QBiz: NCLT Rules Against Mistry; Modi Opens Largest Mobile Factory
Here are the top business stories of the day.
1. NCLT Dismisses Cyrus Mistry’s Plea Against Tata Sons
Cyrus Mistry lost the legal battle against Tata Sons Ltd. as the company law tribunal rejected all his allegations and ruled that the parent of India’s largest conglomerate had the right to remove him as its chairman.
The NCLT found no merit in Mistry’s allegations of operational mismanagement and oppression of minority shareholders. The court also found no merit in Mistry’s argument that Ratan Tata and Tata Sons’ trustee NA Soonawala interfered in the governance of Tata Sons, according to the bench headed by Justices BSV Prakash Kumar and V Nallasenapathy, who had heard both the parties for nearly four months between October and February.
Mistry, in a statement, called the ruling “disappointing although not surprising”. It’s in “line with the earlier position expressed by the tribunal,” he said, adding that “an appeal on merits will be pursued.”
2. World’s Largest Mobile Phone Factory to Open in India
Samsung Electronics Co. opened the world’s largest mobile phone factory in India, in a win for Prime Minister Narendra Modi’s flagship program to lure investors to manufacture in the South Asian nation.
The factory was inaugurated by Modi and South Korean President Moon Jae-in during their visit to the facility in located at the outskirts of Delhi. This will double Samsung’s Noida unit capacity for mobile phones to 120 million units a year from 68 million units a year, it said in a statement. The phase-wise expansion will be completed by 2020.
Smartphone makers from Xiaomi Corp. to Oppo Mobiles are building factories in the world’s fastest growing market for the product bolstering Modi’s push to encourage overseas investors to ‘Make in India’. Asia’s third-largest economy attracted record foreign direct investment in the past year totaling $62 billion, including reinvestment.
3. Telecom Department Clears Vodafone-Idea Merger With Riders
The telecom ministry today approved the merger of Vodafone India and Idea Cellular Ltd. that will create the country’s largest mobile services operator, an official said.
The Department of Telecom cleared the Vodafone-Idea merger, but both companies will have to meet conditions for final approval, the official told PTI. The department has asked Idea Cellular to pay Rs 3,926 crore in cash for Vodafone spectrum and furnish a bank guarantee of Rs 3,342 crore, the source further said.
The combined operations of Idea and Vodafone will create the country’s largest telecom operator worth over $23 billion (or over Rs 1.5 lakh crore), with a 35 percent market share and a subscriber base of around 430 million.
4. I-T Dept Sells Part Of Cairn Energy's Shares in Vedanta to Recover Dues
The Income Tax department has sold a portion of Cairn Energy’s shares in Vedanta Ltd in a bid to recover some of the tax dues. In a statement to the exchanges, Cairn Energy said, “Cairn has now been notified by the IITD (Indian Income Tax Department) that it has sold part of Cairn’s shareholding in VL (Vedanta Ltd), realising and seizing proceeds of $216 million. Following this sale, Cairn’s retained holding in VL is now approximately 3 per cent. It is possible that the IITD may make further sales.”
In January 2014, Cairn UK Holdings Ltd (CUHL), a direct subsidiary of Cairn, was restricted from selling its shareholding of approximately 10 per cent in Cairn India Ltd, which at that time had a market value of approximately $ 1 billion.
The Income Tax department raised a Rs 10,247-crore tax demand notice in January 2014 against gains that Cairn had made in 2006, before the Initial Public Offering of Cairn India Ltd.
(Source: Business Line)
5. No Bullet Train on Our Land, Says Godrej Group
Till now, opposition to Prime Minister Narendra Modi’s pet project – the Rs 1.1 lakh-crore high speed rail corridor between Mumbai and Ahmedabad – came largely from farmers and tribal communities in Gujarat and Maharashtra, whose lands were earmarked to be acquired for it. One of India’s well-known business houses has now joined the list.
The Godrej Group moved the Bombay High Court challenging the proposed acquisition of its land in Mumbai’s eastern suburb of Vikhroli for the 508-km rail corridor and demanded its realignment, said a senior official with the National High-Speed Rail Corporation, the project’s nodal agency. “The court has granted a 45-day stay and we’ll come out with some solution by then.”
6. China Agrees to Cut Tariffs On Indian Cancer Drugs: Foreign Ministry
India and China have reached an agreement on reduction of tariffs on the import of Indian medicines, particularly cancer drugs, to China, the Foreign Ministry said, days after a Chinese movie on a leukaemia patient highlighted the need for paving the way for import of cheap Indian medicines.
However, it is not yet clear whether China has agreed to grant licences to Indian companies to sell cancer drugs in the huge market here, which could be a major step.
About 4.3 million people are diagnosed with cancer annually in China, according to a report of the state-run China Central Television. Indian drugs, specially cancer curing medicines, are in big demand in China as they are far cheaper than their western counterparts.
7. Leeway For Labourers, Nurses, Women Employees and ATM Guards in GST
An amendment in the Goods and Services Tax (GST) law may bring a cheer from labourers, nurses, security guards and working women.
In what could align the country’s labour law and other employee and worker friendly laws, the government in its proposed amendment released on Monday afternoon allowed a leeway to companies for taking input tax credits in several cases.
Banks can now take input tax credit of life insurance premiums paid by security guards, hospitals can take credit of medical insurance premium paid by nurses and companies can take credit of canteen fees charged to labourers.
The amendment also means that in places like New Delhi where the state law mandates that women employees, especially those working in the outsourcing industry, be provided with a nigh drop, would be available for input tax credit.
8. Reliance Jio's Broadband Service to Impact MSOs, DTH Players: Report
Reliance Jio's recently announced broadband offering will impact multiple system operators (MSOs) and direct-to-home (DTH) players, but will benefit content providers, a report said today.
"Jiogigafiber, a fibre-based broadband service for homes and businesses, by Reliance Industries has the potential to disrupt the retail broadband segment and open up new digital avenues for the enterprise broadband segment," India Ratings said in a report.
It said the level of impact on the MSOs and DTH players will depend on their geographical diversity with regard to subscribers, the relative attractiveness of the market, and current tariffs and service offerings.
9. Microsoft Signs MoU With Rajasthan Government to Offer Digital Training to Students
Microsoft has signed an MoU with the Rajasthan government to provide free digital training to 9,500 college students in one year. The initiative was taken for the enhancement of digital learning and capacity building of college students in the state, higher education minister Kiran Maheshwari said on the MoU signing. “Today is the time of technology and speed, and those who are not updated will be outdated, therefore the government has taken a new initiative to increase digital learning of college students,” the minister said.
The commissioner of college education Ashutosh A T Pednekar informed that the company will run MS office specialist training programme in 50 government colleges from August which will benefit 9,500 students.
(Source: Financial Express)
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