India-Pak tensions escalate, SEBI probes NSEL Scam, ED carryout raids against Kochhar – Weekly Digest #78

Monday- 25th February 2019

  • The income tax department has revived its demand that Cognizant provide documents related to the bribes it had paid to Tamil Nadu government officials to secure approvals for a building. Cognizant had voluntarily disclosed to the US SEC in 2016 the payment of bribes after it uncovered the 2014 payments in internal audits.
  • Vodafone Group CEO Nick Read sought a level playing field in India, pointing out that the outcomes of the telecom regulator’s decisions over the past two years have hurt all carriers, except Reliance Jio Infocomm.
  • The government has clarified that the ordinance issued to ban unregulated deposit schemes does not stop any entity from seeking funds for its business or an individual raising a quick loan from relatives to tide over a crisis or SMEs from receiving loans for the business.
  • Adani Group has emerged the winner in the privatisation of five out of six airports put up by the government, outbidding competitors including GMR, AMP Capital and the NIIF. Adani group won the right to upgrade and operate the airports of Lucknow, Jaipur, Thiruvananthapuram, Mangaluru and Ahmedabad.
  • The SEBI has initiated criminal proceedings against about 300 brokers for their alleged role in the ₹5,500-crore National Spot Exchange Ltd (NSEL) scam in 2013.

 

Tuesday-  26th February 2019

  • India took down the largest Jaish-e-Mohammad terror training camp in Pakistan in a meticulously planned early morning air raid, terming it a “non-military, preemptive” strike based on credible intelligence that terrorists based in the camp were being trained for another suicide bombing in India.
  • Bharti Airtel is in talks with Vodafone Idea to create a fibre joint venture similar to their co-owned tower company, Indus Towers. Vodafone Idea has given the proposal a “warm” response. Bharti Airtel is setting up Telesonic Networks Ltd to house all of its 246,000 kilometres of fibre assets.
  • Prominent sellers on Flipkart like SuperComNet, OmniTech Retail and RetailNet to slash direct purchases from Flipkart wholesale to about 10% or even less in the coming months so that they would be ready for any potential changes in FDI rules.
  • The SEBI has declared Anand Rathi Commodities and Geofin Comtrade as not ‘fit and proper’ to be commodities derivatives brokers for their alleged role in the NSEL scam. These are the second set of orders the regulator has passed after banning the commodities arms of Motilal Oswal and India Infoline.
  • The market stumbled but managed to recover as investors hoped India’s air strikes on terrorist camps in Pakistan would not escalate into a war. The Nifty ended 45 points lower at 10,835, recovering 106 points from the day’s low of 10,729 while the Sensex ended 240 points lower at 35,973, recovering 260 points from the day’s low of 35,714.

 

Wednesday-  27th February 2019

  • The ED plans to seize as many as 14 properties in Jammu and Kashmir belonging to Hafiz Muhammad Saeed, co-founder of the Pakistan-based LeT terrorist group, as part of efforts to crack down on the funding of such organisations.
  • IT services major Wipro is selling its Workday and Cornerstone OnDemand practices to Illinois-based HR and payroll solutions company Alight Solutions for $110 million. The deal includes a transfer of 350 employees of the two businesses to Alight Solutions.
  • Taiwanese smartphone brand HTC is in talks with Micromax, Lava and Karbonn to return to the Indian market. HTC will earn royalty in return, a business model it wants to embark on for the Indian market where it failed to thrive in the face of Chinese smartphone onslaught and exited.
  • The resolution professional overseeing Gitanjali Gems has contested the ED’s seizure of the company’s assets on the grounds that the action has disrupted the insolvency resolution process. The RP asked the NCLT to direct the ED to release the confiscated assets so that they can be evaluated independently in accordance with the bankruptcy code.
  • The Sensex ended at 35,905, down 68 points and the Nifty ended at 10,807, down 29 points as the sentiments of the investors remain low despite the market participants bet that a war between the two countries is unlikely.

 

Thursday- 28th February 2019

  • The Cabinet waived the need for Aadhaar seeding of bank accounts for the second instalment of the income transfer to small and marginal farmers under the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme.
  • UAE-based sovereign wealth fund ADIA has committed $500 million to a new distressed fund backed by KIA, the alternative investments arm of Kotak Mahindra Bank. ADIA’s investment comes at a time of geopolitical tension in the subcontinent and reflects the close ties between UAE and India.
  • Bharti Airtel to raise ₹32,000 crore through equity and bond sales in one of the largest such exercises by an Indian company. The funds to be used to reduce debt and financing costs, bolster cash flows and meet capital expenditure to fight the price war unleashed by Reliance Jio.
  • Investigating agencies are tightening the noose on absconding arms dealer Sanjay Bhandari as the ED to initiate proceedings to obtain the tag of “fugitive economic offender” for Bhandari, who is wanted in India for offences including violation of foreign exchange rules to black money and routing of kickbacks in defence deals.
  • Infosys fined its independent director, Kiran Mazumdar-Shaw, for “inadvertently” selling 1,600 of its shares on the open market in violation of insider-trading guidelines. The shares were sold by her portfolio management services provider without obtaining clearance with the stock exchange. Mazumdar-Shaw was fined ₹9.5 lakh, to be paid to a charity organisation.

 

Friday- 1st March 2019

  • The ED carried out raids at five places in Mumbai and Aurangabad in connection with a money laundering case against former ICICI Bank CEO Chanda Kochhar, her husband Deepak Kochhar and Videocon Group chairman Venugopal Dhoot.
  • The JSW Group is in advanced negotiations with General Motors India to buy its Talegaon plant as part of the steel maker’s ambition to venture into electric vehicles. Under the plan, JSW Energy will take over the plant and become a contract manufacturer for the Beat and Essentia compact cars.
  • Companies and investors looking to buy firms, whose debt restructuring exercise is not under the insolvency rules, will not get exemptions from open offer to public shareholders. Sebi’s decision could make it tough for Etihad Airways to up its stake in Jet Airways.
  • American investment firm Carlyle Group acquired a 9% stake in SBI Life Insurance Company from BNP Paribas through an open market transaction. BNP Paribas sold 92 million shares, of which 90 million were bought by the Carlyle Group in a block deal. Shares of SBI Life Insurance crashed around 12% to ₹510 to close at ₹612.25.

 

Source: The Economic Times

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