OPINION, P8 M&M, P10 NOT IN RUNNING Thanks to oil and `, CPI pressure to rise — expect rate hikes The jury is still out, but if defaulting promoters repay banks in full, opt out from NCLT is OK DOMESTIC DISAPPOINTMENT No plan to apply for Bank of England top job, says Rajan EDITORIAL INTERNATIONAL, P14 Busy with overseas deals, McMillon-led Walmart’s sales fall short at home NEW DELHI, FRIDAY, MAY 18, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 66, 28 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: 35,149.12 ▼ 238.76 NIFTY: 10,682.70 ▼ 58.40 NIKKEI 225: 22,838.37 ▲ 121.14 HANG SENG: 30,942.15 ▼ 168.05 `/$: 67.70 ▲ 0.10 `/€: 79.82 ▲ 0.08 BRENT: $79.58 ▲ $0.30 GOLD: `30,826.00 ▼ `128.00 RACE FOR ESSAR STEEL Numetal,Arcelor continue to scrap IN THE NEWS April domestic air passenger volume up 26% DOMESTIC AIR passenger volume surged 26% in April to 11.51 million over the year-ago period, driven by the tourists season that began from the previous month, according to Directorate General of Civil Aviation data released on Thursday, reports PTI. Indian carriers together flew 11.51 million passengers in April this year against 9.13 million in the same month last year, thereby logging a 26.05% growth, the DGCA’s data showed. Jharkhand buys Tilaiya power plant for `112 cr RELIANCE POWER has transferred its entire stake in the 3,960-MWTilaiya power plant to the state-run Jharkhand Urja Vikas Nigam for `112.6 crore, reports fe Bureau in New Delhi. According to sources, the company, which was awarded the project in 2009, would also get back bank guarantees of `600 crore. Argue in court over which bids should be considered valid — those in the first round or those in the second Aug 2, 2017 February 12 NCLT admits Essar Steel's insolvency case ArcelorMittal, Numetal submit bids for Essar Steel Lakshmi Mittal Last date for submission of second round of bids April 19 April 28 270-day resolution period comes to an end May 15 ArcelorMittal deposits `7,000 crore into an escrow account for repayment of Uttam Galva, KSS Petron's dues May 22 NCLTAhmedabad asks RP, CoC to consider 1st set of bids; gives 30-day extension May 8 RP asks ArcelorMittal, Numetal to rectify their bids by repaying dues within 7 days Rewant Ruia NCLAT to hear the case again also enhanced the bid amount to `37,000 crore. Rohatgiclaimedthatassessingthebidsmadeinthesecond round would help realise the maximum value for the asset. EssarSteel owes financial creditors close to `50,000 crore. TheNCLATwillhearthecase again on May 22. Bankers are likely to take a call on the matter once the NCLAT passes its order. “The move byArcelorMittal is positive, but there are other factorstobeconsidered.Wewill take a decision once the NCLAT passes its order,” a banker,who is a member of the committee of creditors (CoC), said on conditions of anonymity. “ArcelorMittal has participated in the resolution process for Essar Steel in good faith from the start,” the company said in awritten statement. Continued on Page 2 Honda Amaze: What else could you desire? The new Amaze should worry rivals. It packs stateof-the-art features at a competitive price, and the company is offering some smart after-sales service packages to boot ■ Motobahn, P13 QuickPicks SC refuses to stay RBI decision on cryptocurrencies THE SUPREME Court on Thursday refused to stay the Reserve Bank of India’s decision that mandated banks, e-wallets and payment gateway providers to withdraw support for cryptocurrency exchanges and other businesses dealing with virtual currencies in the country, reports fe Bureau in India. However, it allowed cryptocurrency exchanges, their shareholders, traders and other individuals to present their case within two weeks to the central bank, which will look into the issue in accordance with the law. PAGE 3 Sebi warns PNB over late disclosures in $2-bn scam PUNJAB NATIONAL BANK (PNB) said on Thursday that markets regulator Securities and Exchange Board of India (Sebi) has warned it over the delay in disclosures to stock exchanges about the $2-billion fraudulent transactions allegedly carried out by Nirav Modi and the Gitanjali Group of companies, reports PTI. Taking serious note of the delay in making disclosures, Sebi has issued a warning letter to state-owned PNB, the country's second largest public sector lender. PAGE 10 Fortis: IHH Healthcare extends acceptance period of offer MALAYSIAN FIRM IHH Healthcare on Thursday said it has extended the acceptance period of its enhanced revised proposal for Fortis Healthcare to May 29, after which it shall lapse, reports PTI. In a letter to the board of Fortis