OPINION, P8 ECONOMY, P2 M SABHARWAL & J JOSEPH New labour market changes are good news for freshers INTERNATIONAL, P14 SUNIL JAIN NOT JUST YET TESTED TACTIC Investment-hindering laws prompted AirAsia violations, govt must scrap such rules Challenging India regulations preventing Tesla's entry: Musk With new listed firm, Sorrell plots comeback after WPP exit NEW DELHI, THURSDAY, MAY 31, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 77, 50 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: 34,906.11 ▼ 43.13 NIFTY: 10,614.35 ▼ 18.95 NIKKEI 225: 22,018.52 ▼ 339.91 HANG SENG: 30,056.79 ▼ 427.79 `/$: 67.44 ▲ 0.44 `/€: 78.44 ▼ 0.11 BRENT: $76.14 ▲ $0.75 GOLD: `30,924.00 ▼ `261.00 IN THE NEWS Faux pas: Petrol, diesel prices cut by 1 p, not 60 p PETROLAND diesel prices were on Wednesday cut by 1 paisa per litre each, the first after 16 days of relentless hikes that triggered derisive comments, reports PTI. State-owned Indian Oil had first announced a cut of 60 paise — the biggest since daily price revision was introduced in mid-June last year — only to retract it in a few hours citing a technical error. Normal monsoon likely across India barring east, N-E ALL OF India is likely to get normal monsoon this year, except the east and northeast India, which are likely to witness below-normal rain, the IMD said on Wednesday, reports PTI. The overall monthly rainfall is likely to be 101% of its long period average (LPA) in July, and 94% of LPA in August — both with a model error of +/-9%. MORBI — A GLOBAL CERAMIC HUB ALLEGATIONS AGAINST KOCHHAR ICICI Bank to go for independent probe Enquiry to centre on loans given to Videocon Group; board had reposed faith in MD and CEO earlier WHISTLE-BLOWER’S TALE transferred his shares to Deepak Kochhar ■ Transfer of the company to Kochchar happened six months after Videocon Group got a loan of `3,250 crore from ICICI Bank in 2012 ■ Almost 86% of that loan FE BUREAU Mumbai, May 30 ALTERING ITS STANCE on an enquiry into the conduct of ICICI Bank managing director and chief executive officer Chanda Kochhar with regard to loans given to theVideocon Group, the board of the lender said on Wednesday it would initiate an independent probe into the matter. However, the board’s statement did not mention whether Kochhar would proceed on leave during the period of the enquiry. A whistle-blower has alleged Kochhar may have violated the bank’s code of conduct and provisions relating to conflict of interest while disbursing loans to the Videocon Group.The conflict may have arisen because of financial transactions between the Videocon Group and Deepak Kochhar, husband of Chanda Kochhar. In March, the board, headed by MK Sharma, had reposed faith in Kochhar say- Chanda Kochhar, ICICI Bank MD and CEO ■ Venugopal Dhoot and Deepak Kochhar set up NuPower Renewables as a 50:50 joint venture in 2008 ■ Venugopal Dhoot gave a loan of `64 crore to the company in 2010, and later ing it had found ICICI Bank’s internal processes that approved loans robust. In a strong endorsement of its CEO, the board ruled out scope for any favouritism, nepotism or a quid pro quo. In 2008,Venugopal Dhoot had set up a company with Deepak Kochhar, called NuPower Renewables. Subsequently, he is understood to have given a loan of `64 crore to this company before he transferred its ownership to a trust headed by Deepak Kochhar for just `9 lakh. In 2012, ICICI Bank had remains unpaid and the Videocon account was declared an NPA in 2017 ■ The board of ICICI Bank said on March 28, 2018, it reposes full faith and confidence in Chanda Kochhar ■ Chanda Kochhar had made all disclosures while sitting on the credit committee, chairman MK Sharma said on March 29, 2018 given a loan of `3,250 crore to the Videocon Group for the group’s oil and gas-related capital expenditure requirements. This was as part of a consortium loan in which 20 banks participated and ICICI Bank’s share is less than10% of the total credit. The transfer of the ownership of NuPower Renewables is understood to have happened around six months after the Videocon Group received the `3,250crore loan. INSOLVENCY PROCEEDINGS ● ‘INVESTOR ACCESS’ NCLAT stays action on RCom, tells