OPINION, P8 ECONOMY, P2 EDITORIAL Operational creditors get a better deal, but IBC process will slow INTERNATIONAL, P14 MAHESH VYAS GOVT MEASURES SECURITY BREACH NSS data bears out CMIE’s claim of jobsgrowth slowing — Surjit Bhalla’s wrong ITR filings set to double under NDA, says FM Jaitley Hackers are using stolen Apple IDs to swipe cash in China NEW DELHI, FRIDAY, OCTOBER 12, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 192, 22 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: 34,001.15 ▼ 759.74 NIFTY: 10,234.65 ▼ 225.45 NIKKEI 225: 22,590.86 ▼ 915.18 HANG SENG: 25,266.37 ▼ 926.70 `/$: 74.13 ▲ 0.09 `/€: 85.80 ▼ 0.43 BRENT: $81.44 ▼ $1.65 GOLD: `31,310 ▲ `289 GLOBAL ROUT STEMMING RUPEE SLIDE Fresh import curbs Sensex crashes over 1,000 points soon to trim CAD PMO to convene meeting shortly; target items may include consumer goods, chemicals, scrap, base metals FE BUREAU New Delhi, October 11 THE PRIME MINISTER'S Office (PMO) will soon hold a meeting on trimming merchandise imports from overseas, as the government prepares for a second round of curbs,including highertariffs, on “non-essential imports” to cut the current account deficit (CAD) and contain its negative impact on the rupee, official sources told FE. Although the list of items for higher import tariffs isyet to be finalised,the curbs could cover around a dozen-and-a-half commodities, including certain consumer goods (such as TV and mobile phones), chemicals, electric machinery, scrap, minerals and base metals like aluminium. Of the 37 items that the government had identified earlier, import duties were raised on 19 last month,one of sources said. The PMO meeting could focus on the rest of the items, 4.8 150 136 138 119 *IMF estimate 4 109 ■ Govt had selected 1.9 2 50 0 CAD for FY19 seen at 3% of GDP* 157 100 37 items for higher tariff, of which duties on 19 were raised recently ■ Consumer goods such 2012-13 2014-15 2017-18 ...as trade deficit widens ($ bn) 64.2 80.4 2017-18 (Apr-Aug) 2018-19 0 as TV and mobile phones, chemicals, electric machinery, scrap, and base metals may face import curbs, including higher duties Source: Ministry of commerce apart from discussing ways to shore up local production and exports. Finance minister Arun Jaitley will likely attend the meeting. Any duty hike, however, will be fully compliant with the country’s commitment to the World Trade Organization,said the sources. Analysts have already expressed scepticism about the efficacy of last month’s duty hike, saying at `86,000 crore,purchases of these items accounted for only 2.5% of total merchandise imports and 0.5% of nominal GDP in 2017-18. Purchases of certain items from overseas saw a massive jump this fiscal. Forinstance,betweenApril and July, imports of electric machinery surged 44%, machine tools 43%,ship,boat and floating objects 36%,ferrous scrap 34% and aluminium 32%. The import value of each of these items was above $1 billion.Even coal imports jumped 28% to $11 billion up to July. The move to curb imports comesamidfearsthatelevated trade deficit,caused mainlyby a spurt in global oil prices,will jeopardise the country’s current account balance. S&P BSE Sensex 39,500 38,000 36,500 Nifty 50 11,500 10,128.4 33,940.44 11,000 35,000 10,500 33,500 10,000 32,000 YOOSEF KP Mumbai, October 11 Apr 11, ‘18 Oct 11, ‘18 YTD $ return (%) Close BOTH THE SENSEX and the Nifty50testedtheirlowestlevelsinsixmonthsafteratumble in US equities sparked sell-off across the globe on Thursday with the benchmark Sensex shedding as much as 1,037.36 points in intra-daytrade. While the Sensex ended the session at 34,001.15 points, the broader Nifty closed at 10,234.65 points. Both the indices were down by 2.2% each with almost all constituentsoftheindexinthered except oil companies which 10,234.65 34,001.15 12,000 6.3 -11.9 5.2 Shanghai Comp 2,583.46 -26.4 4.4 KOSPI 2,129.67 Apr 4, ‘18 Fall (%) Close Taiwan TAIEX 9,806.11 9,500 -19.5 * As on October 10, 2018 Source: Bloomberg were up tracking fall in global crude oil prices, government’s statement that they will not ask oil marketing companies to further subsidise petrol and Oct 11, ‘18 YTD $ return (%) Fall (%) 3.9 NIKKEI 225 22,590.86 -0.4 3.5 HANG SENG 25,266.37 -15.8 2.2 Nifty 50 10,234.65 -16.3 3.1 Dow Jones * 25,598.74 3.6 diesel prices. The Brent crude which is hovering at $81.5 per barrel has declined about 4% in the last two days. Here’s how you can avoid post-festival financial stress QuickPicks RBI sold net $2.3 billion in forex intervention in August THE RBI sold a net $2.34 billion in the foreign exchange market in August versus $1.87 billion in July, its monthly bulletin showed on Thursday, reports Reuters. The net dollar purchases in the forward market stood at $5.7 billion