Healthcare, IHH Healthcare said it remains strongly committed to participate in the bid for Fortis and is therefore very keen to understand the next steps the board is considering in the wake of the modified Manipal offer. IHH Healthcare had increased its offer to directly invest in Fortis Healthcare at `175 per share on May 1. PAGE 6 Monnet Power’s put on the block again Lender Amount admitted (` cr) IDFC Bank IDBI Bank State Bank of India ICICI Bank Punjab National Bank Union Bank of India Bank of India Total of 24 lenders Weightage of vote (%) 610 513 506 491 471 432 426 5,892 10.35 8.71 8.58 8.34 7.99 7.34 7.24 100 Source: Monnet Power's RP SHAYAN GHOSH Mumbai, May 17 MONNET POWER, PROMOTED by the Jajodia family,is up for sale.Monnet Power is an 88% subsidiary of Monnet Ispat,whichhasbeenbidforand won under the Insolvency and Bankruptcy Code (IBC) process by the JSW Steel-Aion Investmentscombine.Thetransaction is awaiting the approval of the NationalCompanyLawTribunal (NCLT). As part of the corporate insolvency resolution process, the resolution professional (RP) for Monnet Power on Thursday sought expressions of interest (EoIs) from interested bidders, according to an advertisement. In February this year, the MumbaibenchoftheNCLThad admitted an application from IDFCBanktoinitiateinsolvency proceedings.The tribunal had appointed Navneet Kumar Gupta as the RP. The power producer has received claims worth `7,653 crorefromallcreditors—financial,operationalandrelatedparties — of which the RP had admittedclaimsof`6,252crore as onApril 25,2018. Continued on Page 2 MEETING WITH STRESSED PSBS Govt may have to cough up more capital in FY19 Goyal promises ‘all possible help’; PCAbanks submit recovery plan, status report on reforms `65,000 crore Already-planned recap bonds for FY19, against `80,000 crore in FY18 Manoj Gaur, Jaypee Group chairman SURYA SARATHI RAY New Delhi, May 17 THE ALLAHABAD BENCH of the National Company Law Tribunal (NCLT) on Thursday ordered that 858 acres of land of bankrupt Jaypee Infratech (JIL) which was transferred by the firm to its holding company Jaiprakash Associates (JAL) be transferred back to the former as the transfer was “fraudulent, preferential and undervalued”. “We have found that corporate debtor (JIL) has by way of mortgage of unencumbered land created security interest in favour of lenders of JAL, which happens to be the holding company of JIL, without any consideration. We have also found that the corporate debtor was facing liquidity crunch and their accounts were declared as NPA (nonperforming asset) and even after formation of joint lenders' forum, without obtaining approval from the JLF,unencumbered land of the corporate debtor has been mortgaged in favour of lenders of JAL,”the NCLTorder said. The order was passed on the petition of the JIL resolution professional (RP) Anuj Jain who had alleged that the transferof the land amounted to asset stripping.As is known, the NCLT had ordered the initiation of insolvency proceedings against JIL in August 2017. THE GOVERNMENT MAY have to fork out more funds for public-sector banks (PSBs) in the current fiscal than estimated earlier as part of its unprecedented `2.1-lakhcrore capital infusion plan overtwoyears,as massive provisioning requirements to coverforbad assets have taken a toll on their capital base, banking sources said. Chiefs of 11 PSBs that are under the central bank’s promptcorrectiveaction(PCA) framework on Thursday met interim finance minister PiyushGoyal,whopromisedall possible help in his first major PCA-banks with highest bad debts Net NPAs, % `52,311 crore Recap bonds issued to 11 PCA-banks in FY18 FE BUREAU New Delhi, May 17 April 2 SEEKING BIDDERS Special Feature NCLT orders JAL to return land to Jaypee Infra SUCH A LONG JOURNEY FE BUREAU Mumbai/New Delhi, May 17 THE FIGHT FOR Essar Steel continued in the courts on Thursday with the two contenders, ArcelorMittal and Numetal, arguing over which bids should be valid — those in the first round or those in the second. Russia’s VTB Bank-led Numetal argued the resolution plans submitted in the second roundofbiddingshouldbeconsidered and the highest bid be selected.ArcelorMittal, on the other hand, opposed the petition to allow the second round of bids to be opened, and said only the first round of bids should be considered. ArcelorMittalisunderstood to have made an upfront offer of `30,500 crore and pledged another `8,000 crore in the form of capital infusion into EssarSteel. Mukul Rohatgi, counsel for Numetal, told the National Company Law Appellate Tribunal (NCLAT) that Numetal hassevereditsassociationwith Rewant Ruia,son of Essar Steel promoter Ravi Ruia,to become eligible to buy the steel company. Moreover, he said, it has ● ‘ASSET STRIPPING’ IDBI Bank IOB 16.02 13.08 United Bank 11.96 Dena Bank 11.95 Bank of Maha meeting with bankers since taking overthe finance portfolio in the absence of Arun Jaitley.