OPINION, P8 COMPANIES, P6 RENU KOHLI India’s financial inclusion suffers from a gender gap INTERNATIONAL, P14 EDITORIAL AIRLINE PRIVATISATION TAKEOVER TERMINATION Govt needs to work on trimming wage costs of banks that are under RBI’s PCA Did not say will not consider Air India: Jet’s Naresh Goyal Shigetaka Komori-led Fujifilm to challenge Xerox call to scrap $6.1-bn deal MUMBAI, SATURDAY, MAY 19, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOLUME XXXXXV NO. 362, 24 PAGES, `10.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 34,848.30 ▼ 300.82 NIFTY: 10,596.40 ▼ 86.30 NIKKEI 225: 22,930.36 ▲ 91.99 HANG SENG: 31,047.91 ▲ 105.76 `/$: 68.01 ▼ 0.31 `/€: 80.07 ▼ 0.25 BRENT: $79.71 ▲ $0.41 GOLD: `30,921.00 ▲ `95.00 AMPLIFIED 'CHANGE IN LAW' PROVISO IN THE NEWS Bureaucrat reshuffle: New secretaries named RISING OIL PRICES Adani’s Kawai unit Import bill may rise up to $50 bn gets major relief Q4FY18 Chg (%) (` cr) PAT Q4FY17 Net revenue Q4FY18 Ebitda 41.5 PAT Continued on Page 2 1,080 802 1,308 906 44.3 34.7 SC orders floor test today, rival Monsoon to arrive in camps confident of outcome Kerala 3 days early Congress leaders Ghulam Nabi Azad, Mallikarjun Kharge, Ashok Gehlot and former CM Siddaramaiah with others in Bengaluru on Friday PRESS TRUST OF INDIA New Delhi/Bengaluru, May 18 THE NEW KARNATAKA chief minister BS Yeddyurappa was on Friday ordered by the Supreme Court to face a floor testinthestateassemblyonSaturdayitselfafteritdrasticallycut the 15-day deadline set by the governorto prove his majority. As the apex court fixed the time for the floor test at 4 pm, the numbers were stacked against the BJP barring any defections or making MLAs of the rival JD(S)-Congress combine to resign or abstain from voting. Continued on Page 2 Tata Steel completes majority stake acquisition Continued on Page 2 38.4 WELCOME CLOUD The BJP emerged as the singlelargestpartywith104seats, followed by the Congress with 78andJD(S)with37,withthree seatsgoingtoothersinthe224member assembly where elections were held for 222 seats. The BJPis short byeight seats. As the BJP and the Congress-JD(S) alliance geared up for the expected showdown confident the outcome will be in their favour, another legal battlewasonthecardsoverthe appointment of BJP MLA KG Bopaiahasthepro-temspeaker bygovernorVajubhaiVala.Usuallythesenior-mostmemberof the assembly is appointed, makingtheCongress’RVDeshpande qualified for the post. “We will abide by the Supreme Court verdict... We have got 100% support and cooperation to prove the majority,” Yeddyurappa, who took the oath of office on Thursday, told reporters in Bengaluru shortly after the apex court's order. ● BHUSHAN STEEL IMD had predicted that the country was expected to receive 97% rainfall of the long period average (LPA). The monsoon is considered normaliftheaveragerainfallis between 96% and 104% of the LPA. 667 40.2 Continued on Page 2 BAMNIPAL STEEL (BNPL), a wholly-owned subsidiary of Tata Steel, has successfully completed the acquisition of controlling stake of 72.65% in Bhushan Steel (BSL). Tata Steel had won the bid to acquire debt-laden BSLin an insolvency auction. The bankrupt firm was among the 12 stressed assets the Reserve Bank of India had referred to theNationalCompanyLawTribunal (NCLT) last year. “BNPL has successfully completed the acquisition of controlling stake of 72.65% in BSL in accordance with the approved resolution plan under the Corporate InsolvencyResolution Process (CIRP) of the Insolvency and Bankruptcy Code 2016 (IBC) which has been managed byVijaykumarVlyer, Partner, Deloitte Touche Tohmatsu India LLP, in his capacity as the resolution professional,” Tata Steel said in a statement. TheadmittedCIRPcostand employee dues have been paid as required under IBC,it said. Further, settlement of the amounts equivalent to `35,200 crore towards financial creditors of BSL is being undertaken as per the terms of the resolution plan and corresponding transaction documents, the company said. Tata Steel said `1,200 crore will be paid to operational creditors of BSL over a period of 12 months as per their admitted claims and as per the terms of the approved resolution plan. 4,805 31.8 demand,he didn’t rule out the impact of increased demand ahead of Karnataka polls on the shortage. On oil prices, Garg said the government would intervene only if prices exceed its comfort level,without mentioning the trigger point. He didn’t offer any commitment on duty cuts to provide relief to people but added the recent spurt in oil prices is unlikelyto drive up the Centre’s petroleum subsidy bill from the FY19 budgeted level of `25,000 crore.This is because of the two subsidised petroleum products — LPG and kerosene — only the latter has some remote link with global oil prices. The secretary also rejected suggestion that the Centre is benefiting much from rising fuel prices. PRESS TRUST OF INDIA New Delhi, May 18 Chg (%) 6,651 Ebitda PRESS TRUST OF INDIA New Delhi, May 18 THE INDIA METEOROLOGICAL Department(IMD)onFridayforecastthatthesouthwest monsoon would hit the Kerala coast on May 29, three days before its normal onset date. The Met department said conditionswere favourable for the