QBiz: Infosys Loses Severance Pay Case; Tesla Faces Criminal Probe
Catch the latest business stories of the day here.
1. Setback for Infosys as Ex-CFO Rajiv Bansal Wins Severance Pay Case
An arbitral tribunal’s ruling ordering Infosys Ltd to pay its former chief financial officer Rajiv Bansal Rs 13.58 crore, including Rs 12.18 crore in severance and Rs 1.4 crore in interest, revives questions about the decision made by the company’s board to arbitrarily halt the payment.
Infosys’s board led by former chairman R. Seshasayee had decided two years ago to stop the payout reportedly after some of its founders expressed their unhappiness.
Arbitrator retired Supreme Court judge R.V. Raveendran looked only into the employment contract of Bansal and if the company’s decision to halt outstanding payment was fair, an executive familiar with the development said on condition of anonymity. Justice Raveendran did not go into the merits of Infosys’s decision to pay Bansal a severance.
2. ICICI Bank Has Replied to Show Cause Notice, Says SEBI
Markets regulator SEBI today said that the ICICI Bank Limited has replied to its show cause notice with respect to a probe into the alleged regulatory lapses involving its CEO Chanda Kochhar, her husband and his business dealings.
The Securities and Exchange Board of India Chariman Ajay Tyagi also said that he has no information about any settlement application filed by the bank. Later, a SEBI member clarified that the bank has not filed any formal application.
In a filing, the ICICI Bank informed the stock exchanges that it has submitted its response to SEBI’s show cause notice but has not filed any application for settlement. ICICI Bank and the business dealings of the Kochhar family has come under the regulatory lens of SEBI and other agencies.
3. SEBI Makes Investing in Mutual Funds Cheaper, Caps Expense Ratio to 1.05 Percent
The Securities and Exchange Board of India (Sebi) on Tuesday announced major changes to the fee structure for the Rs 25-trillion mutual fund (MF) industry, a decision that will hit the profits of asset management companies (AMCs) but result in savings for investors.
The regulator has capped the so-called total expense ratio (TER) for fund houses with equity assets up to Rs 500 billion at 1.05 percent, down from as much as 1.75 percent charged earlier. AMCs with lower assets under management (AUM) will be allowed to charge a higher TER, based on slabs. Sebi also said the industry would have to move to a full “trail model” for commissions. It also capped fees for exchange-traded funds (ETFs) at a maximum of 1 percent.
4. Flipkart Gets Over Rs 3,462 Crore Infusion From Singapore Entity
Flipkart Internet, the online marketplace arm of the Walmart-backed company, has received over Rs 3,462-crore fund infusion from Flipkart Marketplace, Singapore, as per regulatory documents.
The fund infusion — done in two tranches — will provide more ammunition to Flipkart, which is locked in an intense battle with US-based Amazon for leadership in the burgeoning Indian e-commerce market.
“...in accordance with the Letter of Offer dated 14 August, 2018 circulated by the company for the rights issue of shares, the board of directors of the company be and hereby allot 14,57,598 Class A equity shares...for an amount aggregating to Rs 30,07,02,46,740 for cash to Flipkart Marketplace Private Ltd, Singapore,” regulatory documents filed with Corporate Affairs Ministry said.
5. IPPB Ties up With Bajaj Allianz to Offer Life Insurance Products
In a move aimed at financial inclusion, India Post Payments Bank (IPPB) on Tuesday partnered with Bajaj Allianz Life Insurance to expand product offerings for its customers. The insurance products will first be available across IPPB’s network of 3250 access points, gradually expanding to 155,000 post offices across every village, town and district in India, said the bank in a statement.
Bajaj Allianz Life Insurance is the first life insurer to tie-up with the newly formed bank. The private insurance company also said it will ensure that the awareness on the benefits of life insurance reaches every IPPB customer.
6. Tesla Is Facing US Criminal Probe Over Elon Musk Statements
Tesla Inc is under investigation by the Justice Department over public statements made by the company and Chief Executive Officer Elon Musk, according to two people familiar with the matter. The criminal probe is running alongside a previously reported civil inquiry by securities regulators.
Federal prosecutors opened a fraud investigation after Musk tweeted last month that he was contemplating taking Tesla private and had “funding secured” for the deal, said the people, who were granted anonymity to discuss a confidential criminal probe. The tweet initially sent the company’s shares higher.
Tesla confirmed it has been contacted by the Justice Department.
7. PNB Fraud: ED Eyes Rs 4,000-Cr Foreign Assets of Nirav Modi for Attachment Under PMLA
Widening its probe, the Enforcement Directorate (ED) has zeroed in on foreign assets worth about Rs 4,000 crore of absconding diamond jeweller Nirav Modi for quick attachment under the anti-money laundering law in connection with the alleged USD 2 billion PNB fraud case.
Officials said the agency has got issued a number of judicial requests (Letters Rogatories), and with a few being in the pipeline, from a local court in Mumbai to be sent to countries like the US, UK, Switzerland, Hong Kong and Singapore for attachment of immovable properties likes houses and villas and bank accounts of Nirav Modi and his family.
(Source: Financial Express)
8. China Strikes $60 Billion of US Goods in Widening Trade War
China announced it will take retaliatory tariff action against $60 billion of US goods, sharply escalating their trade conflict as the Trump administration considers imposing duties on almost all Chinese imports.
China’s retaliatory tariffs, on items ranging from meat to wheat and textiles, will take effect on 24 September, China’s Ministry of Finance said in a statement posted on its website. Beijing is still ready to negotiate an end to the trade tensions with the US, the ministry said.
At almost the same time Beijing released its list of counter-tariff targets, President Donald Trump on Tuesday threatened more punitive measures against China if it targets politically potent US agricultural products for retaliation.
9. Govt Plans Hike in Gold Import Duty to Check Rising CAD
The government is set to hike the import duty on gold to 12-13 percent from 10 percent to control the widening current account deficit. The move will hit jewellery exports and pull down domestic demand.
Besides the option of increasing import duty, the government is also considering some policy measures to restrict gold imports, according to sources close to the decision-making process.
The margins of jewellery exporters have already shrunk as the gold cost for exporters is 13 percent higher compared to that prevailing in competing countries due to the import duty of 10 percent and the rupee depreciation of 14 percent since January.
(Source: Business Line)
10. RCom to Exit Telecom Biz Completely, Focus on Real Estate: Anil Ambani
However, Ambani gave a ray of hope to shareholders. He unveiled a new source of redemption through development plans for the 133-acre Dhirubhai Ambani Knowledge City (DAKC) in Navi Mumbai.
“As we have moved out of the mobile sector, we will monetise at an appropriate stage our enterprise business (which includes enterprise, data, submarine and long distance international voice calls). Reliance Realty (a subsidiary of RCom) will be the engine of growth for the future of this company. We are unlikely to have any telecom sector exposure in the long run,” he said.
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