OPINION, P8 COMPANIES, P6 SURJIT S BHALLA ASI data shows healthy jobs, industrial-output growth post 2013 INTERNATIONAL, P14 EDITORIAL ED'S EXTRADITION REQUEST M&A BOOM Boycotting Chinese goods sounds good but India needs to fix its industrial policies London court issues arrest warrant against Nirav Modi In biggest payments sector deal, FIS to buy Worldpay for $34 bn KOLKATA, TUESDAY, MARCH 19, 2019 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM VOL.XXVIII NO. 118, 20 PAGES, `6.00 (NORTH EAST STATES & ANDAMAN `10.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E READ TO LEAD SENSEX: 38,095.07 ▲ 70.75 NIFTY: 11,462.20 ▲ 35.35 NIKKEI 225: 21,584.50 ▲ 133.65 HANG SENG: 29,409.01 ▲ 396.75 `/$: 68.53 ▲ 0.56 `/€: 77.85 ▲ 0.37 BRENT: $67.28 ▲ $0.12 GOLD: `31,725 ▼ `241 Anil thanks Mukesh & Nita Ambani April-Jan ($ million) ($ million) 160 140 120 100 80 60 40 20 0 144.79 (2006-07) 78.73 67 64 22.96 1998-99 2017-18 2017-18 2018-19 THE GST Council will on Tuesday consider the transition provisions for builders as the reduced GST rate for real estate is coming into effect from April 1, reports fe Bureau in New Delhi. The new rates would be accompanied with denial of input tax credit to the developers and subject to purchase of certain portion of inputs from GST-registered dealers. It would also consider guidelines on dealing with buyers who have partly paid for under-construction houses at a higher GST rate. PAGE 2 WITHTWO-WHEELER DEALERS saddled with inventory of 80-90 days against the normal level of 20-30 days, major manufacturers like Hero MotoCorp, Honda Motorcycle and Scooter India and Royal Enfield have decided to cut backtheirmonthlyproduction by around 15% from the current month till May. While the companies declined to comment on the development, sources said they have communicated the same to dealers’ association Federation of Automobile Dealers Association (FADA). Nikunj Sanghi,director,international affairs at FADA, said it has been communicated to the manufacturers that inventories have reached alarming levels and they expect them to recalibrate theirproduction overthe next few months. Two-wheeler sales have beensluggishsinceSeptember during the current fiscal leading to a growth of 6.95% between April-February against lastyear’s 14% growth in the same period. Usual monthly production Expected production (units) Cut in production (%) Maruti Suzuki Tata Motors M&M 20 10 10 Companies generally align production to demand because once the inventory with dealers crosses the normal mark, they run short of space to store the products. Hero MotoCorp's production has been on the downside since December.While output remained flat year-on-year (yo-y) in December, it fell 13.54% y-o-y in January. Production in February also remained flat. 15 15 Hero Royal MotoCorp Enfield » GST cut for realty: Council to fine-tune norms today PRITISH RAJ New Delhi, March 18 » THE RUPEE on Monday closed at a seven-month high of `68.53 against the dollar, after having appreciated 0.8% to an intra-day high of `68.44 during the session, primarily due to increased foreign inflows into Indian equities and debt and a weakening greenback, reports fe Bureau in Mumbai. FPIs have invested $4.2 billion in Indian equity and debt markets this month as on March 15 — the highest inflow in FY19. PAGE 10 Mar 18, 2019 per the Sebi’s takeover regulations to the public shareholder of Mindtree to purchase up to an additional 31% of the outstanding shares of Mindtree at a price of `980 per share in cash.” IftheSPAandtheopenoffer goes through, L&T’s stake in Mindtreewillstandat66.32%, givingitthecontrollingstakein the company. In a separate fil- » Rupee scales 7-month peak on strong foreign inflows Dec 3, 2018 ing, Mindtree also said it has received L&T’s proposal for an openofferrepresenting31%of thevoting share capital. L&T further informed the exchanges that Mindtree would remain an independent listedentity,L&Twould extend support to Mindtree in its business going forward. Continued on Page 2 ■ On January 2, the carrier defaulted on repayments on its ECBs Shares ` senior staff. Jet Airways did not immediately respond to Reuters’ request for comment on payment-related details. Meanwhile, the airline groundedfourmoreaircrafton Monday, taking the number of planestieddownto41,ormore than a third of its entire fleet. Founder and chairman Naresh Goyal, who transformed Jet into India’s biggest full-service carrier from its humble start 25 years ago, has said it is charting out a bailout plan,ledbystate-runbanksand Abu Dhabi’s EtihadAirways. Continued on Page 2 Related report on Page 6 Two-wheeler companies decide to cut production » HOTEL LEELAVENTURE on Monday entered into a binding agreement with Canadian PE major Brookfield Asset Management to sell four hotels and hospitality operations business for `3,950 crore on a slump sale and going-concern basis, reports fe Bureau in Mumbai. It will sell four hotels in