OPINION, P8 COMPANIES, P6 SELF-FINANCING EDITORIAL Most feel GDP data biased as it is full of inconsistencies That TNPCB and NGT differ so much on Sterlite proves India’s regulatory system is bust INTERNATIONAL, P14 HEADQUARTERS ROW Adani says to fully fund its troubled Australia coal project Unilever CEO Polman steps down after 10 years at helm PUNE, FRIDAY, NOVEMBER 30, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.IX NO. 223, 22 PAGES, `6.00 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: 36,170.41 ▲ 453.46 NIFTY: 10,858.70 ▲ 129.85 NIKKEI 225: 22,262.60 ▲ 85.58 HANG SENG: 26,451.03 ▼ 231.53 `/$: 69.85 ▲ 0.77 `/€: 79.32 ▲ 0.38 BRENT: $59.40 ▲ $0.64 GOLD: `30,360.00 ▼ `34.00 REGULATORS UNDER SCANNER ● LIFETIME ACHIEVEMENT AWARD: VINEET NAYYAR A man for all seasons Kotak, Mahindra slam excessive rules Colourful Canada One of the weakest links in fiduciary chain of governance in India is accounting, says Kotak Mahindra Bank boss THE CBI has booked a Karol Bagh-based company for allegedly defrauding its investors to the tune of `10,000 crore by promising double returns on their investments in a year, officials said on Thursday, reports PTI. The Central Bureau of Investigation (CBI) registered a case against the company on Wednesday on the direction of the Supreme Court which in 2014 had asked the agency to investigate cases related to chit fund companies, they said. CHAK DE PHATTE! That was Vineet Nayyar’s triumphant response to reporters’ queries after Tech Mahindra snapped up Satyam Computers. It was the summer of 2009. Nayyar may have been a bureaucrat for much of his life but in that moment he was an entrepreneur.It had taken him just 10 slides to convince the Mahindra and Mahindra (M&M) board to throw its hat in the ring; in the very last one he went for the kill. It said: “We simply cannot afford to not buy Satyam.” If convincing M&M was hard,itwas even harderto convince Satyam’s clients to stay on. In a somewhat frighten- When one takes a view that let’s follow spirit, and letter is not clear, you get a push back... If you play for spirit, you run into problems — UDAY KOTAK KOTAK MAHINDRA BANK VICE-CHAIRMAN & MD PRESS TRUST OF INDIA Mumbai, November 29 IN THE NEWS `10k-cr fraud: CBI books Delhi firm for duping people ROUHAN SHARMA Mumbai, November 29 INDUSTRY CAPTAINS Anand Mahindra and Uday Kotak on Thursday came out against “proliferation” of regulations in business, stating that in the current environment they are forced to follow the rules in letter and not in spirit. The comments come days after industry veteran Rahul Bajaj expressed his displeasure on laws made by Sebi and corporate affairs ministry in the wake of fleeing defaulters. “When one takes a view that let’s follow spirit, and the letter is not clear, you get a push back (saying) ‘this is the rule; have you followed it or not’.You get a slap back. If you play for spirit, you run into problems. I have no ability to question spirit, (so) let me follow rules. We are living in this world where we are going in a transition from principles to rules,” Kotak, vice-chairman and managing director of Kotak Mahindra Bank,said. He was speaking at a summit on corporate governance, organised by a body promoted Current environment reminds me of licence raj, where the govt role in promoting enterprise was found wanting... (govt) job is to eliminate unwarranted risk — ANAND MAHINDRA M&M CHAIRMAN by former Sebi chief M Damodaran. Kotak had run-ins with the regulator over recognition of an instrument used by the bank to decrease promoter shareholding recently. Kotak also said auditors are one of the “weakest links” plaguing the corporate governance architecture. “One of the weakest links in fiduciary chain of governance inIndiaisaccounting.Timeand againwefindthatthissituation is leading to significant issues for many listed companies whetheritisontheequitymarkets ordebt markets,”he said. The comments fromKotak, who is tasked with helping IL&FS get back in shape, come amid growing instances of fraud being. He said the issue in the profession stems from a potential “conflict of interest”where an associationofaccountants,ICAI, also