“Thepresentationsofsome of these banks through the day indicate they require more capital in 2018-19 than estimated earlier,”a source told FE. PSBs were offered `90,000 crore (of which `80,000 crore was in the form of bonds) in 2017-18 and securities worth another `65,000 crore is to be 11.24 provided to them in the current fiscal. Any further infusion,if finally approved,ahead of an election year could be done through recapitalisation bonds —whichwill be the government’s off-Budget liabilities — to avoid worsening the fiscal deficit. However, the interests on such bonds are part of the Budget. Continued on Page 2 The hot seat Newly sworn-in Karnataka chief minister BS Yeddyurappa assumes charge at his office in Bengaluru on Thursday Report on Page 23 Continued on Page 2 PAIN AT THE PUMP Brace yourself for even costlier auto fuels SAURABH KUMAR New Delhi, May 17 WITH OIL TURNING costlier relentlessly—Brentcrudewent past $80 a barrel on Thursday, up 3.3% from aweek ago and a three-and-half-year high, taking the cost of Indian basket to a prohibitive $76 a barrel — and the rupee losing value against the dollar, consumers should brace for more hikes in auto fuel prices.After a 19-day reprievetoconsumersowingto assembly elections in Karnataka, oil marketing companies (OMCs) had increased petrol and diesel prices on Monday.Sincethen,priceshave been going up on a dailybasis. Retail prices in Delhi (`/litre) Apr 2015 Petrol 60.49 Diesel 49.71 May 17, 2018 75.32 66.79 Itisestimatedthatevery$1 increase in crude price demands an increase of around 63 paise perlitre in the pricesofbothdieselandpetrol, and a `1 depreciation against Brent ($/bbl) 80.18 80 75 70 62.72 65 60 55 *@ IST 15:16 hrs Nov 17, 2017 May 17, 2018 the dollar requires a 50 paise increase in the prices of these fuels. While 47% of petrol prices comprises excise duty andvalue-addedtax,thefigure stands at around 40% for diesel. So far, the Centre and states have shown no inclination to cut the taxes. Morgan Stanley expects Brent to hit $90 a barrel in 2020. For several months continuously, except for major election seasons, OMCs have been revising petrol and diesel prices on a daily basis depending on the rolling 15-day petroleum product prices in the international market. Brent crude price is now at its highest since November 2014. Continued on Page 2 Related report on P12 FINANCE COMMISSION TOR ‘Don’t reduce us (states) to being glorified municipalities’ FE BUREAU New Delhi, May 17 STATE GOVERNMENTS HAVE already suffered considerable erosion of their autonomous fiscal space and circumscription of revenueraising ability (thanks partly to the goods and services tax), and they would virtually be reduced to “glorified municipalities” unless the 15th Finance Commission’s terms of references (ToR) change, Kerala finance minister TM Thomas Isaac said on Thursday. He was speaking at Express Group’s Idea Exchange programme before joining a group of state finance ministers who later in the day petitioned President Ram Nath Kovind against the ToR. Isaac said though he was definitely not against “equity in distribution”and redistribution to address poverty and backwardness, the commission using the 2011 census data (instead of 1971) along with the weighty“income dis- It’s crazy stuff. You are disturbing the architecture of GST... are making things complicated and discriminating between sectors. — THOMAS ISAAC Kerala FM, on GST sops for digital deals and sugar cess EXPRESS PHOTO: GAJENDRA YADAV tance” yardstick would make redistribution almost the “only”criterion for horizontal distribution of Union resources among states. Such an approach could cost “progressive” states that have reached the replacement population level dear. According to the Kerala finance minister, given the “badly drafted”ToR,his state’s tax-devolution share could potentially reduce to 1.7% or thereaboutsfrom2.5%during the 14th Finance Commission award period (2015-20). Kerala’s share was 3.06% in the 11th commission period and, according to Isaac, used to be even higher at around 3.5% earlier. While the previous commissions relied on 1971 census,theYVReddy-headed14th commission ascribed 17.5% weight to 1971 and 10% to 2011 populations, while giving 50% weight to “income distance”. 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