it to pay Ericsson `550 cr SURYA SARATHI RAY & SHAYAN GHOSH New Delhi/Mumbai, May 30 THE NATIONAL COMPANY LawAppellateTribunal(NCLAT) on Wednesday halted insolvency proceedings against Reliance Communications (RCom) afterthe telco agreed to payEricssonanamountof`550 crore as part of its dues to the operational creditor.The decisionwouldallowRComtosellits assetstorepaylendersaspartof its plan to pare debt. “The corporate insolvency resolutionprocess,inrelationto thecorporatedebtor—Reliance Infratel, Reliance Telecom and Reliance Communications — shallremainedstayeduntilfurther order,” the NCLAT said. RCom had moved the NCLAT after the Mumbai bench of the NationalCompanyLawTribunal (NCLT) admitted insolvency pleas filed against it byEricsson overduesofnearly`1,000crore. MAY 15 NCLT, Mumbai admitted Ericsson's insolvency plea against RCom BLOOMBERG Singapore/Hong Kong, May 30 MAY 22 RCom moved NCLAT challenging NCLT order routes. A total of 14 people, including some former and current employees of AirAsia, have been named in the charge sheet.This includes the airlines’ former CEO Mittu Chandilya, his secretary, and the current and the former CFO of the airline, Deepak Mahendra and Vijay Gopalan. In response to FE’s query on summons to Fernandes, AirAsia India said, “We are not taking any queries in this regard.” MSCI, ONE OF the world’s biggestindexcompilers,isplacing emerging markets including India and Brazil on notice forlimiting investoraccess. The two countries, along with Turkey and South Korea, are“potentialfutureexamples” of markets whose weights could be capped on MSCI indexes, the New York-based companysaidinapresentation on its website onWednesday. Allfourcountriesrestrictthe use of their local data in derivatives created by offshore exchanges, which puts them afoul of MSCI’s anti-competition clause,and India also has a “lengthyandburdensomemandatory registration process”for foreign investors,MSCI said. MSCI will now consult its clients and announce the results by December 31. The presentation is part of a broaderreviewon howfunds access global equity markets and shows the influence of firms like MSCI in lobbying for institutional investors. Continued on Page 2 Continued on Page 2 MAY 30 NCLAT halted insolvency proceedings subject to conditions Continued on Page 2 Related reports on Page 6 SUMMONED FOR QUESTIONING Fernandes’ CBI date set for June 6 MANISHA SINGHAL Mumbai, May 30 AIRASIA GROUP CEO Tony Fernandes and his recently appointed deputy group CEO (operations) Bo Lingam have been summoned for questioning by the Central Bureau of Investigation (CBI) on June 6, sources told FE. The CBI on Tuesday registered a case against Fernandes, AirAsia India non-executive director R Venkataramanan and other officials for allegedlytrying to manipulate Tony Fernandes, AirAsia Group CEO government policies through corrupt means to get permission to fly on international MSCI mulls capping India weight Continued on Page 2 CY18 FORECAST Special Feature Moody’s cuts India growth to 7.3% IBM is heavily invested in up-skilling its employees IBM Global Business Services’ Samiron Ghoshal says that in today’s competitive landscape, it’s important to align the workforce to technology shifts and market needs. ■ eFE, P13 Growth forecasts for India (%, for 2018-19) 8.0 7.5 7-7.5 7.4 7.3 7.3 7.3 7.3 7.6 Extract of Audited Results for the Quarter and Year Ended 31.03.2018 7.0 Sl. No. 6.0 5.5 QuickPicks 5.0 Iran: 2 banks to wind up exposure INDUSIND BANK and UCO Bank have become the first set of banks to have asked exporters to wind up their exposure to Iran by early August, after the US ordered reimposition of sanctions against the Islamic country, leaving them in dire straits, reports Banikinkar Pattanayak in New Delhi. Exporters apprehend if more banks follow suit, trade dealings with Iran will be hit. PAGE 3 Eco Survey IMF World Bank WITH JUST a day left for submitting the expression of interest (EoI) for Air India, civil aviation secretary RN Choubey on Wednesday said so far, they have not received even a single bid, reports fe Bureau in Mumbai. After having extended the last day for submitting the EoIs from May 14 to May 