OPINION, P8 MONEY & MARKETS, P11 IN INVESTORS’ INTEREST EDITORIAL PM doesn’t need India Inc to tell him what’s not working If the government distrusts India Inc, it is also partly to blame for this state of affairs INTERNATIONAL, P14 FROZEN FOOD POWERHOUSE Singapore FM asks sparring NSE, SGX to resolve issues Connolly-led Conagra to buy Pinnacle Foods in $8.1-billion deal MUMBAI, THURSDAY, JUNE 28, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. 58 NO. 152, 34 PAGES, `7.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 35,217.11 ▼ 272.93 NIFTY: 10,671.40 ▼ 97.75 NIKKEI 225: 22,271.77 ▼ 70.23 HANG SENG: 28,356.26 ▼ 525.14 `/$: 68.63 ▼ 0.38 `/€: 79.73 ▼ 0.04 BRENT: $77.38 ▲ $1.07 GOLD: `30,536.00 ▲ `142.00 IN THE NEWS US tells India to end Iran oil imports by Nov 4 THE US has told India and other countries to cut oil imports from Iran to ‘zero’ by November 4 or face sanctions, making it clear that there would be no waivers to anyone, reports PTI. Iran is India’s thirdlargest oil supplier behind Iraq and Saudi Arabia. Iran supplied 18.4 million tonnes of crude oil during April 2017 and January 2018 (first 10 months of 2017-18 fiscal). Temasek buys $250-m stake in UST Global TEMASEK HAS bought a $250-million stake in Chanderias-led UST Global, an unprecedented bout of investment in the digital technology sector by the Singapore-based investment behemoth, reports fe Bureau in Thiruvananthapuram. Temasek is usually known to invest in sectors such as infrastructure, financial services and consumer business. Probe report on Fortis indicts ex-promoters Says management overruled, loans given to ‘relatedparty’ entities without board okay 68.40 68.415 68.48 IN THE DOCK ■ Management absolved as it acted under duress ■ Board says legal action initiated to recover dues from brothers BHAVIK NAIR Mumbai, June 27 ■ Strikes down INDICTINGTHE FORMER promoters of Fortis Healthcare, Malvinder and Shivinder Singh, an investigation report bylawfirmLuthra&Luthrahas said a subsidiary of the companyhadgrantedthreecompanies affiliated to the Singh brothers an unsecured loan worth`445crore.Theloanhad been givenwithout the board’s approval and despite objections from the management. The report, however, absolved the executives of any blame and said they processed the That sinking feeling Rupee hits 19-month low ONE-DAY RULE HARD-HITTING Malvinder M Singh Malvinder’s appointment as lead: strategic initiatives, to recover payments payments under duress. What is damaging for the Singh brothers is the observation that the entities which received the inter-corporate deposits (ICD) qualified as ‘related parties’; the promoters, the report said, were considering selling assets owned by them to settle the ICDs. Shivinder M Singh The company said that it has initiated legal action to recover the outstanding ICDs. The findings of the investigationreportandthefirm’searnings in FY18were intimated to the stock exchanges early on Wednesdaymorningfollowing a two-day board meeting. Fortis Healthcare, which is Defaults jump, hit `1.2 lakh crore currently in the midst of a takeoverbattle,terminatedthe September2016appointment of former executive chairman Malvinder Singh as ‘lead: strategic initiatives’. It also decided to recover payments madetohiminthatroleaswell as any company asset in his possession. As is known, the Singh brothers had resigned as directors from the board of Fortis Healthcare in February this year, following the Delhi High Court order upholding the `3,500-crore arbitral award in favourof Daiichi Sankyo in the RanbaxyLaboratoriessalecase. Malvinder Singh, who was appointedlead:strategicinitiatives for five years with effect from October 1, 2016, at a remuneration of `12 crore per annum, had received `6 crore during 2016-17 and a proportionate sum for 2017-18. Continued on Page 2 FE BUREAU The rupee ended at 68.63 to the dollar on Wednesday, a 19month low. It is just 19 paise away from its all-time closing low of 68.82 seen on August 28, 2013. ■ P10 68.56 68.64 68.72 `/$ Intra-day, Jun 27 (Inverted scale) 68.634 Previous close: 68.255 Open Close QuickPicks NCLAT stays NCLT order in 63 Moons case The National Company Law Appellate Tribunal (NCLAT) on Wednesday stayed the June 4 order of the National Company Law Tribunal’s (NCLT) Chennai bench in the 63 Moons Technologies (formerly Financial Technologies India) case, reports fe Bureau in New Delhi. With the stay order, no government nominee can be appointed a director on the firm’s board. PAGE 24 Thyssenkrupp,Tata Steel reach compromise in steel JV talks THYSSENKRUPPAND Tata Steel are closing in on a deal to combine their European steel units this week, four people familiar with the talks told Reuters. Sources said options included a cash payment to Thyssenkrupp, changing the 50-50 ownership structure, lowering the debt to be transferred to it, or limiting dividend payments to Tata Steel for a number of years. PAGE 7 NDTV shares surge 20% as Sebi orders open offer A SEBI order saying that the 10-year loan advanced in 2009 by Vishvapradhan Commercial to NDTV’s promoters was ‘not a normal investment transaction’ and that the primary purpose of the loan was to acquire NDTV’s shares, sent the TV broadcaster’s stock soaring on Wednesday, reports fe Bureau in Mumbai. The share price rose 20% and ended the session at `39. PAGE 11 Haley cometh US ambassador to the UN Nikki Haley (centre) poses in front of Humayun’s Tomb in New Delhi on Wednesday. The daughter of Sikh immigrants from Punjab, she’s the first Indian-American to serve in a Cabinet-level position in any US presidential administration FY18 RESULTS AI revenues to rise, loss to drop ARUN NAYAL New Delhi, June 27 AIR INDIA WILL report operating revenues for 2017-18 that are around 20% higher thanthosefortheprevious yearwhen theywere `21,859 crore. However, the operating profit is likely to be lower than in 2016-17, thanks