New Delhi : Top representatives of the Tata group — the salt-to-software conglomerate — have red-flagged “reputational issues” of Naresh Goyal-led Jet Airways, from the time of inception of the airline, including sources of its funding. This could adversely affect the progress of a deal between the two.
While Tata Sons, after a board meeting on Friday, said it was in preliminary talks with Jet and that there was no proposal yet, an internal panel has been constituted within the Tata group to carry out due diligence on the financial aspects and funding of Jet. The findings of the committee will determine the direction of the talks for a possible acquisition of Jet Airways by the Tatas, sources indicated.
As things stand now, apart from a clean chit from the internal committee, the Tatas would need some more conditions to be fulfilled for the transaction with Jet to fructify.
The group is likely to insist on Goyal selling his entire 51 per cent stake in the airline and relinquishing the board positions held by him and his family. More than anything else, any decision on Jet is likely to hinge on what Tata Trusts Chairman Ratan Tata has to say on the matter, said a source.
Plan to buy beleaguered Jet Airways flies into rough winds with Tata bosses The recent board meeting of Tata Sons discussed whether the proposed acquisition would fit into the group’s overall strategy, especially in relation to aviation. The Tatas and Singapore Airlines have already invested Rs 20 billion in Vistara (the largest single equity infusion ever) to support its expansion plan. Scaling up business is a priority but a few board members are believed to have expressed doubts over the proposed acquisition of Jet. In pursuit of scaling up, when the Tatas did not go for Air India, what is the need to buy Jet.
A source said Jet’s high debt and regulatory issues such as inquiries by several ministries and government agencies over the years also weighed in.
Jet had a debt of Rs 84 billion as of end-September, including Rs 18 billion of aircraft-related debt. The airline was trying to sell and lease back its Boeing 777 and Airbus A330 planes to pare down debt, but large repayment is an area of concern.
In addition, there could be operational concerns as well.
For instance, Tata’s joint venture (JV) partner in Vistara, Singapore Airlines, would like to tread cautiously on the deal. If the deal were to mature, the Tatas would want to merge Jet with Vistara. Tatas run two joint airlines in India — Vistara in partnership with Singapore Airlines and AirAsia India with Malaysia’s AirAsia Berhad. Fleet alignment could come in the way too. Vistara operates an all-Airbus A320 fleet, while Boeing 737 is the mainstay of Jet’s fleet.
Vistara is a 51:49 per cent JV between the Tatas and Singapore Airlines. According to the civil aviation ministry, Tata Singapore Airlines (Vistara) is an Indian controlled entity. However, the Federation of Indian Airlines, or FIA (of which Jet Airways is a part) has challenged the grant of permit to Vistara in the Delhi High Court. Among other things, the FIA has alleged that Vistara is controlled by Singapore Airlines and that litigation is still pending.
Simone Reis, co-head M&A practice at Nishith Desai Associates, said, “Foreign airlines investing in an Indian company cannot hold more than 49 per cent (under the government route) and control of such company must be with Indian residents. In the absence of specific restrictions, any downstream investment by such an Indian company (including in another airline company) should be considered Indian. Should the original government approval permitting the airline to invest have conditionalities (including how the Indian JV company will invest going further), those will have to be taken into consideration.”
Analysts believe the Tatas will not rush into an acquisition and will drive down the purchase price by prolonging the transaction.
India can’t achieve 9-10 per cent GDP growth without agri-revolution: Kant
New Delhi: India cannot achieve 9-10 per cent GDP growth without revolution in the farm sector, Niti Aayog CEO Amitabh Kant said.
Addressing Mahindra Samriddhi Agri awards, he said there is a need to boost investment in the agriculture sector as well as to introduce new technology and market reforms.
Kant also stressed on scrapping Agriculture Produce Marketing Committee and some old laws like Essential Commodites Act, which restrict movement of farm produces.
However, he said agriculture is a state subject and the central government has limited role in it.
“In India 50 per cent of our population is dependent on agriculture. If India’s GDP has to grow at 9-10 per cent for the next 30 years, then it cannot be without bringing revolution in the agri sector,” Kant said.
He also emphasised on eliminating middlemen in marketing of farm produces to boost farmers’ income.
Kant expressed confidence that farmer income will be doubled by 2022.
He said there is a need to spread good agriculture practice and success stories of farmers across the country.
“The second revolution in agriculture will come from technology and marketing,” Kant said.
Pawan Goenka, Managing Director, Mahindra & Mahindra Ltd,, said: “The contribution made by our farming community is a manifestation of this new age of farming which we celebrate through our annual awards”.
As part of Mahindra Agri Village (MAV) programme, he said the company has worked closely with more than 50 villages.
“Our Prerna initative has empowered nearly 2,000 women farmers over 40 villages, through the introduction of gender-neutral farm tools for reducing farm drudgery, and dissemination of knowledge and essential capabilities,” Goenka said.
Mahindra Samriddhi Krishi Shiromani Samman (Lifetime Achievement Award) 2019 was conferred upon E A Siddiq for his immense contribution to Indian agriculture. The award was handed over to recognise his contribution of enhancing productivity of paddy (Both Basmati & Non Basmati).
The group gave awards in total 11 categories.
Mukesh Ambani bails out Anil in Ericsson payout case day before SC deadline
Mumbai: Billionaire Mukesh Ambani stepped in to bail out younger brother Anil Ambani by helping him repay Reliance Communications’ (RCom’s) dues to Ericsson. The last-minute rescue spares the younger Ambani a three-month jail term for contempt of court.
