1) Criminal offences in Companies Act to be slashed, govt mulls 65 changes
In a move to relax punishment for fraud under the Companies Act, the corporate affairs ministry is planning to withdraw the criminalisation aspect in 65 sections where the offences are compoundable or not serious in nature, a government official in the know said. “Criminalisation has had no worthwhile outcome. We will look at decriminalising most of the compoundable offences.
Conviction can lead to many far-reaching consequences, which is not the intention of the law,” a senior government official said. (Read more here)
2) Credit rating agencies likely to get access to loan default details
The Securities and Exchange Board of India (Sebi) is likely to come up with a framework for credit-rating agencies (CRAs) to enable them to seek information from lenders or other institutions about loan repayment or possible default by a debtor.
According to a source, Sebi is planning to amend the regulations on CRAs by adding a clause in the agreement between an issuer and a rater to provide an ‘explicit consent’ from the issuer to obtain information related to loans, repayment, delay, etc. from banks or other lending institutions. (Read more here)
3) Banks may take majority stake in DHFL, convert part of debt into equity
The consortium of banks led by Union Bank of India, which is working on the feasibility of the resolution plan submitted by cash-strapped housing financier Dewan Housing Finance Corporation (DHFL), is toying with the idea of taking a majority stake in the firm.
It is understood that in order to execute the resolution process, banks may convert a part of their loans into equity. Sources say banks are at the final stage of deliberating on DHFL’s resolution plan it submitted on August 6. (Read more here)
4) Credit rating agencies, auditors on ED radar in IL&FS charge sheet
The Enforcement Directorate’s (ED’s) first chargesheet in the Infrastructure Leasing & Financial Services (IL&FS) case has elaborated the role of India’s top credit rating agencies and auditors, indicating irregularities, concealment, and possible collusion with the beleaguered entity’s former management.
The enforcement agency had filed its prosecution complaint on Friday, containing the statements of Deloitte’s former Chief Executive Officer Udayan Sen (statutory auditor of IL&FS), N Sampath Ganesh, partner, BSR and Associates, S S Kohli, chairman of IL&FS Financial Services (IFIN) audit committee; Anjan Deb Ghosh, chief ratings officer, ICRA, and TN Arun Kumar, chief ratings officer, CARE Ratings among others. (Read more here)
5) Sebi rejects Icra's settlement application in IL&FS case
Markets regulator Securities and Exchange Board of India (Sebi) has rejected credit ratings agency Icra's consent application in the Infrastructure Leasing and Financial Services Ltd (IL&FS) case, the Economic Times reported on Monday, citing a source familiar with the development.
The report said that Icra had been looking to reach a settlement in the matter of ratings agencies not having given warning of the IL&FS default in September last year. The default led to a liquidity squeeze that has impacted non-banking finance companies (NBFCs) and added to the pressure on markets, amid an economic slowdown.
6) Watch out, Starbucks: OYO is brewing plans to start a premium coffee chain
After hotels, homestays, co-working and co-living spaces, OYO Hotels & Homes is planning to go all out in the food business by launching a coffee chain as well as a slew of restaurants. It is learnt that over the next few months, the Ritesh Agarwal-led company is ready to set up more than 50 premium coffee shops under the brand name The French Press. Plans to start a restaurant chain on the back of its four cloud kitchens are also on the drawing board.
Significantly, OYO is changing tack and shedding its “affordable” image for its chain of premium coffee shops in order to take take on coffee chain giant Starbucks. Sources said that to ensure that the brand is considered exclusive, the company has decided not to use the OYP branding with The French Press. (Read more here)
7) Amazon to use Prime Now for food delivery launch
Amazon's two-hour grocery delivery platform, Prime Now, could be the primary vehicle for the e-commerce giant's foray into the food delivery business in India, the Times of India reported on Monday, citing sources aware of the company's plan.
Citing these sources, the report said that Amazon has also had preliminary talks with Foodpanda, Ola's food delivery unit, for a potential partnership for this business, which could be extended to an acquisition. Further, Amazon has also had talks with Uber Eats.
8) Coffee Day may restart stake sale talks with Coke
Coffee Day Group's promoters plan to restart talks with Coca-Cola to sell a chunk of their stake in the Café Coffee Day (CCD) chain to further cut the group's debt, the Economic Times reported on Monday, citing sources with knowledge of the matter. Further, they told the financial daily that a group company, Sical Logistics, was also seeking to divest assets.
9) Unnerved by Reliance Jio offer, leading multiplex companies hit back
Leading multiplex companies have said they will not screen films whose rights have been sold for an earlier or simultaneous release on OTT (over the top) digital platforms.
This is a significant development as it could lead them to challenge Reliance Industries chairman Mukesh Ambani, who recently announced that premium users of the commercially launched high-speed Jio Fiber (fibre to the home) would be able to see movies at home on the same day that they are released in the theatres. (Read more here)
10) IT companies fume over double taxation avoidance treaty with Australia
Information technology majors have blamed the current Double Taxation Avoidance Treaty (DTAA) with Australia as a major constraint on plans to grow operations Down Under.
Income from IT services is being taxed as royalties under the DTAA, industry body Nasscom has told the government. The loss for companies is estimated at $1 billion since 2012, along with related job losses. This comes at a time when services exporters have resisted government efforts to prod them into new markets, by pointing out that significant market access barriers in major markets like China exist. (Read more here)