Bengaluru, Chennai, Delhi and Udaipur and 100% shareholding in Leela Palaces and Resorts. PAGE 6 750 it is defaulting on its foreign debt servicing ANI » Hotel Leelaventure to sell assets to Brookfield for `3,950 crore 800 ■ This is the second time HIGH DEALER INVENTORY » QuickPicks 850 15 HMSI HMSI had cut down production in Decemberas inventory went up to over 60 days. Unlike nearly 4 lakh units produced every month, the company manufactured only 2.48 lakh units.In January and February,output fell 12.64% y-oy and 14.93% y-o-y, respectively, and the monthly production in March is expected to see a 15% cut. Continued on Page 2 Goa gambit A Congress delegation led by Leader of the Oppostion Chandakant Kavlekar handed over a letter to governor Mridula Sinha in Panaji on Monday, saying it was the single largest party in the Assembly and should be allowed to form the government. "We are saddened by the CM's demise, but before his final rites are performed, a new government has to be formed,” Kavlekar said ● BIGGEST SINCE SNAP Lyft aims to raise up to $2.1 bn via IPO OLIVIA ZALESKI & ERIC NEWCOMER San Francisco, March 18 LYFT IS SEEKING to raise as much as $2.1 billion in its initial publicoffering,valuing the firm at up to $18.5 billion.The No. 2 US ride-hailing giant is offering 30.8 million shares at $62 to $68 each, it said in a regulatory filing on Monday. At the targeted range, the SanFrancisco-basedcompany’s offeringwillbethebiggestfrom a tech upstart since Snap went public two years ago, and the largest in the US so farthisyear afterthepartialUSgovernment shutdown put a damper on first-quarter listings. Lyft had earlierbeenaimingforamarket valuation of $20 billion to $25 billion, a person familiar with the mattersaid in February. Continued on Page 2 ● GUEST COLUMN: AJIT RANADE, co-founder and trustee, Association for Democratic Reforms ‘Need to move from disclosure to disqualification’ IN SEPTEMBER LASTyear, the Supreme Court rejected a bunch of petitions that asked for disqualification of criminal candidates in elections. The decision came almost twenty years after the first successful petition filed by the Association for Democratic Reforms (ADR) in the Delhi High Court, asking for disclosure of criminal cases, financial and educational details of candidates. From disclosure to disqualification is a long unfinished journey. The Attorney General,defending the central government, said the apex court cannot add new disqualifications since this is in the legislative domain. The fact of the matter is that, according to the government’s own affidavit, 1,765people’srepresentatives in state and national legislatures, i.e. MPs and MLAs, have criminal cases against them. That is close to 33%. Many pending cases are for heinous crimes, like murder, rape, kidnapping and extortion. Last year, the SC had asked the government to set up fast-track courts to deal with cases dealing with elected representatives.The Prime Minister’smaiden speech in the Rajya Sabha mentioned this issue of cleansing politics and fast-track courts. ILLUSTRATION: ROHNIT PHORE After scaling a peak of $145 million in FY07, India's forticulture exports have fallen and settled in the range of $75-80 million over the last five years. Exporters say growth momentum can be regained with budgetary incentives and a policy to identify large land parcels for cultivation of flowers. Detailed report on Page 12 893.50 ■ VG Siddhartha, largest shareholder in Mindtree and founder of Cafe Coffee Day steps down as non executive director of the company interest to its debenture holder, due March 19 5,00,000 4,25,000 Another bloom in the offing? 962.50 950 70,000 FE BUREAU Mar 9 2018 JET AIRWAYS SAID on Monday it has grounded four more planes and would delay paying interest on maturing debt in a fresh sign of deepening liquidity crisis engulfing the Indian carrier. The country’s second-largest carrier has delayed payments to its pilots, suppliersandlessorsformonths anddefaultedonloans,asitbattles intensifying competition,a weakrupeeandrisingfuelcosts. The airline said itwill delay paying interest to its debenture holder, due March 19, owing to financial constraints. This is the second time the airline is defaulting on its foreign debt servicing — on January 2, it defaulted on repayments on its external commercial borrowings. The airline,which has a debt of over `8,000 crore, did not specify what the quantum of interest due Tuesday nor quantum of the debt on this particular account. “The payment of interest due on March 19 to the debentureholderwillbedelayed owing to temporary liquidity constraints,”Jet Airways said in an exchange filing on Monday. The acute liquidity crunch has forced it toground aircraft, shut down stations and delay salary payments to its pilots andengineersalongwithother ■ It will delay paying 60,000 Forticulture exports Continued on Page 2 ■ According to reports L&T board discusses Mindtree deal (share price on