IndUS Business Journal

Fugitive Indian businessman Mallya arrested in London in money laundering case. gets bail

Oct 3, 2017 0

New Delhi– Fugitive Indian businessman Vijay Mallya was on Tuesday arrested in London in a money laundering case but later granted bail by a city court there, officials said here.

The Enforcement Directorate (ED), which is probing the money laundering case against Mallya, in a statement, said that Mallya was arrested by the British Police “in pursuance of the request sent by the agency for his extradition”.

Sources in the ED said that Mallya was later granted bail by Westminster court within half-an-hour after his arrest on the similar grounds on which he was earlier allowed bail.

“A fresh application was routed through the Ministry of External Affairs for the extradition of Vijay Mallya. The application has since been filed before the concerned Court in London, through the Crown Prosecution Service. The matter came up for hearing today (Tuesday). In pursuance of same, Mallya was arrested,” the ED statement said.

Mallya is already facing extradition proceedings in Britain in a criminal case being probed by the Central Bureau of Investigation, the statement said.

Vijay Mallya

The flamboyant businessman, known for his lavish lifestyle, was arrested by the Scotland Yard on an extradition warrant on April 18. He was, however, released on conditional bail immediately after he provided a bail bond of 650,000 pounds.

The ED, which started its probe on January 25, 2016, had issued three summons to Mallya, who however, deliberately chose to avoid presenting himself before the Directorate in defiance of the due process of law and left the country.

A two-member ED team also visited London in July this year to submit a 5,500-page chargesheet against Mallya in a step to seek his extradition. The chargesheet has details on the money trail, how Mallya diverted funds from Rs 900 crore loan received from IDBI Bank to group entities in India and several other countries via numerous shell companies.

Mallya fled to Britain after being pursued for recovery of Rs 8,191 crore owed to a consortium of 17 Indian banks by his now defunct Kingfisher Airlines.

The Indian government had in February this year, handed over to British authorities a formal request for Mallya’s extradition, saying it had a legitimate case against him on charges of financial irregularities and loan default.

The ED has also written to six countries to get information on financial dealings of Mallya to probe the alleged illegal laundering of over Rs 1,300 crore he had made through 13 shell companies in the US, Ireland, Mauritius and France.

On ED’s request, Mallya’s passport was revoked in April 2016 and the agency so far has attached his properties worth Rs 9,890 crore. (IANS)

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India’s manufacturing output expands in September

Oct 3, 2017 0

Mumbai–India’s manufacturing sector expanded marginally in September due to stronger domestic demand, key macro-economic data showed on Tuesday.

The Nikkei India Manufacturing Purchasing Managers Index (PMI), a composite indicator of manufacturing performance, stood at 51.2 in September.

The index remained unchanged from August. However, it indicated a modest improvement in manufacturing sector business conditions in September.

An index reading of above 50 indicates an overall increase in economic activity and below 50 an overall decrease.

“September data painted an encouraging picture as the sector continued to recover from the disruptions caused by the introduction of the GST in July,” said Aashna Dodhia, Economist at IHS Markit and author of the report.

“This sustained amelioration reflected expansions in new work and output, supported by stronger domestic demand conditions. Subsequently, business confidence strengthened among manufacturers as they reportedly anticipate long-term benefits from recent government policies.” (IANS)

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TCS to appeal against US court order on $420 million punitive damages

Oct 2, 2017 0

Mumbai–Tata Consultancy Services (TCS) on Sunday said it would appeal against a US court order in a lawsuit filed by an American firm for damages on the alleged misuse of its trade documents.

“The company plans to defend its position before the trial judge, as it did not misuse or derive any benefit from the documents of Epic Systems Corporation (Epic),” said the IT major in a regulatory filing on the BSE.

In an appeal by TCS, the Western District Court of Wisconsin, however, reduced the compensatory and punitive damages to $420 million (Rs 3,055 crore) from $940 million (Rs 6,110 crore), awarded by its jury in April 2016.

