OPINION, P8 COMPANIES, P6 SUNIL JAIN Fear of suit-boot-kisarkaar tag slows faster broadband INTERNATIONAL, P14 EDITORIAL EXCEPTIONAL GAIN PUSH THIRD-QUARTER HOPE Proposal to have another cess, this one for environment, is a bad idea Vedanta PAT surges 40% y-o-y to `3,956 cr in fourth quarter Musk maintains Tesla will have positive cash flow, make money MUMBAI, FRIDAY, MAY 4, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOLUME XXXXXV NO. 349, 18 PAGES, `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: 35,103.14 ▼ 73.28 NIFTY: 10,679.65 ▼ 38.40 NIKKEI 225: 22,472.78 ▼ 35.25 HANG SENG: 30,313.37 ▼ 410.51 `/$: 66.65 ▲ 0.02 `/€: 79.81 ▲ 0.17 BRENT: $72.77 ▼ $0.59 GOLD: `30,905 ▼ `13 INSOLVENCY DEADLINE ENDS TODAY Lanco Infratech likely to face liquidation Resolution plan not approved by its committee of creditors; owes banks `43,502 cr ● STAKE SALE ANUSHREE BHATTACHARYYA New Delhi, May 3 AHEAD OF SELLING a majoritystake to a strategic investor, Flipkart has initiated the exercise to buyback shares from its minorityshareholders bypaying around $350 million to convert the company into a private limited one by reducing the number of shareholders, according to a document sourced from data intelligence platform Paper.VC. The move, sources said, will make it easierforanystrategic investoras compliance burden forprivate limited companies are lesser in Singapore. Flipkart did not offer its comments till the time of going to the press. Flipkart is registered in Singapore and analysts said that the regulations of that country automatically makes a companya public limited one if the numberofshareholdersexceed 50.To convert a company into aprivatelimitedone,thenumber of shareholders has to be broughtbelow50.Flipkartcurrently has around 145 entities as its shareholders. Continued on Page 2 7,381 ICICI Bank 3,608 2,999 2,990 2,811 2,752 2,683 2,563 1,819 IDBI Bank Punjab National Bank FE BUREAU Mumbai, May 3 ‘Holy’ inspection Petroleum and natural gas minister Dharmendra Pradhan inspects gas stations operating at the Harishchandra Ghat, in Varanasi on Thursday PTI ENTER THE DRAGON Xiaomi to file world’s biggest IPO since Alibaba’s 2014 debut Could raise about $10 bn with market value of up to $100 bn REUTERS Beijing/Hong Kong, May 3 Chinese smartphone and connected device makerXiaomi is bringing its blockbusterinitial public offering to Hong Kong, where it could raise about $10 billion in the largest listing globally in almost fouryears. The IPO plans, filed on Thursday,willbeoneofthefirst in Hong Kong under new rules designed to attract tech listings,amajorwinforthebourse as competition heats up between Hong Kong,NewYork CHARGING ABROAD (%) 50 40 30 Xiaomi gets more than 40% of its smartphone sales from overseas 20 10 2014 2015 2016 2017 Sources: Bloomberg/Canalys and the Chinese mainland. The listing is expected to give Beijing-based, Caymandomiciled Xiaomi a market value of between $80 billion and $100 billion, just eight years after it came onto the scene in China,people familiar with the plans told Reuters. The $10-billion fund-raising target, if achieved, will make it the biggest IPO since Chinese internet giantAlibaba Group Holding raised a total of $25billionthroughaNewYork listing in 2014. Continued on Page 2 GST RETURNS Special Feature Our game plan for boosting sales starts with new Amaze Rajesh Goel of Honda Cars India says the new Amaze will be a game-changer for the company, both in terms of boosting its business and strengthening its model line-up ■ Motobahn, P13 QuickPicks PFRDA okays partial NPS fund withdrawal for education, biz PENSION FUND regulator PFRDA on Thursday said National Pension System (NPS) subscribers will now have the option to partially withdraw funds from their account for pursuing higher education or setting up new business, reports PTI. Further, NPS subscribers who wish to set up a new business or acquire new business will also be allowed to make partial withdrawals from their contributions. PAGE 10 Jaypee bid: Lenders may not approve Lakshadweep’s offer A COMMITTEE of creditors will meet on May 7 to consider Lakshadweep's bid for the embattled Jaypee Infratech and they will e-vote on the proposal on May 8, reports Surbhi Prasad in New Delhi. However, sources indicated that said lenders might not approve the proposal as they “are not pleased with the subdued bid value”. According to the rules, a proposal needs