QBiz: ED Files Charges Against Nirav Modi; India Drags US to WTO
Top business stories of the day.
1. ED Files Charges Against Nirav Modi, to Approach Interpol in PNB Case
The Enforcement Directorate (ED) on Thursday, 24 May, filed its first charge sheet in the Punjab National Bank (PNB) fraud case, said two people with direct knowledge of the matter, including an official from the investigative agency.
PNB’s total exposure to the entities involved in the fraud now stands at Rs14,356 crore. A special Prevention of Money Laundering court will hear the case on Monday.
“The charge sheet has named 24 as accused in the case, including 18 individuals and six companies. The charge sheet will pave the way for the investigative agency to extradite Nirav Modi to India,” the ED official said on condition of anonymity.
2. Govt Push for Merger of Vodafone-Idea: New Entity Can Pay All Dues
The government has allowed the merged entity of Vodafone India Ltd and Idea Cellular Ltd to clear dues related to spectrum charges and licence fees, a departure from the Telecom Department’s earlier stand that the merger will be approved subject to the payment of all dues.
The government has accepted an assurance by Idea at the National Company Law Tribunal (NCLT) that the dues will be paid after the merger is completed, a top government official said, requesting anonymity.
“I think Idea has already given an undertaking to NCLT. So, since they are both going to continue and would be bound by their commitments to the government of India, I don’t think that will be a showstopper of any kind,” the official cited above said, requesting anonymity.
3. Govt Seeks $3.8 Billion from RIL, ONGC, Shell
The government has reiterated a demand for $3.8 billion dollars from Reliance Industries, Shell and ONGC following an English court ruling over government share from the Panna-Mukta and Tapti fields in western offshore.
In a regulatory filing, RIL said the government had on May 2017 sought $3.8 billion as its share from the western offshore field and has “recently repeated its demand.”
The liability is to be split between the three companies in proportion to their stake in PMT. State-owned Oil and Natural Gas Corp (ONGC) has 40 percent interest while RIL and Shell hold 30 percent apiece.
4. India Drags US to WTO Over Levy of Additional Duties on Steel, Aluminium
As the Trump administration threatened to take unilateral crowbar trade actions against auto and automotive parts manufacturing countries, India has dragged the US to the World Trade Organization (WTO) over Washington’s controversial additional duties on import of steel and aluminium.
Late on Wednesday, 23 May, US President Donald Trump pressed ahead with alleged unilateral trade actions by ordering investigations into imports of autos, trucks and auto parts, under the Section 232 provisions, which deals with the country’s national security.
Despite growing concerns over the earlier additional duties of 25 percent and 10 percent on steel and aluminium, respectively, under the controversial Section 232 provisions, the Trump administration decided to investigate whether “core industries, such as automobiles and automotive parts, [which] are critical to our strength as a Nation” are being undermined by imports.
5. Debt Outflows in May at the Highest in 17 Months
Foreign investors have remained net sellers of Indian debt in May, offloading the most since December 2016. Foreign portfolio investors have been sellers of Indian debt for four consecutive months due to volatility in global markets and concerns around India’s widening fiscal and current account deficits.
Foreign portfolio investors have sold a net of Rs 18,228 crore so far this month, shows data from the National Securities Depository Ltd. Sales for the year to date now stand at over Rs 29,000 crore.
The last time foreigners were selling such Indian debt so heavily was in November and December, 2016. At the time, the government’s demonetisation decision had rattled investors. Foreign portfolio investors sold more than Rs 21,000 crore in debt in November 2016. Total debt outflows in 2016 had added up to over Rs 43,000 crore.
6. Centre Mulling Immediate Solution to Deal With Rising Fuel Prices, Says Pradhan
The Centre is deliberating on an “immediate solution” to deal with rising fuel prices, Union Oil Minister Dharmendra Pradhan said on Thursday, 24 May.
"The oil ministry is of the view to bring petroleum products under the purview of the GST in order to bring down the prices of petrol and diesel. We are deliberating on an immediate solution to this problem till that time," Pradhan told reporters. "We will certainly find a way out to deal with the situation," he said.
He also asked the Odisha government to reduce VAT on petroleum products to contain the cascading effect on rising fuel prices.
7. Jet Airways’ Debt May Rise in Short Term, Says Chief Financial Officer
After posting a massive loss in the March quarter, private carrier Jet Airways Ltd on Thursday, 24 May, said it may see a rise in debt for the next one or two quarters.
“The (March) quarter had negative cash flow generation. Maybe for a quarter or two you would see the debt going up. There could be a short-term blip in terms of rise in the debt,” Jet Airways chief financial officer and deputy chief executive officer Amit Aggarwal said during a post-earnings analysts call.
He said the airline has already reduced its debt by Rs 3,000 crore over the last two-and-a-half year, adding that the overall strategy of reducing debt would continue on an ongoing basis.
8. Rs 130-Bn Tenders Withdrawn or Cancelled to Promote Made in India Products
Government tenders worth about Rs 130 billion were either cancelled or withdrawn and re-issued after the Department of Industrial Policy and Promotion (DIPP) stepped in to change their conditions for promoting 'made in India' goods, a top official said.
The government issued the order on 15 June, 2017, to promote manufacturing and production of goods and services in India and enhance income and employment in the country.
9. Centre's Target of All-Electric Vehicles Possible Only in 2050: Toyota
Toyota Kirloskar Motor on Thursday, 24 May, said the Centre's earlier target of setting up an all-electric fleet from 2030 will be possible from only 2050 and suggested that hybrid cars will be an "interim" solution till that time.
Vice chairman and whole-time director at TKM, Shekar Viswanathan, said the Japanese car maker is in the process of shipping around 4,000 newly launched Toyota Yaris sedan across the country for consumers even as he maintained that as of now they have about 60,000 customer enquiries on the car.
"The central government itself has backtracked on the 100 percent e-vehicles by 2030 target. They realised that you can't have electric charging infrastructure in place by 2030 to achieve that target),” he said.
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