QBiz: Air India Sale Takes Off; ED Arrests DHFL’s Kapil Wadhawan

Your daily round-up of the latest business news on QBiz.

5 min read
Representational image of Air India.

1. Air India Divestment Process Finally Takes Off, With Sweetened Deal Terms

Almost two years after a failed attempt, the government on Monday launched the biggest privatisation exercise in value terms, inviting preliminary bids for Air India with sweetened deal terms. Full management control, reduced debt, a leaner organisation and flexibility to form a consortium are among the relaxed terms on offer for Air India divestment as potential bidders weigh their options to buy what was once a national asset.

According to the bid document, the government would divest its entire stake in the state-owned airline and subsidiary Air India Express, along with its joint venture Air India SATS Airport Services. The Air India brand will, however, have to be retained by the new owner.

(Source: Business Standard)

2. ED Arrests DHFL's Kapil Wadhawan in Iqbal Mirchi Money Laundering Case

The Enforcement Directorate (ED) formally arrested Kapil Wadhawan (pictured), former chairman and managing director of debt-laden Dewan Housing Finance (DHFL), for his alleged role in financing a loan to gangster Iqbal Memon (alias Iqbal Mirchi), supposedly also used for funding terrorism.

Wadhawan was produced in court under the Prevention of Money Laundering Act and remanded to the ED's custody for two days.

Sources in the ED alleged he approved all payments to Mirchi. “He was looking after the finances at that point of time (in 2010) and had played a vital role in structuring the whole deal with Memon,” said an official.

(Source: Business Standard)

3. AGR Dues: Telecom Firms, DoT Discuss Part Upfront Payment by 31 March

Leading telcos are discussing a proposal with the Department of Telecommunications (DoT) regarding paying part of their AGR dues upfront by 31 March if the Supreme Court gives a favourable verdict on their “modification petition”, which will be heard this week.

The companies have offered to pay upfront the principal amount due for licence fees and spectrum usage charges (SUCs) on the basis of adjusted gross revenue (AGR). This amount will not include the interest, the penalty, and the interest on the penalty. The proposed upfront amount will be the difference between the AGR calculations done by the DoT and what the telcos have paid as licence fees and SUCs over the years based on their interpretation of AGR. The Supreme Court had in October upheld the DoT definition of AGR, which resulted in a Rs 1.47 trillion additional payout bill for the telcos.

(Source: Business Standard)

4. Govt Starts Search for Next Sebi Chief; Ajay Tyagi's Term Ends on 1 March

The Centre on Monday kick-started search for the chairman of the Securities and Exchange Board of India (SEBI) to succeed Ajay Tyagi, whose tenure ends on 1 March.

The finance ministry has put out an advertisement seeking applications from eligible candidates for the post and gave just two weeks against the usual practice of three months. Further, the tenure of the watchdog is again being extended to five years.

According to the eligibility criteria advertised, “The chairman shall hold office for such period not exceeding five years and shall not hold office beyond 65 years of age, whichever is earlier. He is eligible for re-appointment.”

(Source: Business Standard)

5. Stocks Tumble Around the World on Virus Jitters

Stocks slumped and bonds rallied as concern over the impact of a deadly virus that originated in China rattled global markets.

The S&P 500 Index fell the most in almost four months, the Dow Jones Industrial Average erased its 2020 gain and the Nasdaq-100 Index had the biggest drop since August. Chipmakers, cruise lines and casino operators were among the hardest hit as investors fled companies with close links to China. A gauge of US equity volatility surged above its one-year average. European and emerging-market shares slid to the lowest since mid-December.

(Source: BloombergQuint)

6. Sebi Panel Proposes Sweeping Changes to Norms Governing Related Party Transactions

A panel appointed by the Securities and Exchange Board of India has proposed sweeping changes to strengthen the monitoring and enforcement of norms pertaining to related party transactions.

Tweaking the definition of Related Party and Related Party Transactions and revising thresholds for classification of such transactions as material, are among the recommendations.

Also, the committee has proposed changes to the process followed by a company's audit committee for approval of RPTs that are material. Further, a format for reporting of RPTs to the stock exchanges has been mooted.

(Source: BloombergQuint)

7. Indigo Q3 Results: Profit Jumps 2.6 Times; FY20 Capacity Growth Guidance Cut

InterGlobe Aviation Ltd’s quarterly profit rose, beating estimates, on better yields and higher passenger growth.

Profit of the operator of India’s largest airline, IndiGo, rose 2.6 times year-on-year to Rs 490 crore in the quarter ended December, it said in an exchange filing. That’s above the Rs 348 crore consensus estimate compiled by BloombergQuint.

Yields – a measure of average fare per passenger per kilometre – rose to Rs 3.9 per kilometre from Rs 3.8 a year ago. Higher passenger load factor – a measure of seat occupancy – and lower fuel prices also aided the carrier’s bottom line.

(Source: BloombergQuint)

8. Rakesh Jhunjhunwala Summoned by Sebi Over Aptech Insider Trades

Billionaire investor and Aptech Ltd chairman Rakesh Jhunjhunwala has been ordered to appear before the Securities and Exchange Board of India (SEBI) in a case of alleged insider trading in shares of the training company, according to the summons served to him, a copy of which has been reviewed by Mint.

“The regulator is examining a time frame of February 2016 to September 2016 for irregular trades, which it suspects were done on the basis of insider information," a person with direct knowledge of the matter said on condition of anonymity.

Insider trading is the practice of trading in shares of a company based on non-public information. Under SEBI’s insider trading norms, communication of unpublished price-sensitive information is also considered a violation.

(Source: Livemint)

9. Godfrey Phillips India, Other KK Modi Assets on Sale,  Says  Lalit  Modi

Promoter stakes in several KK Modi group companies, including listed cigarette maker Godfrey Phillips India Ltd, are up for sale, the late industrialist’s son Lalit Modi tweeted on Monday.

Lalit Modi and his family own 47.09 percent stake in Marlboro maker Godfrey Phillips, while Philip Morris Global Brands, the owner of the Marlboro brand, owns 25.1 percent.

“Just to set the record straight. Yes all Assets of the #kkmodi group are going on sale. I mean all. The other 3 trustees wanted to continue running the business but I felt post my father passing away - the value will deplete. I voted for sale," Lalit Modi said in a tweet. KK Modi died in November.

(Source: Livemint)

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