OPINION, P8 EDITORIAL ECONOMY, P2 Merging BoB, Dena, & Vijaya Bank was the best available option INTERNATIONAL, P14 MADAN SABNAVIS PNB FRAUD LOWERING TENSIONS Import curbs to stabilise ` may not work, higher duties on electronics won't affect demand ED eyes `4,000-cr foreign assets of Nirav Modi for attachment under PMLA Russia faults Israel over Syria plane downing but keeps calm NEW DELHI, WEDNESDAY, SEPTEMBER 19, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 172, 20 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: 37,290.67 ▼ 294.84 NIFTY: 11,278.90 ▼ 98.85 NIKKEI 225: 23,420.54 ▲ 325.87 HANG SENG: 27,084.66 ▲ 151.81 `/$: 72.97 ▼ 0.46 `/€: 85.22 ▼ 0.68 BRENT: $79.12 ▲ $1.07 GOLD: `30,737 ▲ `123 TRADE WAR WIDENS SEBI DECISIONS Jio displaces Vodafone as 2nd largest operator by subscribers FE BUREAU New Delhi, September 18 RELIANCE JIO DISPLACED Vodafone India and Idea Cellular to emerge as the second largest telecom operator in terms of subscribers at the end of July, data released by the Telecom Regulatory Authority of India on Tuesday showed. Though Jio has been adding the maximum number of subscribers each month, at end June it was still at number four position — slightly behind Idea Cellular — with a total subscriber base of 215 million. In July, Jio once again added the maximum number of users at 12 million, taking its tally not only beyond Idea but also Vodafone with a gross user base of 227 million. Continued on Page 2 FE BUREAU Mumbai, September 18 INAMOVE thatwouldreassure foreign portfolio investors (FPIs), the Securities and Exchange Board of India (Sebi) said on Tuesday it broadly agrees with easier know-yourcustomer norms suggested by the committee headed by former Reserve Bank of India deputy governor HR Khan. Moreover,theregulator’sboard has mandated that large companies must now access the bond markets for a fourth of their borrowings. In addition, the Sebi board approved a fresh framework forthe settlement of cases and a proposal that will allow foreign investors to trade in the derivatives market for commodities, except sensitive ones. The capital markets watchdog also introduced a new methodology to calculate the expense ratios for mutual funds and approved amendments to the delisting rules. The Khan committee has suggested allowing non-resident Indians (NRIs), OCIs or overseas citizens of India and NEW RULES ■ Khan panel suggested NRIs and OCIs be allowed to hold noncontrolling stake in FPIs ■ Expense ratios cut, to 1.5% for AUM>`10,000 cr versus 1.75% earlier ■ Listing time cut from T+6 to T+3 days ■ Rules to declassify promoters amended ■ Framework for market borrowing by large firms resident Indians to be allowed to hold non-controlling stake in FPIs, saying no restriction should be imposed on them to manage non-investing FPIs or Sebi-registeredoffshorefunds. It said NRIs should be allowed to invest as FPIs if the single holding is under 25% and group holding under 50% in a fund and also suggested that erstwhile PIOs or persons of Indian origin should not be subjected to any restrictions. The committee also recom- mended allowing clubbing of investment limits forwell-regulated and publicly-held FPIs having common control. The Sebi board also mandated on Tuesday that from April next year, companies must raise 25% of their incremental long-term borrowings in a year, in the bond markets. These are companies that have outstanding borrowings of `100 crore or more and command a credit rating of AA or better. The watchdog also allowed promoters to give a counter-offerinacaseofvoluntary delisting, if the price discovered through the reverse book-building process is not acceptedbythem.However,the counter-offershouldnotbeless than the book value and delistingwillbesuccessfulonlyifitis accepted by such number of public shareholders that the post offerpromotershareholding reaches at least 90%.It has beendecidedtoamendtheregulations to provide that promoterswillhavetogivetheexit to public shareholders within three months of delisting from recognised stock exchanges. With a view to making expenses of asset management companies (AMCs) more transparent, the regulator directed thatallcommissionandexpensesmustbebornebythescheme and not from the AMC/associate/sponsor/trustee. Continued on Page 2 US TARIFF ON METALS Special Features PFRDA caps equity mutual fund investment by NPS PFRDA guidelines on investment in equity MFs will be applicable to all NPS schemes—central and state governments, private sector, NPS Lite and Atal Pension Yojana ■ Personal Finance, P13 Goibibo sets to redefine the future of travel with AI The online travel agency’s chatbot Gia utilises the power of artificial intelligence to reduce in-person support ticket handling by more than 25% ■ eFE, P13 QuickPicks Rupee falls 47p to close at record low of 72.98 as crude oil rises THE RUPEE on Tuesday slid further 47 paise to settle at a record low of 72.98 against the dollar due to surging crude oil prices and escalating trade war worries, reports PTI. Panic dollar demand from importers and speculative traders sent the local currency sinking to a historic low of 72.99 in late afternoon deals with very little chance of RBI intervention. Since Monday, it has plunged by 114 paise or more than 