Wisconsin-based privately-held healthcare software firm Epic had alleged that a TCS employee had illegally downloaded its documents, which amounts to breach of contract and an Intellectual Propriety (IP) infringement.

“The company has received legal advice to the effect that the order and the reduced damages awarded are not supported by evidence presented during the trial and an appeal can be made to a superior court to set aside the jury verdict,” said TCS in the filing.

The order will not have impact on the company’s financial results for the second quarter of 2017-18, to be declared on October 12, it said. (IANS)

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US ships first lot of crude oil to India

Oct 2, 2017 0

New Delhi–The first shipment of US crude oil to India arrived at Paradip Port in Odisha, as part of the two million barrels contracted by India.

The shipment follows recent commitments to US oil purchases by Indian Oil Corporation (IOC) and Bharat Petroleum (BPCL), both of which have placed orders for over 2 million barrels from the US. US crude oil shipments to India have the potential to boost bilateral trade by up to $2 billion.

The shipment at Paradip was met by US Consul General to Hyderabad, Katherine Hadda; Joint Secretary for International Cooperation from the Ministry for Petroleum and Natural Gas, Sunjay Sudhir; and Joint Secretary, Americas Division, from the Ministry of External Affairs, Munu Mahawar, said a US Embassy press release.

This is one of the first shipments to India since the United States stopped oil exports in 1975.

MaryKay Carlson, ChargĂ© d’Affaires at the US Embassy in New Delhi said “This event marks a significant milestone in the growing partnership between the United States and India. The US and India are elevating our cooperation in the field of energy, including plans for cleaner fossil fuels, renewables, nuclear, and cutting edge storage and energy efficiency technologies. We look forward to working together on further sales of US crude and exploring opportunities to expand the role of natural gas in India.”

During their June 26 meeting in Washington, President Donald Trump and Prime Minister Narendra Modi committed to expanding and elevating bilateral energy cooperation through a Strategic Energy Partnership. The leaders called for a rational approach that balances environment and climate policy, global economic development, and energy security needs.(IANS)

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Rajiv Sabharwal to become Tata Capital’s new CEO and MD

Sep 28, 2017 0

Mumbai–Financial services provider Tata Capital on Thursday announced the appointment of banking industry veteran Rajiv Sabharwal as its CEO and Managing Director-designate.

According to the company, Sabharwal will join Tata Capital from January 2018 and would take over from the firm’s current Managing Director and CEO Praveen P. Kadle.

Subsequently, Kadle will assume other responsibilities in the Tata Group effective from April 1, 2018.

Sabharwal is currently a partner at True North Managers LLP, formerly India Value Fund Advisors.(IANS)

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100 percent rural road connectivity by 2019: Tomar

Sep 28, 2017 0

New Delhi–Rural Development Minister Narendra Singh Tomar said on Thursday that coverage of Pradhan Mantri Gram Sadak Yojana (PMGSY) has increased from 64 per cent to 81 in the last three years and hoped that 100 per cent rural road connectivity will be achieved by 2019.

Talking to reporters here, Tomar said the allocation for all major flagship programmes of the ministry has gone up considerably, with the budget for the rual job scheme MGNREGA having gone up by Rs 20,000 crore in the last five years.

“The budget for the rural job guarantee scheme has gone up from Rs 37,000 crore in 2011-12 to about 58,000 crore in 2016-17,” he said.

Tomar said that his ministry’s budget has gone up from Rs 50,161 crore (0.5 per cent of GDP) in 2012-13 to Rs 95,096 crore (0.63 per cent of GDP) in 2016-17.

After restructuring of the scheme by the NDA government, 235 crore man days were generated in a fiscal and about two crore assets were created under the scheme, he said, adding that 85 per cent of the payments are being made within 15 days and 96 per cent payment to the wage workers are made through direct benefit transfer.