as of end August. The rupee started hitting a series of record lows in late July and moved in a wide band of 68.26 to 71.01 per dollar in August. Revenue Operating Net profit (` cr) income (` cr) (` cr) 7.6 13.9 « JETAIRWAYS' management is understood to have conveyed to its senior pilots at a meeting held on October 9 that it might have to ground 23 Boeing 737s to cut down its losses, reports Manisha Singhal in Mumbai. Sources said in the same meeting the airline said it will not be able to pay pilots and engineering staff pending salaries for September. PAGE 6 Chg (%) Operating margins (%) 7.6 25 26.5 Source: Company 149bps « Jet Airways looks to ground 23 Boeing 737s to cut losses Q2FY19 « THE CRISIS at Infrastructure Leasing and Financial Services has prompted authorities to review the health status of the housing finance segment that gets critical refinancing support from the National Housing Bank, reports Banikinkar Pattanayak in New Delhi. There is “no reported stress” in the 97 housing finance companies as yet, a senior government official told FE. PAGE 2 Q1FY19 « IL&FS aftermath: Govt official says no stress in HFCs so far ONTHE BACK ofwinning customers for its digital offerings andbenefitingfromtheslidein rupee against the dollar, the country’s biggest software exporter,TataConsultancyServices (TCS) onThursdayposted a strong set of numbers for the July-September quarter. The company registered a consolidated net profit of `7,901 crore, up 7.6% quarter-on quarterin linewith ana- « With festivities comes the risk of over-spending money. So avoid impulse buying and put your festive bonus to good use even as you enjoy the festivities ■ Personal Finance, P13 FE BUREAU Mumbai, October 11 7,901 Adam Berger, president, global media at Essence, on trends in advanced TV and voice, and advertising opportunity in the subscription video on demand space ■ BrandWagon, P13 PRESS TRUST OF INDIA New Delhi, October 11 Continued on Page 2 lysts’estimates.Revenues during the period beat estimates at `36,854 crore, increasing 7.6% from the June quarter. Revenues in dollar terms were up a reasonably good 3.2% at $5.2 billion. Operatingmarginsstoodat 26.5%,up 149 basis points on a sequential basis, which was highest in last 11 quarters, according to Bloomberg data. Of this, 120 basis points was contributed by currency gains while 30 basis points came in through operational efficiencies.The company reported an operating profit or ebit (earnings before interest and tax) of `9,771 crore, a rise of 13.9% on a q-o-q basis. With a revenue growth of 3.7% in cross-currency terms, Rajesh Gopinathan, CEO & managing director, TCS, said that it makes the company’s full-year revenue growth in terms of constant currency at 11.5%,bringing it back on the double-digitgrowthtrajectory. Continued on Page 2 Continued on Page 2 ED attaches Karti's assets worth `54 cr in India, abroad TCS turns in good show, weak ` helps In lighter vein 7,340 ‘Continued growth of SVoD is a challenge’ Meanwhile, the foreign portfolio investors (FPIs) remained net sellers for the last nine sessions offloading equitiesworth nearly$2.5 billion. Overseas investors sold shares worth $387 million in the cash segment on Thursday, provisional data from stock exchanges showed. The recent sell-off by FPIs have taken their year-to-date sale tally to $4.4 billion.This compares with a net purchase of $8.01 billion in 2017. On the other hand, the domestic institutional investors (DIIs) bought shares worth $13.9 billion so far this year. The massive sell-off in domestic stocks on Thursday wiped off `2.7 lakh crore of investor wealth, taking the value of market cap eroded to `23.6lakhcroresinceSeptember. The market value of BSElisted companies stood at `135.7lakhcroreonThursday. ● PMLA CASE Q2FY19 Special Features 9,771 BANKS HAVE ASKED passport authorities to impound the passport ofAbhijit Rajan, chairman of Gammon India, which has defaulted on loans, reports PTI. Sources say the firm is sitting on NPAs of `7,000 crore, and as a proactive step, the lenders have informed the authorities about the passport details. 6 190 200 8,578 Banks ask officials to seize Gammon chief’s passport Trade deficit ($ bn) CAD (% of GDP) RHS 36,854 FACEBOOK IS UNDERSTOOD to have informed India that the recent breach has not compromised accounts of its Indian users, reports Rishi Ranjan Kala in New Delhi. On September 28, Facebook, in a security update, informed about the data breach, which impacted around 50 million user accounts. The breach was discovered on September 25. BoP worries haunt... 