Category Archives: Business

Markets open flat as Sensex, Nifty test psychological marks

NEW DELHI: The equity markets on Wednesday morning opened flat and Sensex had slipped 70 points in the red by 9.50 am. Analysts are seeing this as a minor correction after Sensex closed half a per cent up on Tuesday.

The 30-share BSE index lost 23 points to open just below the 34,600-mark which it had attained yesterday. Nifty too could not hold on to the 10,600-mark and was down 0.30 per cent in the morning.

All sectoral sub-indices with the exception of Nifty IT were in the red, with metal and PSU bank stocks bleeding the most.

Bharti Airtel, Wipro and TCS were the major gainers in early trade while NTPC, Yes Bank and Axis Bank were making losses.

Government plans ordinance to empower home buyers

NEW DELHI: The government is set to amend the Insolvency & Bankruptcy Code (IBC) to give home buyers the status of financial creditors and enable to participate them in proceedings in the way banks do, as part of the latest set of measures to address concerns related to the over one-year-old law.

Sources said the cabinet will recommend the promulgation of an ordinance by the President, although the issue was not on the agenda circulated to ministers on Tuesday.

The new treatment to home buyers, which follows from observations made by the Supreme Court in cases related to Jaypee Infratech and Amrapali, will provide comfort to a very important section, which parks its lifetime savings into housing projects, many of which are running nearly a decade behind schedule as builders have run out of money.

The amendments follow recommendations made by a committee headed by corporate affairs secretary Injeti Srinivas. The proposed amendments are also expected to address the concerns of small businessmen as the ban on promoters from bidding during the resolution process is severely impacting SMEs.

Further, to address the problem of unintended exclusions under section 29A of IBC, which disqualifies certain persons from submitting resolution plans, the committee had recommended that only those, who contributed to loan repayment defaults by the company or are seen to be undesirable, are ineligible. The move is also meant to ensure that there is a larger pool of investors available to take over ailing projects.

Fuel prices hit new high, no relief in sight for consumers

NEW DELHI: There’s no respite in sight for fuel consumers as pump prices remain on a record-breaking spree as crude clambers towards $80(approximately Rs 5,314) a barrel-mark in a market edgy over US bailing on Iran nuclear deal, outages in Venezuela and uptick in demand.

Petrol and diesel prices scaled new peaks on Tuesday as benchmark crude rose to $75(approximately Rs 5,000)a barrel, its highest since November 2014.

In Delhi, the sample market considered by the government, petrol price rose to Rs 74.63 a litre, the highest since September 2013. Diesel sold at Rs 65.93 a litre.

Several factors indicate oil prices are going to remain on fire. The rupee’s fall to one-year low against the Greenback will only amplify the impact unless the Centre cuts excise duty, which it had raised by Rs 11.77 per litre on petrol and Rs 13.47 on diesel when crude went on a free fall between November 2014 and January 2016.

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Sanctions on Iran is the biggest trigger for sending crude north. Restrictions on the third largest oil producer in Opec — the cartel of 14 oil exporting countries accounting for 40% of global supplies — will squeeze supply when inventories are sliding due to production cut and outages in Venezuela but demand, as the International Energy Agency says, is growing faster than previously.

While the US shale industry can still flood the market to calm oil prices, there’s another American factor — the summer driving season — that could weigh on fuel consumers in India. Petrol and diesel prices in India are linked to their rates in trading hubs and not directly to crude, which is a component of the overall pricing. Product trading hubs swing according to demand and supply position.

Every summer, demand — and prices — for fuel shoots up in the US as families hit the highways.

Around the same time US refiners take shutdowns for switching from winter to summer fuel ‘blend’, leaving supply gap that is met with imports. The additional demand from the US pushes up rates in trading hubs such as Singapore, Dubai and Europe — giving domestic retailers a higher benchmark for pump prices.

The winter blend comes with low evaporation point (Reid vapour point) to help cold start and summer blend with higher evaporation point to allow smooth running in summer.

ED moves to seize Vijay Mallya, Nirav Modi's assets

NEW DELHI: Armed with powers provided in the just promulgated Fugitive Economic Offenders Ordinance, the Enforcement Directorate has swiftly moved to confiscate properties of businessmen Vijay Mallya, Nirav Modi and Mehul Choksi.

