OPINION, P8 COMPANIES, P5 SURJIT BHALLA No reason why the elite can’t pay for college education INTERNATIONAL, P14 EDITORIAL IP THEFT CAMBRIDGE ANALYTICA SCANDAL To ensure NHPS works well, insurers have to be given more powers than they have now Sikka terms Teradata's allegations 'baseless and outrageous' Facebook's Sandberg meets attorneys general behind closed doors MUMBAI, SATURDAY, JUNE 23, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. 58 NO. 148, 16 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: 35,689.60 ▲ 257.21 NIFTY: 10,821.85 ▲ 80.75 NIKKEI 225: 22,516.83 ▼ 176.21 HANG SENG: 29,338.70 ▲ 42.65 `/$: 67.83 ▲ 0.16 `/€: 78.95 ▼ 53.00 BRENT: $74.65 ▲ $1.60 GOLD: `30,484 ▲ `47 INSOLVENCY PROCESS IN THE NEWS TN to HC: Order to shut Sterlite unit a policy decision Alok goes to RIL-JM with big haircut THE TAMIL NADU government told the Madras High Court on Friday that its order to shutter the Sterlite Copper plant at Tuticorin permanently was purely a policy decision, reports fe Bureau in Chennai. The HC had sought a clarification from the state government whether its order to shut the plant permanently was backed by its policy decision. CoC approves winning bid of `5,000 crore compared with `30,000 crore owed to lenders Hotel Leelaventure defaults on LIC interest payment FE BUREAU Mumbai, June 22 BANKS HAVE TAKEN a huge 83% haircut on the sale of Alok Industries bagged by the Reliance Industries (RIL)-JM Financial ARC combine for just `5,000 crore. The nearbankrupt Alok Industries owed lenders a whopping `30,000 crore. The committee of creditors (CoC) on Friday approved the resolution plan submitted by RIL-JM Financial. If approved by the bankruptcytribunal,thiswill be the third large resolution under the Insolvency and BankruptcyCode (IBC) from among thefirstlistof12largedefaulters, after Bhushan Steel and Electrosteel Steels. In the case of Bhushan Steel, bankers were fortunate to get away with a haircut of only 37% since Tata Steel’s offer was for `35,200 crore. However, the haircut for Electrosteel Steelswas a steep 60% since Vedanta offered `5,320 crore against lenders’ out- LOSS-MAKING HOTEL Leelaventure said on Friday that it has defaulted on its quarterly interest payment of `2.12 crore due on June 19 to Life Insurance Corporation of India (LIC), reports fe Bureau in Mumbai. The company had issued secured redeemable NCDs on a private placement basis aggregating to `90 crore to LIC in December 2008. Bajaj Finance tops Axis Bank in market cap BAJAJ FINANCE surpassed Axis Bank in terms of market capitalisation, following a surge in its share price on Friday, reports PTI. At the end trade on Friday, Bajaj Finance’s valuation stood at `1,34,952.29 crore, `227.16 crore more than that ofAxis Bank's `1,34,725.13 crore. Haircut (%) Binani Cement 2 Bhushan Steel 37 Electrosteel Steels Amtek Auto Monnet Ispat & Energy 60 72 72 Alok Industries 83 Jyoti Structures 85 Source: CLSA, media reports standings of `13,175 crore. In a statement to the stock exchanges on Friday, RIL said its resolution plan was put to vote before the CoC on June 20 and has received the assent of 72.192% of the total votes. Thevoting threshold required to pass a resolution was recentlylowered to 66% from 75% earlier following an amendment to the IBC. The RIL-JM FinancialARC alliance now requires approval of the National Company Law Tri- ‘We’ll build a diverse portfolio of India-made cars’ At this year’s Auto Expo, while some big brands didn’t participate, Kia Motors of South Korea made a grand entry by showcasing its global line-up of vehicles. ■ Motobahn, P13 OPEC AND ALLIES including Russia will boost oil production starting next month, offering relief to consumers after Saudi Arabia secured a last-minute deal to overcome Iran’s veto threat. “We have an agreement” for a “nominal” production increase of 1 million barrels a day, Saudi energy minister Khalid Al-Falih told reporters in Vienna. In reality, the accord will add about 700,000 barrels a day of oil to the market in the second half of the yearbecause several members are unable to increase their output,said Nigeria’s oil minister Emmanuel Ibe Kachikwu. The agreement is a victory for Saudi Arabia and Russia, which for a month have advocated for a production increase to alleviate high prices.It’s also a success forUS President DonaldTrump,who has criticised the Organisation of Petroleum Exporting Countries on Twitter for inflating the cost of fuel. However,the final communique from the group’s meeting in Vienna left many unanswered questions about how the oil will flow to consumers. Continued on Page 2 Continued on Page 2 Higher oil price betters prospects for GAIL Owing to delayed roll-out of the unified tariff regime, FY19F EPS cut 15%. EPS likely to rise 27-31% in FY19-20F; TP revised to `460 from `450 with