34,261 IN THE NEWS No accounts compromised in India: Facebook Nifty ends below 10,300-mark after a tumble in US equities sparked heavy sell-off across the globe RIL chairman Mukesh Ambani speaks with Maharashtra chief minister Devendra Fadnavis at the launch of the World Economic Forum Centre for the Fourth Industrial Revolution, in New Delhi on Thursday Related report on Page 3 Fuel subsidy FE BUREAU Actual bill seen higher by `21,000 crore Subsidies on petroleum products, which saw a major reduction in recent years thanks to decontrol of the two auto fuels (diesel and petrol), will buck the declining trend this year and be the highest since FY15 Brent ($/bbl) Petroleum subsidy (` crore) 2011-12 1,47,007 2013-14 2014-15* Subsidy 2018-19 76,969 (` cr) LPG 34,186 2016-17 2017-18 (RE) 24,460 2018-19 (BE) BE 20,880 Kerosene 4,053 27,629 24,933 Likely: 46,000 *Diesel deregulated in October 2014 FERA VIOLATIONS 82.02 84 1,64,409 2012-13 2015-16 87 1,42,022 81 79.06 78 Likely ~39,000 75 ~7,000 72 Sept 11, 2018 Oct 11, 2018 While the government assumed crude oil (Indian basket) to be at $65/ barrel and rupee at 65 against the $ for 2018-19 as it made the Budget, crude averaged $73.7 in April-Sept 2018 and the rupee, after hitting a fresh record low of 74.48 on Wednesday, closed higher at 73.99 on Thursday. THE ENFORCEMENT DIRECTORATE (ED) on Thursday said ithasattachedassetsworth`54 crore of Karti Chidambaram, son of former finance minister P Chidambaram, in India, the UK and Spain in connection with the INX Media money laundering case, an action termed “bizarre and outlandish”byhim. The central probe agency issuedaprovisionalorderunder thePreventionofMoneyLaundering Act (PMLA) for attachment of agricultural land and bungalow in Kodaikanal and Ooty in Tamil Nadu and a `16crore flat in south Delhi’s Jorbaghwhichisinthenameof Karti and his motherNalini. Karti, the ED said, has a 50% share in this property. In the United Kingdom,the ED attached a `8.67-crore cottage and a house in Somerset (in the name of ASCPL) and a tennis club valued at over `14.57 crore located in Barcelona, Spain, have also been attached as part of the same order,the agency said. Karti, through his official twitter handle, reacted to the order and said: “A bizarre and outlandish provisional attachment order which is not based on law of facts but on crazy conjectures.This is meant only to grab headlines.” The“orderwillnotwithstand judicialscrutiny,review,appeal. Will approach the appropriate legal forum”,he said. Continued on Page 2 RANBAXY ARBITRATION Shivinder willing to pay his share Court orders attachment of Mallya’s Bengaluru properties of `3,500-crore dues to Daiichi PRESS TRUST OF INDIA New Delhi, October 11 A DELHI COURT on Thursday ordered attachment of liquor baron Vijay Mallya’s properties in Bengaluru in a case relating to FERA violations. Chief metropolitan magistrate Deepak Sherawat issued fresh directionsaftertheBengalurupolice, through Enforcement Directorate(ED),soughtmoretimeto execute its earlierorder. Special public prosecutor NK Matta and advocate Samvedna Verma, representing the ED, told the court that the process to attach the prop- Vijay Mallya ertieswas on and due to lack of sufficient time, could not be completed on time. Mallya has been declared a proclaimed offender by the court on January 4 for evading its summons in the case. “It is submitted that the processofattachingthepropertiesofVijayMallyaisbeingcontinued by the revenue authorities. Due to lack of sufficient timetoexecutetheattachment of warrant, the same could not be executed on time. “In order to execute the same, some more reasonable time is required.Therefore,it is respectfully submitted that this court may kindly be pleased to grant some more time to execute the warrant of attachment,”the ED said. Continued on Page 2 FE BUREAU New Delhi, October 11 FORMER RANBAXY PROMOTER Shivinder Singh on Thursday told the Delhi High Court that he was willing to negotiate and mediate with Japanese pharma major Daiichi Sankyo for paying his part of the dues towards the settlement of a `3,500-crore international arbitration award that went against him and his brother Malvinder Singh. Observing that Shivinder’s intentions might be noble, but heneedstobackhisofferbysubstance, justice Rajiv Shakhdar ■ Court had ordered in February the brothers maintain status quo on the assets disclosed by them ■ Still 45 lakh equity shares in Religare Healthcare were sold in Singapore in April ■ Court had said this would not have come to light had it not asked for bank statements Shivinder Singh, former Ranbaxy promoter asked him to come up with a viable plan for settlement by October 30, the next date of hearing. Shivinder argued that he was ready to sit across the table with Daiichi and mediate to find a solutionwith regard to payment of his share of dues. Continued on Page 2
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