OPINION, P8 COMPANIES, P5 SURJIT S BHALLA India created 15m jobs in 2017, that’s no mean record INTERNATIONAL, P14 EDITORIAL SURPRISE ANNOUNCEMENT AD SALE BOOM Taxman reclassifying expenses like advt and discounts is nothing but tax terror Aditya Ghosh resigns as president of nofrills airline IndiGo Amazon founder Bezos richer by $12 bn in a day NEW DELHI, SATURDAY, APRIL 28, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM VOL.XLIV NO. 49, 296 PAGES, `15.00 (PATNA `9.00, RAIPUR `10.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E READ TO LEAD SENSEX: 34,969.70 ▲ 256.1 NIFTY: 10,692.30 ▲ 74.5 NIKKEI 225: 22,467.87 ▲ 148.3 HANG SENG: 30,280.67 ▲ 273 `/$: 66.66 ▲ 0.09 `/€: 80.54 ▲ 0.77 BRENT: $74.46 ▼ $0.28 GOLD: `31,190 ▼ `99 Continued on Page 2 BHAVNAGAR SHAMIK PAUL Mumbai, April 27 ArcelorMittal moves NCLAT challenging disqualification SURYA SARATHI RAY & SHAMIK PAUL New Delhi/Mumbai, April 27 APR IN WHAT THREATENS to be a fierce legal tussle for control of EssarSteel,ArcelorMittalonFriday appealed against the disqualification of its bid for the bankruptsteelmakerbytheresolution professional (RP) and committee of creditors (CoC). On Thursday, VTB-led Numetal had approached the National Company Law Appellate Tribunal (NCLAT) against an order by the Ahmedabad benchoftheNationalCompany Law Tribunal (NCLT) that gives ArcelorMittal a chance to clear itsduestobanksandmakeiteligible to bid for Essar Steel. Numetal contended the bid cannotbegivenadditionaltime to be rectified as itwas received after Section 29 was added to theInsolvencyandBankruptcy Code (IBC). The amendment, which came into effect from November 2017, bars defaultingpromotersfrombiddingfor assets underthe IBC. The two-member NCLAT bench, led by justice SJ Mukhopadhaya, said it would hear both the appeals on May 17. The appellate tribunal issued notices to the ArcelorMittal, Numetal, the RP, lead bankerStateBankofIndia(SBI) and the CoC, asking them to respond within a week. APR NuMetal moves NCLAT against NCLT order APR NCLTAhmedabad orders CoC & RP to reconsider bids 27 26 19 MAR RP disqualifies both Numetal and ArcelorMittal’s bids FEB ArcelorMittal, NuMetal submit bids for Essar Steel 23 12 On Friday, ArcelorMittal challenged the disqualification, saying it had exited from Uttam Galva,a defaulter company, before submitting a bid for Essar Steel on February 12. In an order dated April 19, the Ahmedabad NCLT had asked the CoC as also the RP to reconsider the first set of bids received from Numetal and ArcelorMittal, granting an additional30daysfortheresolution process. The RP had called for a second round of bids but the tribunal had suggested the two bidders be allowed an opportunity to rectifytheirbidstomakethemeligible. The NCLT observed that inviting a second round of bids without offering bidders an opportunitytorectifytheirbids was“prima facie invalid”. Numetal’sbidwasheldtobe ineligible by the RP, Satish Kumar Gupta, on the grounds that Rewant Ruia,who is associatedwith the company,is the son of Ravi Ruia,a promoter of EssarSteel.Theshareholdersof Numetal include Russia’s VTB Bank and engineering firm Tyazhpromexport, financial investorAurora Enterprises (in whichRuiahasaninterest)and commodity trading company Indo International Trading. ArcelorMittal’s bid was disqualified as it is a promoter of Uttam Galva Steels and KSS Petron,both defaulters. Continued on Page 2 Liberty offers over `26k cr for Bhushan Power, Page 6 THE COMMITTEE OF creditors (CoC) of Essar Steel,which met on Friday for the second time since the National Company Law Tribunal’s (NCLT) order on April 19, will ask ArcelorMittal and Numetal to “cure” their bids as per the NCLT's order,bankers told FE. “Today’smeetingwasaprocedural one,” one of the large lenders to Essar Steel who attended the meeting said, on condition of anonymity. “We will do what the NCLT has directed us to do. And we will wait for the hearing