acts as the sectorregulator. ‘We will launch 100 originals in the next 18 months’ Rishika Lulla Singh, Eros Digital’s CEO, talks about driving subscription, bringing the cinematic experience to the smaller screen, the OTT player’s pricing strategy, and more ■ BrandWagon, P13 PRINCIPAL PARTNER QuickPicks SBI to sell Jayaswal Neco exposure seven months after SC order SEVEN MONTHS after the Supreme Court ordered the maintenance of status quo on insolvency proceedings against manufacturing company Jayaswal Neco Industries, the State Bank of India (SBI) on Thursday sought bids from asset reconstruction companies (ARCs) for the firm, reports Shritama Bose in Mumbai. The lender said it already has a bid in hand from an investor interested in buying the asset and the auction will be through the Swiss challenge method, based on the existing bid. SBI is seeking a 100% cash bid and the reserve price implies it is willing to take a haircut of up to 65%. PAGE 10 I-Sec IPO: ICICI Pru MF, Nimesh Shah settle case with Sebi ICICI PRUDENTIAL Asset Management and its managing director & CEO Nimesh Shah on Thursday settled a Sebi probe into alleged violation of mutual fund norms over their investments in IPO of the fund house’s sister concern ICICI Securities, reports PTI. The fund house has paid `89.96 lakh, while Shah has remitted `6.8 lakh towards settlement fees, Sebi said in an order, under which an entity is allowed to settle charges by paying a penalty without admission or denial of guilt. PAGE 11 Rupee above 70-mark after three months, gains 77 paise THE RUPEE vaulted 77 paise to a three-month high of 69.85 per dollar on Thursday, propelled by easing crude oil prices and fresh foreign capital inflows, reports PTI. In a major relief to energy importers like India, oil prices slipped below the $60 per dollar mark as investors fretted over a supply glut. The dollar weakened against some currencies overseas after US Federal Reserve chairman Jerome Powell said the central bank’s benchmark interest rate is likely near a “neutral level”. PAGE 10 THE CENTRAL BANK on Thursday relaxed rules for non-bankingfinancialcompanies(NBFCs)tosellorsecuritise theirloanbooks,inabidtoease persistent stress in the sector. NBFCs can now securitise loans of more than five-year maturity after holding those for six months on their books, the Reserve Bank of India said. Earlier, they had to hold these assets for at least one year, a BLOOMBERG California, November 29 A JURY IN California rejected claims that Tata Consultancy Services (TCS) discriminated against American workers in favourof staffing its US offices with Indians. Theverdictisamajorvictory for TCS,whose business model depends heavily on exporting engineers to the US. A federal jury in Oakland, California, on Wednesday sided with TCS againstfourex-employeeswho Continued on Page 2 claimed they’d been sidelined and fired because they aren’t SouthAsian. The casewas the first of severalaccusingIndia’sbigITfirms of hiring bias in the US to go to trial. HCL, Infosys and Wipro face similar claims. “This is a shotinthearmfortheindustry, which has not seen anything positivecomeoutontheUSvisa regulationfrontforsomeyears,” said Anurag Rana, an analyst with Bloomberg Intelligence. Continued on Page 2 Quote unquote FM Jaitley on row over GDP data banker said. However, the relaxation on the minimum holding period will be allowedwhen the NBFC retains 20% of the book value of these loans,the RBI said. NBFCs, loosely known as shadowbanks,arefacingstress on their balance sheets after a debt crisis hit a large infrastructure funding company in September, triggering panic amongst investors and a cash crunch in the sector. Data based on facts and on the best global practices is rejected by the Congress because it takes away the last of its surviving arguments that ‘my GDP growth was higher than yours’ Continued on Page 2 “It has been decided by the Government of India to increasewefNovember2,2018, Interest Equalisation rate from 3% to 5% in respect of exports by the Micro, Small & Medium Enterprises (MSME) sector manufacturersundertheInterest Equalisation Scheme