He also said that the Ministry would complete 51 lakh houses under Pradhan Mantri Aawas Yojana by March 2018.

Tomar said the his Ministry,in partnership with state governments, and is organizing a “Gram Samridhi Evam Swachhta Pakhwada” in every gram panchayat of the country from October 1 to 15, to aim at promoting cleanliness in the village and generating community interaction on economic issues and development.

Gram Sabhas will be organized on Gandhi Jayanti on October 2 in all gram panchayats of the country. (IANS)

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Yashwant sticks to his guns, finds support from Shatrughan Sinha

Sep 28, 2017 0

New Delhi–A defiant Yashwant Sinha on Thursday stuck to his stand on his criticism of the government, saying he had to go public with his views on the state of economy because the doors of Prime Minister Narendra Modi and the BJP were shut for him.

Sinha also felt that if his son and Union Minister Jayant Sinha was asked to write an article rebutting his views as published in a newspaper, then it was a “cheap trick” of pitting a son against the father. If Jayant was competent to answer the questions raised by him, why was he removed from the Finance Ministry, the senior Sinha asked.

Talking to TV channels a day after his stinging critique of the government’s management of the economy created a storm, the veteran BJP leader said the previous Congress-led UPA regime could no longer be held responsible for the mess Indian economy was in today.

He had a word of advice to the government: If people like former Prime Minister Manmohan Singh and former Finance Minister P. Chidambaram speak on the economy, the government should listen to them.

Civil Aviation Minister Jayant Sinha, without naming his father, claimed on Thursday in an article in the Times of India that his father had missed the fundamental structural reforms initiated by Modi that were transforming the economy.

Modi re-tweeted Jayant Sinha’s published article.

Yashwant Sinha

The government also rubbished Yashwant Sinha’s criticism, citing that the International Monetary Fund (IMF) and UN bodies were hailing India as one of the fastest growing economies.

Stepping up his attack against the government, Yashwant Sinha, who was Finance Minister in the Atal Bihari Vajpayee government and is still in the BJP, reiterated that the Finance Ministry failed to address the problem of reviving stalled projects and sort out issue of non-performing assets (NPAs) of banks.

He again said that demonetisation and the GST that followed were massive disruptors of the economy, which had been growing slowly in the last six quarters.

He said the fall in growth in the latest quarter made him speak up in national interest.

“I am not frustrated. I deliberately chose this. I will speak on national issues. I cannot be kept silent on national issues.”

He said last year he went to Jammu and Kashmir as part of efforts to find a solution to the festering unrest and wanted to meet the Prime Minister. “It is 10 months since I had sought an appointment and I am yet to get it.

“There was a constant downfall in the economy but I did not speak. We cannot blame the previous government any more because we have been in power for 40 months and got full opportunity to correct things,” said Sinha, responding to claims that it inherited an economy in a bad shape from the UPA.

He blamed Finance Minister Arun Jaitley for the mess and said Jaitley should take the primary responsibility for the economic slowdown though Modi was a participant in the decision making.

“The first serious task of the government should have been to solve the NPAs issue plaguing the banking sector and holding back the economy. Around 40 months have elapsed since the government took over and the bad loans crisis looks nowhere near resolution.”

His son Jayant Sinha, the Aviation Minister, argued that newspaper articles written recently on the Indian economy were written from “a narrow set of facts, and quite simply miss the fundamental structural reforms that are transforming the economy”.

The senior Sinha said he had not judged the economy on the basis of one quarter.

“The economy is not something that can be fixed overnight. No one has a magic wand. It took us four years to get the economy back on track (during the Vajpayee government).”

Asked about the defence of the government by Home Minister Rajnath Singh and Railway Minister Piyush Goyal, Sinha said: “Rajnath Singh and Piyush Goyal seem to know the economy better than me. So they think India is the backbone of the world economy. I politely disagree.”

