QBiz: SEBI Slaps Rs 5 Cr Fine on Choksi; RBI’s Inflation Concern
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1. PNB Fraud Case: SEBI Slaps Penalty of Rs 5 Crore on Mehul Choksi, Others
The Securities and Exchange Board of India (SEBI) on Thursday, 27 February slapped a penalty of ₹5 crore on Gitanjali Gems Ltd and its promoter Mehul Choksi. This penalty is with regards to non-disclosures by the company with respect to the Punjab National Bank fraud.
The state-owned bank was allegedly defrauded to the tune of ₹14,356 crore by Nirav Modi and Mehul Choksi, through his companies including Gitanjali, by issuance of fake Letter of Undertakings (LoUs).
This is the highest ever penalty imposed on a company for disclosure violations. SEBI’s decision is based on conduct of the company, the repetitive defaults and the principle of proportionality.
(Source: Livemint)
2. RBI Flags Risks to Banks, Inflation in Telecom Crisis
The Reserve Bank of India (RBI) is concerned about the fallout of the Supreme Court order on telecom dues and is watching developments in the industry closely, a senior official aware of the matter said.
The central bank is worried that further tariff hikes, as sought by telecom operators, could be inflationary, a concern it raised in December too when telcos upped tariffs for the first time in over a decade. Another concern is the impact of the court order on banks, which have substantial exposure to telecom companies. A collapse of an operator will add to lenders’ bad loan pile.
Fears over fresh tariff hikes have resurfaced after the apex court pulled up Bharti Airtel Ltd, Vodafone Idea Ltd as well as government officials for failing to comply with its October verdict directing telecom operators to pay an estimated ₹1.4 trillion in spectrum usage and licence fee dues to the government.
(Source: Livemint)
3. DCC May Discuss Telcos' AGR Issue on Friday; COAI Presses for Relief
The Digital Communications Commission, the apex decision-making body in the telecom sector, is expected to meet on Friday, 28 February, to deliberate on a relief package for the financially stressed industry.
As directed by the Supreme Court, telecom companies need to pay Rs 1.47 trillion to the government towards licence fee and spectrum charge dues linked to adjusted gross revenue (AGR).
Of this, Bharti Airtel needs to pay Rs 35,500 crore and Vodafone Idea more than Rs 50,000 crore – they have paid just a fraction of the total till now. The industry has made a string of demands including a moratorium, staggered mode of payment, lower licence fee and setting up of a tariff floor.
(Source: Business Standard)
4. Domestic Steel Prices Under Pressure as Imports From China Resume
Post a likely price hike effective 1 March, Indian steel makers may have to take a hiatus and desist from raising prices for a considerably long period, as imports from China have lately picked up after a near stoppage due to the coronavirus pandemic.
Since the second week of October, 2019 when domestic steel prices plunged to a 34-month low of Rs 34,250 per tonne, domestic steel units have raised prices multiple times to the current level of Rs 38,500 per tonne. Signs of eroding pricing power have, however, been seen now – according to Edelweiss, JSW Steel and Tata Steel rolled back prices by Rs 1,000 per tonne last week.
The price hike in March could well be the end of the current series as “there is scope for a correction in domestic HRC prices if exports from China pick up,” Edelweiss said, maintaining ‘buy’ for JSPL and Tata Steel, ‘hold’ on JSW Steel and ‘reduce’ on SAIL. Some provinces in China have resumed production. Its largest steelmaker Baowu has ramped up its core plants to almost full capacity and non-core plants to 70-90% capacity.
(Source: Financial Express)
5. Suryoday Small Finance Bank Finalises Merchant Bankers, Targets Diwali D-Street Debut
Mumbai-headquartered Suryoday Small Finance Bank backed by the likes of International Finance Corporation (IFC) and HDFC has kicked off the process to raise around Rs 1,000 crore through an initial public offer (IPO) and has shortlisted four merchant bankers, sources with knowledge of the matter told Moneycontrol.
IFC is the World Bank's private-sector investment arm. Under RBI norms, small finance banks with a net worth of more than Rs 500 crore are required to list within three years of launching operations. Suryoday Small Finance Bank is required to list before April 2021.
"The proposed IPO will also provide a complete/partial exit to select investors and private equity funds and a portion of the proceeds may be used for growth capital,” said a second source Moneycontrol spoke to.
(Source: Money Control)
6. 11 ‘REMCs’ to Be Commissioned Today
In what would be a milestone event for the renewable energy industry, eleven ‘Renewable Energy Management Centres’ (REMC) are to be inaugurated on Friday, 28 February, by Union Power Minister RK Singh.
These REMCs, built at a cost of ₹409 crore, will make it possible for the country to have more of renewable energy, particularly wind. Without these, absorption of large packets of intermittent electricity from wind and solar plants would not be possible.
Public sector major Power Grid Corporation of India is overseeing the setting up of these REMCs on behalf of the Ministry of Power. One REMC will come up in the National Load Dispatch Centre, three in as many Regional Load Dispatch Centres and seven in the State Load Dispatch Centres of Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, Madhya Pradesh, Gujarat and Rajasthan.
(Source: Business Line)
7. First Phase of India-US Mega Trade Deal Expected to Be Sealed Soon
India and the US are set to sign the first phase of a mega trade deal soon under a model followed by the Donald Trump administration in finalising a similar deal with China.
Official sources said India and the US have almost completed negotiations for first phase of the ambitious deal and it will be formalised soon. The US and China inked an initial trade deal last month, ending an 18-month-long dispute. The two countries are now working on a final trade deal.
Sources said India and the US have also decided to launch talks on a totalisation agreement which relieves Indians from double taxation.
(Source: Business Standard)
8. European Stocks Slide Again on Pandemic Fears
European shares fell again on Thursday, 27 February, with travel stocks taking the biggest knock, as a jump in new coronavirus cases outside of China deepened fears of a pandemic that could dent global growth.
Multiple blue-chip companies issued profit warnings, with Standard Chartered tumbling 3.4 percent after the Asia-focused bank said that a key earnings target would take longer to meet as the epidemic adds to headwinds in its main markets of China and Hong Kong.
The world's largest beer maker, Anheuser-Busch InBev , dropped 5.6 percent after forecasting muted growth in 2020 due in part to the outbreak.
(Source: Business Line)
9. ONGC, HPCL Buy 34.56% of Bankers' Stake in Petronet MHB for Rs 371 CR
State-owned Oil and Natural Gas Corp (ONGC) and its subsidiary Hindustan Petroleum Corp Ltd (HPCL) have bought out lenders in Petronet MHB Ltd, the firm that owns a petroleum product pipeline in Mangalore, for about Rs 371 crore.
A consortium of eight public sector banks held 34.56 percent stake in Petronet MHB Ltd, where ONGC and HPCL held 32.72 per cent apiece. ONGC and HPCL bought 17.28 percent stake each from lenders, the firms said in separate but almost identical regulatory filings.
The two firms paid Rs 185.38 crore each for acquiring 17.28 percent more share in Petronet MHB Ltd. They now hold 49.996 percent each in the company that transports petroleum products from Mangalore Refinery.
(Source: Business Standard)
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