to have the approval of at least 75% of the lenders. PAGE 6 HCC stock dives 25%; auditors question Lavasa as going concern THE HINDUSTAN Construction (HCC) stock lost a quarter of its value on Thursday, after auditors of the company raised concerns over Lavasa's ability to continue as a going concern, reports KP Yoosef in Mumbai. The stock plunged as much as 24.8% to hit its lowest level in over two years. The fall was its biggest singleday percentage fall ever. As on March 31, Lavasa’s net worth has “significantly eroded”, the auditors said. PAGE 11 LANCO INFRATECH IS likely to face liquidation as a resolution plan by Thriveni Earthmoverswasnotapprovedbyits committee of creditors (CoC), the company said in a regulatory filing on Thursday. One of the 12 large cases to be sent to the National Company Law Tribunal (NCLT) last year, Lanco’s 270-day insolvency deadline ends on May 4. Lanco Infratech owed banks `43,502 crore at the end of fiscal 2017. While details of the likely liquidation value of the company were not immediately available, it is expected that lenders will take a big hair-cut on such a move. ICICI Bank, IDBI Bank, Punjab National Bank, Andhra Bank and Axis Bankareamongtheprominent lenders to Lanco Infratech. QUOTE-UNQUOTE 0 -10 Andhra Bank New system may take a year SUMIT JHA New Delhi, May 3 EVEN THOUGH THE Goods and Services Tax Council is likely to approve the ‘fusion model’ for tax returns generation on Friday,its implementation could take 9-12 months, as the process would require changes in the GST Acts by the Centre and states, designing of new forms and IT-related preparedness including a long-testing schedule. This would mean that invoices-matching on a large scale, which is crucial curb GST evasion and boost compliance, would take longer to materialise, too. Under the new model, cleared bya group of ministers recently, taxpayers are spared the job of filing returns.The IT The benefits of that (Aadhaar) are very high. Yes, countries should adopt this approach... We have funded the World Bank to take this Aadhaar approach to other countries. — BILL GATES, MICROSOFT FOUNDER Report on P18 COSTLY DELAY ■ CGST, SGSTActs need to be amended for new system's roll-out ■ IT-system requires major changes and so, a long testing period ■ Invoices-matching to be minimal till the new system is in place system, run by the GST Network, will produce monthly returns based on supply data uploaded and inward supplies accepted. Invoices-matching would be done through a ‘semi-automatic’credit reconciliation process. Axis Bank Canara Bank Power Finance Corp Indian Overseas Bank State Bank of India Total of 29 lenders 45,263 Source: Lanco Infratech ■ Revised resolution plan ■ Likely liquidation value by Thriveni Earthmovers was submitted on May 1; CoC didn’t approve not immediately available; lenders expected to take a big hair-cut According to the company, since the corporate insolvency resolution period expires on May 4, the necessary application is being filed by the resolution professional (RP) with the NCLT bench in Hyderabad forliquidationofthecompany. Lanco added that Thriveni Earthmovers had submitted a revised proposal on May 1. In its statement, Lanco Infratechsaid:“Thisistoinform you that the resolution plan submitted by Thriveni Earthmovers was presented by the resolution professional (RP) for the approval of the committee Related reports on Page 6 ● BHARTI-TELENOR MERGER ● OPENING UP DoT moves SC against TDSAT’s relief on dues Envoy sees benefit for India as China gives tax relief for drugs FE BUREAU New Delhi, May 3 THE STAND THE DEPARTMENT OF telecommunications has moved the Supreme Court seeking a stay on TDSAT’s order that asked it to approve the merger of Telenor India with Bharti Airtel without any bank guarantee towards one-time spectrum charges (OTSC) for spectrum held beyond 4.4 MHz. DoT had in April asked Bharti to submit a bank guarantee of around `1,700 crore so that it can approve the proposed merger. Since Bharti and other players have got a stay from various high ■ DoT seeks stay as bank guarantee for OTSC not furnished by Bharti ■ It asked Bharti in April to submit `1,700 cr as bank guarantee to approve merger ■ DoT says OTSC needs to be cleared, in case matter in court courts against payment of OTSC till the matter is decided, the company has refused to pay it. Continued on Page 2 Lost glitter Gold demand down 12% in