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BQuick On Feb. 22: Top 10 Stories in Under 10 Minutes

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

1. Anil Ambani And A Case Of ‘Deliberate Misstatements’

This was no ordinary case. Anil Ambani was ordered to be physically present in court over two days as his companies were accused of failing to honour a settlement agreement with telecom equipment maker Ericsson.

  • It is rare for a prominent industrialist to be summoned to court in India. And even rarer for him to have been found in contempt.
  • Undertakings that were given by Anil Ambani, pursuant to Supreme Court’s order to pay its dues worth Rs 550 crore, and in those undertakings he stated that the sum of Rs 550 crore will be paid “upon sale of assets of the company”.
  • The judgment noted that Reliance companies had made it clear that the entire payment would be made in 10 days if the petitions were withdrawn. But in their reply they said they were “disabled” and “were unable to pay”.
This is also not a case of accidental or unintentional disobedience.
Supreme Court

Here’s how one of the most high-profile corporate cases in India played out.

2. Suzlon’s Debt Demons

Once tipped to be a global powerhouse of renewables, Suzlon Energy Ltd. has been battling debt demons for more than six years.

  • Beset by the fallout of boom-year excesses, the maker of wind turbines was working on a turnaround by selling assets and cutting costs.
  • It even brought in a white knight in billionaire Dilip Shanghvi. But then India shifted from a subsidy-based programme to competitive auctions for wind farms, driving tariffs to record lows and eroding volumes and profits of Suzlon.

Suzlon has lost nearly 99 percent of its market value since its peak in January 2008.

  • Meanwhile, Suzlon shares rose as much as 38 percent on Friday, the biggest gain in its history, after CNBC-TV18 reported that the two companies were in talks about Vestas taking a majority stake.
As we have said before on similar speculation, our industry-leading position means we are open to additional bolt-on opportunities to accelerate our growth strategy should such arise.
Vestas Spokesman
  • Suzlon responded saying that it is exploring multiple options for debt reduction, but added that it won't comment on market speculation.

3. Speeding Up Resolutions

Seven months after banks signed inter-creditor agreements, lenders have started to use these accords to speed up resolution of mid-sized stressed assets. These agreements put in place rules under which minority lenders would need to fall in line with a decision taken by the majority of creditors.

  • According to two senior bankers familiar with the discussions, inter-creditor agreements are being invoked in at least two cases — Hindustan Construction Company Ltd. and GMR Chhattisgarh Energy Ltd.
  • In both these cases, lenders had finalised resolution plans even before the agreements were signed, however, a small portion of lenders were still to give their approvals.

Inter-creditor agreements have become critical after RBI’s revamp of stressed asset resolution guidelines.

4. Sensex Ekes Out Weekly Gain

Indian equities fluctuated as investors continued to look ahead to the outcome of a national election for direction even as minutes of the recent central bank meeting signaled more cuts in benchmark interest rate. Key indexes eked out weekly gains.

  • The S&P BSE Sensex Index ended flat at 35,871.
  • The NSE Nifty 50 Index ended two points higher at 10,791.
  • The market breadth, however, was tilted in favour of buyers.
  • Eight out of 11 sectoral gauges compiled by NSE advanced, led by the NSE Nifty Metal Index’s 1.65 percent rally.

Follow the day’s trading action here.

BQuick On Feb. 22: Top 10 Stories in Under 10 Minutes

U.S. stocks rose along with Treasuries as investors awaited results from top-level trade talks between America and China.

  • The S&P 500 edged toward a weekly gain as President Donald Trump’s scheduled meeting with China’s lead negotiator on Friday afternoon boosted hopes headway will be made before tariffs on some Chinese goods more than double on March 1.
  • Kraft Heinz plunged after announcing a $15 billion write-down, dragging down consumer staples stocks.
  • The 10-year Treasury yield fell below 2.67 percent while the dollar erased gains against major currencies.
  • The pound weakened even as the European Union’s chief Brexit negotiator said he won’t rule out a delay to the date Britain leaves the bloc.
  • West Texas Intermediate crude advanced 1.3 percent to $57.68 a barrel, the highest in more than 14 weeks on the largest gain in a week.