1.5%. PAGE 10 Infosys says arbitrator rules in favour of ex-CFO’s severance pay INFOSYS SAID an arbitration tribunal has ruled in favour of former CFO Rajiv Bansal's disputed severance package, reports Reuters. Infosys is required to pay the outstanding severance amount of `12.17 crore with interest. The company’s founders had objected to Bansal’s payout and the ensuing row culminated in the resignation of the then CEO Vishal Sikka. Record cane arrears: `5,500-cr package likely for sugar sector THE CENTRE is considering a financial assistance of around `5,500 crore for the sugar sector in the next marketing year starting October to assuage pains of both farmers and mills, report Banikinkar Pattanayak and Prabhudatta Mishra in New Delhi. The government is concerned about record cane arrears and the prospect of a domestic sugar glut worsening further. PAGE 2 India defers response on trade deal hopes FE BUREAU New Delhi, September 18 when Washington has raised the stake in its trade war against Beijing by announcHOPING TO HAMMER out a ing extra tariff on around mutually-acceptable trade 6,000 Chinese goods worth package, India has deferred its $200 billion on Monday. planforasecondtimetoimpose According to sources, as retaliatory tariff worth close to part of the trade deal, while a $235 million on 29 American waiverfromtheextradutieson products by 45 days to Novem- the metals is still being pushed ber 2. The proposed hardbyNewDelhi, retaliation is against NARROWING GAP among others, the the Trump adminisUS wants India to tration’s move to slap $22.9 billion remove price cap an additional 25% India's goods trade surplus on bioresorbable duty on steel and with US in 2017, down 6% stents. India is a from a year before 10% on aluminium large market for supplies from counstent makers and tries,including India. $11.1 billion it imported medNew Delhi’s deci- India's surplus with US in ical instruments, sion to defer tit-for- 2018 (Jan-Jul), down from including stents, tat action through a $12.4 billion a year before worth around midnight notifica$1.6 billion from tion on Monday $615 million the US in the last comes at a time Iron and steel exports to fiscal, up 10% when both the US in April-July period, from ayearearlier. countries are down 5.7% y-o-y mainly on extra tariffs engaged in serious Continued on trade negotiaPage 2 tions. It is India, US closing expected to in on packease a tariff age deal to war between remove the two countrade tries, at least irritants, temporarily, Page 2 ● CONSENT PLEA? ICICI Bank, Kochhar hint at settlement FE BUREAU Mumbai, September 18 THE SECURITIES AND Exchange Board of India (Sebi) onTuesdaysaidICICIBankand its managing director and chief executive officer Chanda Kochhar have indicated they would like to settle by consent thematterofloansextendedto the Venugopal Dhoot-promoted Videocon Group. Ananta Barua, whole-time member,Sebi,said on the sidelines of a press conference that no formal letter had been filed yet by Kochhar or the lender. Continued on Page 2 TOUGH CALL ■ No settlement if loss to investors large or affects market integrity ■ Not possible for wilful defaulters or economic offenders Shots fired US 10% duty on Sept 24, rising to 25% next year; Trump to pursue $267 bn more if China retaliates US-China trade war is intensifying, based on imposed and threatened tariffs Total US imports of Chinese goods in 2017: BLOOMBERG Hong Kong/Washington, September 18 CHINA ANNOUNCED IT will take retaliatory tariff action against$60billionofUSgoods, sharplyescalatingthetradewar as the Trump administration considers imposing duties on virtuallyall Chinese imports. China’s retaliatory tariffs, on items ranging from meat to wheat and textiles, will take effect on September 24, China’s ministry of finance said in a statement posted on itswebsite.Beijing is still ready tonegotiateanendtothetrade tensions,it said. At almost the same time the tariff list was released in Beijing, President Donald Trump onTuesdaythreatened more counter-measures againstChinaifittargetspolitically potent US agricultural productsforretaliation.“China has openlystated that theyare $250 bn $60 bn Total Chinese imports of US goods in 2017: $50 bn $130 billion Source: US Census Bureau and Bloomberg actively trying to impact and change our election by attacking our farmers, ranchers and industrial workers because of theirloyaltytome,”Trumpsaid on Twitter.“What China does not understand is that these people are great patriots.” In an announcement on Monday, Trump ordered his administrationtolevy10%tariffs on about $200 billion in Chinese goods on September 24andtomorethandoublethe rateinJanuaryifBeijingrefuses to offer trade concessions.The latestroundofdutiescomeson top of a 25% tariff already imposedonabout$50billionin Chinese goods. Stock talk FE BUREAU Bank stocks react along predictable lines The Bank of Baroda stock plummeted following the government’s move to merge a weaker bank — Dena Bank — with it. Not surprisingly, Dena Bank gained a lot. Bank Nifty Intra-day 27,000 26,200 26,000 Vijaya Bank Intra-day on BSE (`) 130 120 115 110 105 65 121.60 60.70 60 Close Close 56.40 Open Close JAPANESE DRUG MAJOR DaiichiSankyo,whichisincourtto recover `3,500 crore from former Ranbaxy