The former minister got support from within the BJP when MP Shatrughan Sinha described Yashwant Sinha as “a true statesman and a tried and tested man of wisdom” and said he showed the mirror on the Indian economic condition.

Law Minister Ravi Shankar Prasad rejected Sinha’s criticism. “Forget us, why is the IMF saying India is the fastest growing economy in the world? Why are UN bodies saying India has the fastest economic growth not just in 2016 but also in 2017…” (IANS)

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Right government policies will drive digital transformation: Sunil Mittal

Sep 27, 2017 0

New Delhi–Calling all telecom operators to come together and fast-track the digital India mission, Bharti Airtel Chairman Sunil Mittal said on Wednesday that right government policies will decide how fast the digital transformation will spread pan-India.

“Right government policies will decide how fast the digital wave will spread across the country,” Mittal told the gathering at the first-ever ‘Indian Mobile Congress’ here.

Mittal said together with telecom operators, Airtel will create the technology of the future. “We have to come together to benefit consumers,” he stressed.

He also urged the Centre and state governments to understand the contemporary needs of the telecom sector and help in laying more fibre and building towers.

“Hard infrastructure is going to take a lot of time to be built. It takes time to execute the projects,” Mittal said.

Speaking on 5G, the Bharti Airtel Chairman said as 5G begins to develop globally, India is keeping track and will be rewarded with the latest technology. (IANS)

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Indian economy in downward spiral, hard landing inevitable: Yashwant Sinha

Sep 27, 2017 0

New Delhi–Senior BJP leader Yashwant Sinha in hard-hitting remarks has lashed out at “superman” Finance Minister Arun Jaitley for making a “mess” of the Indian economy which is headed for a “hard landing” as sector after sector is slipping into distress.

In an editorial page article in The Indian Express, Sinha, who was Finance Minister in the Atal Bihari Vajpayee government, said Prime Minister Narendra Modi “claims he has seen poverty from close quarters (and) his finance minister is working over-time to make sure that all Indians also see it from equally close quarters”.

Sinha said Jaitley had been luckier than his predecessors to hold the Ministry at a time when lakhs of crores of rupees were at his disposal following the depressed global crude oil prices.

But he wasted the oil bonanza which “was waiting to be used imaginatively”.

“The legacy problems like stalled projects and bank NPAs were no doubt there and should have been managed better… But the legacy problems have not only been allowed to persist, they have become worse.”

Arun Jaitley

Illustrating the picture of the Indian economy today, Sinha said private investment has shrunk “as never before in two decades” while industrial production has all but collapsed.

“Agriculture is in distress, construction industry, a big employer of the work force, is in the doldrums, the rest of the service sector is also in the slow lane, exports have dwindled, sector after sector of the economy is in distress.”

Continuing his tirade against the government’s demonetisation decision, Sinha said spiking large currency notes “has proved to be an unmitigated economic disaster” which coupled with “a badly conceived and poorly implemented GST” has played havoc with businesses and sunk many of them.

“Countless millions have lost their jobs with hardly any new opportunities coming the way of the new entrants to the labour market. For quarter after quarter, the growth rate of the economy has been declining until it reached the low of 5.7 per cent in the first quarter of the current fiscal.”

He said if the government had not changed the methodology for calculation of the GDP in 2015, the growth rate of 5.7 per cent would have actually been 3.7 per cent or less — according to the old method of calculation.

He came down heavily on the government’s view that the slowdown was for technical reasons and cited the SBI, the largest public sector bank of the country, as stating “with unusual frankness that the slowdown is not transient or ‘technical’, it is here to stay”.

He said it was not difficult to anticipate the reasons for the slowdown and counter measures taken to deal with them.

“But that called for devoting time to the task, serious application of mind, understanding of the issues and then working out a game plan to tackle them.”

He noted that Jaitley, who holds the department of disinvestment, and also held the Ministries of Defence (which was given to Nirmala Sitharaman in the last cabinet rejig) and Corporate Affairs, was carrying the heavy burden of so many extra responsibilities and it was “perhaps too much to expect from” him.

