OPINION, P8 COMPANIES, P4 SEBI-SAHARA REFUND ACCOUNT EDITORIAL Govt wants more oil and gas but its policies hit oilcos Centre must not use ordinance if apex court rejects its petition to review SC/ST judgment INTERNATIONAL, P14 TAKEOVER OFFER SC allows Roy-led Sahara Group to sell a part of Aamby Valley Ornskov-led Shire rejects Takeda Pharma’s $60-bn bid NEW DELHI, FRIDAY, APRIL 20, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 42, 30 PAGES, `6.00 (PATNA `6.00, RAIPUR `7.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 34,427.29 ▲ 95.61 NIFTY: 10,565.30 ▲ 39.10 NIKKEI 225: 22,191.18 ▲ 32.98 HANG SENG: 30,708.44 ▲ 424.19 `/$: 65.80 ▼ 0.13 `/€: 81.42 ▼ 0.14 BRENT: $74.30 ▲ $0.82 GOLD: `31,305.00 ▲ `29.00 RAJASTHAN HEALTH INSURANCE Frauds get easy as mandatory Aadhaar checks eased, insurers complain THE RUPEE continued its losing streak for a fourth straight session to hit a fresh 13-month low of 65.80 to a dollar, dropping 14 paise as growing worries over higher crude prices and likely fiscal slippages led to subdued forex market sentiments, reports PTI. The rupee logged its lowest closing since March 14, 2017. The rupee has depreciated by 60 paise in the recent spell of downtrend. World crude prices rose to a new 2018 peak of $74 a barrel, following reports of a sharp fall in US crude inventories coupled with West Asia tensions and growing optimism ahead of a major oil producers' meet on Friday. 21.2 20 Claims 15 10 7.5 0 1 2 2015-16 Claims 2016-17 ratio 2017-18* 3 9 4 5 6 7 8 oftheproblemistherisingincidence of fraudulent claims that NewIndiahasdiscovered.While over90%ofpeopleinRajasthan arecoveredbyAadhaar,forsome reason, hospitals are being allowed to admit patients just on the basis of their IDs — that ● AI SALE THE AHMEDABAD BENCH of the National Company LawTribunal(NCLT)onThursdayasked thecommitteeofcreditors(CoC) toreconsiderthebidsofArcelorMittal and Numetal for Essar Steel made in the first round. Thetwocompetingbiddershad also participated in the second round with Numetal teaming upwith JSWSteel. The bench comprising judges Manorama Kumari and HPChaturvediadmonishedthe CoCandresolutionprofessional (RP)SatishKumarGuptafornot followingdueproceduresbynot providing “sufficient chances” to both the resolution applicants.Itobservedthatinvitinga secondroundofbidswas“prima facie invalid” and directed the CoC and RPto revisit theirdecision to reject the earlier bids underSection 29A. ■ The bench said invitation of second round of bids by CoC was prima facie invalid ■ In the second round, JSW Steel joined hands with Numetal, while Vedanta and ArcelorMittal also submitted bids NCLT granted additional 30 days beyond the 270 day deadline for resolution Legalexpertsalsonotedthat given the Insolvencyand BankruptcyCode(IBC)wasinitsearly days, the bench should have been less harshwith the RPand the CoC.The CoC is understood tohavedisqualifiedArcelorMittal and Numetal as it believed theywerenoteligibleasperSection 29 A of the IBC,which bars defaultingpromotersfrombidding forassets at the NCLT. As has been reported, ArcelorMittalwasapromoterin Uttam Galva Steels,which has Essar Steel owes about `50,000 crore to lenders ■ SBI, Canara bank, Punjab National Bank, IDBI Bank, ICICI Bank among key lenders to Essar Steel defaultedonitsloans.Numetal’s bid was held to be ineligible since one of the persons associatedwiththecompany,Rewant Ruia,isrelatedtothepromoters of Essar Steel.The shareholders ofNumetalincludeRussia’sVTB Bank and engineering firm TyazhPromExport,financialinvestor Aurora Enterprises (in which Ruia has an interest) and commodity trading company Indo InternationalTrading. Continued on Page 2 BOARD DECISION Special Feature Taking the first five steps to saving income tax As you plan for your taxes, remember that not all investments and insurance are tax-saving instruments. You need to buy tax-savers only to the extent of your taxes ■ Personal Finance, P13 QuickPicks Pace of India economic reforms may flag in poll year: Lagarde INTERNATIONAL MONETARY Fund (IMF) chief Christine Lagarde on Thursday said she does not expect the pace of economic reforms in India to continue in an election year, reports PTI. Asked about economic reforms in India, the IMF managing director said there had been several major steps towards reforms the IMF had recommended, but expressed doubt over whether that pace would continue in the run-up to the election. PAGE 17 Vivo IPL witnesses viewership of 371 m during first week ATOTAL of 371 million viewers tuned in to watch the Vivo Indian Premier League (IPL) in the first week between April 7 and 13, according to data released by Star India, reports fe Bureau in New Delhi. This includes viewership across the 10 channels of Star India as well as Hotstar. Viewership on television stood at 288.4 million, as per data released by TV audience measurement agency BARC (BARC 2+ U+R), while 82.4 million viewers watched the games on Hotstar. PAGE 4 Fortis to rate only binding offers PRESS TRUST OF INDIA New Delhi, April 19 WITH FOUR SUITORS in the race, the Fortis Healthcare board on Thursday approved the evaluation of only binding offers