to rising fuel costs.The airline witnessed a threefold hike in operating profit to `298 crore in FY17. Savings on account of lease rentalsandbetterutilisationof aircraft would, however, leave the national airline with a loss that is slightly lower than the loss of `5,765 in 2016-17.Air India’s projected net loss for TAILWIND Fuel expenses (` cr) Operating revenue (` cr) 2016-17 21,589 2016-17 25,900* 2017-18 6,337 2017-18 6,900* *AI sources Domestic passengers carried (million) 14.8 16.4 2016-17 2017-18 2017-18 is estimated at `3,579 crore as per a written replyfrom the ministryof civil aviation in January this year. The ministrywas conservative in its FY17 loss estimates as actual losses turned out to be `2,000 crore more than the `3,728-crore provisional figure for that year. Continued on Page 2 SUBRAMANIAN-SPEAK ‘Stigmatised capital’is India’s biggest roadblock: CEA FE BUREAU New Delhi, June 27 APARTFROM HIGH oil prices, the biggest headwind for India’s growth prospects,outgoing chief economic adviser Arvind Subramanian said,was “stigmatised capitalism”, or the view that the private sector could not be trusted. This, he said, was the reason why the government was not able to make much progress in privatising PSUs, in lowering high telecom levies, writing off enough of Air India’s debt to make the sale alluring, etc. Subramanian was speaking at the Express Group’s Idea Exchange programme. “I do think that stigmatised capitalism is coming in the way of a lot of reforms to bring in the private sector as public officers fear that they might be questioned by investigative agencies later,” he said. Subramanian, who will be leaving at the end of July,said there was no truth to the view that he felt stifled in the ministry and that that was the reason why he was leaving. He said he had made his position known on a variety of issues, and through public documents like the Economic Survey. Had the government been uncomfortable with this, he said, he couldn’t have done as much as he has. While he had argued that the goods and services tax (GST) needed to be less complicated, and said he was happy with the way GST was evolving, he added that the 28% slab needed to be removed at the earliest. And while the cess had to be retained,having just one rate was better instead of the multiple rates right now. “I had proposed 18% and 40% slabs, and the cess is a different way of implementing the 40% rate,” he said. Continued on Page 2 SHAYAN GHOSH Mumbai, June 27 MORE THAN 4,000 borrowers with outstanding loans of `1.2 lakh crore have defaulted under the Reserve Bank of India’s (RBI) one-day default norms as on April 30. An RBI circular of February 12 required banks to classify borrowers as defaulters if their repayments are late even by a day. These relate to exposures of `5 crore or more and would notbebadloans;theywouldbe classified as Special Mention Accounts (SMAs). However, if payments are not regularised within 90 days, they would turn bad and be added the existing `10.2 lakh crore pool of non-performing assets. Responding to a right to information query, the RBI noted 4,210 borrowers were classified as defaulters under the one-day default norm.The central bank added that 2,810 borrowers had been late on repayments on April 1, 2018, and they owed banks `1.18 lakh crore. Meanwhile, data released by the RBI in its financial stability report (FSR) showed a 277% jump in SMA-0 loans — where repayments have been delayed between 1 and 30 days — between March 2017 and March 2018. The power sector accounted forat least `70,000 crore of system-wide stressed loans. According to a report on stressed /non-performing assets in the electricity sector tabled in Parliament by the Standing Committee on Energy on March 7, 2018, 34 power projects with a capacity of 40,130 MW are stressed. Last month, a senior State Bank of India (SBI) executive had observed lower-rated bor- BANK DEBT MOUNTAIN 4,210 borrowers were defaulters under one-day default norm as on Apr 30 2,810 borrowers had been late on repayments on April 1 277% jump in SMA-0 loans between March 2017 and March 2018 rowersaccountforalargechunk of one-daydefaults at the bank. According to him several small companiesandlower-ratedborrowers have missed interest payments in April.“The bigger and better-rated companies have stronger cash flows than the smaller firms and we have not seen major deadline misses fromthem,”hesaid,addingthat the new circular has made borrowers more disciplined. In February, the RBI had asked banks, either singly or jointly, to initiate a resolution plan as soon as a corporate default is spotted. In other words, banks have several options to revive the defaulting companies but these must be exercised within 180 days. Going by the new framework forresolution of stressed accounts,the fate of a defaulting entitywill be sealedwithin 465 days. Continued on Page 2 ● HIGHER EDUCATION Centre to scrap UGC, replace it with new body, HECI PRESS TRUST OF INDIA New Delhi, June 27 THE CENTRE IS set to replace the apex higher education regulator body University GrantsCommission(UGC)with theHigherEducationCommission of India (HECI) by repealing the UGC Act, 1951, HRD minister Prakash Javadekar said on Wednesday. “In a landmark decision, a draft Act for repeal of #UGC & setting up #HECI has been prepared,”Javadekar tweeted. He said the draft act is in accordance with the commitment of the government to reform the regulatory mechanism to provide “more autonomy”to highereducation institutes to promote excellence and facilitate holistic growth of the education system. The proposed HECI would focussolelyonacademicmatters and monetary grants would be under the purview of the ministry,according to the draft. Continued on Page 2 Special Feature Stay connected with these laptops on your journeys ■ Gadgets, P13
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