BQuick On Jan. 24: Top 10 Stories In Under 10 Minutes

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

1. Chanda Kochhar Booked, KV Kamath May Be Probed

The Central Bureau of Investigation filed a first information report against ICICI Bank Ltd.’s former chief executive officer Chanda Kochhar, her husband Deepak Kochhar, also managing director of Nupower Renewables Ltd., and Venugopal Dhoot, managing director of Videocon Group; over alleged irregularities in transactions between the lender and the private entities.

• Other entities named in the FIR include the private firms Supreme Energy Pvt. Ltd., Videocon International Electronics Ltd. and Videocon Industries Ltd. The FIR also names “unknown public servants”.
• In addition to those named as accused in the FIR, the CBI had said that it may investigate the role of senior officials including KV Kamath in the sanctioning of Rs 1,575 crore in loans to companies related to the Videocon Group.

Here are full details from the FIR and what it means for ICICI Bank.

2. Yes Bank’s New CEO

Private sector lender Yes Bank Ltd. has named Ravneet Gill as its next chief executive officer.

• Gill, currently the head of Deutsche Bank in India, will take charge from founder CEO Rana Kapoor, who will step down at the end of January after the Reserve Bank of India denied him another full term.
• A decision on a new CEO lifts an overhang for investors of Yes Bank. With Kapoor set to exit next week, the lack of clarity over the bank’s top leadership had weighed on the stock.

Gill’s appointment will ensure a clean-slate for the bank.

3. Aditya Mittal Hits Back At Ruias, Sajjan Jindal

The Ruia family’s delayed offer for Essar Steel Ltd. is a bid to prevent the right resolution of the stressed asset and banks should follow the law, according to Aditya Mittal, president of ArcelorMittal that was selected by the lenders as the highest bidder under the insolvency code.

• The Ruia family’s delayed offer for Essar Steel Ltd. is a bid to prevent the right resolution of the stressed asset and banks should follow the law, according to Aditya Mittal, president of ArcelorMittal that was selected by the lenders as the highest bidder under the insolvency code.
• Mittal’s comment came after billionaire Sajjan Jindal, chairman of JSW Steel Ltd., told BloombergQuint that the Ruias should be given a chance as the erstwhile promoters were willing to repay the debt in full.
• “These tactics are to delay, to frustrate and prevent the right resolution for the company,” Mittal told BloombergQuint on the sidelines of the sidelines of the World Economic Forum 2019 at Davos, Switzerland.
• “It’s very important that the IBC [Insolvency and Bankruptcy Code] process is followed.”

Here’s why he says ArcelorMittal’s bid is the best option for lenders.

4. Auto Industry’s Y2K Moment

A few of Mahindra & Mahindra Ltd.’s products may miss the deadline of switching to the Bharat Stage-VI emissions policies, according to its Managing Director Pawan Goenka.

• He said that the entire auto industry faces this problem. “Everyone is putting up a brave face. But I don't think anybody can guarantee whether they'll be all ready,” Goenka told BloombergQuint on the sidelines of the World Economic Forum in Davos, Switzerland.
• The Supreme Court ruled that BS-VI emissions standards must be effective from April 1, 2020, saying that no vehicle under the existing BS-IV should be sold or registered from then.

Watch the full interview with Goenka here.

5. Sensex Rises, Dow Falls

Indian equity benchmarks halted two-day losing streak paced by gains in Yes Bank Ltd.

• The S&P BSE Sensex rose 0.24 percent or 87 points to 36,195.
• The NSE Nifty 50 Index advanced 0.17 percent or 18 points to 10,850.
• For most part of the day, benchmarks traded in a narrow band. However, a late rally in Yes Bank helped benchmarks break out of range.
• Ten of 19 sector gauges compiled by BSE ended lower led by the S&P BSE Telecom Index's 1.97 percent decline.
• UltraTech Cement too reported its quarterly results after which the stock fell 2 percent.

Follow the day’s trading action here.

A rally in semiconductor stocks helped push the Nasdaq Composite Index higher, while broader indexes were lower amid concern the U.S. and China may be further from a trade resolution than investors had hoped.

• The euro trimmed a drop as ECB President Mario Draghi said the central bank had all of its “toolbox still available” as risks shift to the downside.
• The Dow Jones and S&P 500 Index declined after Secretary of Commerce Wilbur Ross said the world’s two biggest economies remain “miles and miles” apart on trade, while still acknowledging that there is a “fair chance” of a deal.
• West Texas Intermediate rose 0.1 percent to $52.66 a barrel.

Get your daily dose of global markets here.

6. MFs Wary Of Side-Pocketing IL&FS Exposure

Mutual funds have not made use of the regulator’s decision to allow segregation of distressed assets even as more IL&FS group entities, now controlled by the government, threaten to default on repayments.

• Crisil and India Ratings downgraded non-convertible debentures of Jharkhand Road Projects Implementation Company Ltd., a subsidiary of government-controlled IL&FS Group, to ‘default’.
• There’s an immediate threat of four more operating arms of the infrastructure group defaulting on obligations after Jharkhand Road Projects asked its debenture trustee to discontinue future disbursement from the escrow account that was servicing the non-convertible debentures of the issuer citing the company law appellate tribunal’s moratorium, according to India Ratings.

There could be two reasons for mutual funds’ reluctance.

7. RBI Needs Far Bigger Capital Buffer

India’s central bank has insufficient capital, much less a surplus to hand over to the government, a new study shows.

• Operating losses could push the RBI to seek financial assistance from the government, compromising its autonomy, wrote the authors, led by Amartya Lahiri, director at Mumbai-based think tank Centre for Advanced Financial Research and Learning and a professor at the University of British Columbia.
• The study, which covered balance sheets of 45 central banks, found the global average capital to asset ratio -- net of revaluation capital -- was 6.56 percent.
• The level for those in emerging economies was 6.96 percent, with the RBI’s standing at 6.6 percent.

The findings rekindle the debate over RBI’s autonomy over its reserves.

7. The Hidden Subtext In Priyanka Gandhi’s Political Entry

There are enough factors at play that might help Priyanka Gandhi swing deals and/or win public sympathy in the most backward part of the Uttar Pradesh, with simmering discontent waiting to be channelled, writes Madhavan Narayanan.

• Is Congress betting on a Telangana act in east Uttar Pradesh?
• Will the call for Purvanchal facilitate deals with caste leaders, BJP defectors or even current BJP allies?

Can Priyanka lead or address the demand for a separate Purvanchal?

9. Bibek Debroy Takes Stock Of Indian Railways, 2014-2019

India’s leading rail policy expert assesses the progress made on five key structural reforms: privatisation, decentralisation, commercial accounting, regulatory legislation, and unification of services.

• The present problems have escalated over several decades and can’t be resolved overnight.
• The last five years could have accomplished more.

But let’s also acknowledge what has been done.

10. World’s Richest Football Clubs

European champion Real Madrid displaced Manchester United as the world’s highest-earning football club as the English team’s under-performance on the pitch in recent seasons ate into its dominance off it.

• United slumped to third place, below both Real and Spanish rival Barcelona based on revenue for the 2017-18 season, financial services firm Deloitte said in its annual Football Money League on Thursday.
• United was the wealthiest club for two of the past three years and eight times in the last two decades.

Clubs in the English Premier League took six of the top 10 spots.