March quarter After a rebound in 2017, India’s gold demand dropped 12% in the January-March quarter to 115.6 tonnes, worse than a 7% fall globally. But consumption is expected to recover in the June quarter, with World Gold Council maintaining its 2018 India demand forecast at 700-800 tonnes. Report on Page 12 FE BUREAU -1 Jewellery Investment Total -7 -12 -12 -13 India World -27 (% change in demand volume, y-o-y, Jan-Mar, 2018) Source: WGC Continued on Page 2 FE BUREAU New Delhi, May 3 AMID A LOOMING trade war with the US, China has exempted 28 drugs — including all cancer medicines — from import tariffs from May 1 and decided to further open up to foreign businesses. The move is a “good news for India’s pharmaceutical industry and medicine export to China”, Luo Zhaohui, the Chinese ambassador in New Delhi, said in a tweet on Thursday. “I believe this will help reduce trade imbalance between China and India in future,” he tweeted. However, pharmaceutical industry executives are sceptical about any meaningful gains to India, saying the choice of mainly cancer products for the exemption suggests the decision is aimed primarily to placate the US. More than tariffs, non-tariff barriers are the real issue for Indian pharma companies seekingtoexporttoChina,they say. India’s exports of pharma productstoChinawerenegligible — $37.44 million in the first 11 months of 2017-18. Continued on Page 2 NATIONAL FILM AWARDS Many winners skip, say President should have given all awards PRESS TRUST OF INDIA New Delhi, May 3 THE NATIONAL FILM Awards were presented on Thursday but protests over the president handing over the honour to only a select set of winners cast a shadow over the 65th edition with many of the recipients staying away. In a departure from tradition,the function was divided into two phases. The first set of awards was conferred by Union information and broadcast minister Smriti Irani and minister of state Rajyavardhan Singh Rathore. The second lot, which included posthumous recognitions forVinod Khanna and Sridevi (Dadasaheb Phalke and BestActress,respectively), was presented by President Ram Nath Kovind. “We will miss them forever,” the president said in his speech. Themurmursofdiscontent over the new practice under which the president was not going to present the awards to EXPRESS PHOTO: TASHI TOBGYAL Flipkart buys shares from minority shareholders Amount claimed (` crore) ofcreditors(CoC),inaccordance with the Insolvency and BankruptcyCode,2016andtherules and regulations framed thereunder. On account of less than 75% of the votes being cast in favour, the aforementioned approvaloftheCoCcouldnotbe obtained.” FE had reported, after reviewing documents, in Januarythat firms linked to Lanco Infratech — some of them subsidiaries — had registered claims of a whopping `7,164.5 crore with the resolution professional (RP) of the company. This claim is bigger than that of all other operational creditors put together. TheHyderabadbenchofthe NCLT had, in August last year, approved the insolvency proceedings against Lanco Infratech,followinganapplicationby IDBIBankundertheInsolvency and Bankruptcy Code (IBC). Lanco reported a loss of `890 crore on the back of `1,635 crore in revenues in FY17. The company is part of a dozen troubled companies — withacombineddebtofcloseto `2.4 lakh crore — which the ReserveBankofIndiahadasked to be referred to the NCLT. Nameplates ofwinners who skipped the National FilmAwards ceremony were removed atVigyan Bhavan onThursday each of the winners began to gain ground during the rehearsal of the ceremony on Wednesday when the winners were informed about the change. Traditionally, the president gives away all the National Film Awards. In an open letter earlier in thedaytotheOfficeofthePresidentandI&Bministry, over70 artistes said theywere skipping the ceremony as they “felt dejectedratherthanhonoured” on being informed that the president would give away only 11 awards.“It feels like a breach oftrustwhenaninstitution/ceremony that abides by extreme protocol fails to inform us of such a vital aspect of the ceremony with a prior notice. It seems unfortunate that 65 yearsoftraditionarebeingoverturned in a jiffy,” read the letter, signed by prominent names such as director Kaushik Ganguly, best supporting actor awardwinnerFahadhFaasiland singerKJYesudas. Continued on Page 2
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