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Sat, 28th May 2016

Anirudh Sethi Report

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Archives of “board of directors” Tag

Out of 11 …….3 Out

In August last year, the Reserve Bank of India (RBI) had approved in-principle 11 applications to set up payments banks, which will offer a range of basic banking and remittance services, except lending. This approval is valid for 18 months during which the applicants have to comply with various requirements.

Since August, three players have dumped their plans to set up a payments bank.

In March, Cholamandalam Investment and Finance Company decided not to pursue its plans in this direction citing competition and a long gestation period as reasons for the pullout.

 Recently, Sun Pharma founder Dilip Shanghvi – who along with IDFC Bank and Telenor had got an in-principle approval for a payments bank – also decided against pursuing the venture.

Former Bacardi chief Javier Ferrán to become Diageo chairman

Javier Ferrán, a former chief executive of rum maker Bacardi, has been named as the new chairman of Diageo.

Mr Ferrán (pictured) is currently a partner at Lion Capital, the consumer-focused private equity investor, but has decades of experiences in the drinks industry.

He will join Diageo’s board next month as a non-executive director before taking over as chairman from Dr Franz Humer on January 1 next year, the group behind Guinness stout and Johnnie Walker whisky said.

Mr Ferrán, who has been at Lion Capital since 2005, is currently also on the board of brewer SABMiller, which has agreed to a £71bn takeover by Anheuser-Busch InBev. He will not seek re-election at SAB’s annual general meeting in July, Diageo added.

Lord Davies of Abersoch, Diageo’s senior non-executive director said:

Deutsche Bank Has Systemic Money Laundering, Terrorist Financing And Sanctions Problems: UK Regulator

Just two days after Deutsche Bank fired the head of its “integrity committee”, Georg Thoma who had been originally tasked with clearing up the bank’s past scandals, because according to DB’s vice chairman Alfred Herling, Thoma had been “overzealous” and “goes too far when he demands ever wider investigations and more and more lawyers come marching up”, today the UK financial watchdog agency FCA announced that Germany’s biggest bank has “serious” and “systemic” failings in its controls against money laundering, terrorist financing and sanctions, the Financial Times reported.

The Financial Conduct Authority (FCA), has now ordered a separate independent review, the FT reported the letter as saying. The FCA declined to comment.

Tata’s UK steel plant ‘almost back in profit’

Tata’s UK steel business has been reducing its £1m-a-day losses steadily for the past few months and is close to making an operating profit again for the first time in more than a year, The Sunday Telegraph understands.

Senior sources say the business, centred on Port Talbot, was headed for a profit even before its Indian parent put it up for sale last month.

The news comes as the hunt to find a buyer intensifies, with theGovernment saying it is willing to take a 25pc equity stake to help secure a sale, and the emergence of a management buyout bid.

The strip steel business was making losses of as much as £1m a day a year ago, Koushik Chatterjee, Tata group executive director, said a fortnight ago.

Such a huge burden was part of the reason Tata put its UK steel operations up for sale, putting the jobs of its 11,000 staff in jeopardy, along with twice as many positions in the supply chain. However, The Sunday Telegraph understands the strip steel business had been steadily cutting back the losses for months when Tata’s board decided to pull the plug by refusing to back a turnaround plan.

The ambitious plan – known as the “Bridge” – would have involved an immediate £100m cash injection, and it is understood that Tata was no longer willing to pump money into its troubled UK steel operations, having already invested £1.5bn since buying them in 2007 for £6.7bn.

 

 

L&T Infotech withdraws draft prospectus for IPO

Larsen and Toubro Infotech Ltd, the information technology services arm of engineering conglomerate Larsen and Toubro Ltd (L&T), on Monday withdrew its draft prospectus for an initial public offering (IPO) to raise Rs.2,000 crore, about four-and-a-half months after it got approval from the capital market regulator Securities and Exchange Board of India (Sebi).

Parent firm L&T, in a stock exchange announcement, cited “change in the offer structure and other considerations” as the reason for the move.

An L&T spokesman said, “One of the reasons for withdrawing the DRHP (draft red herring prospectus) was that market conditions were not right for the issue. It is possible that we may file a fresh DRHP at some future date, but we cannot offer a specific comment on the matter at this stage.”

“Since the DRHP was filed several months ago, and in the IT services industry business changes on a quarterly basis, when our company does take the L&T Infotech IPO to the market, it should do so on the basis of the most recent financial results. This is necessary to ensure that we are fair to our investors,” the spokesman added.

L&T Infotech had planned to sell 17 million shares, or 10.85% of the share capital, as part of the public issue, according to the draft prospectus filed on 28 September last year. The company won Sebi approval on 31 December with a one-year validity.

Former CAG Vinod Rai expresses concern over economic growth

Chairman of Banks Board Bureau and former Comptroller and Auditor General of India Vinod Rai today expressed concern that the country’s economy has slipped to six per cent after excellent signs of growth.