and formed an expert committeetoevaluatetheproposals and make a final recommendation byApril 26. The troubled healthcare chain had received binding offers from the Manipal/TPG consortium, and Munjal and Burman family offices. It had also received nonbindingexpressionofinterests from Malaysia’s IHH Healthcare and Chinese firm Fosun Health Holdings. “In exercise of its fiduciary duties, the board has decided to evaluate the binding offers and has appointed an advisory committee and also directed StandardCharteredBank(SCB) to assist the committee,”Fortis said in a statement after its board meeting. The Manipal/TPG-led consortium had raised its offer for Fortis last week to `155 per share, valuing the hospital businesshigherat`6,061crore from `5,003 crore in its initial offer on March 27. OnThursdaymorning.Hero SELECTION PLAN ■ Fortis board forms expert panel to evaluate proposals, make final recommendation by April 26 ■ Troubled healthcare chain had received binding offers from the Manipal/TPG consortium, and Munjal and Burman family offices Enterprise Investment Office and Burman Family Office madeanimprovedoffer,saying they were willing to invest `1,500 crore directly at a valuation of `161.60 per share from the earlier `1,250 crore. Malaysia’s IHH Healthcare, which had last week offered to acquire a stake in the Indian firm at `160 per share, also uppedtheantebyproposingto infuse `4,000 crore through a preferential allotment of equity shares at a price not exceeding its offer share price. Continued on Page 2 AMID REPORTSTHAT domestic private airlines have developedcoldfeetinbiddingforAir India due to the tough conditions and doubts about the worthofthestate-runcarrier,a topfinanceministryofficialon Thursday said not just airlines but other firms having sufficient net worth and the ability to run AI could buy the 76% stake on the block. Venture capital funds could tie up with domestic companies to bid forAI,Neeraj Kumar Gupta,secretary of the department of investment and public asset management said.“...we are not looking for only an airline to take over (AI)...Finance and the capability to take over and run such an asset are the main criteria (for potential bidders),” Gupta said. Last month, the government issued a preliminary information memorandum (PIM) offering 76% equity in AI, along with its budget arm Air India Express and airport serviceunitAirIndiaSATS.“We had given a small carve-out for airlines (to bid) (in terms of) howdomestic airlines could be fitted in (when it comes to) eligibility of the consortium, but otherwise anybody who has (the required) net worth and funds can bid for Air India,” Gupta said at an Assocham event here. Domestic carriers IndiGo and JetAirways have indicated they won’t be bidding for the state-run carrier unless the current bidding conditions are changed. Continued on Page 2 TCS beats expectations on most parameters Strong demand in digital boosts net profit; revenue too comes in above what was predicted REPORT CARD Q3FY18 Revenue (` cr) % change Operating income (` cr) FE BUREAU Mumbai, April 19 THE COUNTRY’S LARGEST software services exporter, Tata Consultancy Services (TCS) on Thursday reported a decent set of numbers,beating analysts expectations on most fronts. The company’s net profit at `6,904 crore during the January-March quarter wasup5.7%quarter-on-quarter on the back of strong demand in the digital segment across industry verticals, and large deal wins. AnalystshadestimatedTCS to report a net profit of about `6,810 crore on revenue of nearly `31,660 crore, Bloomberg data showed. Revenue during the period Q4FY18 Operating margins (%) Net profit (` cr) 25.2 3.8 4.7 25.4 20 bps 6,904 FE BUREAU New Delhi, April 19 BACK TO SQUARE ONE softwarestillnothavingaprovision for live photo-capture of beneficiaries though this was part of the RfP and also the fact that biometric authentication was not being done. Indeed, while a two-hour window is allowed for the insurance companytoapproveaclaimafterthe hospitalrespondstoitsqueries, New India complained that the pre-authorisation was happening in less than two hours — in lessthanoneminute,attimes— leaving the company little time to examine whether the hospital’s replies made sense. FOURTH QUARTER NCLT faults RP, CoC for ‘not following due procedures’; holds inviting second round of bids ‘invalid’ FE BUREAUS Mumbai/Ahmedabad, April 19 *sofar 10 11 12 13 14 15 16 17 is, without insisting on live authenticationusingbiometric devices—aslongasthemedical officer of the hospital okays it. Clause 1.13.4 of the request for proposal(RfP)isclearthat“identification of the patient as faras possiblewillbedoneusingAadhaar-linked biometrics”. There is no live photograph capture of the patient at both the admission and discharge stage taking place either — Clause 220.127.116.11 of the RfP says this is mandatory. On several occasions in February, for instance, New India wrote to the Rajasthan government to complain about the 6,531 IndiaAssurance—respondedto email queries on the scheme and its problems. Whatisprobablyattheheart ‘First ArcelorMittal, Numetal bids valid’ Numetal had bid for Essar