Business
RCom shares plunge on report of government blocking Jio deal
Mumbai: Shares of Indian telecom company Reliance Communications Ltd plunged as much as 13 percent on Wednesday after the Economic Times reported that Department of Telecommunications (DoT) rejected a proposed spectrum sale to Reliance Jio Infocomm Ltd.
The DoT rejected the deal to trade airwaves as it did not conform to its guidelines, the paper said, adding that as per the trading norms, the buyer is liable for dues that are not recovered from the seller.
Jio informed the DoT that it wonât be held liable for RComâs past dues related to airwaves, according to the report.
The DoT move comes as a surprise as the it was widely expected to approve the transaction, though a day later than the original timeline due to last-minute paperwork, ET reported on Tuesday.
The transaction was key to the debt-laden telecom operatorâs restructuring plan, announced earlier this year, which entailed the sale of telecom assets such as towers and airwaves to Jio.
The plan to sell the assets had followed a settlement with telecom gearmaker Ericsson for partial payment of dues owed by RCom to the Swedish company.
RCom shares, which traded at 14.5 rupees by 0428 GMT, have more than halved in value this year, as of last close.
The companies were not immediately available for comment, while the DoT could not be immediately reached for comment.
New Delhi: Asian Development Bank on Thursday lowered India’s GDP growth forecast to 7 per cent for the current year on the back of fiscal shortfall concerns.
“India is expected to grow by 7 per cent in 2019 (FY20) and 7.2 per cent in 2020 (FY21), slightly slower than projected in April because the fiscal 2018 outturn fell short,” ADB said in its supplement to the Asian Development Outlook 2019.
For the south Asian region, ADB said the outlook remains robust, with growth projected at 6.6 per cent in 2019 and 6.7 per cent in 2020.
Earlier in April this year too, the Manila-based multi-lateral funding agency had lowered India’s growth forecast for FY20 to 7.2 per cent from 7.6 per cent estimated previously due to moderation in global demand and likely shortfall in revenue on the domestic front.
New Delhi: The Union government may not get the windfall gain it was expecting from the Reserve Bank of India (RBI) reserves as the Bimal Jalan committee, tasked with reviewing the central bankâs economic capital framework, has proposed a ânominalâ transfer of surplus to the central government in a phased manner, according to a source in the know.
âThe report has proposed a formula for a nominal transfer of a portion of the RBIâs reserves to the central government in a period of three-five years. This is in line with the current practice being followed by the RBI for transferring dividend annually,â a person close to the development said.
The person said the panel members might ânot be unanimousâ on the suggestions the committee made. These will be submitted to RBI Governor Shaktikanta Das âin a few daysâ. The RBIâs central board, headed by Das, will take up the matter.
The report would likely include a dissent note by Finance Secretary Subhash Chandra Garg, who is the governmentâs representative on the panel.
The committee has recommended a periodic review of the RBIâs economic capital framework, according to the source.
Initially, the finance ministry had expected around Rs 3 trillion from the RBIâs reserve funds, which were at the heart of a conflict between the regulator and the government last year.
On the insistence of the finance ministry, the central board of the RBI formed a six-member committee â headed by Jalan and co-chaired by former RBI deputy governor Rakesh Mohan â in December to review the central bankâs economic capital framework.
The main difference of opinion within the panel was over transferring the RBIâs âexcessâ capital reserves. While most panel members are in favour of a phased transfer of the RBIâs capital reserves to the government over the years, the government’s view, voiced by Garg, was for a one-time transfer.
For this financial year, the government had accounted for around Rs 20,000 crore as âadditional dividendâ from the RBI, a finance ministry official said. This, the official said, is unlikely to happen.
In the Receipts Budget, allocation towards the âdividend or surplus of RBI, nationalised banks and financial institutionsâ was increased by Rs 23,130 crore to Rs 1.06 trillion in 2019-20, compared to the Interim Budget.
New Delhi: The government today gave its approval to seven amendments to the Insolvency and Bankruptcy Code (IBC), a move that will benefit unsecured creditors like home buyers in a big way.
Minister for Information and Broadcasting Prakash Javadekar said, the IBC (Amendment) Bill, 2019, would be introduced in Parliament during this session and will have retrospective effect. An official statement read: âThe amendments aim to fill critical gaps in the corporate insolvency resolution framework as enshrined in the Code.â
of all financial creditors, including unsecured ones (home buyers) covered under Section 21 (6A) âshall be cast in accordance with the decision approved by the highest voting share (more than 50 per cent) of financial creditors on present and voting basisâ, it said. It also said greater emphasis had been given âon the need for time-bound disposal at application stage and a deadline for completion of CSRP within an overall limit of 330 days, including litigation and other judicial processesâ. Experts say this provision will help unsecured creditors (mostly home buyers) in a big way.