on Pre and Post Shipment Rupee Export Credit,” the RBI said in a notification. TELEVISION PARTNER US jury clears TCS of anti-America bias Interest sop hiked for MSMEs TO BOOST MSME sector exports, the Reserve Bank on Thursday said the interest subsidy on post and pre-shipment exportcredithasbeenincreased to 5% from 3%,reports PTI. The increased subsidy is applicable from November 2. Exporters get the subsidy underthe‘InterestEqualisation Scheme on Pre and Post Shipment Rupee Export Credit’. KNOWLEDGE PARTNER ● BIG WIN RBI relaxes asset securitisation rules REUTERS Mumbai, November 29 Continued on Page 2 CARICATURE: ROHNIT PHORE NBFCs Special Feature ingenvironmentpost-Lehman, trust levels had plunged,litigation loomed large and no one wastakingchances.Inamatter ofweeks,abunchofBFSIclients had cancelled contracts. But Nayyar,as everyone knows,is a cool customer. The company may have been losing its bread and butter but with cups and cups of coffee to keep him going,he rebuilt the team.That wasnoteasyatatimewhenlateral attrition in the IT industry was high and when engineers were more likely to opt for an Infosys or a Wipro at campus recruitments. Ayounger man would have been daunted by the task but even at 70 he was unfazed, confident Satyam’s awesome ability to deliver would do the trick. We don’t know what his mother fed him for breakfast butwedoknowwhathehasfor lunch: an hour of cardio and light weights. “We would meet companies and ask them for another chance. Don’t throw us out, we would say.” Eye in the sky This new GDP series (with 2011-12 as base year) is globally more comparable, it takes into account a far greater representation of the Indian economy and is more reflective of the real state of the economy In 2015, growth in the last two years of UPA was revised upwards and it was welcomed. It is curious that when the same yardstick now shows lower growth rates for the earlier years, it is opposed A PSLV C-43, carrying an earth observation satellite called HysIS and 30 foreign co-passenger satellites, lifts off from a launch pad in Sriharikota on Thursday Report on Page 4 NATIVE PUSH ‘We have transferred technology from metros to smaller towns’ FE BUREAU New Delhi, November 29 ITWAS ON a trip to Bengaluru that IT minister Ravi Shankar Prasad, who at that time also held the telecom portfolio,met some youths from Bihar who requested him to do something which would enable them to work back home rather than come to far off places in search of livelihood. And thus was born the idea of promoting BPOs in smaller towns and cities. According to Prasad,the industrywouldn’t have gone to smaller places unless provided with some incentive and so his ministryformulatedaper-seatsub- sidy policy.Almost three years later,the initiative is thriving.“I amquitesurethatthedayisnot farwhen the movement of taking BPOs to smaller places will The BPO & CSCs are aimed at transferring technology out of metros to smaller towns to provide youth work at their native places — RAVI SHANKAR PRASAD be a subject of study for global strategists,” Prasad told FE. “Now, the IT industry is no more confined to only metros and big cities.Theyhave moved to smaller towns and the youth no longer needs to move out of their native place in search of jobs,” he added. The IT ministry in 2015 MOVING TO THE HINTERLAND ■ The aim is to create 53,300 ■ So far, 47,495 BPO seats have ■ 184 companies are ■ IT ministry provides subsidy per seat to encourage firms seats and 268 BPO centres across 110 cities spread over 22 states and 6 Union Territories participating in the plan been allocated, of which 29,147 seats and 153 centres have already become operational launched two schemes — the India BPO Promotion Scheme (IBPS) and North East BPO Promotion Scheme (NEBPS) — under which it provides capital support along with special incentives of up to `1 lakh per seat in the form of viability gap funding. Under the IBPS and NEBPS,the target was to create a total of 53,300 seats and 268 BPO centres across 110 cities spread over 22 states and six Union territories. Continued on Page 2
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