rollover to FY20F ■ Investor, P13 QuickPicks Sowing down due to monsoon halt, to pick up in coming days THE KHARIF acreage so far has been more than 9% lower than the year-ago season after the monsoon was stalled for about 15 days, reports fe Bureau in New Delhi. Now that the Met is predicting a revival of the monsoon from Saturday, the sowing activities may pick up in the coming days and the acreage could even surpass last year’s. PAGE 12 VID rollout: RBI asks banks to tweak systems by June 30 The RBI has asked all lenders to tweak their systems by June 30 to enable the use of virtual IDs (VIDs) in lieu ofAadhaar, and migrate to the limited KYC mechanism, reports fe Bureau in New Delhi. This means customers can choose to give the bank either their Aadhaar numbers or the VIDs generated by the Unique Identification Authority of India. PAGE 2 Final day: RITES IPO subscribed 66.88 times, Fine Organic 8.8 THE IPOs of RITES and Fine Organic Industries were subscribed 66.88 times and 8.8 times, respectively, on the concluding day of their offerings on Friday, reports fe Bureau in Mumbai. While investors bid for 168. 54 crore shares of the 2.52 crore shares offered to them by RITES, Fine saw bidding of 4.72 crore shares of the 53.65 lakh shares on offer. PAGE 11 LIC in the running to buy govt stake BLOOMBERG New Delhi, June 22 THE GOVERNMENT IS likely to sell a part of its stake in IDBI Bank as early as next month and potential buyers include the country’s top insurer, said people familiar with the matter. Potential investors would include Life Insurance Corporation of India,the people said, asking not to be identified as the information isn’t public. The sale would lower the government’s stake to below50% from about 81%,they said. India has been trying since at least two years to sell IDBI Bank, which has the highest bad-loan ratio among staterun lenders in India.India Ratings & Research, the local unit of Fitch, downgraded IDBI Bank this month citing a sharp deterioration in asset quality. Exact details of the potential sale haven’t been agreed yet and there’s no certaintythe talks will lead to a transaction, the people said.ET Now television channel had reported the possible deal earlier Friday. OPEC+ to boost output after Iran softens stand bunal (NCLT) to gain control of the company. Emails sent to State Bank of India (SBI) and JM Financial seeking comments remained unanswered till the time of going to press. The re-voting took place aftertheAhmedabad bench of the NCLT earlier this month directedAjayJoshi,the resolution professional (RP),to consider the voting process with respect to the amended insolvency code. The tribunal had said that considering the amendment to the IBC, it was of the “considered opinion that resolution professional is legallyexpected to present the resolution plan of the sole resolution applicant before the CoC fora relook and forproper consideration...” The NCLT had directed the RP to consider the voting process as per the amended provisions of the code and to submit its report along with recommendationorresolution of the CoC by June 26. Following the new amendment, employees of Alok Industriesandagroupofoperational creditors had pleaded to the NCLT to accept the resolution plan,taking the amendment into account. Alok Employees Benefit and Welfare Trust had also demanded a rejection of the liquidation proposal filed by the RP. IDBI BANK Special Features ● CONSUMER RELIEF IDBI BANK Intra-day on BSE (`), June 22 62 BLOOMBERG London/Tehran/Dubai, June 22 India to pay Iran in rupees again INDIA PLANS GO back to rupee payments for Iran crude oil supplies due to impending US sanctions, reports Saurabh Kumar in New Delhi. Report on Page 2 61 59.05 60 59 58 57 55 Prev. close: 57.90 Open ICICI BANK STATEMENT Whistleblower’s charges against 31 loan accounts The accounts had a total outstanding of `6,082 crore, or over 1% of the bank’s gross loans SHRITAMA BOSE Mumbai, June 22 ICICI BANK ON Friday said the anonymous complaint received by it in March 2018 alleged irregularities in the conduct of 31 loan accounts with an outstanding of `6,082 crore,representing over 1% of the bank’s gross loans, including a charge of incorrect asset classification.An enquiry carried out under the supervision of the audit committee of the bank’s board found that in CSR spending SURBHI PRASAD Govt worried over slowdown 57.95 56 Dress code US First Lady Melania Trump wore a Zara jacket with the phrase ‘I Really Don't Care. Do U?’ on the back on her trip to and from visiting detained immigrant children in Texas, sparking a flurry of speculation on what the message meant REUTERS Close IDBI Bank’s shares rose 1.99% in Mumbai. The 10memberBankex Indexwas little changed. MK Jain, who was brought in as chief executive officer of IDBI Bank last year to tackle the bad-loan problem, was recently named deputy governor of the Reserve Bank of India. B Sriram, managing director of State Bank of India, the country’s biggest lender, was given additional charge as head of IDBI Bank effective June21,exchangefilingsshow. CSR spend by companies saw a big decline in 201617, after a surge seen in the previous year. According to sources, the government is stepping up pressure on firms that underpaid to comply. 