“I have handled the Ministry of Finance and know how much hard work there is in that ministry alone. Finance Ministry, in the best of times, calls for the undivided attention of its boss if the job has to be properly done. In challenging times it becomes more than a 24/7 job. Naturally, even a superman like Jaitley could not do justice to the task.”

Sinha said he was speaking about the mess after realizing that “I shall be failing in my national duty if I did not speak up even now”.

“I am also convinced that (it) reflects the sentiments of a large number of people in the BJP and elsewhere who are not speaking up out of fear.”

He said the SME sector was suffering from an “unprecedented existential crisis”.

“The input tax credit demand under the GST is a whopping Rs 65,000 crore against a collection of Rs 95,000 crore. The government has asked the income tax department to chase those who have made large claims.

“Cash flow problems have already arisen for many companies specially in the SME sector. But this is the style of functioning of the Finance Ministry now.

“We protested against raid raj when we were in opposition. Today it has become the order of the day.” (IANS)

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Gold will not glitter this Diwali

Sep 24, 2017 0

By Aparajita Gupta

New Delhi–With Goods and Services Tax (GST), demonetisation and Anti-Money Laundering (AML) regulations coming into effect, gold will not glitter much this Diwali, feels Somasundaram P.R., Managing Director – India of the World Gold Council (WGC).

“Diwali this time has its own challenges. But I am optimistic now, as everything has settled down. It is the AML part which is probably hurting people at the moment. Wedding purchases will be more affected than Dhanteras buying,” Somasundaram told IANS in an interview here.

“I still think there will be a lot of issues with the authorities, but not so much at the consumer end. The organised sector has picked up very well. Demonetisation and AML, though, are definitely hurting,” he added.

Somasundaram said last Diwali came before demonetisation and after three years India had witnessed good monsoons. So “there was really good demand”.

The government has brought the gems and jewellery industry under the purview of Prevention of Money Laundering Act, which in turn has increased compliance requirements. The new indirect tax regime (GST) was rolled out across the country on July 1, in which the yellow metal came in the three per cent bracket.

“First half (January-June) imports were 532 tonnes, while demand was still 298 tonnes. Actually, pre-GST people imported as much as they could. But that didn’t get converted into demand,” Somasundaram said.

At present, gold price is hovering around Rs 29,000 per 10 grams for 22 karat.

“Our estimation is it will take 12-18 months for GST to stabilise in this industry as 70 per cent of it is unorganised.”

He, however, said demand through the black channels have gone down.

“We see consumer behaviour changing in response to GST. Our econometric analysis spanning 26 years of data illustrates that higher taxes act as a headwind to gold demand. But the tax should also change the industry to the benefit of the consumer,” WGC said in a report earlier.

Demand for gold in India for the second quarter (April-June) 2017 was at 167.4 tonnes, up by 37 per cent compared to overall Q2 demand of 122.1 tonnes for 2016, WGC data showed recently.

The total jewellery demand in India for Q2 2017 was up by 41 per cent at 126.7 tonnes as compared to Q2 2016 (89.8 tonne). The value of jewellery demand was Rs 33,000 crore, up by 36 per cent from Q2 2016 (Rs 24,350 crore).

The WGC has put India’s yellow metal demand for this calendar year between 650 tonnes and 750 tonnes.

Reports said the import bill for gold in value terms, according to the Ministry of Commerce, was $23 billion (Rs 1.5 lakh crore) in 2016.

Talking about the government’s demonetisation drive and its impact on the sector, Somasundaram said: “The level of activities are definitely much better now than when it was introduced. Our view is, demand will pick up (during Diwali), but whether it will really pick up to potential is something which is difficult to say.”

India’s gold demand for 2016 fell sharply by 21 per cent to 676 tonnes from 857 tonnes in 2015. (IANS)

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