OPINION, P8 COMMODITIES, P12 TRIPLE ETHANOL PRODUCTION SC takes the right call on both Jaypee and Amrapali loans New amendment to Arbitration Act will hit earlier awards and so needs to be dropped MALICIOUS ACTIVITY PM Modi targets `12,000-cr savings in oil import bill EDITORIAL INTERNATIONAL, P14 Microsoft threatens to pull Gab services over anti-Semitic posts MUMBAI, SATURDAY, AUGUST 11, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. 58 NO. 190, 30 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: 37,869.23 ▼ 155.14 NIFTY: 11,429.50 ▼ 41.20 NIKKEI 225: 22,298.08 ▼ 300.31 HANG SENG: 28,366.62 ▼ 240.68 `/$: 68.84 ▼ 0.15 `/€: 78.88 ▲ 0.74 BRENT: $72.36 ▲ $0.29 GOLD: `29,477 ▼ `9 BID ELIGIBILITY CHALLENGE THIRD IN A ROW SBI posts `4,875.8-cr loss in first quarter THE LOK SABHA and Rajya Sabha were on Friday adjourned sine die, reports PTI. While Lower House speaker Sumitra Mahajan said the session has been “more productive and safisfactory”, Upper House chairman M Venkaiah Naidu said it has been "three times more productive". The Lok Sabha passed 21 laws, including one to amend the SC/STAct. Fourteen bills were passed in the Rajya Sabha. No proposal to withdraw `2,000 notes: Govt THE GOVERNMENT ON Friday said there is no proposal to withdraw `2,000 denomination notes, reports PTI. MoS for finance Pon Radhakrishnan said “there is no such proposal”. The RBI introduced `2,000 notes following demonetisation of high-value `500 and `1,000 notes in November 2016. TUSHAR GOENKA & UTSAV SAXENA Mumbai, August 10 Q1FY19 Source: SBI 2.8 0.83 Gross NPA ratio (%) NA 9.97 44 bps sions to the tune of `900 crore towards gratuity.“We had provided for this in the previous quarter and we will do it in the next two quarters as well,” the SBI chairman told mediapersons on a call. The lender’s asset quality during the quarter was little changed as the gross non-performingassets(NPAs)declined marginally to 10.69% from 10.91% in the March quarter. Net NPAs improved 44 basis points sequentially to 5.29%. Slippages during Q1FY19 stood at `9,984 crore, much smaller than the `33,670 crore in Q4FY18. Kumar said the outlook was positive.“The quarterly performance of the bank has been very good and -4,876 2,006 16.58 2.36 Net profit/ loss 11,973 11,874 6,679 8,006 21,798 Domestic NIM (%) Change (%, y-o-y) Operating profit Other income 23.81 STATE BANK OF India (SBI) on Friday posted a third consecutive quarterly loss of `4,875.8 crore in the three months to June. The country’s largest lender attributed the losses to higher provisions for mark-tomarketlossesonthebondportfolio,lowertradingincomeand tohigherprovisionsonaccount of wage revisions. Chairman Rajnish Kumar said the lender was likely to report a profit in the Decemberquarter.He said hewas not sure about the September quarter results. The chairman explained that the mark-to-market provisions were high at `5,900 crore since the bank had not opted to defray the provisions over four quarters as allowed by the Reserve Bank of India. Instead, all the provisioning had been taken care of in the June quarter. Profits, Kumar added, had also been impacted by provi- Base effect Q1FY18 Net interest income 17,606 IN THE NEWS LS, RS adjourn sine die; termed ‘productive’ (` crore) « Puts it down to higher provisions for mark-to-market losses on bonds, lower trading income, pay revisions 10.69 72 bps only a few variables have seen a decline,”he said. Operationally, the lender fared satisfactorily with domestic advances registering a growth of 7.2%year-on-year of which retail advances increased a good 14.11%. Net interest income was up 23% year-on-yearto `21,798 crore. Domestic net interest margin rose 28 basis points sequentially to 2.95%. Provisions and contingencies surged 115.33% to `19,228.26 crore in Q1FY19 from`8,929.48croreayearago. However,onaquarter-on-quarter basis,theydeclined 31.56% from `28,096.07 crore. NCLAT clears the deck for Tata Steel and Vedanta ● LEO PURI ‘I am clear I am not seeking an extension’ DESPITE T ROWE Price being in court against the government and UTI’s four PSU shareholders, the mutual fund’s MD Leo Puri remains confident a solution will be hammered out soon.He,however, will not be part of it since, he tells Chirag Madia in Mumbai, it is not possible to work with a board that remains divided. He speaks of how UTI has done underhis stewardship,is candid about the fact that the trustee board and the asset management company’s board don’t see eye to eye — it is the trusteeswho are responsible for the fund — and that, while bank-owned funds have done well in the industry, UTI’s bank shareholders have done little for it since they run their own funds. Detailed Q&A on Page 9 BHUSHAN STEEL Ends all uncertainty on the success of awards relating to Bhushan Steel, Electrosteel Steels July 26, 2017: Bhushan Steel admitted by NCLT Delhi July 22, 2017: Electrosteel Steels admitted by NCLT Kolkata May 15, 2018: NCLT approved Tata Steel's resolution plan April 17, 2018: NCLT approved Vedanta's resolution plan May 16: Neeraj Singal moved NCLAT challenging Tata’s eligibility SURYA SARATHI RAY New Delhi, August 10 THE NATIONAL COMPANY Law Appellate Tribunal (NCLAT) on Friday dismissed the petitions of former promoter and managing director of Bhushan Steel Neeraj Singal, who had challenged the eligibility of Tata Steel to bid for his bankrupt company, as well as that of Renaissance Steel, which had challenged the eligibility of Anil Agarwal’s Vedanta to bid for Electrosteel Steels. August 10: NCLAT upholds NCLT's order Though the National Company Law Tribunals had cleared the bid of Tata Steel for Bhushan Steel on May 15 and Vedanta’s for Electrosteel on April 17, both were challenged in the NCLAT, which while not staying the awards hadsaidthatthefinaloutcome Tata Steel, JSW Steel and LibertyHouse — in the frayforthe bankrupt Bhushan Power and Steel to submit revised bids. A bench led by justice RF Nariman directed the NCLAT to“hearandpassfinalordersas expeditiously as possible” and also asked the lawyers not to INDU BHAN New Delhi, August 10 IN A SETBACK for Tata Steel, the Supreme Court on Friday refused to stay the National Company Law Appellate Tribunal (NCLAT) order that allowed the three bidders — Continued on Page 2 4 0 -4 2.1 0.1 -0.3 -0.7 Jun 2017 Mining Jun 2018 Special Feature DAIICHI CASE HC grills Singh bros, freezes their assets FE BUREAU New Delhi, August 10 They can’t self-drive, but can perform certain driving tasks We take a look at the cars that can stick to lanes, follow the vehicle ahead at a predefined speed, apply brakes when needed, and even park on their own ■ Motobahn, P13 QuickPicks Sebi looking into Jet delaying June quarter results; stock dips SEBI IS looking into Jet Airways deferring its June quarter results after the carrier's audit committee expressed reservations, reports PTI. The regulator is concerned about any possible lapses in terms of disclosure and corporate governance norms. The airline’s shares declined 8.39% to hit an over three-year low of `276.40 on Friday on the BSE. PAGE 11 Passenger vehicle sales drop first time in 9 months in July DOMESTIC SALES of passenger vehicles declined for the first time in nine months in July on account of a high base last year when sales had spiked due to GST, report fe Bureaus in New Delhi and Mumbai. PV sales fell to 2,90,960 units in July from 2,99,066 units a year ago. Domestic car sales also declined marginally to 1,91,979 units against 1,92,845 in July 2017. PAGE 6 Continued on Page 2 “transition period” (till June 2022),duringwhich states are constitutionally guaranteed a GST revenue growth (over the base year, 2015-16) of 14% per year, meaning any shortfall from the threshold will be compensated from the fund. To obtain the proceeds of the compensation, a cess is levied on some demerit/sin goods along with luxury items, over and above the GST rates. Continued on Page 2 Continued on Page 2 8.5 6.6 6.9 Electricity seek any adjournment on August 17, the day the appellate tribunal is slated to hear the case. Earlier, the appellate tribunal had granted extension of time forsubmitting the revised bids till August 13. PARESH SUKTHANKAR ON Fridaysteppeddownasdeputy managing director of HDFC Bank,the country’s largest private sector bank by assets.The resignationcomesasasurprise as Sukthankar, who was elevated to the deputy managing director position in March 2017, was widely expected to take over from managing directorAditya Puri. While there was no official confirmation from HDFC Bank, media reports said Puri had indicated at an analysts meetthatthebankintendedto identify his successor 18-24 months before he retired. PriortojoiningHDFCBank, Sukthankar worked in Citibankforaroundnineyears, across verticals including corporate banking, risk management, financial control and credit administration. Sukthankar, who has done his Masters in Management Studies from Jamnalal Bajaj Institute (Mumbai) and