Ratan Tata with Cyrus Mistry. (Source: PTI)

BQuick On August 24: Top 10 News Stories In Under 10 Minutes

This is a roundup of the day’s top stories in brief.

1. At Least 60 Stressed Firms Are Set To Face Insolvency Action

The Indian banking system is bracing itself for another round of insolvency proceedings, this time due to the impact of the new stressed asset rules put in place by the Reserve Bank of India in February.

  • Three people in the know told BloombergQuint requesting anonymity that at least 60 corporate accounts are likely to be referred to the National Company Law Appellate Tribunal after Sept. 1.
  • The banking system has exposure of about Rs 3.5 lakh crore to these accounts, they added.
  • This comes after the RBI issued a circular on Feb. 12 asking banks to initiate resolution of stressed assets soon after there is a delay in payments. The regulator gave banks 180 days to resolve accounts being loaned over Rs 2,000 crore.
  • The 180-day deadline for accounts which were in default on March 1 will expire by August, leaving banks with no option but to initiate insolvency.

Read more on the 60 large corporate accounts likely to face insolvency.

2. NCLAT Says Tata Sons Cannot Force Sale Of Mistry Shares For Now

The National Company Law Appellate Tribunal declined to pass an interim order on Cyrus Mistry’s plea against the conversion of Tata Sons Ltd. to a private limited company.

  • However, the NCLAT asked Tata Sons not to take steps on the sale of minority shareholders’ stake until the appellate tribunal decided on Mistry’s plea alleging oppression by the group holding company.
  • The NCLAT will start hearing arguments on Mistry’s appeal against the NCLT order that removed him as Chairman of Tata Sons on Sept. 24.

Read more on the NCLAT order.

3. Sensex, Nifty Snap Four-Day Winning Streak; U.S. Stocks Climb

Indian equity benchmarks snapped their four-day winning streak dragged by banking stocks.

  • The S&P BSE Sensex Index fell 0.2 percent or 85 points to 38,252.
  • The NSE Nifty 50 Index declined 0.2 percent or 26 points to 11,557.
  • Benchmarks logged their fifth weekly gain this week, their longest stretch of weekly gains in two months.

Follow the day’s trading action here

U.S. stocks rose, while the dollar and Treasuries fell after a speech by Federal Reserve Chairman Jerome Powell backed up the case for gradual rate increases.

  • The S&P 500 Index headed for its second weekly gain in a row, trading just under a record close last reached in January.
  • West Texas crude rose above $69 a barrel.

Get your fix of global markets here

4. Needn’t Be Too Worried About The Rupee: Rajan

India should focus on strengthening its macroeconomic fundamentals instead of worrying about the depreciating rupee, according to former Reserve Bank of India Governor Raghuram Rajan.

  • India should work on bringing down its current account deficit and maintaining fiscal stability, he told Bloomberg TV.
  • This is the time when the country should focus on macro stability considering it is going into an election year, he added.
I think it (rupee) hasn’t depreciated to worrying levels, it’s dollar strength around the world.
Raghuram Rajan, Former Governor, RBI

For Rajan’s views on India read this, and for his take on trade wars, read this.

5. Anil Ambani Gets Relief From RCom Bondholders

Anil Ambani-led Reliance Communications Ltd. clinched the approval of its overseas bondholders to ease the carrier’s debt burden, putting the company a step closer to averting bankruptcy.

  • The telecom operator, which defaulted on a $300-million bond last year, got 83 percent of bondholders to approve the plan, the company said in an exchange filing.
  • The vote was crucial for Ambani because settling the matter was a precondition for RCom to reorganise its larger local debt.
  • The company has been working against the clock to reach agreements with all its creditors by Aug. 27 or face insolvency proceedings.

Read more on RCom’s efforts to avert insolvency.

6. How M&M Plans To Regain Lost Footing

Mahindra & Mahindra Ltd. has managed to hold on to its title of India’s leading sports utility vehicle maker despite losing a chunk of the market share. And for Managing Director Pawan Goenka, that’s where the challenge lies.

