift and complete payment in support of its resolution plan at a meetingonWednesday.Binani Industries is believed to have received a bank guarantee from UltraTech Cement for it to make this commitment to the lenders,sources said. ABinani Cement lawyer,on condition of anonymity, said, “The meeting is still continuing. Before the CoC today, Binani Industries is going to Continued on Page 2 Continued on Page 2 Source: BCCI CoC TO MAKE NEXT MOVE FE BUREAU Mumbai, April 4 that would take the approval to the necessary 75%,” said a banker familiar with the development.Meanwhile,the technical glitch has been sorted out. The IBC requires a threefourths majority to approve any resolution plan.However, the Insolvency Law Committee is understood to have suggested lowering the voting threshold to 66% to promote speedy resolutions. Jyoti Structures has received just one resolution plan from a consortium led by Sharad Sanghi, MD & CEO of Netmagic Solutions,and comprising Madhusudan Kela, formerly with Reliance Capital, and Manish Kejriwal, managing partner of Kedaara Capital, in his individual capacity. The Kolkata-based company makes cables for transmission lines,substations and distribution projects. In FY17, the company reported a net loss of `1,483 crore on the back of `857 crore in revenues. April 3 and the NCLT (National Company Law Tribunal) on April 2,that they are willing to make the entire payment in 10 days. If the tribunal wants, Binani can secure the amount in the tribunal.” On whether Binani Industries will offer a bank guarantee to the lenders,she said,“We have not given any bank guarantee today. First the CoC has to decide on the out-of-tribunal settlement, only then can we offer the bank guarantee.” FE learnt from banking sources that the lenders had sought part payment in cash and assurance of the rest through a bank guarantee to consider an out-of-tribunal arrangement. Final bid price in 2012: `3,851 crore won by Star India April 4 Net loss THE CABINETON Wednesday decided to “right-size” the Competition Commission of India, the country’s one-andhalf-decade-old antitrust regulator, saying that its workload has reduced as merger proposals below a threshold don’t need its concurrence after a 2017 amendment to the relevant rules. The commission will henceforth have a maximum strength of one chairperson and three members, while so far it could have had a seven-member board,including the chairperson. The change is being effected “by not filling the existing vacancies of two members and one more additional vacancy, which is expected in September, 2018 when one of the present incumbentswill complete his term”, the government said. In pursuance of a policy of shutting down non-viable loss-making PSUs,the Cabinet also approved closure of Burn Standard (BSCL), which has been in poor financial health for over 10 years. The CCI is mandated to “eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in the markets of India”.Itwas set up under the Competition Act, 2002, which saw major amendments in 2007. Top players in the fray: Star India, Sony Pictures & RJio April 3 Starting bid: 1,486 Optical equipment (incl. medical/surgical) Intra-day, April 4 33,600 33,437.52 33,000 241 Powering down 782 Electrical machinery (incl. TV & sound recorders) S&P BSE SENSEX 33,400 537 (incl. nuclear technology) SHRITAMA BOSE Mumbai, April 4 Jyoti could escape liquidation fate 842 CHINA SAID IT would levy an additional 25% tariff on imports of 106 US products including soya beans, automobiles, chemicals and aircraft, in responsetoproposedAmerican duties on its high-tech goods. Matching the scale of proposedUStariffsannouncedthe previous day, the ministry of commerce said on Wednesday in Beijing that the charges would applyto around $50 billionofUSimports.Officialssignalled that the implementation of the proposed measures would depend on when the US applied its own,and that there was still time for both sides to agree to a settlement. The step escalates a brewing trade war between the world’s two largest trading nations, with the Trump administration’s latest offensive based on alleged infringements of intellectual property in China. While the dispute centres around a $375-billion goods trade imbalance in favour of China, the US is also now targeting high-tech sectors that Beijing sees as the future for its economy, prompting an angry reaction. Fintechs lose access to key eKYC system GRACE PERIOD 234 Industrial machinery theircurrentactionsaroundthe figure of $50 billion worth of imports,the US estimate of the annualdamagetothedomestic economy caused by China’s intellectual-property infringements.That number accounts forroughlyone-thirdofChina’s imports from the United States last year,versus less than onetenth of China’s exports to the US, according to data from International MonetaryFund. The implementation date of China’s retaliatory tariffs depends on the outcome of bilateral negotiations, and the US decisions, deputy finance minister Zhu Guangyao, told reporters after a news conference in Beijing. “Now both sides have put up our lists. We believebothcountrieshavethe ability and wisdom to address the problem,”Zhu said. The US list of planned charges on more than 1,300 product categories focused on China’s industrial machinery andtechnologyexports.China’s envoytotheWorldTradeOrganisation,ZhangXiangchen,called it“an intentional and grossviolation of theWTO’s fundamental principles of non-discrimination and bound tariffs”. ● API DISABLED 850 Trumped-up tariffs 95 95 New bid norms for CNG, PNG retail licence BLOOMBERG Beijing, April 4 97 105 NEPAL PRIME Minister KP Sharma Oli will press India to exchange millions of dollars held in Nepal in banned highvalue Indian banknotes during a visit this week to improve ties with its large southern neighbour, reports Reuters. Nepal and India have yet to agree on how to exchange the old currency estimated to be worth $146 million held by individuals and informal sectors after India’s shock announcement in 2016 to ban `500 and `1,000 notes. Announcing measures of equal intensity, Beijing takes aim at soya beans, aircraft in counter-punch to US levies; speed of retaliatory steps stuns financial markets 86 102 Nepal PM to press India for banned currency swap China’s $50-billion riposte 88 94 THE SUPREME Court on Wednesday dismissed five petitions challenging the CBSE’s decision to conduct a re-examination of the Class 12 economics paper after an alleged leak, reports PTI. The top court said it is the discretion of the Central Board of Secondary Education (CBSE) to conduct the reexamination and can’t be challenged in the court. TRADE WAR TENSIONS 106 103 IN THE NEWS SC junks pleas challenging CBSE Class XII retest
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