onset of monsoon over the Andaman Sea and southeast Bay of Bengal from May 23. “Thesouthwestmonsoonis expected to set over Kerala on May 29 with a modelled error of plus orminus fourdays,”the IMD said. The normal onset date for the monsoon to hit Kerala is June 1. The event marks the start of the rainy season over the region and as the monsoon progresses northward, relief from scorching summer temperatures is experienced over the areas. In its first-stage long-range forecast for the 2018 southwest monsoon seasonal rainfall released last month, the RAIN RELIEF ■ Dept says monsoon to hit on May 29 ■ Normal onset date for monsoon is June 1 ■ Last month, IMD said expects 97% rainfall of long-period average ■ Last week, Skymet predicted monsoon to hit Kerala on May 28 MARRIAGE & MERCHANDISE It’s a Royal Wedding! Ride a tour bus! Buy some cereal and condoms! NEW YORK TIMES London, May 18 THEY CAME FROM Arizona, Australia,Brighton,Seattleand Nottingham, among other places.Theycamebecausethey love the royal family, because they love to eat cake and, in one case, because they had free tickets. English literature is full of tales of disparate people thrown together for unexpected reasons. But Wednesday afternoon’s gathering was hardly “And Then There Were None”. Rather, it was a 90minute royal-wedding-andhigh-tea-themed bus tour that ended up attracting a full gamut of royalists, antiroyalists and don’t-care-ists who were not always altogether sure what they were doing there. “The bus tour idea was just a different way of having afternoon tea, while going someplace,” said Sally Saunders, a high school teacher from Wollongong, Australia, ILLUSTRATION: SHYAM THE ENFORCEMENT Directorate has summoned at least four members of absconding diamantaire Nirav Modi's family, including his father and brother, and his US-based business partner, in connection with a money-laundering case linked to the more than $2-billion Punjab National Bank (PNB) fraud, officials said on Friday, reports PTI. The family members are required to be questioned as a number of financial transactions and Modi's businesses are linked to them, the officials said. PAGE 24 Q4FY17 Net revenue Revived domestic demand and growing exports took Bajaj Auto's Jan-Mar net profit up 34.7% to `1,080 crore. Net sales saw a growth of 38.4% at `6,651 crore. « PNB fraud: ED summons Nirav Modi’s family, US partner (` cr) RAJIV BAJAJ, Bajaj Auto CEO « WITH GLOBAL crude prices touching $80 a barrel, oil minister Dharmendra Pradhan has pressed Opec kingpin Saudi Arabia to keep prices stable and moderate, saying that a spike in rates would have a negative impact on Indian consumers as well as the economy, reports PTI. Pradhan conveyed India's concerns when Saudi energy minister Khalid Al-Falih called him on Thursday "to discuss continued joint cooperation between the two countries and in particular the current oil market situation", an official statement said in New Delhi. PAGE 12 Ashok Leyland beat estimates, posting a 40% yo-y growth in standalone net profit at `667.4 crore in Q4. But net sales were below estimates, up 32% to `8,772.5 crore. KARNTAKA ASSEMBLY Finmin keeps up demand for relief on insolvency trigger Pradhan asks Saudi Arabia for stable, moderate oil prices VINOD K DASARI, Ashok Leyland CEO Continued on Page 2 QuickPicks THE FINANCE ministry will renew calls for relaxing the Reserve Bank of India's February stipulation that requires banks to finalise a resolution plan in case of a default on large accounts within 180 days, failing which insolvency proceedings will have to be invoked against the defaulter, an official source told FE, reports Banikinkar Pattanayak in New Delhi. Most of the 11 stressed public sector banks that submitted their turnaround plans with the finance ministry on Thursday have expressed apprehension about this move. PAGE 2 Bikes keep on trucking « Tiny acoustic modems will do the job. Nanomodems consume only 10 milliwatts when listening, and 1Wwhen broadcasting. They are able, as an existing modem is, to broadcast over a distance of up to 2km ■ Science & Tech, P13 FE BUREAU « Sound waves: Transmitting messages underwater able across the country now. “Forthe last fewdays in factwe are seeing net increase in the currency. In last three to four days there is surplus deposit of `4,000 crore,” he said. While the cash shortage was mainly driven by an unusual spurt in Big wheels « Special Feature allowancewasdisallowedbythe Appellate Tribunal for Electricity(Aptel)in2015.Thelatestruling by RERC has been considered in the light of the Supreme Court order on compensatory tariffs,which had removed the uncertainty over whether a change in government policy would constitute CL. The SC ruling, while rejecting the claims to compensatory tariffs of Adani Power and Tata Power on their Mundra units on account of Indonesian coal price hike,was clearthatchangeinforeignlaw doesn’t amount to either CL or necessitate force majeure. However, it averred that a change in domestic policy would qualify as CL. « THE RBI ON Friday said it has imposed a penalty of `5 crore on South Indian Bank for non-compliance to its asset classification and KYC norms, among