promoters MalvinderandShivinderSingh aspartofthearbitrationaward by a Singapore tribunal, on Tuesday moved the National Company LawTribunal (NCLT) to staythe insolvencyproceedingsagainstRHCHoldinginiti- Flipkart Marketplace invests in Indian arm ANUSHREE BHATTACHARYYA New Delhi, September 18 Continued on Page 2 15 19.10 0 July 2, 2018 Sept 18, 2018 Daiichi moves NCLT seeking stay on insolvency proceedings ated byHDFC Bank. RHC Holding is the holding company through which the Singh brothers had made the sale of Ranbaxy to Daiichi. A two member NCLT bench asked both RHC Holding and its lender HDFC Bank to file a reply on the matter within a week. The matter will next be heard on October 4. Daiichi Sankyo, which has filed an intervention applicationintheinsolvencypleafiled ● `3,463 CRORE Continued on Page 2 15 ● RHC HOLDINGS CASE FE BUREAU New Delhi, September 18 Continued on Page 2 Alibaba's Ma says friction could last 20 years, Page 14 byHDFC Bank,said theyhave a decree to recover money against RHC Holding. The Delhi High Court has already granted a status quo over sale of assets by RHC Holdings. A tribunal in Singapore had passed the award in favour of Daiichi holding that the Singh brothers had concealed information. 20 5 Prev. close: 59.80 Trump said that the USwill immediately pursue additional tariffs on about $267 billion of Chinese imports if Beijing hits back to the $200 billion round. The Trump administration is giving American businesses a chance to adjust and look for alternative supply chains by delaying an increase of the tariff to 25% on January 1 for the $200 billion batch of Chinese goods,according to two senior administration officials who briefed reporters on Monday. SINGAPORE-BASED FLIPKARTMarketplace has infused `3,463 crore into the Indian entityFlipkartInternet,accordingtoregulatoryfilingssourced by data intelligence platform Paper.vc. Flipkart Marketplace has infused the money in two tranches. In the first tranche, theSingapore-basedfirmputin `456 crore in lieu of 2.2 lakh shares and in the second tranche `3,007 crore for 14.5 lakhsharesintheIndianentity. An email sent to Flipkart did not elicit any response till the time of going to press. Priortothis,inFY18Flipkart Internet had received two roundsoffundsfromtheSingapore-based firm. In March this year, Flipkart Marketplace had pumped in `370 crore in the firm and `1.7 crore before that. Flipkart competes against US-based Amazon in India. In August, Amazon infused a fresh capital of `2,800 crore into two of its Indian business units. Amazon Seller Services — the e-commerce business — received `2,700 crore while Amazon Retail got `100 crore. 10 50 45 Open Share price on BSE (`) 25 55 Prev. close: 135.10 Prev. close: 26,820.30 Dena Bank Intra-day on BSE (`) 70 113.45 Open 26,757 26,400 Bank of Baroda 125 26,441.45 26,800 26,600 $506 billion $267 bn Threatened ● JULY NUMBERS Earlier circular put $75 bn FPI at risk, Sebi promises new rules in keeping with Khan panel China hits back with $60-bn levy after US’ $200-bn hit Tariffs on goods in effect or announced Relief for NRIs, cut in mutual fund costs AIMING HIGH Meet the billionaire dreamer taking Musk’s rocket to the moon BLOOMBERG Tokyo, September 18 IN A COUNTRY known for conformity, Yusaku Maezawa hasalwayssoughttostandout. He skipped college, moved to California to play in a rock band and started his own ecommerce company. After making it big, the 42-year-old started dropping hundreds of millions of dollars on artwork. Now the billionaire founder of StartTodayissettobecomethe first paying passenger to the moon on a SpaceX rocket scheduled to blast off in 2023. It’s the latest headline-grabbing project by Maezawa, whose Twitter handle is @yousuck2020. WhileMaezawaisrelatively unknownoutsidethearchipelago and the art world, he’s guaranteed to become more famous with his plan to fly to Earth’s biggest satellite with a cabalofartists.Aself-professed art lover, the Japanese entrepreneurintends to take a combination of painters, musicians,dancers,photographers, film directors,fashion designers and architects on a weeklong lunarloop,where he’ll get Yusaku Maezawa, founder and president of StartToday, at an event at the SpaceX headquarters in California, US, onTuesday to watch as they get inspired and create art along the way. “I thought long and hard about howvaluable itwould be to be the first passenger to the moon,” Maezawa said at an announcement at Space Exploration Technologies’ headquarters in Hawthorne, California, sitting next to the rocket company’s CEO, Elon Musk. “I choose to go to the moon with artists.” Theflightaroundthemoon is a marriage of Maezawa’s diverse interests: To be a visionary,to support art and to promote his company. Taking the enormous personal risk of orbiting the moon as the first private citizen would cement himinhistorybooks.Maezawa said he hopes the art created during the trip will inspire more interest and support for artists. Maezawa and Musk declined to say how much the lunar trip would cost. “This is not us choosing him,”Musksaid.“Hechoseus.He isaverybravepersontodothis.” Maezawamadeanameand fortune for himself by defying the norms of Japanese society. Continued on Page 2
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