Sources said after deliberations which stretched over 48 hours, the ED decided to approach the Prevention of Money Laundering Act (PMLA) court to seek that Mallya, Modi and Choksi be declared ‘fugitives’ who had defied non-bailable arrest warrants to stay put abroad. It will argue that they are liable to be covered under the stringent provisions of the new law against economic offenders.

Mallya’s assets, estimated to be worth Rs 9,000 crore, have been provisionally attached under PMLA. He is still the legal owner of the assets but cannot sell them.

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After a nod from the PMLA court, he will be dispossessed of properties and assets which will then be vested with the central government. The government, under the new law, will be free to dispose of the assets of “fugitives” like Mallya.

Permission from the PMLA court will set the ED free to confiscate Mallya’s assets, in what will easily be the biggest blow to the flamboyant businessman even if it does not necessarily lead him to revisit his decision to stay ensconsed in a London suburb.

Mallya will be among the first targets of the fresh law because in his case, two essential conditions for confiscation of property — arrest warrant and filing of chargesheet in court — have been met.

No chargesheet has been filed against diamond merchants Nirav Modi and Mehul Choksi but the reprieve for them could be shortlived with the ED just days away from completing the process against them. The duo runs a real risk of being disentitled of properties and assets worth over Rs 3,000 crore.

The ED has identified assets worth over Rs 12,000 crore belonging to a few economic offenders who have fled the country and which can be confiscated.

Other fugitives against whom the agency is likely to move include former deputy collector of Maharashtra Housing Area Development Authority Nitish Thakur and the promoters of Speak Asia. The confiscation of assets will include all properties of the accused identified in India and abroad.

The confiscated properties will be owned by the central government which will appoint an administrator to dispose them of.

No case related to these confiscations will be entertained by any court or tribunal anywhere as per the ordinance once the PMLA court declares an accused ‘fugitive economic offender’ and orders confiscation of assets equivalent to the proceeds of crime.

The agency has attached assets worth over Rs 100 crore in the Nitish Thakur case and more than Rs 100 crore in bank balance in the Speak Asia case. “Fugitive economic offender means any individual against whom a warrant for arrest in relation to a scheduled offence has been issued by any court in India, who has left India so as to avoid criminal prosecution, or being abroad, refuses to return to India to face criminal prosecution,” the ordinance says.

US-China trade fight reaches top American court in antitrust case

WASHINGTON: President Donald Trump‘s trade fight with China moved inside the white marble walls of the US Supreme Court on Tuesday, where lawyers for both countries faced off over whether Chinese companies can be held liable for violating US antitrust laws.

The nine justices heard arguments in an appeal by two American companies of a lower court ruling that threw out claims of price fixing against two Chinese vitamin C manufacturers based on submissions by China’s government explaining that nation’s regulations.

The arguments provided both countries an opportunity to air their differences over an aspect of their trade relationship. The Supreme Court took the unusual step on April 13 of granting China the ability to present arguments even though it is not an official party in the case. Typically, only the US government is reserved that privilege.

The world’s two economic superpowers are engaged in an escalating trade fight. The United States, accusing China of unfair trade practices and theft of intellectual property, has threatened to impose tariffs on up to $150 billion of Chinese industrial and other imports. China has threatened comparable retaliation against US exports if Washington pushes ahead with the tariffs.

None of the heated rhetoric over tariffs trickled into Tuesday’s arguments, which remained respectful. The lawyer representing China, Carter Phillips, urged the justices to defer to China’s explanation about Chinese regulations. A US Justice Department lawyer said that such deference comes with limits.

Startup visas, work permits for spouses of H-1B visa holders to go

MUMBAI: It is the end of the road for spouses of H-1B workers in the US as they will no longer be able to seek employment, or set up their own business, which for many was something as simple as running a crèche, tutoring, conducting yoga classes or supplying desi home-cooked food to nearby offices.

In a move that would impact nearly a 100,000 spouses of Indian workers, mostly women, the Trump administration plans to revoke + a policy which enables them to obtain an employment authorisation document (EAD).

In addition, the writing on the wall is clear that international entrepreneurs, will in the months to come, no longer be able to apply for parole (in general terms, it means a stay in the US) to nurture their startups for a certain period.

Incidentally, both these Obama-era policies will be revoked in a bid to attain the objectives of ‘Buy American, Hire Amercian’, an executive order signed by US President Trump last April.

