Connect with us

Business

2 days after announcing Flipkart-Walmart deal, SoftBank undecided on selling stake

Published

on

IST


New Delhi :Japan’s SoftBank Group Corp has not yet decided to sell its 20-22% stake in Flipkart to US retailer Walmart Inc, sources with direct knowledge of the development said.

SoftBank’s Masayoshi Son will take a call in the next 7-10 days, on whether the group will exit India’s biggest online retailer or say invested for some more time, they said.

Walmart had on Wednesday announced that it will pay about $16 billion to buy 77% stake in Flipkart.

 

A statement issued by Walmart that day identified Flipkart co-founder Binny Bansal, Tencent Holdings Ltd, Tiger Global Management LLC and Microsoft Corp as the investors who would hold the remaining 23%, implying SoftBank had agreed to sell its 20-22% stake.

Sources, however, said SoftBank is yet to take a call on exiting Flipkart. The factors that hold key to the decision include the tax SoftBank has to pay on profits it would earn from such share sale.

SoftBank had invested $2.5 billion in Flipkart and exiting the company would fetch it up to $4.5 billion. The $2 billion profit would be taxed as per Indian law.

Since the profit is made from shares that were held for more than two years, it would attract a long-term capital gains tax of 20% plus surcharge and education cess, effectively wiping away a fourth of the profit.

Other deciding factors would be Son’s relationship with Walmart and that SoftBank likes to be a long-term investor, sources said, adding the Japanese conglomerate is very bullish on India and sees immense opportunities for growth of investment.

When contacted, a SoftBank spokesperson declined to comment.

Sources said Walmart had indeed courted SoftBank for buying its shares but the Japanese group has not yet taken a final call on the issue.

On May 9, hours before Walmart was scheduled to announce the Flipkart acquisition, SoftBank chief executive Masayoshi Son told an investor call on his company’s earnings that Walmart had agreed to buy a controlling stake in the Indian e-commerce company.

“Last night, (they) reached a final agreement and it was decided that Flipkart will be sold to America’s Walmart,” Son had stated in Tokyo, according to an AFP report.

He had gone on to state that the $2.5 billion that the Japanese company through its Vision Fund had invested in Flipkart was worth about $4 billion in the deal.He had not clearly stated if SoftBank had agreed to sell the stake at such valuations.

In case SoftBank decides to not sell its stake, Walmart would be left with about 55% holding in Flipkart.


Comments

Business

RBI needs to ensure stability: Shaktikanta Das

Agencies

Published

on

New Delhi: The head of the Reserve Bank of India (RBI) said he would take the steps necessary to maintain financial stability in the country and help create favourable conditions for growth.

India’s economy has grown because of measures such as the nationwide goods and services tax and the insolvency and bankruptcy code that prevents wilful defaulters from bidding for stressed assets, Shaktikanta Das said in his address to an investor roundtable.

The country’s growth story is backed by its strong domestic fundamentals, he said, citing lower inflation.

 

Annual retail inflation rate dropped to an 18-month low of 2.19 per cent in December, strengthening the views of some economists that the central bank could ease monetary policy next month.

India’s top business groups on Thursday urged the central bank to cut its benchmark interest rate by at least half a percentage point and lower the cash reserve ratio it imposes on banks.

The country also needs to watch out for any sudden turbulence in the gloal financial market, Das said.

Continue Reading

Business

Centre removes two PNB executive directors for lapses in Rs 13,500-cr fraud

Agencies

Published

on

Chennai:The Central government has removed two Punjab National Bank (PNB) Executive Directors — Sanjiv Sharan and K.Veera Brahmaji Rao — for the lapses in the Rs 13,500 crore fraud allegedly perpetrated by absconding diamantaire Nirav Modi.

The PNB has intimated the action to the stock exchanges.

“We welcome the Central government’s action to dismiss the two Executive Directors. The scam of such proportions could not have happened without the knowledge of the top management,” C.H. Venkatachalam, General Secretary, All India Bank Employees’ Association (AIBEA), told IANS.

 

“Perhaps for the first time, the Centra has removed the Executive Directors of a nationalised bank under the Nationalised Banks (Management and Miscellaneous Provision) Scheme, 1970. All these days it was said the top management of government-owned banks — Chairman, Managing Director, Executive Directors — are governed only by the contract of appointment.

“It is also good that the central government has followed the due process of giving the two PNB Executive Directors opportunity to put forth their views before dismissing them,” Venkatachalam added.

According to the Central government’s notification, on July 3, 2018, Sharan and Rao were issued a show cause notice as to why they could not be removed from office for having failed to exercise proper control over the functioning of PNB, thus enabling the fraud through the misuse of SWIFT at the bank’s Brady House branch in Mumbai.

After considering Sharan and Rao’s replies and the comments of the bank’s Board, the Centre removed them from office as it found it was expedient in the interests of PNB.

According to the notification, the dismissal of Rao is subject to the outcome of a plea in the Delhi High Court.

“We are happy to see some action being taken. Whether it is only the two Executive Directors and other officials are also involved in the scam has to be probed in full,” Venkatachalam said.

According to him, in the past, low-level officers would have been the scapegoats for such massive scams.

“With the action taken on the top management, people will be satisfied that public sector bank officials are answerable for their lapses,” Venkatachalam added.

Continue Reading

Business

In this new world, data is the new wealth: Ambani

Agencies

Published

on

Mumbai: Reliance Industries chairman and managing director Mukesh Ambani urged Prime Minister Narendra Modi to take steps against ‘data colonisation’, specially by global corporations, stating that Indian data must be owned by Indians.

Invoking Mahatma Gandhi’s movement against political colonisation, Ambani said India now needs a new movement against data colonisation.

“Gandhiji led India’s movement against political colonisation. Today, we have to collectively launch a new movement against data colonisation,” he said Gandhinagar at the Vibrant Gujarat Global Summit.

 

Stressing that, in this new world, data is the new wealth, Ambani said, “India’s data must be controlled and owned by Indian people and not by corporate, especially global corporations.”

He further said, “For India to succeed in this data driven revolution, we will have to migrate the control and ownership of Indian data back to India. In other words, give Indian wealth back to every Indian.”

Stating that the “entire world has come to recognise” Modi “as a man of action”, Ambani said, “Honorable Prime Minister, am sure you will make this one of the principal goals of your digital India mission.”

Later in the day, countering Ambani’s call, Governor – Commonwealth of Kentucky, Matthew Griswold, asked Modi “to think in the opposite” in order to realise the tremendous opportunity that lies in Indo-US partnership.

“Honorable prime minister you have been asked from this stage to think about limiting the amount of competition, limiting the exchange of ideas, information and goods. I would encourage you to think in the opposite,” he said.

While stating that it is important to put the people of India first, Griswold said, “It is also important to put their opportunity and our opportunity as citizens of the world to trade with one another and exchange ideas because iron sharpens iron.”

The greatest possibility comes from the exchange of these idea, he added.

“If we can cut the regulations, cut the bureaucracy, cut the red tape, the opportunity is enormous between our nations,” he added that India is now the 10th largest trading partner for the US and “climbing quickly”.

“The opportunity before us between India and the United States is incredible, but responsibility falls on each of one us, those of us in elected positions, those of you in the industry, those of you who represent various constituencies, we have much work to do…we must do this, ” Griswold said.

Continue Reading

Subscribe to The Kashmir Monitor via Email

Enter your email address to subscribe to The Kashmir Monitor and receive notifications of new stories by email.

Join 980,016 other subscribers

Archives

January 2019
M T W T F S S
« Dec    
 123456
78910111213
14151617181920
21222324252627
28293031  
Advertisement