OPINION, P8 COMPANIES, P6 BIDDING ADIEU Catch the lynchers, chasing WhatsApp is of limited use FPIs will vote the way they have to, it makes no sense to blame foreign proxy firms SHORING UP THE ECONOMY Anu Aga hangs up her boots, leaves a stronger Thermax EDITORIAL INTERNATIONAL, P14 S Korea Prez Moon gets $161-billion Samsung boost MUMBAI, THURSDAY, AUGUST 9, 2018 VOL. 58 NO. 188, 22 PAGES, `7.00 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 37887.56 ▲ 221.76 NIFTY: 11450.00 ▲ 60.55 NIKKEI 225: 22644.31 ▼ 18.43 HANG SENG: 28359.14 ▲ 110.26 `/$: 68.63 ▲ 0.06 `/€: 79.58 ▲ 0.07 BRENT: $73.96 ▼ $0.69 GOLD: `29418.00 ▼ `103.00 TATA-MISTRY WAR We might have to write ... on how a judgment should be written: NCLAT SURYA SARATHI RAY New Delhi, August 8 was hearing the case brought about by Cyrus Mistry, who was dismissed from his post of chairman by the Tata Sons board in October 2016. It was not only the bench we were a little perplexed whethera properexamination was done or not?” “Wedonotdemeanajudge. Buthesaysthatwehavetoprotect the future. See how far he has gone. That means he is a protector of a particular company. He says we will have to protecttheinterestofthecompany and that too in a judgment,”the bench added. Continued on Page 2 PSB write-offs cross US investor sues govt over UTI `1 lakh cr in FY18 « « 175 57 IDBI Bank 2,868 12,515 Indian Bank 437 1,606 Oriental Bank of 2,308 6,357 Commerce 1,264 Union Bank of India 3,477 United Bank of India 714 1,867 Total for 21 banks 268 161 Data on write-offs of PSBs Source: Ministry of finance pletion of four years, are removed from the balance sheetsofbanksbywayofwriteoffs.Write-offsarepartofaregular exercise by banks to clean up their balance sheets and avail tax benefits.Borrowers of written-off loans continue to be liable for repayment and bankskeepupeffortstorecover them. If recoveries are made from written-off accounts, they get reflected in banks’ non-interest income. IDBI Bank saw the steepest ■ IPO plan to cut PSU stake to 10% each, in line with Sebi rules CHIRAG MADIA Mumbai, August 8 AFTER UNSUCCESSFULLY PETITIONING the finance ministry and the Securities and Exchange Board of India (Sebi),US investorTRowe Price (TRP) on Wednesday filed a case in the BombayHigh Court against the Indian government asking it to prevent PSU ■ Govt/PSUs wanted smaller IPO to cut TRP financial investors — State Bank of India, Life Insurance Corporation (LIC), Punjab National Bank (PNB) and Bank of Baroda — from scuttling Unit Trust of India’s (UTI) attempts at an initial public offering (IPO) and trying to stake under 26%, would allow PSU takeover of UTI ■ Trustee board wants PSU to cut stake & MD to get a year’s extension to complete IPO ■ With PSUs not allowing this, TRP goes to court take over the country’s fourth largest mutual fund through the back door. TRP owns 26% of UTI and was sold these shares in 2009-10bythegovernmentas part of a process to make UTI a board-managed profes- Continued on Page 2 ● SURPLUS TRANSFER RBI declares `50,000-cr dividend for 2017-18 Surplus transfer by RBI to Centre (FY July-June, ` crore) Continued on Page 2 ■ PNB to raise `8,600 cr through asset sale in FY19, Page 10 50,000* « « « INANTICIPATION OF recovering bad loans and looking to clean up their balance sheets, banks have written off more than `1 lakh crore worth of loans in 2017-18. Write-offs made by 21 public-sector banks(PSBs)rose57%year-onyear(y-o-y)inFY18andcrossed the `1-lakh-crore mark, minister of state for finance Shiv Pratap Shukla said in responsetoaRajyaSabhaquestion.Thereductioninnon-performing assets (NPAs) due to write-offs stood at `1.28 lakh crore as on March 31, 2018, against `81,684 crore as on March 31,2017. Thevalueofwrite-offsadds up to over 14% of the aggregate gross NPAs of the 21 PSBs at the end of March 2018. According to Reserve Bank of India (RBI) guidelines and policy approved by banks’ boards, NPAs, including those in respect of which full provisioninghasbeenmadeoncom- 175 26% of UTI. LIC, SBI, PNB,BoB own rest 30,659 « « SHRITAMA BOSE Mumbai, August 8 Change (in %) ■ Govt sold T Rowe Price sional company. WithTRPaccusing the four PSUsoftryingtostallUTI’sIPO “for reasons best known to them” and to ensure it becomes headless soon — current MD Leo Puri’s term ends soon — at stake are the interests of 11 million shareholders, lakhs of pensioners, `3.6 lakh crore of UTI’s corpus and India’s reputation as a safe place for global investors. Others named in the petition are Sebi and the four PSU financial institutions — Sebi’s job is to