31, Choubey said there would be no further extension. However, he still exuded confidence, adding that he expects bids to come at the last hour. PAGE 6 ADB Moody's* CSO has forecast India's 2017-18 growth at 6.6% FE BUREAU New Delhi, May 30 AI stake: No bids, last day today MOODY’S INVESTORS SERVICE on Wednesday trimmed its India growth forecast to 7.3% for calendar year 2018 from a previous projection of 7.5%, saying higher oil prices, tighter financial conditions and the ongoing transition to the goods and services tax (GST) regime could slow down the pace of expansion. “The Indian economy is in cyclical recovery led by both investment and consumption. Fitch Goldman Sachs *2018 calendar year However, higher oil prices and tighterfinancialconditionswill weigh on the pace of acceleration,” it said in its global macro outlookreport.However,itkept its2019growthforecastforthe country unchanged at 7.5%. TheIndianeconomyhadgrown 6.6% in 2017,it said. Moody’s acknowledged that economic growth in 2019 should benefit from a rise in rural consumption, aided by higher minimum support prices and a normal monsoon. Continued on Page 2 DIGITAL PLAY Big banks’ market-loss fear behind AePS lapse SHOBHANA SUBRAMANIAN Mumbai, May 30 CONFUSION DESPITE A BIG push by the Prime Minister’s Office (PMO) for greater use of the Aadhaarenabled Payments System (AePS), the apprehension on the part of larger banks that theymightlosemarketshareis slowing the process. A set of revised interchange charges,which was to be rolled out on June 1, might be held back,sourcessaid.TheNational Payments Corporation of India (NPCI) and stakeholders had decided on the changes,taking intoaccountrecommendations fromthePMO/UniqueIdentity to have been rolled out on June 1, may be held back ■ Revised interchange charges ■ Proposed charges those prevalent pre-April 2017 as recommended by UIDAI in Nov 2017 ■ Charges for nearly 1 year were cut to half the original interchange with no minimum limit Authority of India (UIDAI), nearlyfourmonthsago,onFebruary 20. However, the AePS steering committee met again on May 24 and some large banks are understood to have ( in Crores) asked for a review of the interchange charges. The currentvolume ofATM off-us transactions (where a customer uses another bank’s infrastructure) is around 43.5 crorepermonthwith2.39lakh ATMs. In contrast,AePS transactions numbered only 2.98 crore per month in April 2018 with 1.26 lakh business correspondent agent points. AePSisimportanttofurther direct benefit transfer (DBT) delivery,for the last mile,especially in semi-urban and rural India.Expertswatchingthedigital payments landscape point out that larger banks are reluctanttoallowthemicro-ATMsof smaller new-age banks, small finance banks and payments bankstoproliferateinthesemiurban and rural areas for fear theywould lose market share. Continued on Page 2 Particulars Standalone Quarter Ended Year Ended 31.03.18 31.03.17 31.03.18 31.03.17 Consolidated Year Ended 31.03.18 31.03.17 (Audited) 6.5 (Audited) (Audited) (Audited) (Audited) (Audited) 1. Total Income from Operations 5,632.00 5,848.88 22,358.27 23,587.30 23,054.42 2. Net Profit for the period (before Tax, Exceptional and Extraordinary items) Net Profit for the period before tax (after Exceptional and Extraordinary items) Net Profit for the period after tax (after Exceptional and Extraordinary items) Total Comprehensive Income for the period [Comprising Profit for the period (after tax) and Other Comprehensive Income (after tax)] Equity Share Capital (Face Value ` 10 per share) Reserves & Surplus (Excluding Revaluation Reserves) (as per audited balance sheet as at 31 March) Earnings per Share (of ` 10 each) (for continuing and discontinued operations) (in `) Basic Diluted 1,265.02 1,887.41 6,852.09 8,860.70 6,941.24 8,972.36 1,265.02 1,887.41 6,852.09 8,860.70 6,941.24 8,972.36 834.79 1,319.23 4,647.00 6,245.76 4,689.46 6,313.37 N.A. N.A. N.A. N.A. N.A. N.A. 1,974.92 1,974.92 1,974.92 1,974.92 1,974.92 1,974.92 33,515.59 31,350.67 33,897.38 31,695.64 3. 4. 5. 6. 7. 8. 4.23 4.23 6.68 6.68 23.53 23.53 31.63 31.63 23.75 23.75 24,194.92 31.97 31.97
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