“The Indian economy was displaying excellent signs of growth, buoyancy and remarkable resilience but from attempting to reach double digit growth in our GDP, we are sliding back to six per cent,” he said speaking at the 18th convocation of Indian Institute of Management-Kozhikode (IIM-K).

He also said it was not enough to be a country having the fourth largest number of billionaires in the world and yet hardly have any globally accepted patents to showcase industrial or manufacturing muscle.

“Ethical management and leadership is the cornerstone for any successful business enterprise. It should be the mantra as you begin your careers”, Rai told the passing out students.

He stressed on the need for students to be change agents to build a robust economy with a good framework for corporate governance and excellence.

As many as 358 students were awarded the Post Graduate Diploma in Management.

IMF says Christine Lagarde nominated for second term

The International Monetary Fund is making what everyone assumed official. Christine Lagarde is heading toward a second five-year term as managing director unopposed.

The official nominating period closed at midnight last night and the fund has just put this statement out:

IMF Statement on the Managing Director’s Selection Process

The Dean of the Executive Board of the International Monetary Fund (IMF), Mr. Aleksei Mozhin, made the following statement today:

“The period for submitting nominations for the position of the next Managing Director closed on Wednesday, February 10. One candidate, current Managing Director Christine Lagarde, has been nominated.

“The Board will now work in line with the process described in its decision of January 20, including meetings between the candidate, Mme Lagarde, and Executive Directors. The Board’s goal is to complete the selection process as soon as possible.”

Ms Lagarde’s current term expires in July.

Write-offs a scam- Says Former Reserve Bank Deputy Governor Dr K C Chakrabarty

Former Reserve Bank Deputy Governor Dr K C Chakrabarty says technical write-offs by banks is a “scam” and should be stopped.

“Technical write-offs by Indian banks are inequitable and should be stopped. It is a big scam. Small loans are rarely written off, most of them are big loans,” London-based Chakrabarty, who handled the supervision department of the RBIfrom 2009 to 2014, told The Indian Express.

Public sector banks have written off Rs 1,14,000 crore in the last three years, as reported in The Indian Express on February 8, based on a response by the Reserve Bank of India to an RTI application.

Banks are planning to write off more bad loans in the current year, and this could be Rs 52,227 crore, similar to the quantum written off in 2014-15.

There’s a reason for the eagerness on the part of banks to write off loans though a loan is technically the bank’s asset. “It benefits banks in terms of tax liability,” M Narendra, former chairman and MD of Indian Overseas Bank, said. The other benefit is that the bad loan no longer stays in the bank’s books.

The write-off instruction comes from the head office.

How Kuroda fooled BOJ members on negative rates

We all know that Kuroda fooled the markets on negative rates, denying their consideration right up to a January 21 interview.

Which, in effect, has cost him credibility, but also bullets in his fight for a weaker yen.

Such a shame.

This piece from Reuters takes an inside look at Kuroda even fooled the BOJ Board (bolding is mine):

  • Most of the nine board members were only told of the scheme in the week leading up to Friday’s rate review, according to interviews with more than a dozen officials familiar with the deliberations.
  • “If you’re a board member, you’re told about the plan at the last minute,” said a former board member, speaking on condition of anonymity. “It’s hard to argue against it or draft a counter proposal when there’s so little time left.”

More:

United Spirits seeks shareholders’ nod to report sick to BIFR -NETWORTH MORE THAN HALVES IN 4 YRS

U-S-L

Below 3038 ,Stock Ready to slide upto 2690-2574 ?

Crisis-ridden United Spirits on Tuesday said its networth has eroded by more than 50 per cent of its peak networth due to a host of reasons, including provisions on advances to its erstwhile promoter group firm United Breweries (Holdings) Ltd.

United Spirits (USL) has called an Extraordinary General Meeting of its shareholders on January 22, 2016.

In a notice for EGM, USL said, “The company shall report to the Board for Industrial and Financial Reconstruction (BIFR) of the fact that the accumulated losses of the company as on March 31, 2015, have resulted in erosion of more than fifty per cent of its peak networth during the immediately preceding four financial years.”

It further said: “This extraordinary general meeting is being convened to consider and approve the enclosed report of the Board of Directors on such erosion and its causes, and the measures being taken as per the relevant provisions of SICA (Sick Industrial Companies (Special Provisions) Act, 1985), and also to approve the reporting of such erosion to BIFR in terms of Section 23 of SICA.”

The company said its accumulated losses as on March 31, 2015 at Rs5,045.45 crore is greater than 50 per cent of the peak net worth in the immediately preceding four financial years at Rs5,849.62 crore.

United spirits said two main reasons for accumulated losses are “diminution in the value of long-term investments in subsidiaries and loans and advances to subsidiaries due to low capacity utilisation, negative margins, or strategic shift in business (Rs716.16 crore)” and “provision on advances to United Breweries (Holdings) Ltd (Rs995.45 crore)”.