at the NCLAT(NationalCompanyLaw AppellateTribunal)onMay17.” In its April 19 order, the Ahmedabad bench of the NCLT had asked Essar Steel’s CoC and resolution professional (RP) to reconsider the first set of bids received from Numetal and ArcelorMittal, granting an additional 30 days for the resolution process. It had suggested that the two bidders be allowed an opportunity to rectify their bids to make them eligible. TheNCLThadalsoobserved that inviting a second round of bids without offering bidders an opportunity to rectify their bids was“prima facie invalid”. Adhunik Metaliks may head for liquidation, Page 6 FOURTH QUARTER Special Feature What explains rising methane levels Even as scientists battle over rival hypotheses, all agree that methane emissions must be slashed. The onus chiefly falls on the oil and gas industry ■ Science & Tech, P13 QuickPicks Fitch denies India a sovereign rating upgrade, again FITCH RATINGS on Friday kept its sovereign rating for India unchanged at the lowest investment grade of BBB-, with a stable outlook, having denied the country an upgrade for 12 years now, reports fe Bureau in New Delhi. The global rating agency cited “weak” fiscal position and “some lagging structural factors, including governance standards and a still-difficult, but improving, business environment” for the status quo. However, it has acknowledged India’s strong medium-term growth outlook and favourable external balance. PAGE 2 NCLAT stays CCI’s `136-cr fine on Google in search bias case THE NATIONAL Company Law Appellate Tribunal (NCLAT) on Friday stayed the Competition Commission of India’s order that imposed a penalty of `136 crore on Google for unfair business practices, reports PTI. Admitting Google's plea against the order, the NCLAT bench directed the internet major to deposit 10% of the penalty amount with it in four weeks. The NCLAT listed the matter for hearing on May 28. A Google spokesperson said: “The NCLAT has accepted our appeal for review of aspects of the CCI decision and its associated findings.” PAGE 4 CBI names BSE chairman in FIR in `600-crore loan fraud case THE CBI on Friday searched the residences of six former and current officials of IDBI Bank in connection with an alleged `600-crore loan fraud case in which BSE chairman S Ravi and the heads of two public sector banks have also been booked, officials said, reports PTI. In an FIR registered based on a complaint from the Central Vigilance Commission, the CBI has named 15 IDBI Bank officials. Also named in the FIR is Ravi who is an independent director on the board of IDBI bank. PAGE 15 Jio earns a profit but price cuts hammer its Arpu FE BUREAU New Delhi, April 27 LIKE THE PREVIOUS two quarters,Reliance Jio on Friday turnedoutanimpressivesetof numbersbypostingaprofitfor the second consecutive quarter.During the January-March period, the company’s net profit at `510 crore was up 1.2% sequentially, and higher than that of BhartiAirtel.However, tariff cuts in January, which also saw the introduction of a `49 pack for its feature phone (JioPhone) offer from the earlier `153, saw its average revenue per user VOICE (Q4 FY18) (Volume, million mins) Airtel RJio Usage (per sub) (mins) 670 DATA (Q4 FY18) (Volume, million MB) 716 6,586 (Arpu) drop a sharp 11% to `137 compared with the precedingquarter.However,itwas still higherthan Bharti’s `116. RIL net beats expectations RELIANCE INDUSTRIES (RIL) beatexpectationsforthefourth quarter, led by strong performance from petrochemicals, refining,retailandtelecom.Net rose 17.3% y-o-y to `9,435 crore,whilerevenuefromoperations was up 37.83% at `1,16,915 crore, due to higher volumes with the start-up of newpetrochemicalprojectsand betterrealisationsduetorisein crude oil price for refining and petrochemicals products. ConsensusestimatesbyBloomberg projectedprofitat`9,379crore. Details on Page 6 Koreas set bold goals: A final peace and no nuclear arms