Tightening of norms relating to eligibility for an H-1B visa, a popular work visa for Indian IT workers, are also on the anvil.

Light on these ongoing plans was shed in a letter recently issued by L Francis Cissna, director of the US Citizenship and Immigration Services (USCIS) to US Senator Charles Grassley, chairperson of the US Senate Judiciary Committee. Grassley was being updated on the various steps taken and proposed by the immigration agency “to ensure the integrity of the immigration system, specifically of the non-immigrant worker programmes.”

Spouses of H-1B visa holders are issued an H-4 visa, which does not give them the right to work in the US. In May 2015, the Obama administration introduced a policy which permitted certain H-4 visa holders (spouses of H-1B visa holders who were on track for a green card) to apply for an employment authorisation document (EAD).

In March, fifteen US Parliamentarians, including those from the technology company-dominant hubs of the East Coast, had sent a letter to the USCIS showing their support to H-4 spouses, given the decade-plus green card backlog and the high cost of living on a single income. Without immigrants, we would not have companies such as Google, Apple, Facebook and Qualcomm and denying spouses the right to work would not attract the best talent to the US. Further, many spouses with work authorisations have set up their own businesses and are employment generators, they had added.

Given such support, including from various industry bodies and business leaders, there was a glimmer of hope that the EAD policy would stay. These hopes now appears dashed.

Cissna’s reply issued in early April reiterates the intention of the Trump administration to “introduce regulatory changes to remove H-4-dependent spouses from the class of aliens eligible for employment authorisations”. It does mention that the public will be given a chance to provide feedback to the new regulation during a notice and comment period. TOI had earlier reported + that a new draft policy could be issued around June and the entire process of bringing in the new rule could take up to the end of 2018 or early 2019.

Rajiv Khanna, managing attorney at Immigration.com says, “In addition to inviting and examining public comments, the US government also has to articulate cogent reasons for changing their mind about the regulation. I expect lawsuits to follow, challenging the government decision to take away the EAD rights that they had given earlier.” Experts feel that a grandfathering period may be introduced to enable workers to retain their jobs till the end of the work authorisation tenure. There is a frenzy on social media, with H-4 spouses expressing their shock and dismay and some calling for a civil liberties lawsuit.

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For international entrepreneurs the story is equally grim, as the Trump administration is set to overturn a US district court order passed last December, that had been reported by TOI. Pursuant to this order, successfully fought by a group of international entrepreneurs (including Indian entrepreneurs) and the US-based National Venture Capital Association (NVCA), USCIS had to commence accepting applications from eligible international entrepreneurs under the International Entrepreneur Rule (IER).

In this context, the update by the USCIS director states: “We are also drafting a proposed rule to remove the IER, as announced in the regulatory agenda. Due to the court order which invalidated the IER delay rule, the IER is currently in effect.” Surprisingly, the letter goes on to add that no requests have been approved at this time. This means, that applications, if any, filed by enthusiastic entrepreneurs post the court order, have been rejected on various grounds.

According to Khanna, the changes proposed as regards to H-1B norms are far-reaching. “USCIS intends to change the definition of ‘specialised occupation’. Currently, a specialised occupation is one which requires a specific degree or set of degrees to perform. This definition, even as it stands, aids in denying visas to several meritorious H-1B aspirants.”

To illustrate, in April 2017, the USCIS had passed guidelines that a computer programmer would not automatically be considered as a ‘speciality’ occupation eligible for an H-1B visa. Further tightening may narrow down opportunities for H-1B workers. Cissna’s letter also mentions the need to revise the definition of employment and employer-employee relationship to better protect US workers and wages.

ED set to confiscate Rs 15,000 crore assets under new fugitive offenders ordinance

NEW DELHI: The Enforcement Directorate (ED) is set to “confiscate” assets worth over Rs 15,000 crore as part of its first action against absconders such as liquor baron Vijay Mallya and diamantaire Nirav Modi under the recently promulgated Fugitive Economic Offenders Ordinance.

Officials said the agency has begun the work to bring together the existing cases of high-value fugitives and bank loan defaulters and it will soon approach various special anti-money laundering courts in the country to get orders issued against them under the new ordinance.

