Government looking at more FDI reforms; relief for investors in defence, telecom and broadcasting
India is set to make further changes in its overseas investment regime, scrapping the need for approvals in sectors where licences are also required, such as defence, telecom and broadcasting, eliminating one layer completely from the process. “Clearance for FDI (foreign direct investment) separately after securing a licence adds another layer of approval from same authorities,” said a senior government official. “Anyone who has gone through one level of scrutiny for licence from the authorities concerned should not need to go through the same checks again.”
GST Council may look at higher peak rate of 20%
Ahead of the second half of the Budget session of Parliament, the Centre and States will meet here to finalise the draft laws for the Goods and Services Tax (GST), which will include a revised proposal for a higher peak rate of 20 per cent. The GST Council, in its meeting on March 4 and 5, is likely to finalise a provision to keep the peak rate under the indirect tax levy at 20 per cent. This means the combined incidence of Centre and State GST could rise up to as high as 40 per cent. This is in contrast to the revised draft of the model Centre and State GST Bills that was released last year, which proposed a cap of 14 per cent. This would in effect lead to a combined incidence of 28 per cent.
Source: The Hindu Business Line
Demonetisation created uncertainty about short and medium term outlook for economy: Moody’s
Even as Indian government said that the Indian economy has not been impacted due to demonetisation, a report by Moody’s said that the economic slowdown in India may be here only for a short time and policy action will determine sovereign credit impact. Demonetization created uncertainty about the short and medium term outlook for the economy. Nearly four months on, latest data support our initial expectation that the disruption would be short term in nature. As liquidity conditions continue to normalize, we expect economic growth to pick up, returning to pre-demonetization rates in the second half of 2017, the Moody’s report stated.
DLF to sell 40% Cyber City stake for $2 billion
Promoters of realty giant DLF K P Singh and his family have decided to sell their entire 40% equity in their flagship company in commercial space DLF Cyber City Developers (DCCDL) to Singapore-headquartered private equity firm GIC, formerly known as Government of Singapore Investment Corporation. The statement issued by the company did not divulge the deal figure. Sources in the company pegged the deal size at around Rs 14,000 crore ($2 billion). At this price, DLF’s rental arm DCCDL could be valued at around Rs 35,000 crore.
Chawla committee report on audit rotation expected in March
The committee constituted to opine on the viability of simultaneously engaging two auditors to examine one company’s books is set to be announced in March, say sources. An expert panel led by the former competition regulator has already submitted its recommendations to the government recently. The Ashok Chawla-headed committee’s recommendations to the Ministry of Corporate Affairs (MCA) are set to impact many stakeholders: Chief Financial Officers of India Inc, local; audit firms and the Big Four auditors.
Higher tax fears spur capital restructuring in Corporate India
With a new higher tax regime coming into effect from April 1, top corporates and wealthy investors are in a rush to restructure their shareholding. On Wednesday, Reliance Industries (RIL) announced a restructuring involving Rs 1.3 lakh crore of shares within promoter entities. Similarly, Aurobindo Pharma last week transferred shares totalling Rs 13,200 crore belonging to promoters into a family trust. Investment guru Shivanand Mankekar, too, was seen undertaking similar restructuring.
NDMC to auction Taj Mansingh in Delhi, also cancels Le Meridien’s license
In a major setback, the Tata Group’s Indian Hotels Company (IHC) will not get a lease extension for the Taj Mahal Hotel in the heart of this city, better known as the Taj Mansingh after the road it is on. New Delhi Municipal Council (NDMC), the civic body for the 43 sq km area in the city centre, which owns the land on which the 294-room luxury hotel is situated, decided on Thursday to proceed with inviting bids to run the place, opening the doors to competitors of IHC.
SBI Caps strengthens institutional equities business
SBI Capital Markets, investment banking and broking arm of State Bank of India (SBI), is in the process of strengthening its institutional equities business. The brokerage plans to leverage the scale and reach of its parent, which deals with nearly a third of corporate clients in the country. The institutional equities division of a brokerage provides services such as equity sales, trading and research to mainly big-ticket clients. These would include mutual funds, insurance companies and foreign institutional investors (FIIs).
CDSL issue may get delayed as SEBI asks promoters to cede special rights
The initial public offering of depository services provider CDSL seems to have been delayed due to securities market regulator SEBI asking promoters (in this case the BSE) and major shareholders to give up their special rights ahead of the IPO, according to SEBI sources. Though SEBI issued final observations on February 8, clearing the road for CDSL’s IPO, it has specifically asked for promoters/major shareholders to give up their special rights so that every shareholder post the IPO is on an even keel. Tejesh Chitlangi, Partner, IC Legal, said, “The SEBI ICDR Regulations require the shares issued in an IPO to rank pari passu with the existing shares in all respects.
Source: The Hindu Business Line
World’s Biggest Banks Fined $321 Billion Since Financial Crisis
Banks globally have paid $321 billion in fines since 2008 for an abundance of regulatory failings from money laundering to market manipulation and terrorist financing, according to data from Boston Consulting Group. That tally is set to increase in the coming years as European and Asian regulators catch up with their more aggressive U.S. peers, who have levied the majority of charges to date, BCG said in its seventh annual study of the industry published Thursday. Banks paid $42 billion in fines in 2016 alone, a 68 percent rise on the previous year, the data showed.
Sunil Mittal lauds govt’s annual spectrum auction idea
The government’s proposal to auction spectrum every year has got a backer in Bharti Airtel Ltd chairman Sunil Bharti Mittal, who however has said there is no need for sale of airwaves in coming fiscal. “The way he (telecom secretary) has put it that spectrum auction will be done every year whether industry needs it or not is very progressive thought. In fact, it will become a leading edge practice worldwide,” Mittal told PTI in an interview.
UTI plans to augment Rs 1,000-cr from Private Debt Fund
UTI Asset Management Company (UTI AMC) is looking at mopping up Rs 1,000 crore from the just launched Private Debt Fund within the first year itself. The fund house is looking at financing corporates who need short term capital, with the newly floated fund. “We are looking at mopping up around Rs 1,000 crore within the first year of Private Debt Fund,” UTI AMC managing director Leo Puri told.
FinMin tells PSBs to exit non-core ventures
As part of capital raising exercise, the Finance Ministry has advised state-owned banks to prepare a list of their non-core assets and look at disposing them at opportune time.They have been asked to move forward on the idea based on deliberations at the Gyan Sangam last year, sources said. Some of the banks have started the process while others are gearing up, the sources said, adding that the move will not only help them raise the much needed capital for growth but also sharpen their focus on the core business.
Minority investor alleges fund misuse by Singhania
Shares of textile maker Raymond, promoted by Gautam Hari Singhania, fell 5.49 per cent on Thursday as an open letter from minority shareholders of the company alleged misuse of money by promoters in developing a property in Mumbai and in owning luxury yachts, speed boats, business jets and helicopters. Raymond shares fell to close at Rs 603 apiece on NSE. The scrip had fallen 7.5 per cent in the previous two trading sessions from a weekly high of Rs 656.75. The open letter also criticised the role of independent directors on the board of Raymond as well as the audit committee for sleeping on the wheel and not objecting towards imprudent deployment of company’s funds in unproductive avenues. Minority investor Bharat Patel, who owns close to 4.3 per cent of the equity, told Financial Chronicle: “The Complete Man is indulging in daylight robbery, kapda banane mein yacht kya kaam hai? We are co-owners and we will not allow this to carry on.”
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