QBiz: Investors Rattled After US Strike; Ratan Tata Plea on Mistry

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1. Economy Braces for a Crude Shock After US Air Strike Kills Iranian General

Investors in India were rattled on Friday after a US airstrike killed a top Iranian general, sending crude oil prices soaring, a development that could further strain the finances of the world’s third largest crude importer and deepen an economic slowdown.

Crude oil futures in London and New York surged by more than 4 percent to levels not seen since the attacks on Saudi Arabia’s oil production facility in September. The strike near Baghdad airport killed Qasem Soleimani, the Iranian general who led the Revolutionary Guards’ Quds force, according to a US defence department statement.

(Source: Livemint)

2. India’s Airlines Likely to Feel the Heat of Spike in Crude Oil Prices

The surge in crude oil prices, after a US air strike killed a top Iranian general, may push airlines operating in India deeper into losses, and threaten the survival of one or two carriers, two airline officials said.

If the conflict between the US and Iran worsens, and crude prices goes above $70-72 a barrel, “there’s a high chance that an Indian airline could go bust," said one of the two executives, requesting anonymity. “A spike in oil prices as a result of the US attack is a major concern, while threat of a war reduces travel demand," he added.

(Source: Livemint)

3. Ratan Tata Moves SC Against Mistry’s Reinstatement

Tata Sons’ chairman emeritus Ratan Tata filed a petition in the Supreme Court on Friday challenging the National Company Law Appellate Tribunal (NCLAT) order in favour of Cyrus Mistry, saying that the ruling was infirm and prejudicial to the interests of Tata Sons and its shareholders.

Tata, who retired as Tata Sons chairman in 2013 paving way for Mistry to take over, said it is unfortunate that the judgment passed adverse remarks against him without providing proper evidence.

Tata filed the petition a day after Tata Sons moved the apex court against the NCLAT ruling which had reinstated Cyrus Mistry as executive chairman on the boards of Tata Sons and three other companies.

4. Amid Promoters' Spat, IndiGo's Rakesh Gangwal Calls for EGM on 29 January

The public battle between Rahul Bhatia and Rakesh Gangwal – co-founders of the country’s largest airline, IndiGo – has taken a new turn with Gangwal convening an Extraordinary General Meeting (EGM) of the company. The EGM, scheduled for 29 January, will vote on changes in the Articles of Association (AoA) demanded by Gangwal. The changes are meant to scrap the AoA provisions that give the right of first refusal to both the promoters over each other’s shares in the company.

The duo, together holding a 75 percent stake, is credited with building a successful airline, which is worth about Rs 64,627 crore — many times more than the promoters’ initial investment. However, they publicly fell out last year after Gangwal wrote to the Securities and Exchange Board of India, alleging lack of corporate governance. Gangwal complained that Bhatia, who holds controlling power, used it to execute questionable related-party transactions between his group company Interglobe Enterprises (IGE) and IndiGo.

5. Adani to Buy 75% Stake in Krishnapatnam Port

Adani Ports and Special Economic Zone Ltd (APSEZ), India’s largest private sector port operator, has agreed to buy a 75 percent stake in Krishnapatnam Port Co. Ltd (KPCL) at an enterprise value of Rs 13,500 crore, APSEZ said on Friday.

The Krishnapatnam Port is located in southern Andhra Pradesh and is a multi-cargo facility. It handled 54 million tonnes (mt) of cargo in the year ended 31 March 2019.

The purchase will accelerate Adani Ports’ plan to expand its cargo-handling capacity to 400 mt by 2025. The acquisition will be funded via internal accruals and existing cash balance, the company said.

(Source: Livemint)

6. 11 States Record Retail Price Inflation Rate of Over 6% in November

Eleven of the 36 states and union territories recorded a retail price inflation rate over 6 percent in November, thanks largely to food price inflation, which touched the double digit mark nationally for the first time in the previous calendar year.

The states that witnessed high consumer price index (CPI)-based inflation rates were Lakshadweep, Tripura, Odisha, Uttar Pradesh, Kerala, Madhya Pradesh, Puducherry, Tamil Nadu, Rajasthan, Manipur and Mizoram.

Odisha recorded the highest increase in inflation in November as the rate rose to 7.23 percent in November against 3.35 percent in the previous month, a rise of about four percentage points.

7. Budget May Introduce Tax Dispute Settlement Scheme

The government is considering a litigation settlement scheme in the upcoming budget that will allow companies to put an end to legacy tax disputes by paying a portion of the money demanded by the revenue department, said four people with knowledge of the matter.

This could help bridge the fiscal deficit gap and monetise a part of the amount stuck in tax litigation, they said.

An estimated 500,000 cases have been pending in the courts and quasi-judicial forums for years and it could take a long while before the tax department sees any of the money, assuming it eventually wins. The total value of these disputes is pegged at Rs 7-8 lakh crore, said the people.

8. Rishad Premji to be non-Executive Chairman at Wipro, Nod Likely on 14 Jan

Rishad Premji is likely to become the non-executive chairman at Wipro Limited as the Securities and Exchange Board of India’s (Sebi) directive on separation of chairman and CEO roles comes into effect from 1 April.

According to sources, Wipro’s board, which is scheduled to meet on 14 January, is expected to take a decision in this regard.

"The shareholder resolution brought out at annual general meeting (AGM) on June, 2019, is visibly clear. The company has spelt it out clearly that in view of the (Sebi) provisions, Rishad (Premji) will move to the role of non-executive chairman," said Amit Tandon, founder & MD of corporate governance and proxy advisory firm IiAS. “The IT firm has even spelt out what will be compensation in the non-executive role. So, unless there is any change, he is likely to move to non-executive chairman role."

9. PSUs May Move SC for Relief on Rs 3 Lakh Cr AGR Demand

Non-telecom PSUs including Gas Authority of India, Power Grid Corp of India, Oil India and RailTel Corp are taking legal opinion on how to jointly approach the Supreme Court for relief, having been served demand notices by the telecom department for over Rs 3 lakh crore of combined license fee dues.

The companies are seeking opinion from the law ministry on whether they should file a joint petition or seek clarification on the applicability of the apex court's 24 October order, sources in the government said.

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