NEW YORK TIMES Seoul, April 27 THE LEADERS OF North and South Korea agreed on Friday to work to remove all nuclear weapons from the Korean Peninsula and, within the year, pursue talks with the United States to declare an official end to the Korean War that ravaged the two nations from 1950 to 1953. At an historic summit meeting,the first time a North Korean leaderhad everset foot in the South,the leadersvowed to negotiate a peace treaty to replace a truce that has kept an uneasy peace on the divided Korean Peninsula for more than six decades,while ridding it of nuclearweapons. “South and North Korea confirmedthecommongoalof realising, through complete denuclearisation,anuclear-free KoreanPeninsula,”readastatement signed by North Korea’s leader, Kim Jong-un, and the South’spresident,MoonJae-in, after their meeting at the bordervillage of Panmunjom. The meeting between Kim and Moon was marked by some surprisingly candid moments but also sweeping pledges, with Kim saying, “I came here to put an end to the history of confrontation.” The event, at the Peace House, a conference building South and North Korea confirmed the common goal of realising, through complete denuclearisation, a nuclear-free Korean Peninsula —SIGNED JOINT STATEMENT 137 RJio 116 Airtel Analysts said that despite suchasharpdeclineinArpu,Jio has been able to report higher revenue — `7,128 crore, up 3.6%sequentially—becauseit isstilladdingahugenumberof subscribers every month, which is making up for its lowcosttariffs.Justforperspective, ifBhartiAirteladdsaround1.52 million users per month, Jio adds around 7-8 million. Continued on Page 2 Maruti posts 10% growth in Q4 profit, Page 6 $1.9 bn of LoUs honoured: PNB’s Mehta FE BUREAU Mumbai, April 27 INDIAN FILE IN A SIMPLIFIED payment process under the goods and servicestax(GST)okayedbyagroup ofministers(GoM)recently,taxpayerswon’tneedtofilereturns, making compliance easy. Accordingtosources,under the new model, the IT system runbytheGSTNetwork(GSTN) will produce monthly returns based on supplydata uploaded and inward supplies accepted. According to a model that is to beconsideredbytheGSTCouncil on May 4, there will be a facility for sellers to continuouslyadd invoices and forbuyers to view them. The system could allow the buyer to lock the invoice after which seller ■ Invoices-matching gests ourfarm and allied sector exports in the last fiscal could havebreachedtheearlierrecord if key commodity prices in the export market would not have remainedsubduedlastfiscal,”a seniorcommerceministryofficialtoldFE.Analystssaidtherise suggests many of our products are becoming competitive again due to a pick-up in prices in competing nations, even though global commodity prices areyet to recoverfully. PUNJAB NATIONAL BANK (PNB) has honoured letters of undertaking (LoUs) related to transactions by defaulters Nirav Modi and Mehul Choksi worth $1.9 billion (`12,680 crore). Banks that were owed money by the lender have been paid, non-executive chairman Sunil Mehta told FE,adding that the remaining LoUs will be honoured on maturity. Mehta said around `6,500 crore worth of LoUs had matured by the end of March. “These have been paid and the ones maturing in April have been honoured.The total amount that has been paid out is about $1.9 billion of $2.07 billion,” Mehta added. LoUs, now banned by the Reserve Bank of India (RBI), were issued as an undertaking that the issuer will honour a lender’s obligations if the borrower fails to do so. While bank guarantees are internationally-accepted instruments, LoUs were mostly issued by banks in India and used by importers to raise money from foreign branches of Indian banks. According to Mehta, since the number of LoUs issued fraudulentlywere substantial, the bank had to go back a number of years to make sure they have been reconciled. Continued on Page 2 Continued on Page 2 would be done via a 'semi-automatic' credit reconciliation