They said the money laundering cases against Vijay Mallya, who is now based in London, Nirav Modi and his uncle Mehul Choski, Winsome Diamond company promoter Jatin Mehta and others are expected to be picked up first for action.

The ED is the empowered agency to enforce the new ordinance.

Under the new ordinance, the officials said, all the assets of such an absconder, both in India and abroad, which have or have not been attached by the Enforcement Directorate under the Prevention of Money Laundering Act (PMLA), will be confiscated immediately.

The case of Nirav Modi and Choksi will be processed under the new ordinance, once the CBI and the ED file their respective charge sheets against them, they said.

While Rs 9,890 crore worth of assets have been attached by the ED in the Mallya case, properties worth Rs 7,664 have been attached in the Nirav Modi-Mehul Choksi case.

In the first go, they said, it is estimated that over Rs 15,000 crore worth of assets could be confiscated by the ED under the provisions of the ordinance, aimed at those who flee the country after defaulting on multi-crore bank loans and similar instances of fraud.

The other such cases will be taken up gradually, they added.

Under the PMLA, the ED could only confiscate the assets once the trial in a case finishes which usually takes a long time, they said.

President Ram Nath Kovind, last Sunday, had given assent to promulgation of the Fugitive Economic Offenders Ordinance, 2018, giving authorities powers to attach and confiscate the proceeds of crime and properties of economic offenders.

The ordinance is aimed at deterring economic offenders from evading the process of law by remaining outside the jurisdiction of Indian courts.

The government brought the ordinance as “there have been instances of economic offenders fleeing the jurisdiction of Indian courts, anticipating the commencement, or during the pendency, of criminal proceedings,” the government said.

The rationale behind the law, the government said, was the absence of such offenders from Indian courts which hampers investigation and wastes court time and undermines the rule of law.

“The existing civil and criminal provisions in law are not entirely adequate to deal with the severity of the problem,” it said.

The Fugitive Economic Offenders Bill, 2018 was introduced in the Lok Sabha on March 12 but couldn’t be taken up due to logjam in Parliament over different issues.

With Parliament being adjourned sine die, an ordinance was proposed.

The Union Cabinet on April 21 approved the ordinance and the President gave his assent to promulgation of the same a day later.

The ordinance makes provisions for special courts under the Prevention of Money Laundering Act, 2002 to declare a person as a fugitive economic offender.

“A Fugitive Economic Offender is a person against whom an arrest warrant has been issued in respect of a scheduled offence and who has left India so as to avoid criminal prosecution, or being abroad, refuses to return to India to face criminal prosecution,” the government statement said.

However, only cases of frauds, cheque dishonour or loan default of over Rs 200 crore would come under this ordinance.

The ordinance provides for all necessary constitutional safeguards in terms of providing hearing to the person through counsel, allowing him time to file a reply, serving notice of summons to him, whether in India or abroad and appeal before the High Court.

The government had said the new law would help banks and other financial institutions to achieve higher recovery from financial defaults committed by fugitive economic offenders, improving the financial health of such institutions.

ED set to confiscate Rs 15,000 crore assets under new fugitive offenders ordinance

NEW DELHI: The Enforcement Directorate (ED) is set to “confiscate” assets worth over Rs 15,000 crore as part of its first action against absconders such as liquor baron Vijay Mallya and diamantaire Nirav Modi under the recently promulgated Fugitive Economic Offenders Ordinance.

Officials said the agency has begun the work to bring together the existing cases of high-value fugitives and bank loan defaulters and it will soon approach various special anti-money laundering courts in the country to get orders issued against them under the new ordinance.

They said the money laundering cases against Vijay Mallya, who is now based in London, Nirav Modi and his uncle Mehul Choski, Winsome Diamond company promoter Jatin Mehta and others are expected to be picked up first for action.

The ED is the empowered agency to enforce the new ordinance.

Under the new ordinance, the officials said, all the assets of such an absconder, both in India and abroad, which have or have not been attached by the Enforcement Directorate under the Prevention of Money Laundering Act (PMLA), will be confiscated immediately.

The case of Nirav Modi and Choksi will be processed under the new ordinance, once the CBI and the ED file their respective charge sheets against them, they said.

While Rs 9,890 crore worth of assets have been attached by the ED in the Mallya case, properties worth Rs 7,664 have been attached in the Nirav Modi-Mehul Choksi case.

