QBiz: 100% FDI in Online Marts, Mallya Offers to Settle Loans

QBiz: Read the top business stories of the day.  

5 min read

File photo of Kingfisher Airlines Chairman Vijay Mallya. (Photo: Reuters)

1. Govt Permits 100 Percent FDI in Online Marketplaces

The government on Tuesday permitted 100 percent FDI in the marketplace format of e-commerce retailing with a view to attracting more foreign investments. As per the guidelines issued by the Department of Industrial Policy and Promotion (DIPP) on FDI in e-commerce, foreign direct investment (FDI) has not been allowed in inventory-based model of e-commerce.

At present, global e-tailer giants like Amazon and eBay are operating online marketplaces in India while homegrown players like Flipkart and Snapdeal have foreign investments even as there were no clear FDI guidelines on various online retail models.

Read more here.

2. Vijay Mallya Offers Rs 2,000 Crore to Settle All Kingfisher Loans: FE

Kingfisher Airlines chairman Vijay Mallya had recently reached out to lenders, to whom he owes nearly Rs 7,000 crore, offering to pay a little over a fourth of the amount by way of settling all claims, according to The Financial Express.

However, the consortium of lenders led by State Bank of India (SBI) turned down the offer saying they were not willing to take a haircut.

Kingfisher Airlines (KFA), now declared a wilful defaulter by multiple banks, owes lenders Rs 6,963 crore. Two senior bankers who are part of the consortium confirmed Mallya had approached lenders through one of his companies asking for a settlement by paying Rs 2,000 crore.

Even as bankers have been making all efforts to recover their money despite facing some legal hurdles, the Enforcement Directorate has initiated an investigation into the businessman’s financial affairs, suspecting malfeasance. The ED has summoned Mallya and the businessman, currently in London, is expected to appear before the investigative agency by 2 April.

Read more here.

3. Janet Yellen Says US Fed Should Proceed ‘Cautiously’

US Federal Reserve Chair Janet Yellen said on Tuesday the central bank should proceed “cautiously” as it looks to raise interest rates again, because inflation has not yet proven durable against the backdrop of looming global risks to the US economy.

In her first comments since the Fed decided to hold rates steady two weeks ago, Yellen again sounded cautious tones about threats to the recovery of the world’s biggest economy, appearing to push back on more hawkish recent comments from a handful of her colleagues.

Developments abroad imply that meeting our objectives for employment and inflation will likely require a somewhat lower path for the federal funds rate than was anticipated in December.
Yellen at the Economic Club of New York

Read more here.

4. SC Green Light to SEBI to Sell Sahara Assets: BS

The Supreme Court on Tuesday allowed the market regulator Securities and Exchange Board of India (SEBI) to devise a mechanism to sell 86 properties belonging to the Sahara group to recover dues in the illegal bonds case.

The Bench headed by Chief Justice TS Thakur directed the regulator to appoint an expert agency and execute the sale of these assets under the supervision of retired judge BN Agarwal.

The move to allow direct sale by SEBI opens a new avenue for realisation of the dues, which have now swelled to nearly Rs 40,000 crore, even as the court adjourned the hearing on a petition to appoint an official receiver and other related matters to 27 April.

Read more here.

5. Tata Steel to Sell Entire UK Operation

India’s Tata Steel, Britain’s largest steelmaker, is considering the sale of its entire UK business to stem heavy losses, a move that would draw a line under its almost decade-long foray into Britain.

After a marathon board meeting in Mumbai, the Indian steel giant said in a statement in the early hours of Wednesday that the financial performance of its UK arm had deteriorated substantially in recent months, after years of weak conditions.

Blaming high manufacturing costs, domestic market weakness and increased imports into Europe from countries like China, the company said it saw little change ahead for its UK plants.

Tata said its European arm would now “explore all options for portfolio restructuring, including the potential divestment of Tata Steel UK, in whole or in parts”.

Read more here.

6. Vodafone Moves International Court on India Tax Case: FE

UK-based Vodafone is understood to have moved the International Court of Justice in The Hague, urging it to intervene in its retrospective taxation case with the Indian government and appoint a third arbitrator, according to The Financial Express.

Sources to The Financial Express said that Vodafone has written to the ICJ president in this regard. Though Vodafone invoked international arbitration in the matter more than two years ago under the India-Netherlands bilateral treaty agreement, it has not progressed so far because the two sides have been unable to appoint a third, neutral arbitrator. Without this, the arbitration process cannot begin.

However, what is significant in Vodafone moving the ICJ is a clear indication that it has rejected the government’s offer of a one-time settlement in such disputed tax matters where the concerned companies can pay the principal tax demand while the government would waive the interest and penalty component.

Read more here.

7. Sun Pharma Buys Novartis Brands for Rs 1,900 Cr: BS

Sun Pharmaceuticals, India’s largest drug maker by sales, has acquired Novartis’ branded drug portfolio in Japan for $293 million (Rs 1,900 crore). With this, Sun will gain a strong foothold in Japan, the world’s second largest drug market after the US.

The deal also marks Sun’s second association with Japan. It had acquired Ranbaxy Laboratories from Japan’s Daiichi Sankyo in 2014. According to the deal, a wholly-owned subsidiary of Sun Pharma will acquire 14 established prescription brands from Novartis for a cash consideration of $293 million.

These brands have a combined annualised revenues of $160 million and address medical conditions across several therapeutic areas.

Read more here.

8. BSE Aims For Up to Rs 800 Crore IPO This Year: Livemint

BSE, Asia’s oldest stock exchange, is looking to launch its initial public offering (IPO) before the end of this calendar year to raise up to Rs 800 crore, according to Livemint.

The exchange and the intermediaries it has hired are working on regulatory aspects of the IPO, and the draft share-sale prospectus is expected to be filed before the end of the April-June quarter.

According to a Livemint report, the size of the IPO is likely to be Rs 700-800 crore and BSE is looking at September or October to launch the public offer.

Read more here.

9. Inoperative EPF Accounts to Earn Interest From 1 April: Livemint

The government on Tuesday reversed a five-year-old decision and announced that inoperative employees provident fund (EPF) accounts will earn interest, a move that will cheer millions of workers.

The decision, taken at a meeting of the central board of trustees (CBT), the highest decision-making body of the Employees’ Provident Fund Organisation, will come into force on 1 April.

It will benefit more than 40 million holders of inoperative EPF accounts, which will start earning interest. Over Rs 32,000 crore is parked in such inoperative EPF accounts.

Read more here.

(The Quint is available on Telegram. For handpicked stories every day, subscribe to us on Telegram)

Stay Updated

Subscribe To Our Daily Newsletter And Get News Delivered Straight To Your Inbox.

Join over 120,000 subscribers!