process ■ Model still involves extra compliance cost, changes in business processes, say analysts ■ Buyers at risk if sellers don't pay tax; suppliers to be profiled to identify 'high-risk' behaviour can’t edit/delete it,making it a confirmedliabilityoftheseller. Continued on Page 2 GST mop-up at `7.41L cr, P3 Farm exports recover, register a 15% rise in FY18 INDIA'S FARM EXPORTS reversed a three-year slide and posted an over 14% rise to $38.2 billion in the last fiscal from a year earlier on robust demand for marine products and rice,showed the latest official data. Interestingly, shipments of buffalo meat — the third-largest item in the farm export basket — posted a near3% rise invalue and a marginal riseinvolumeinFY18,despitea crackdownonillegalabattoirsin UttarPradesh lastyear. What bolsters the notion of a recovery in farm export is the fact that, in volume terms, as many as 27 of the top 40 items that make up around 95% of total agricultural shipments registeredariseinFY18.Infact, export volume of six of the top 10itemsaccountingforaround 70% of agricultural and allied product shipment rose in the last fiscal,vis-a-vis FY14 when farm export value had touched a record $43 billion.“This sug- Farm exports rebound ($ billion) 41.2 42.9 38.7 32.1 33.4 38.2 FY13 FY14 FY15 FY16 FY17 FY18 Export volumes in top segments rise, too (% change, y-o-y, in FY18) Volume Marine products Basmati rice Buffalo meat Value 20.1 1.3 1.4 26.7 Non-basmati rice Spices Continued on Page 2 ● MODI-CHOKSI CASE HOT COMMODITIES BANIKINKAR PATTANAYAK New Delhi, April 27 on the South Korean side of Panmunjom, was closely watched because it could set thetonefortheevenmorecritical summit meeting between US President Donald Trump andKim,twoleadersknownfor bold if unpredictable actions who only recently had the world fearing a nuclearwar. Trump and his aides are expected to seek a quick timetable for the North to eliminate its nuclear weapons, mindful thatithasfailedtodeliveronits promises in the past,including a pledge not to develop nuclear weapons. And Friday’s agreement between Moon and Kim was notably short on specifics such as timing. “The South and the North agreed towork diligentlytowin the international community’s supportandcooperationforthe denuclearisation of the Korean Peninsula,”theirstatementsaid. SUMIT JHA New Delhi, April 27 (`) Q4FY18 9,700 HISTORIC MEETING No filing of returns in new GST model Blended Arpu Airtel RJio Usage (per sub) (mb) BRIDGING THE GAP: North Korean leader Kim Jong-un (left) with South Korean President Moon Jae-in at the border village of Panmunjom in the demilitarised zone on Friday AP/PTI EASING THE BURDEN Metrics of Bharti Airtel, Reliance Jio 50,60,000 LAKSHADWEEP, A JOINT venture between Suraksha Asset Reconstruction Company and Mumbai-based Dosti Reality that emerged as the top bidder for embattled real estate developer Jaypee Infratech,may increase its bid value by nearly 5% to around `7,700 crore,a source close to the development said.Bankers have been unhappy with the “low bids”received during the insolvency resolution process andwanted the bids to“at least match the liquidation value” of the company, which is around `7,700 crore. Jaypee Infratech's outstanding dues to the banks are around `9,000 crore. According to the source, Lakshadweep has had several rounds of negotiations with the lenders over the last fortnight. ICICI Bank, IDBI Bank and State Bank of India are the three largest lenders to parent Jaiprakash Associates Group. CoC to give bidders chance to ‘cure’ bids Challenges its disqualification, claims it is not a defaulter; move after Numetal approached NCLT 15,39,746 SURBHI PRASAD New Delhi, April 27 ArcelorMittal moves NCLAT 3,72,180 Lakshadweep to up bid for Jaypee Infra ESSAR STEEL BID 5,92,657 ● 5% HIGHER 7.3 24.8 29.2 2.8 39.6 7.3 Source: DGCIS; ministry of commerce
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