In the first go, they said, it is estimated that over Rs 15,000 crore worth of assets could be confiscated by the ED under the provisions of the ordinance, aimed at those who flee the country after defaulting on multi-crore bank loans and similar instances of fraud.

The other such cases will be taken up gradually, they added.

Under the PMLA, the ED could only confiscate the assets once the trial in a case finishes which usually takes a long time, they said.

President Ram Nath Kovind, last Sunday, had given assent to promulgation of the Fugitive Economic Offenders Ordinance, 2018, giving authorities powers to attach and confiscate the proceeds of crime and properties of economic offenders.

The ordinance is aimed at deterring economic offenders from evading the process of law by remaining outside the jurisdiction of Indian courts.

The government brought the ordinance as “there have been instances of economic offenders fleeing the jurisdiction of Indian courts, anticipating the commencement, or during the pendency, of criminal proceedings,” the government said.

The rationale behind the law, the government said, was the absence of such offenders from Indian courts which hampers investigation and wastes court time and undermines the rule of law.

“The existing civil and criminal provisions in law are not entirely adequate to deal with the severity of the problem,” it said.

The Fugitive Economic Offenders Bill, 2018 was introduced in the Lok Sabha on March 12 but couldn’t be taken up due to logjam in Parliament over different issues.

With Parliament being adjourned sine die, an ordinance was proposed.

The Union Cabinet on April 21 approved the ordinance and the President gave his assent to promulgation of the same a day later.

The ordinance makes provisions for special courts under the Prevention of Money Laundering Act, 2002 to declare a person as a fugitive economic offender.

“A Fugitive Economic Offender is a person against whom an arrest warrant has been issued in respect of a scheduled offence and who has left India so as to avoid criminal prosecution, or being abroad, refuses to return to India to face criminal prosecution,” the government statement said.

However, only cases of frauds, cheque dishonour or loan default of over Rs 200 crore would come under this ordinance.

The ordinance provides for all necessary constitutional safeguards in terms of providing hearing to the person through counsel, allowing him time to file a reply, serving notice of summons to him, whether in India or abroad and appeal before the High Court.

The government had said the new law would help banks and other financial institutions to achieve higher recovery from financial defaults committed by fugitive economic offenders, improving the financial health of such institutions.

Airtel profit slips to Rs 83 cr in Q4, down 78%, as Jio hammers profitability

NEW DELHI: Bharti Airtel announced a profit of Rs 83 crore, around 78 per cent drop, in the quarter ended March 31, 2018, as severe competition from Mukesh Ambani’s Reliance Jio continued to erode the company’s income.

The Sunil Mittal-led Airtel, the country’s biggest telecom company, had a profit of Rs 373 crore in the same quarter of 2016-17, and Rs 1,290 crore in the fourth quarter of 2015-16.

Stiff competition after the entry of Jio in September of 2016 has seen the profitability of telecom companies decline sharply as Vodafone India and Idea Cellular slipped into the losses and Anil Ambani’s Reliance Communications moved out of the business.

Airtel is perhaps the only large company that has still managed to remain profitable.

“The telecom industry continues to witness below cost, artificially suppressed pricing. Industry revenues were further adversely impacted this quarter due to the reduction in International termination rates,” Gopal Vittal, MD and CEO of Airtel’s India & South Asia operations, said.

Airtel’s India revenues were down 7.5 per cent in the period.

Ahead of the Q4 results, the company shares rose 0.61 per cent on BSE and closed 0.78 per cent higher on NSE.

Sensex tops 34,600, Nifty goes past 10,600 as markets rise

NEW DELHI: Benchmark equity indices made significant gains on Tuesday as both Sensex and Nifty went past psychological marks.

The 30-share BSE index gained 165.87 points to close at 34,616.64 while the broader NSE index too gained 0.30 per cent during the day’s trading session to close above the 10,600-mark. The markets were buoyant on Tuesday since morning and Sensex went up by as much as 256 points to hit the intra-day high of 34,706.71. However, the index lost steam in the last hour of trading as investors indulged in profit booking.

IT and metal stocks faced heavy losses on Tuesday with the respective sectoral sub-indices losing 2 per cent each.

Reliance, Yes Bank, Mahindra & Mahindra and Adani Ports were the major gainers while Wipro, Infosys, Tata Steel and SBI scrips slipped the most.


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