QBiz: PM Modi Calls for Swift APMC Reforms; UBI Hit by Bank Fraud
1. Narendra Modi Calls for Swift APMC Reforms to Benefit Farmers
A free and open market is “a must” for better price realisation by farmers and states must, therefore, “unshackle” the existing market ecosystem at the earliest in the interest of farmers, Prime Minister Narendra Modi has told states amid farmer protests sparked by low crop prices.
In a letter to chief ministers sent on 9 March, the Prime Minister said that “it is imperative to swiftly undertake market reforms of our decades old and restricted agriculture produce and marketing committee (APMC) architecture.”
He added that the model Agriculture Produce and Livestock Marketing (APLM) Act circulated by the centre to states last year “encompasses the desired changes to unshackle the existing market ecosystem.”
“Many states have already made good progress in this regard. I request you to complete the desired set of reforms at the earliest in the interest of the farmers of the country,” the letter said. Mint has reviewed a copy of the letter.
The letter said that the centre’s “emphasis is to help farmers produce more at a lesser cost and simultaneously get higher price...this will help our ambitious goal of doubling farmer’s income by 2022.”
2. After PNB, SBI, Now Union Bank of India Hit by Bank Fraud
The Central Bureau of Investigation (CBI) registered a Rs1,394.43 crore bank fraud case against Hyderabad-based Totem Infrastructure Ltd on a complaint by state-run Union Bank of India.
“The CBI registered a case today (Thursday) on a complaint by Union Bank of India against Totem Infrastructure and its promoters and directors Tottempudi Salalith and his wife Tottempudi Kavita of Hyderabad,” a person familiar with the developments said.
Union Bank of India’s industrial finance branch of Hyderabad filed the complaint against Totem for cheating the bank to an extent of Rs313.84 crore.
“Totem Infrastructure took a loan from a consortium of eight banks, including Union Bank, wherein the total outstanding dues stand at Rs1,394.43 crore. This account became NPA (non-performing asset) on 30 June 2012,” the person added.
The agency said that Union Bank of India had only recently filed a complaint with the agency against Totem Infrastructure.
It was alleged in the complaint by Union Bank that “the company had diverted funds by opening accounts outside the consortium and through payments of wages by showing excess expenditure and inflated stocks. The entire sale proceeds were not allegedly routed through the dealing branches of consortium banks.”
3. Sensex, Nifty Drop as Trade War Fears Grip Markets
Indian equities slipped deeper into the red on Thursday with the benchmarks Sensex and Nifty shedding about 0.4 percent each to end the day at 33,006 (-129 points) and 10,114.75 (-40.50), respectively.
This is the 10th day of decline in 15 sessions this month, indicating a ratio of two down days to every up day in the month. The Sensex and Nifty have shed 3.45 percent and 3.60 percent, respectively in March so far, even as foreign and domestic institutions have been net buyers.
Foreign investors have infused a net $1,552 million this month, while domestic institutions have invested a net $164 million. This trend contrasts with February when foreign institutions were net sellers (selling a net $1,879 million), even as domestic institutions were big buyers (net investment of $2,664 million).
A correction in valuations could be behind the trend reversal, as the valuation premium of Indian equities (reflected in the PE of MSCI – India index) narrowed to 36.5 per cent over the emerging markets group (PE of MSCI – Emerging Markets index) from a high of 46.7 percent in early February. Indian equities now trade at a forward PE of 16.9 (18.3 on January 1, 2018) against 12.4 for the emerging markets group (12.49) and 15.7 for world equities (16.9).
(Source: Financial Express)
4. Kumar Mangalam to Lead Vodafone-Idea Combine’s Leadership Team
Vodafone India and Idea Cellular Ltd, which are in the process of a merger, on Thursday outlined the key leadership team which will head the merged entity.
Kumar Mangalam Birla will be the non-executive chairman of the Vodafone-Idea combine. Balesh Sharma, who is currently the chief operating officer (COO) of Vodafone India, has been as the chief executive officer (CEO) of the merged entity.
Akshaya Moondra, currently chief financial officer at Idea Cellular, will be the CFO and Ambrish Jain, currently deputy managing director at Idea, will take over as COO of the merged entity, a statement from Vodafone Group Plc said.
Both Moondra and Jain will report to Balesh Sharma, who will be responsible for the combined business’s strategy and its execution as well as driving integration.
5. Mahindra, Ford Motor Enter Second Phase for a Potential Alliance
Mahindra and Mahindra and the India subsidiary of Ford Motor have signed five non-binding agreements, furthering the accord signed between them last September, Mahindra said.
The two automobile makers would be collaborating on multiple areas including connected vehicle projects, electric battery vehicles, development of compact sports utility vehicles (SUVs), B-segment SUVs and power trains. Teams from both would work towards definite agreements in these areas, the statement added.