Steel in the first round 90% 176% 70% WEEK Not looking for airlines alone, says government ■ ArcelorMittal and 20.4 Claims ratio in 2017-18 rose from 36% in Week 1 to 93% in Week 17 5 RACE FOR ESSAR STEEL ■ NCLT admonished CoC, RP for not providing sufficient chances to both resolution applicants 21.9 Pemium 8,147 Rupee falls to 13-month low on crude shock Data for 2017-18, ` crore) 25 7,781 THE SUPREME Court on Thursday dismissed pleas seeking an independent probe into the death of special CBI judge BH Loya, ruling that the judge died of natural causes and the petitions were a serious attempt to scandalise and obstruct the course of justice, reports PTI. The SC also held that all litigations concerning circumstances of the death of judge Loya is concluded with this judgment. The top court dubbed the PILs into the death of judge Loya, who was hearing the high-profile Sohrabuddin Sheikh fake encounter case, as frivolous and motivated litigations to settle political scores and rivalry. UNHEALTHY TREND 32,075 IN THE NEWS Loya death: Apex court dismisses pleas HEALTH INSURANCE CLAIMS inRajasthanunderthegovernment’sBhamashahSwashthya Bima Yojana have shot up dramatically, from `7.5 crore in the first week — the current scheme began on December 13, 2017 — to `20.3 crore in the 17th week,taking the current claims ratio to around 70% already (see graphic). Based on current trends, the ratio for the full year could be as high as 120% despite the fact that the premium charged rose 3.4 times since last year. In 2015-16,the first year of thescheme,theclaimsratiowas 90% — claims of `320.7 crore were made against the premium of `357.4 crore — and this went up to 176% in 201617.Thehighclaimsensuredthe premium charged per family rose almost 3.5 times, from `370 in the first two years to `1,263atthemoment.Thecentral government’s National Health Protection Scheme (NHPS), likely to be rolled out soon, is based on the Bhamashah model. Neither officials of the Rajasthangovernmentorofthe insurance company — New 30,904 SUNIL JAIN April 19, New Delhi 5.7 Source: Company was at `32,075 crore, up 3.8% from the preceding quarter, again higher than forecasts. The company also registered a revenue growth of 3.9% sequentially in dollar terms to $4.97 billion — this Stressed metal was higher by $185 million, making it TCS’ highest ever dollar incremental growth from the third to fourth quarter. Continued on Page 2 AGENCIES Hot commodities Talk of oil at $100 and the turmoil unleashed by US sanctions against Russia’s Rusal hit the commodities sector, with aluminium and nickel at multi-year highs. 92.00 90.84 Apr 19, 2018 90.00 88.00 86.00 84.00 Continued on Page 2 88.41 Jan 2, 2018 Bloomberg Commodity Index INSIDER TRADING Sebi scans Facebook ‘likes’, finds evidence PRESS TRUST OF INDIA New Delhi, April 19 TO CATCH MANIPULATORS, the Securities and Exchange Board of India (Sebi) has started looking at Facebook accountsofsuspectedpersons, with “friends” and “likes” for posts being scanned in insider trading cases. The watchdog checked the Facebook profiles of suspected persons to ascertain whether theywere“connected”in a case related to violation of insider trading norms. After going through the Facebook profiles in the case relatedtoDeepIndustries,Sebi found that the entities involved in insider trading were “friends” on the social networking site and they they “liked” each other’s photos posted on the platform. “The profiles of these persons were having restricted access and the photos posted by them can be ‘liked’ only by selectpersonswhomtheyhave addedastheir‘friends’onFacebook,” the regulator said in an order dated April 16. After gathering evidence, also through scanning of Facebook posts,abouttheviolations,Sebi has ordered impounding of unlawfulgainsworth ILLUSTRATION: ROHNIT PHORE over`2.4crorefromthreeentities involved in the case. The three entities — RupeshbhaiKantilalSavla,Sujay Ajitkumar Hamlai and V TechwebIndia—wereallegedly“connected entities”and had traded in Deeep Industries shares while possessing pricesensitive information. They had details pertaining to the company baggingthreecontracts from ONGC and using it the entities made illegal gains, according to Sebi. Sebi said Deep Industries’ managing director Savla and his wife Sheetal Rupesh Savla — also one of the promoters — were acquainted with two directors of V Techweb — Ajay Ajitkumar Hamlai and Sujay Ajitkumar Hamlai — through Facebook.TheSavlacouplewas also friends with Radhika Hamlai, wife of Ajay Hamlai, through the platform. The regulator found that Ajayand SujayHamlai are associated with Deep Industries by virtue of frequent communication with Rupeshbhai Savla.By virtue of this association and frequentcommunications,they arereasonablyexpectedtohave accesstotheunpublishedpricesensitiveinformationrelatedto Deep Industries in the JulyOctober2015 period. Continued on Page 2
The Financial Express (FE) is a business paper that’s closest to the people who are in the business of business. From business policies to market trends to new developments, The Financial Express comes packed with incisive news on every relevant issue.