BSE, `) 6,00,000 Continued on Page 2 Mar 5 2019 Mar 15 2019 1,000 700 AGENCIES March 18 Mar 17 2019 Mindtree 900 Jet delays interest payments, grounds four more planes ■ Subroto Bagchi, one of the co-founders of Mindtree resigned as head of Odisha Skill Development Authority to return to the company ■ VG Siddhartha, reportedly open to sell Dec his 20.4% stake 2018 in Mindtree 5,10,000 NCLATasksCoCto approvefresh distributionplan betweenfinancial& operationalcreditors HEAVY ENGINEERING MAJOR Larsen and Toubro (L&T) on Monday said that it has entered into a definitive share purchase agreement (SPA) with VG Siddhartha and his related entities — Coffee Day Trading and Coffee Day Enterprises — to acquire a 20.32% stake in Mindtree at `980 pershare,aggregating to approximately `3,269 crore. In a late evening filing to stock exchange, L&T said, “Immediately following the filing of the public announcement,L&T has placed an order with its broker for on-market purchaseofup to15% of share capital of Mindtree at a price not exceeding `980 pershare.” The company further said, “Pursuant to execution of the share purchase agreement, aforementioned market order for share purchase and with the intent to acquire majority stake in Mindtree, L&T has announced an open offer as 31,000 NCLATasksEssarSteel promoterstopay theirentiregroup’s debttobeheard help came from the elder brother Mukesh Ambani.“My sincere and heartfelt thanks to my respected elder brother, Mukesh,and Nita,forstanding by me during these trying times, and demonstrating the importance of staying true to our strong family values by extending this timely support. I and myfamilyare gratefulwe have moved beyond the past, and are deeply touched with this gesture,”Anil Ambani said in a statement. Meanwhile,onMonday,the twogroups—RcomandRjio— called off the deal agreed some 15 months back whereby the spectrum and other infrastructure of the former was to be bought over by the latter. FE BUREAU Mumbai, March 18 ■ Mindtree's board of directors to meet on March 20 to consider a buyback proposal to foil any hostile takeover bid 27,000 FE BUREAU New Delhi, March 18 Will acquire 15% from open market, launch open offer to buy further 31%, thus taking its total stake to 66.32% 21,000 March8 March11 EssarSteel promotersmove NCLATchallenging theorder March14 My sincere and heartfelt thanks to my respected elder brother Mukesh and Nita (Ambani), for standing by me during these trying times, and demonstrating the importance of staying true to our strong family values by extending this timely support (in clearing RCom dues). Me and my family are grateful we have moved beyond the past, and are deeply touched with this gesture. ADAYBEFOREtheexpiryofthe Supreme Court-set deadline, elder brother Mukesh Ambani bailed out younger sibling Anil Ambani in paying off `458.77 crore to Ericsson India, thus clearing the outstanding dues and fending-off a possible jail term for the younger brother. Thelastdateofmakingthepaymentwas March 19. “The requisite payment of `550 crore and interest thereon to Ericsson has been completed on Mondayin compliance of the judgment of the Hon’ble Supreme Court,” an RCom spokesperson said. While RCom did not state the source of funds formaking the payment,it hinted that the NCLT,Ahmedabad approves ArcelorMittal’splan forEssarSteel March15 IN A VICTORY of sorts, ArcelorMittal’s `42,000crore resolution plan for the bankrupt Essar Steel received a conditional nod from the National Company Law Appellate Tribunal (NCLAT) on Monday. A two-member bench, headed by justice SJ Mukhopadhaya, said the acceptance of the resolution plan submitted by ArcelorMittal will be subject to its final order in the appeal filed by the Essar Steel promoters and Standard Chartered against the move. L&T to buy 20.32% stake in Mindtree 18,900 SURYA SARATHI RAY New Delhi, March 18 Mukesh bails out Anil, but RCom-RJio deal off the table AIR POCKET `3,269-CR DEAL 1,50,000 NCLAT gives conditional approval to Arcelor plan ERICSSON DUES 1,20,000 ● ESSAR STEEL For the past two decades, ADRand the National Election Watch network have been consistently documenting and disseminating the data on pendingcases,wealthandeducation of candidates, taken from theirown self sworn affidavits.There is now a cumulative database of close to 60,000 personswho have contested state or national level elections. In recent years, even local election data has been compiled, since the same disclosure requirement applies.The data includes a large set of candidates who are repeat contestants and hence, present an interesting time trend of data on wealth as disclosed by their affidavits over several elections. Forinstance,the numberof crorepatis in Parliament increased from 156 to 315 to 449 from 2004 till 2014. The average wealth of the present outgoing Lok Sabha is around `14 crore, and in the Rajya Sabha,it is `55 crore. Continued on Page 2
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