RCom cleared the entire dues to Ericsson India to purge the contempt of a Supreme Court order. The debt-ridden company had already paid Rs 118 crore of the Rs 550-crore dues. In addition, the company had paid around Rs 3 crore in penalties to Ericsson.
“My sincere and heartfelt thanks to my respected elder brother, Mukesh, and Nita for standing by me during these trying times and demonstrating the importance of staying true to our strong family values by extending this timely support,” said Anil Ambani in a media statement. RCom had time until Tuesday to make the payment, failing which Anil Ambani, its chairman, would have had to serve a three-month jail term, according to the court’s order.
Probing Amazon, Flipkart for alleged violation of foreign exchange law: ED
New Delhi : Investigation has been initiated against e-commerce giants Amazon and Flipkart for alleged violation of foreign exchange law, the Enforcement Directorate (ED) Monday informed the Delhi High Court.
A bench of Chief Justice Rajendra Menon and Justice A J Bhambhani noted the submissions of the ED that a case has been registered under provisions of the Foreign Exchange Management Act (FEMA) against the two companies and disposed of a PIL which has alleged that the e-commerce giants were violating foreign direct investment (FDI) norms.
The court had earlier sought response of the central government, Amazon and Flipkart to the plea which has sought a probe into the alleged FDI violations.
The ED, in its reply filed through central government standing counsel Amit Mahajan, has said the “department has already registered and initiated investigation under the provisions of FEMA against the two companies to ascertain whether they have been contravening any provisions of FEMA or contravening any rule, regulations, notification, direction or order issued in exercise of the powers under FEMA….”
The agency also sought dismissal of the petition.
The petition by an NGO, Telecom Watchdog, also asked for initiation of legal proceedings against the two e-commerce companies under the FEMA for alleged violation and circumvention of FDI norms.
The plea, filed through advocate Pranav Sachdeva, has claimed that Amazon and Flipkart have created multiple entities to circumvent the FDI norms and route the hot-selling stock at cheaper rates.
The petition has contended that according to Press Note 3 of 2016, which regulates FDI in e-commerce, entities like Amazon and Flipkart are not to exercise ownership over stock, nor directly or indirectly influence price of goods and services sold on their marketplace.
It claimed that by creating name lending companies, Amazon and Flipkart buy branded goods in bulk at discounts from manufacturers and render small sellers uncompetitive by a wide margin, thus influencing the prices in violation of the FDI norms.
“As a consequence of this FDI norms violation, smaller sellers are unable to participate in the fast growing e-commerce sector,” the plea has contended, adding that due to subsidised prices on such platforms, small sellers are unable to sell in the brick-n-mortar world too.
Besides, the plea has also claimed that the two e-commerce firms have created several other group companies in the chain to divide discounts and losses.
“Exchange offers, EMI costs and bank offers are funded completely or substantially by Amazon and Flipkart and constitute a clear influence on price in violation of FDI norms,” it has alleged.
State elections deferred as JK sought 70,000 troops for simultaneous polls: Officials
New Delhi, Mar 20 The Jammu and Kashmir Assembly elections were deferred as the state administration asked for over 70,000...
Funding case: Delhi court allows ED to quiz Syed Ali Shah Geelani’s son-in-law
New Delhi, Mar 20: A Delhi court Wednesday allowed ED to quiz Altaf Shah, son-in-law of separatist leader Syed Ali...
Nirav Modi arrested in London, to be produced in court
Fugitive diamond merchant Nirav Modi, who is accused of cheating the Punjab National Bank (PNB) of over Rs 13,000, has...
Congress-National Conference seal alliance in J&K for Lok Sabha polls
Congress and National Conference have sealed alliance in Jammu and Kashmir for the upcoming Lok Sabha Elections. National Conference president...
India loses hosting rights of Davis Cup, Fed Cup due to closure of Pak air space
The closure of Pakistan’s air space in the aftermath of the Balakot air strikes has resulted in India losing the...
Pakistan cancels annual maritime dialogue with New Delhi
New Delhi: In the backdrop of rising tension between India and Pakistan after the Pulwama attack, Pakistan on Wednesday cancelled...
Mayawati won’t contest 2019 Lok Sabha polls
Bahujan Samaj Party (BSP) chief Mayawati will not contest the 2019 Lok Sabha polls. “Our coaliation is doing good…I can...
Traffic on Jammu-Srinagar National Highway suspended due to inclement weather
JAMMU: The traffic on the strategic Jammu-Srinagar National Highway was suspended Wednesday as the high altitude areas of Jammu and...
Uri resident injured in Pak firing succumbs at SKIMS
BARAMULLA: A 32-year-old youth, who was critically injured in Pakistan firing at Line of Control (LoC) in Uri sector on...
Don’t use places of worship for propaganda: EC to parties, religious leaders
New Delhi: The Election Commission asked political parties and religious leaders to refrain from using places of worship for propaganda...
‘Azaan’ to be broadcast nationally in solidarity with Muslims: NZ PM
Christchurch: New Zealand Prime Minister Jacinda Ardern on Wednesday said Azaan (the call to prayer) will be broadcast nationally along...
President Kovind appoints Justice PC Ghose as India’s first Lokpal
New Delhi: President Ram Nath Kovind appointed Justice Pinaki Chandra Ghose as the first Lokpal of India. According to a...
Heavy snow accumulation may delay Zojilla re-opening
Sonamarg, Mar 20 : With Sonamarg-Zojilla road still closed since December, officials said the reopening of the road is likely...
Kashmir shuts against Awantipora teacher’s custodial death
Srinagar, Mar 20: A complete shutdown called by the JointHurriya against the custodial death of a private school teacher of...