2014-15 Companies Amount spent on CSR (` cr) CSR projects 2015-16 14,944 19,184 9,565 13,828 7,959 17,423 2016-17 6,286 4,719 11,597 Firms above certain thresholds are required to spend 2% of average net profits (of three preceding fiscal years) for CSR, such spends get 100% tax waiver under funds like SBK, CGF, PMNEF Continued on Page 2 INSIDE STORY ■ Transactions in some accounts may have delayed their classification as NPA ■ Provision coverage for these accounts was 50% as of March 2018 ■ Complaint includes a charge of incorrect asset classification some of the accounts there were transactions which may have delayed their classification in the non-performing asset (NPA) category. At the end of March 2018, these accounts constituted 1.1% of gross loans.The provision coverage (including prudential/ technical write-offs) for these accounts was 50%. In a regulatory notification,the bank said the charges of incorrect accounting of interest income and overvaluation of security, also brought by the whistleblower, did not stand scrutiny. “Based on the procedures performed in the enquiry, the allegations relating to incorrect accounting of interest income and NPA recoveries as fees, and overvaluation of security for corporate loans, were not borne out. In certain accounts, transactions were observed that may have delayed the classification of the account as nonperforming under Indian GAAP (generally accepted accounting principles) in earlieryears,”the notification said. Continued on Page 2 ● ED MOVES COURT India seeks fugitive tag for absconding Mallya PRESS TRUST OF INDIA Mumbai/New Delhi, June 22 INDIA ON FRIDAY made its first move to clamp down on big bank loan defaulters under a new law as the Enforcement Directorate (ED) moved court against liquor baron Vijay Mallya seeking to declare him a “fugitive offender” and to confiscate his assets worth `12,500 crore. Officials said the central probe agency filed an application before a special court in Mumbai under the recently promulgated Fugitive Economic Offenders Ordinance that empowers it to confiscate “all linked assets” of an Vijay Mallya absconding loan defaulter. Theapplicationaccessedby PTI said the ED seeks to “confiscate all the properties of Vijay Mallya including those properties indirectly controlled by him”. Continued on Page 2 ECO-FRIENDLY Flexi-marketing: Yoga mats give a leg-up to Kerala coir exports M SARITAVARMA Thiruvananthapuram, June 22 THE PUBLICITY BLITZKRIEG for yoga in recent times has given a leg-up to India's coir businesscentredinKerala,catapulting coir yoga mats to a fashionstatementofsorts.Out of India’s `2,600-crore coir exports, Kerala accounts for 44% and a good part of the exports are coir mat products. “Although there are nearly 100 diverse coir products including doormats and carpets, at international fairs there is huge attention for the new yoga mat kit.This usually comes with a yoga mat rolled up inside a kit and has two pillows and a bed sheet as complementary,” said S Ratnakumar,managing director,Foam Mattings. This package is priced at `525 per kit. It was the state-run Coirfed that, in 2014, first thought up the idea of a coir yoga mat to piggyback on the NDA government’sthrustonyogaexercises. “Unless there are such innovative products in tune with times, the traditional industry would be unable to catch up,” ILLUSTRATION: ROHNIT PHORE said Raul Fangueiro, natural fibre specialistwith the University of Minho, Portugal.“However, they have to address the newkindofaestheticneedstoo.” The coiryoga mat has easily emergedastar-attractionatthe internationalcoirexpothatthe Kerala government conducts every year at Alapuzha, with a buyer or two from European Union often pointing out that “it works out cheaper than the Persian silk rug”. “What I like about a coir yogamatisthatitisenvironment-friendly and yet produced as sleek and smooth as onewouldwantapersonalcare product to be,” said Elmira Babalou, an Iranian partner at a German firm that buys coir products from India. Private exporters in Kerala, who account for annual coir exports of over `1,000 crore, say that China, Europe and US are the biggest consumers of new coir matting products. From `2,260 crore in the 2016-17, India’s coir exports rose to `2,600 crore in 201718, according to CP Radhakrishnan,chairman,Coir Board. Continued on Page 2
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