  • Mahindra has been facing tough competition from Maruti Suzuki India Ltd. that sold more utility vehicles than M&M in the previous fiscal year, riding on its compact SUV—the Vitara Brezza.
  • M&M is looking to step up its offerings in the utility vehicles segment with the upcoming multipurpose vehicle Marazzo, the S201 compact SUV and the more premium G4 Rexton.
In our mainstream utility vehicle business, the biggest turnaround that we need is to regain market share...we are at about 24 percent [market share] or so now, and we were at 55 percent not so long ago. Everybody keeps reminding me of that.
Pawan Goenka, MD, M&M

Here’s how Goenka plans to drive M&M’s turnaround.

7. To Vote Or Not To Vote For Chanda Kochhar

On Aug. 30, shareholders of ICICI Securities Ltd. will vote to decide on the reappointment of Chanda Kochhar as director on the company’s board and hence chairperson too. That puts parent ICICI Bank Ltd., where Kochhar is managing director and chief executive officer, in an interesting position.

  • If the bank, that owns 79.22 percent stake in the subsidiary, votes in favour of Kochhar, the resolution—that needs a simple majority—will pass.
  • But will a ‘yes’ vote be interpreted as supporting the beleaguered leader, at a time when she’s under investigation for alleged impropriety in sanctioning loans?

There are arguments for a vote in Kochhar’s favour and against her.

ICICI Securities AGM: To Vote Or Not To Vote For Chanda Kochhar

To vote or not to vote for Chanda Kochhar in the ICICI Securities’ AGM? In conversation with Amit Tandon. #BQLive

Posted by BloombergQuint on Friday, August 24, 2018

8. Apple, JPMorgan, Pepsi Fear ‘Harm’ From Trump’s H-1B Visa Policy

Dozens of top U.S. business leaders including Apple Inc.’s Tim Cook, JPMorgan Chase & Co.’s Jamie Dimon and Pepsico Inc.’s Indra Nooyi signed a letter expressing “serious concerns” about the Trump administration’s immigration policy changes and their potential to undermine economic growth.

  • The executives decried moves that were said to include “inconsistent immigration decisions” and the likely curtailing of work permits for spouses of some high-skilled immigrants.
  • Those shifts were “unfair” and created a risk of “unnecessary costs and complications,” the CEOs said in a letter to Homeland Security Secretary.
“As the federal government undertakes its legitimate review of immigration rules, it must avoid making changes that disrupt the lives of thousands of law-abiding and skilled employees, and that inflict substantial harm on U.S. competitiveness,” the executives said.

Read more on top executives’ concerns.

9. Punjab’s New Sacrilege Bill – ‘A Society Governed By Criminal Law’

On Aug. 21, the Punjab cabinet led by Chief Minister Amarinder Singh approved a draft bill, making the desecration of religious texts in the state punishable with life imprisonment. The move has come in for sharp criticism from lawyers and human rights activists.

Three leading lawyers told BloombergQuint that Punjab government’s move could be challenged in court.

  1. Mohan Parasaran, Former Solicitor General of India: If the same offence is covered under the Indian Penal Code, it is actually a repetition for Punjab to introduce a new law...a state that is bringing in another set of law virtually on the same subject matter providing greater penalty will make the law susceptible to challenge.
  2. Indira Jaising, Former Additional Solicitor General of India: The existing Section 295A of the Indian Penal Code is itself liable to be declared unconstitutional. We are becoming a society governed by criminal law – what to eat, when to speak, and what to speak is all being defined by criminal law rather than by a rights framework.
  3. Sidharth Luthra, Former Additional Solicitor General of India: What the Punjab government has done is only political expediency. There is no rationale for a change in law or for the addition of any special provision...have they even applied the existing provisions over the past few years or decades? What, if any, deficiencies did they find?

Read the detailed arguments here.

10. Kerala – Where God And Communism Co-Exist, Death Can Be Dealt With

When everything is wiped out, what good is reason? Faith on the other hand, is something to hold on to, wrote Revati Laul in a column for The Quint.

Here’s an excerpt...

And in ‘God’s Own Country’, Che Guevara and the red flags of the Communist Party of India-Marxist (CPI-M), are worshiped alongside Jesus and Allah, and the entire Hindu pantheon, and Seventh Day Adventists.

It brings with it a certain egalitarianism mixed with faith, that seemed to equip the state as a whole, with a way of coping that when seen up-close, can be life-altering.