the Advanced Management Program (AMP) from the Harvard Business School, has been a member of various Committees formed by the Reserve Bank of India and the Indian Banks’Association. (% rise, y-o-y) 7 Continued on Page 2 FE BUREAU Mumbai, August 10 COMING DOWN HEAVILY on former Ranbaxy promoters Malvinder and Shivinder Singh, who were personally present in the court on Friday, the Delhi High Court barred them from selling any of their assetswithoutitsapprovaland also asked them to furnish details of all their sold and gifted assets, including bank accounts,from April 2016. While freezing their bank accounts, justice Rajiv Shakhder also barred Malvinder Singh from selling his property in Singapore, which is currently mortgaged with DBS Bank. Questioning the brothers in open court on bank accounts and properties in India and abroad, the bench asked them to reveal the assets sold since April 2016 before September5,which is the next date of hearing. “They seem to be heading in the direction of saying that we don’t have any money… If they don’t have any money, theyshoulddeclareinsolvency, they can’t keep money away from the court... Half-truths have been given before us by the Singh brothers,” the judge told the two brothers. Continued on Page 2 A flood of misery An aerial view of the floods in Aluva, in Kerala on Friday. Twenty-nine people have lost their lives so far in landslides and floods due to the heavy rains in the state LS APPROVES CHANGES GST cess surplus can now be shared SUMIT JHA New Delhi, August 10 IN A MOVE that would partly address the goods and services tax (GST) revenue deficit for the Centre and come in aid of states worried over stagnant growth in their own tax (non-GST) revenue, the Lok Sabha on Thursday approved changes to the relevant law to allow both to dip into the surplus in the GSTCompensation Fund at any time during a financial year. Compensation cess collected till May 2018 `86,026 cr Disbursed to states `51,773 cr Surplus `34,253 cr The law has hitherto allowed division of the surplus only after a five-year WATCHDOG’S WARNING E-commerce companies may be in deep trouble on deep discounts FE BUREAU New Delhi, August 10 E-COMMERCE COMPANIES LIKE Flipkart, Amazon and others could soon find themselves under investigation by the Competition Commission of India (CCI) for indulging in deep discounting and according preferential treatment to select sellers on their platforms, something that is prohibitedunderthe2016foreign direct investment (FDI) policy. TheCCIsoundedthiswarning while granting approval to the Walmart-Flipkart deal on August 8. The approval was granted to the deal between thetwodespitetheCCIfinding such violations on the part of Flipkart because it said that such discounting is not specifictoFlipkartbutisprevalent in the market so it won’t make any difference from the competition point ofviewonce the ILLUSTRATION: ROHNIT PHORE 8 will depend on its decision on the petitions. Subsequently, Tata Steel took over the management of Bhushan Steel and the same was done by Vedanta in the case of Electrosteel. HDFC Bank deputy MD Sukthankar resigns Industrial production grew 7% in June, against 3.9% in May and -0.3% a year earlier. Capital goods, consumer durables, primary goods and infra/construction goods recorded growth in the 8.5-13.1% range in June 2018, thanks partly to the favourable base effect caused by de-stocking ahead of the July 2017 GST roll-out. Overall IIP August 10, 2018: NCLAT upholds NCLT's order ● SURPRISE MOVE June IIP scales 5-month high Manufacturing May 18: NCLAT admits Renaissance Steels' challenge against Vedanta's eligibility No SC stay on NCLAT’s Bhushan Power order FE BUREAU 12 ELECTROSTEELSTEELS merger comes into force. Still sounding a warning that it would not hesitate to probe such players at a time of its choosing, the CCI said, “There is no bar on the Commission at anypoint of time to examine such issues underthe relevant provisions of sections 3(4) and 4 the Act and regulations made thereunder.” The observations on such violations bythe marketplacebased e-commerce companies have been noted first for the firsttimebyanystatutorybody since the enactment of the 2016 FDI policy which bars them from discounting aswell sourcingbulkoftheirproducts from preferred sellers. The CCI has also asked the government to look into the matter either through a policy or devising a suitable regulatory mechanism. 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