QBiz: ‘Sexual Harassment’ in Mistry Ouster; RBI Tweaks Debt Rules

The Quint’s top business news from dailies across india.

Cyrus Mistry (Photo Courtesy: Dhiraj Singh/Bloomberg)

1. Tata Sons Escalates War With Cyrus Mistry, Says Trust Betrayed

Tata Sons Ltd on Thursday accused ousted chairman Cyrus Mistry of betraying the trust it had reposed in him and seeking to control the main operating companies of the Tata group “to the exclusion of Tata Sons and other Tata representatives”. Mistry’s aides issued a rebuttal saying the Tata Sons statement “reflects desperation”.

It is unfortunate that Tata Sons, acting in good faith, did not anticipate such devious moves by Mr. Mistry and thereby did not inform the other directors of the operating companies about its dissatisfaction with Mr. Mistry at the level of Tata Sons. However, we will now do whatever is required to deal with this situation

Tata Sons Statement

(Source: Livemint)

2. Sexual Harassment Case Against Taj CEO Rakesh Sarna May Have Added to Cyrus Mistry Woes

The handling of a sexual harassment case against Indian Hotels Co. Ltd (IHCL) boss Rakesh Sarna may have been among the factors that led to the shock dismissal of Cyrus Mistry as chairman of Tata Sons on 24 October, when Ratan Tata took back the reins at the group’s holding company until a successor is found.

While the woman concerned left the Tata group a year ago, Mistry’s office said he had strictly followed protocols and that an inquiry was ongoing. It rebuffed suggestions that there had been a delay in starting an investigation against the former Hyatt executive who’d been handpicked by Mistry to revive IHCL, which runs the Taj group of hotels. The lady executive initially worked with members of Mistry's Group Executive Council (GEC) before Sarna "requested" her to move to Taj.

(Source: The Economic Times)

3. Cyrus Mistry's Camp Says He Was Fired for Going After Tata Group's Holy Cows

People close to Cyrus P. Mistry, the ousted chairman of Tata Sons Ltd, say that he may have paid the price for going after what they termed "holy cows" in the Tata group. These people, who spoke on condition of anonymity, said there were minor and major issues he acted against or sought to, some involving violations of good governance principles, that may have all added up to his ouster. Some of these instances have been highlighted in recent days.

One involves the irregular payments made by AirAsia India. Another involves the fact that Mistry was pressing C. Sivasankaran to pay his share of the DoCoMo arbitration award. To be fair, the Tata group has clarified that in the first case, it is following up the findings of a forensic report with a so-called First Information Report (or police complaint) and that in the second, it is pursuing all legal remedies to ensure that Sivasankaran pays up.

(Source: Livemint)

4. Cashless Economy: Centre to Implement 19 Measures to Facilitate Transition

The government has identified 19 short-term measures to be implemented in the current financial year in keeping with its plan to move to a cashless economy.

The national task force for promotion of payments through cards and digital means is facilitating coordination among different agencies to ensure speedy roll-out of initiatives, including digital payments through ration shops, strengthening the network of business correspondents in rural areas and equipping all existing and future ATMs with Aadhaar authentication facility.

(Source: The Economic Times)

5. RBI Tweaks Debt Restructuring Rules; Eases Provisioning Needs

The Reserve Bank of India on Thursday revised debt recast rules, reducing the provisioning burden for lenders. The details of the revision follow an 4 October statement from the RBI, where the regulator said that it had taken note of requests from the banking sector to relax provisioning rules under the Scheme For Sustainable Structuring of Stressed Assets (S4A).

The RBI, however, has not given in to the demands from the banking sector to allow them flexibility in changing terms of the loan being restructured.

Under S4A, banks had been allowed to divide a company’s debt into a sustainable part and an unsustainable part. The sustainable part, which had to be at least 50 percent of the total debt, could be serviced with existing cash flows. The unsustainable part of the debt could be converted into equity or equity-linked instruments and held in the investment books of the bank.

(Source: Bloomberg Quint)

6. Is Entry Tax Constitutional? Apex Court's Decision Today Will Impact Rs 30,000 Crore in Arrears

It is judgment day in the Supreme Court on Friday as a nine-judge bench will deliver the much-awaited judgment on over 2,000 cases filed by several companies against states levying entry tax on the movement of goods.

Entry tax is imposed by many state governments on the movement of goods from one state to another. It is levied by the state that receives goods. The bench led by Chief Justice of India, Justice TS Thakur examined the validity of entry tax over month-long arguments by companies and states. The bench considered arguments on whether states have the power to impede free trade by taxing movement of goods.

(Source: Bloomberg Quint)

7. Cash Hoard of PE/VC Funds at Six-Year High

Dry powder – the amount of cash with private equity (PE)/venture capital (VC) funds –stands close to a six-year high of $7.1 billion, data from private deal tracker Preqin shows, suggesting an improved fund-raising environment.

Preqin data shows that following a low of $2.1 billion in fund-raising by India-based funds in 2012, the industry has managed to raise $3.4 billion and $3.8 billion in 2014 and 2015, respectively.

There is a fair amount of appetite for Indian funds, both private equity, venture capital and those investing in public markets. The number of enquiries that we have witnessed in the last six months is higher than what we had seen in the previous two years.

Rajesh Begur, Founder and Managing Partner, ARA Law

(Source: Livemint)

8. Reliance Jio Call Drop Rate Reduces to 28%

Instances of call failures on the Reliance Jio Infocomm network have contracted to little over a quarter of all calls (28%) made with India’s largest telcos, Bharti AirtelBSE 2.38 %, Vodafone India and Idea CellularBSE 0.90 % releasing additional points of interconnection (PoIs).

Roughly 8.5 crore out of about 30 crore call attempts by Jio’s users to the three operators failed on 7 November – the latest data available on the Mukesh Ambani-owned new telco’s website updated on Thursday. This compares with around 50-60% call failure rates earlier this month.

(Source: The Economic Times)

9. Auto Sales Enter Slow Lane as Firms Clear Inventory

Sales growth sputtered for passenger vehicles and two-wheelers in October as manufacturers – they called it a “one off dip’’ – focused on clearing inventory built during the festival season. Retail sales remained high, according to industry lobby Society of Indian Automobile Manufacturers, or Siam, which reports wholesale figures.

Sales of passenger vehicles grew 4.48% to 2,90,000 units while two-wheeler sales grew 8.72% to 1.8 million units from a year ago.

Siam said sales reflected a “one-off dip” and showed confidence to achieve the 3 million sales mark for passenger vehicles during the fiscal – a first for India.

(Source: Livemint)