ensure the mutual fund guidelines were adhered to, so the suit asks the court to ensure Sebi does this. 65,876 336 FY18 BATTLE FOR UTI’S SOUL 65,896 NEW ZEALAND dairy giant Fonterra Co-operative Group has partnered with India's Future Consumer to introduce its dairy products in the country, the companies said on Wednesday, reports Reuters. Fonterra (Europe) Cooperatie UA, a unit of Fonterra Co-operative Group, and Future Consumer will form an equal joint venture, the firms said in a joint statement. FY17 climb in write-offs, which jumped 336% from the end of FY17 to `12,515 crore at the end of FY18.It was followed by Indian Bank, which saw a 267.5% rise in write-offs to `1,606 crore at the end of March 2018. StateBankofIndia(SBI),the country’s largest bank, had written off loans worth `39,151 crore at the end of March 2018, up 42% from `27,574 crore a year ago. The FY17figureincludeswrite-offs madebySBI’sassociates,which weremergedwiththeparentat the beginning of FY18. Punjab National Bank (PNB) was one of the three banks where write-offs declined between March 2017 and March 2018, the other two being Dena Bank and Punjab & Sind Bank. PNB’s write-offs stoodat`7,407croreattheend of March 2018,down 19.5%yo-y. Dena Bank’s write-offs declined 21% y-o-y to `661 crore, while those at Punjab & SindBankfell6%to`460crore. InJune,FEhadreportedthat 10 banks accounted for writeoffsworth`1lakhcroreinFY18. While it is possible banks may recoversome of this money,the write-offs are expected to be sizeable in the currentyeartoo. Alleges PSUs trying to control board & ignoring trustees who are responsible under Sebi rules 52,679 PSBs’ write-offs (` cr) ASKING THE promoters and directors ofAmrapali Group not to “play smart”, the Supreme Court on Wednesday directed them to furnish details of their movable and immovable properties along with valuation reports within 15 days, reports fe Bureau in New Delhi. The SC also directed the group to file a proposal on selling off its assets to raise `5,000 crore. to rule on whether or not to stay the order of the Mumbai bench delivered last month. It — ABHISHEK MANU SINGHVI, TATA COUNSEL which expressed its anguish at the manner the judgment was written. Senior advocate AbhishekManuSinghvi,representingtheTatas,observed,“We invite trouble by this kind of writing.Iamnotsupportingthe language, not supporting the adjectivesandtheflowerybackground.Expunge thewords.” The NCLAT bench headed by its chairman SJ Mukhopadhaya exclaimed, “When we were going through the order, INVESTOR RELATIONS Up 57% from a year ago; NPAs lowered by `1.28 lakh crore NZ's Fonterra to versus `81,684 enter India with crore in the Future Consumer previous year SC to Amrapali: Raise `5,000 cr via assets sale — NCLAT BENCH We invite trouble by this kind of writing. I am not supporting the language, not supporting the adjectives and the flowery background. Expunge the words 33,010 AN AMENDMENT to the Central Goods and Services Tax (CGST) Act has explicitly and retrospectively barred claiming transitional credit in lieu of cess, Krishi Kalyan and Swachh Bharat paid in the pre-GST regime, reports fe Bureau in New Delhi. The CGSTAmendment Bill was tabled in the Lok Sabha on Wednesday. We do not demean a judge. But he says that we have to protect the future. See how far he has gone. That means he is a protector of a particular company CLEANING UP 81,684 1,28,230 IN THE NEWS GST amendment Bill tabled in Lok Sabha THE NATIONAL COMPANY Law Appellate Tribunal (NCLAT) on Wednesday made some sharp observations on thequalityoflanguageusedby the Mumbai bench of the National Company Law Tribunal (NCLT) in its over 368page order. Such was the anguish of the bench that it observed, “We may have to write a judgment as to how a judge should write a judgment.” It went on to add,“We are not angry,ratherworried.” The appellate tribunal made the observations while hearing the appeal by Shapoorji Pallonji investment firmswith a stake inTata Sons, the holding company for the Tata Group. The companies have alleged mismanagement and oppression of minority shareholders.The NCLATisyet FY13 FY14 FY15 FY16 FY17 FY18 Special Feature Home truths BlackBerry Key2: The utility device is back in action `3L cr worth homes delayed The BlackBerry Key2, available for `42,990, boasts a judicious mix of high performing hardware and creative software features, and has the looks to go with it ■ Gadgets, P13 Over 4.65 lakh housing units worth `3.3 lakh crore across India are massively behind delivery schedule due to construction delays. Of these, over 