A partnership will allow them to share investment and technology, get economies of scale and increase efficiency. The new compact SUV, the plan goes, will be built on the Mahindra platform. Both companies will sell it independently under own brands.
Mahindra will also supply its power trains to extend Ford’s product range, went the statement. The scope will include the companies co-developing a suite of connected car solutions and electric vehicles.
The alliance will continue to focus on leveraging Ford’s global reach and expertise, and Mahindra’s scale in India and its operating model. The teams would work together, up to three years, to develop further avenues of cooperation, Mahindra said.
(Source: Business Standard)
6. Sebi to Focus on Big Bang Market Reforms at Board Meeting
Capital markets regulator Securities and Exchange Board of India (Sebi) will consider closely supervising the work of auditors, independent valuers and compliance secretaries and penalise them for lapses at its board meeting on 28 March, three people with direct knowledge of the matter said.
The Sebi board will also consider proposals such as making algorithmic trading cheaper and more accessible, and reducing fees charged by mutual funds to unit holders.
Norms for companies admitted to bankruptcy court related to their trading, delisting, and disclosures will also be discussed, the people said, requesting anonymity.
The proposal to increase auditor oversight comes amid a move by the government to set up the National Financial Reporting Authority (NFRA) as an independent regulator for auditors, who are facing greater scrutiny after a $2-billion fraud was discovered at a Mumbai branch of state-run Punjab National Bank last month.
“Under the proposed norms, Sebi will have powers to disgorge ill-gotten gains and bar auditors from the securities market,” said one of the people cited earlier.
7. Banks to Vote on New Bidders for Debt-Laden Essar Steel on Friday
The consortium of Indian lenders, led by State Bank of India, are set to vote on a proposal on Friday whether to allow new bidders for Essar Steel or not in the second round. If the voting goes in favour of allowing new bidders, then JSW Steel is likely to make a bid by joining a consortium of private equity players, said a source close to the development.
On Wednesday, the committee of creditors had rejected both the bids by ArcelorMittal and Numetal for the steel company as both failed to clear the legal eligibility test.
Corporate lawyers said by restricting bidding only from the six companies, which gave the expression of interest (EoI), the State Bank of India is restricting other bidders who may be interested in joining the race. As of now, only SBI is opposing fresh bidders to join the race while other banks want the gates to be opened up for new players so that maximum value can be derived for Essar Steel.
(Source: Business Standard)
8. Maharashtra Govt to Address Sugar Sector Concerns
The Government of Maharashtra has set up a group of ministers ( GoM), to be chaired by state finance minister Sudhir Mungatiwar, to recommend measures to address concerns of the sugar sector.
The GoM includes cooperation minister Subhash Deshmukh, rural development minister Pankaja Munde, minister for food & civil supplies Girish Bapat, opposition leader Radhakrishna Vikhe Patil, MLA s Ajit Pawar and Jayant Patil, Dilip Walse Patil (chairman, National Federation of Cooperative Sugar Factories), Rajesh Tope, Hasan Mushrif, and Jayprakash Dandegaonkar (vice chairman, Maharashtra State Cooperative Sugar Factories Federation) among others.
With fair and remunerative price (FRP) arrears for the sugar season 2017-18 piling up to Rs 2,228 crore, the sugar commissionerate had recently issued show cause notices to 136 factories in the state for not completing their FRP commitments to farmers.
Representatives from sugar industry, including the ministers who are part of the GoM, and a delegation led by the chief minister Devendra Fadnavis will soon meet the Prime Minister seeking Centre’s intervention.
This was decided at the meeting chaired by Fadnavis in Mumbai with the concerned parties. Sugar industry representatives, who were present at the meeting, said the industry has called upon the state government to allow sugar factories to pay FRP in two installments and the government needs to purchase sugar for its sale under the public distribution scheme (PDS).
(Source: Financial Express)
9. Supreme Court Orders Status Quo for RCom Asset Sale to Reliance Jio
The Supreme Court on Thursday ordered status quo to be maintained in the sale of Anil Ambani-led Reliance Communications’ airwaves, fibre and towers to Relaince Jio for Rs240 billion.
A consortium of lenders, led by State Bank of India (SBI), had challenged the stay order of the National Company Law Tribunal (NCLT) on the proposed sale. The Supreme Court refused to raise the stay order or revoke the Bombay High Court 8 March order, which had dismissed an RCom plea against it.
The NCLT had been moved by Swedish telecommunication equipment maker Ericsson.
The SC Bench of Justice Adarsh Goel said a full hearing of the case would be held on 5 April. RCom owes Rs450 billion to public sector banks and exited a strategic debt restructuring plan in December last year after it assured them that it would repay debt by selling its assets to Jio.
The sale is important for RCom to repay debt by March. Else, it could be sent to the NCLT under the Insolvency and Bankruptcy Code. Banks would also have to make additional provision for its loans if RCom failed to meet its provisions.
(Source: Business Standard)