QBiz: NCLT Allows ArcelorMittal to Take Over Essar Steel & More

A quick round-up of the top business stories of the day.

ArcelorMittal to Take Over Essar Steel

(Photo: Reuters)

1. LN Mittal Set to Gain Control of Ruias’ Essar Steel

Setting the stage for steel tycoon LN Mittal’s entry into Indian steel industry, the Ahmedabad bankruptcy court on Friday, 8 March, cleared the decks for ArcelorMittal and Nippon Steel’s Rs 42,000-crore offer to take over debt-ridden Essar Steel.

The Ahmedabad bench of National Company Law Tribunal (NCLT) on Friday approved the resolution plan submitted by the world’s largest steel-maker ArcelorMittal to the Committee of Creditors (CoC) and Resolution Professional (RP) of Essar Steel.

The verdict has paved the way for acquisition of the biggest asset under the new bankruptcy law. Essar Steel has witnessed a hard-fought battle, with the promoters, the Ruia family, seeking to regain control of their family jewel.

The company owes over Rs 49,000 crore to over two dozen banks, led by State Bank of India, which had referred the case for insolvency resolution to recover their dues.

(Source: The Times of India)

2. RBI Fines 36 Banks for Not Complying With Directions on SWIFT Messaging System

The Reserve Bank of India imposed penalties totalling Rs 71 crore on 36 banks for not complying with its directions on operational controls in the SWIFT system, the messaging network allegedly misused to perpetrate India’s largest banking fraud.

The penalties were imposed on several public, private and foreign banks between 21 January 31 and 25 February, with the fines ranging from Rs 1 crore to Rs 4 crore, according to a central bank statement.

Among the banks fined are Bank of Baroda, Indian Bank, BNP Paribas, Dena Bank, Deutsche Bank, ICICI Bank Ltd., IDBI Bank and State Bank of India.

(Source: BloombergQuint)

3. MSME Sector Added Up to 14.9 Million Jobs Per Annum in Last Four Years, Claims CII Survey

The Micro, Small and Medium Enterprises (MSME) sector created 13.5 million to 14.9 million new jobs over the past four years, industry body CII claimed in a survey. The sector registered a job growth rate of 13.9 percent during this period, the report stated. CII surveyed 1.05 lakh MSME firms based in 350 industrial centres across 28 states of the country for this study.

"The survey establishes a growth of 3.3 percent (compounded growth rate) per annum.  When mapped to the macro level data sourced from Labour Bureau, this works out to an estimated additional job creation to the tune of 13.5 to 14.9 million per annum", said CII president Rakesh Bharti Mittal.

(Source: Business Today)

4. Economic Affairs Secretary Subhash Chandra Garg Named as Finance Secretary

Economic Affairs Secretary Subhash Chandra Garg was on Friday named as the Finance Secretary, according to a Personnel Ministry order.  The Appointments Committee of the Cabinet headed by Prime Minister Narendra Modi has approved designating Garg as the Finance Secretary, it said.

Garg, 58, a 1983 batch IAS officer of Rajasthan cadre, has been working as the Secretary in Department of Economic Affairs since June 2017. As per the convention, the senior-most among the five secretaries in the Finance Ministry is designated as the Finance Secretary.

(Source: Financial Express)

5. SBI to Link Saving Deposits, Loan Pricing to Repo Rate From 1 May

State Bank of India (SBI), the country’s largest bank, will use the Reserve Bank of India’s (RBI’s) policy repo rate as a benchmark to set the savings deposit rates and those for short-term loans from 1 May this year.

It is the first bank to announce a timeline to switch to an external benchmark. The bank’s decision to link its key pricing decisions on savings bank deposits and short-term loans to the repo rate will help it to address rigidities in the balance sheet and ensure a quick transmission of changes in the RBI’s policy rates, SBI said in a statement.

(Source: Business Standard)

6. GST Won’t Apply on Tax Collected at Source

The Central Board of Indirect Tax and Customs (CBIC) on Friday, 8 March, clarified that the goods and services tax (GST) will be levied on the value of supply excluding the tax collected at source (TCS), overturning a circular issued on 31 December last year. This has come as a relief to the industries that come under TCS ambit, especially mineral firms and automakers as the tax-inclusive price to the consumer could now be lower.

(Source: Financial Express)

7. Government Slashes Price of 390 Non-Scheduled Cancer Drugs By Up to 87%

The maximum retail price of 390 non-scheduled cancer medicines have been reduced by up to 87 percent, which would result in annual savings of around Rs 800 crore for the patients, the government said.

The National Pharmaceutical Pricing Authority on 27 February had brought 42 non-scheduled anti-cancer drugs under price control, capping trade margin at 30 percent.

Manufacturers and hospitals were directed to convey the revised MRP, to be effective from 8 March, based on the trade margin formula.
(Source: BloombergQuint)

8. NCLT Admits ICICI Bank’s Insolvency Plea Against Punj Lloyd Over Rs 854-Crore Default

The National Company Law Tribunal has admitted an insolvency plea against Punj Lloyd Ltd. filed by ICICI Bank Ltd. A two-member principal bench headed by President Justice MM Kumar admitted the lender’s plea to initiate insolvency proceedings against Punj Lloyd for a default of Rs 853.83 crore.

Punj Lloyd, confirming the development, was waiting for the copy of the full order to provide further details, the engineering and construction company said in a regulatory filing. “We hereby inform you that NCLT principal bench, New Delhi vide order pronounced on 8 March 2019, has admitted the petition filed by ICICI Bank under Section 7 of the Insolvency and Bankruptcy Code, 2016 in respect of an alleged default amount of Rs 853.83 crore,” Punj Lloyd said in the filing.

(Source: BloombergQuint)