60% are in NCR and Mumbai Metropolitan Region alone. THE $2.6-TRILLION Indian economy is like an "elephant starting to run" and will remain one of the fastest-growing economies, aided by structural reforms, the International Monetary Fund (IMF) said on Wednesday, reports fe Bureau in New Delhi. However, it said India needs to simplify the GST structure and take advantage of strong growth to trim debt more aggressively. In its annual country report, it cautioned that India’s debt is “close to the thresholds that raise the likelihood of debt distress among emerging market economies”. PAGE 2 Markets scale new peaks on RIL push, IMF fillip BENCHMARKS RALLIED to fresh lifetime highs on Wednesday on persistent investor appetite for market heavyweight Reliance Industries (RIL), while the broader buying momentum got a fillip after the International Monetary Fund underlined India's role as a source of global growth, reports PTI. The Sensex vaulted 221.76 points to close at a new peak of 37,887.56, while Nifty extended its record-setting run for the fourth session and finished above the 11,400-mark for the first time. PAGE 11 Kalaignar’s last journey ● CHEAPER BORROWING TUSHAR GOENKA Mumbai, August 8 Housing projects stuck/on hold Top 7 cities* and Tier 2 cities No. of projects 1,687 Million sq ft No. of units Present value (` crore) 598.59 4,65,555 3,32,848 *MMR, NCR, Bengaluru, Chennai, Hyderabad, Pune and Kolkata Source: PropEquity Research FE BUREAU New Delhi, August 8 Supporters pay their last respects to DMK chief M Karunanidhi as his cortege passes through the streets of Chennai on Wednesday Corporate bond yields at two-year high QuickPicks India needs to simplify GST, cut debts more aggressively: IMF FE BUREAU *Including `10,000 crore transferred to the Centre in March 2018 CORPORATE BOND YIELDS are at a two-year high, according to data compiled by CARE Ratings,which has pointed out that the weighted average yield across all maturities and tenors has risen by 70 basis points (bps) to 9.1% in the seven months to July. CAREnotedthatcorporates are finding it cheaper to borrow through bonds because the average yield at 8.9% so far in FY19 is lower than the interest rates paid by borrowers from bankswhich stands at 10.11%. Banks WALR (Avg) Corporate bond yield (Avg) 13 12.33 12 10.11 11 10 9 8 9.40 8.90 7 FY13 FY19* *WALR for Apr-May’18 and Corporate Bond Yield for Apr-Jul’18 Continued on Page 2 THE RESERVE BANK of India (RBI)onWednesdayannounced thetransferof`50,000croreto the Centre from its 2017-18 (July-June) surplus. Given that the amount included `10,000 croretransferredinMarchasan interimmeasuretoaidtheCentre’s effort to contain the FY18 fiscal deficit, the Centre will have only `40,000 crore available for FY19, against the finance ministry’s estimate of `45,000 crore. The Centre’s FY19 receipts budgetincludes`54,817crore as“dividend/surplus fromRBI, public sector banks and financial institutions”. Continued on Page 2 ‘MADE AS INDIA’ Ikea expects 6 m shoppers a year at its first local store with local flavour BLOOMBERG Mumbai, August 8 IN A MILESTONE that’s been morethanadecadeinthemaking, India’s first Ikea store will open on Thursday,bringing inexpensive Nordic-inspired furnishingsandfoodtotheworld’s fastest-growing middle class. Ikea expects to welcome as many as 6 million visitors a year to its 13-acre complex in Hitec City, on the outskirts of Hyderabad. The 400,000square-foot showroom contains some 7,500 products, of which about 1,000 will sell for less than `200 apiece. Ikea’s launch comes at least 12yearsafteritstartedstudying India,which is poised to overtake the US to become the world’s second-largest middleclass market by 2022. By then, sales of homewares and home furnishings will probably reach $15.3billionfrom$12.9billion lastyear,accordingtoresearcher EuromonitorInternational. “Rising incomes and affluence make for an attractive market in India,”said Sowmya Adiraju,aresearchanalystwith Euromonitor in Bengaluru, in an email.“Indian consumers are curious to see what Ikea has to offer and the retailer is well-positioned to meet this demand.” The world’s biggest furniture retailer invested more than `1,000 crore on its first foray in India.It is counting on new customers in industrialising nations bolstering sales growth in the face of brand fatigue and increased competition from online retailers, such as Amazon.com and made.com, in established markets. Continued on Page 2 ■ Ikea eyes long-term commitment in India, Page 17
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