others, reports PTI. Shares of the lender closed at `25.60 each on the BSE, down 2.66%. In its petition, ARPL claimed that if it were to keep the power tariff at the power purchase agreement (PPA) rate of `3.20 per unit even after the changes in coal distribution policy that constrained CIL supplies and forced it to import (costlier) fuel,itwould lose `1,221 crore perannum.The companyhad, along with its Q4FY18 financial results,recognised receivables of more than `2,546 crore on this account “up to March 31,2018”. The company had approached the RERC in 2014 claimingcompensationwhenit was allowed an interim tariff hike of `0.25 per unit, though the regulator did not recognise the event as“force majeure”or CL.However,thecompensation nomic fundamentals due to weakening rupee, rising oil prices or foreign portfolio investor outflows. Talking about the recent shortage of cash in some states, Garg said adequate amount of currency is avail- « RBI penalises South Indian Bank ■Adani's Kawai andTiroda plants are now getting domestic coal under Shakti scheme; Kawai unit is no longer importing coal — SUBHASH CHANDRA GARG ECONOMIC AFFAIRS SECRETARY 476 THE SUPREME Court on Friday approved the central government’s draft Cauvery Management Scheme for distribution of water between the southern riparian states ofTamil Nadu, Karnataka, Kerala, and Puducherry, reports fe Bureau in New Delhi. It also directed the Centre to implement the scheme before the monsoon session of Parliament after finding it in consonance with its February 16 judgment. ■The court said change in foreign law doesn’t amount to ‘change in law’, but averred that a change in domestic policy could 1,033 SC approves draft Cauvery scheme ■The SC, in anApril 2017 order, rejected Adani/Tata claims to compensatory tariffs for their Mundra units (firms cited Indonesian coal price hike) THE FINANCE MINISTRY on Friday said rising crude oil prices could drive up India’s import bill in the range of $2550billionthisfiscal,worsening the current account deficit. However, elevated oil prices would impact neither economic growth nor the fiscal deficit of the Centre,economic affairs secretary Subhash Chandra Garg said, stressing that there is no threat to the country’s solid macroeco- « THE RAJASTHAN ELECTRICITY Regulatory Commission (RERC) has allowed Adani PowerRajasthan(ARPL),which runs the 1,320-MW Kawai power plant, to recover the additional cost — estimated by the company at `1,221 crore per annum since 2014,but yet tobeapprovedbythebuyerdiscoms—onaccountofhavingto import coal due to reduced supplies from Coal India (CIL). The RERC’s order has relied on the April 2017 Supreme Court ruling that widened the ambit of the“change in law”(CL) provision in power purchase agreements by including changes in government's policies — in this case, the 2013 amendmentstothecoaldistribution policy. Once the provision is invoked, the affected firm would get the right to fully recovertheextracostsincurred onaccountofthepolicychange through tariff increases. Since the SC ruling,ARPL is the third power plant to get the CL benefits; two other Adani group plants — Mundra (Gujarat)andTiroda(Maharashtra)— also received such benefits. ■ARPLclaims to have suffered additional cost of `1,221 crore/annum from coal imports, as 2013 policy change hit CILsupplies FE BUREAU New Delhi, May 18 730 ANUPAM CHATTERJEE New Delhi, May 18 TARIFF TIFF Macroeconomic parameters continue to be very sound, inflation is within the range. So we have no downward revision of growth or upward revision of fiscal deficit forecasts (due to oil price hike). 8,772 ARPL third Adani firm to get the right to recover extra costs via tariff hikes after April, 2017 SC order DEA secy says high oil prices to impact current account deficit but not growth or fiscal deficit 6,654 SENIOR BUREAUCRAT Amit Khare, who blew the lid off the infamous fodder scam in Bihar, was on Friday appointed secretary of the information and broadcasting ministry as part of a major reshuffle involving 24 top IAS officers, reports PTI. Anup Wadhawan and former Delhi chief secretary MM Kutty have been named new commerce and petroleum secretaries, respectively. Rina Ray has been appointed secretary, department of school education and literacy, an order issued by the personnel ministry said. who was starting on her first course, featuring minishepherd’s pies, cucumber sandwiches and sausage rolls. “The whole point is to drive around London and eat some nice food. As for the royals — whatever.” Much of Britain is gripped by wedding fever — or by a feverinducedbyweddingfever — as it awaits the marriage on Saturdayof Prince Harry,sixth in line to the throne, and Meghan Markle, who is from the United States and not in lineforthethroneatall.Tocapitalise on this singular moment, companies are rollingoutnewlinesofroyaltyrelated goods and services. The “Royal Tea Bus Tour,” sponsored by Debrett’s, known for publishing a handbook to Britain’s titled families, and B Bakery, a London shop specialising in tasty tea cakes, is one of these. But across Britain,Meghan and Harry are everywhere. Continued on Page 2
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