Get your daily global markets fix here.

5. Mumbai: Real Estate Risk!

The biggest risks to Indian realty might come from Mumbai, according to Nirmal Jain.

  • The founder and chairman of IIFL Holdings Ltd. said the sector’s “fragility” was largely due to high-priced pockets in India’s financial capital, causing 80-90 percent of the problems.
  • However, Jain said the sector doesn’t face a systemic risk.
  • The expensive real estate in Mumbai, according to Jain, is “the epicentre of all problems” due to sky-high prices and minimal end-user demand.

Watch the full interview where Jain also talks about the NBFC pain.

6. Niti Aayog Bats For Public Debt Management Office

Niti Aayog Vice Chairman Rajiv Kumar on Friday made a case for setting up an independent public debt management office to manage the government’s debt.

  • Kumar questioned whether the Reserve Bank of India should have the responsibility of setting the monetary policy, play supervisory role for banks, and at the same time manage Indian government's debt.
  • "In 2014, the Finance Minister in his budget speech had announced, but it has not happened. How do we segregate different aspects of Reserve Bank's responsibilities?" Kumar asked.
  • The government, he said, has been very courageous to give RBI the statutory authority of inflation targeting.
Therefore, who then looks after growth, employment, debt and other legal things in the country. I think those are the things that needs to be discussed.
Rajiv Kumar, Vice Chairman, Niti Aayog

Many committees in the past have suggested forming an independent debt management office.

7. Mr. Buffett, Please Answer These Nagging Questions

Warren Buffett’s annual letters to Berkshire Hathaway Inc. shareholders have felt a bit dry in recent years. Perhaps it was the noticeable reduction in dirty-grandpa humor, or the fact that the world’s most renowned dealmaker hasn’t had a transaction to crow about since 2016, writes Bloomberg Opinion's Tara Lachapelle.

But for this year’s missive, expected to arrive on Saturday evening India time, Buffett has provided himself with plenty of fodder — if only he’ll use it to answer two nagging questions for investors:

  1. Should anything be gleaned about the future of Berkshire from its relatively new, and recently erratic, interest in technology investments?
  2. If Buffett didn’t find a significant acquisition in December’s market swoon, then when will he?

Here’s why investors deserve more than just a memo from Buffett this year.

8. CBI Issues Lookout Notice Against Chanda Kochhar

The Central Bureau of Investigation has issued lookout notices against former ICICI Bank Ltd. Chief Executive Officer Chanda Kochhar, her husband Deepak and Managing Director of the Videocon Group Venugopal Dhoot, officials said.

  • The move was taken nearly a week after a case was registered against Chanda Kocchar, Deepak and Dhoot, they said.
  • They added that the move is to ensure that none of the accused in the case related to alleged corruption in clearing loans worth Rs 1,875 crore to the Videocon Group.

No summons have been issued against Chanda Kochhar to record her statement.

9. Congress To Promise One-Time Farm Loan Waiver

The Congress party will pledge a one-time farm loan write off and focus on “have nots” in a bid to woo voters from Prime Minister Narendra Modi’s ruling group in elections due by May.

  • His party is also considering a plan to provide income for landless farmers and agricultural workers, said M.V. Rajeev Gowda, a Wharton School doctorate in public policy who’s convener of the panel drafting the Congress’ manifesto.
  • Congress will get more people to pay taxes and better target subsidies to help fund these payouts, he said.
  • Rahul Gandhi has already promised a minimum income guarantee to the poor.
Our overall thrust is constructive, compassionate and competitive. We will look at expanding the tax net and rationalizing some subsidies to meet the additional expenditures for these promises
M.V. Rajeev Gowda, Convener, Congress’ Manifesto Committee

Congress’ manifesto will focus on the “have nots” of India.

10. Completing Netflix’s Hollywood Invasion

This Sunday, Netflix Inc. will find out if it finally has a seat at the cool kids’ table.

  • The company’s film “Roma’’ is the favorite to win the Academy Award for best picture, the highest accolade at Hollywood’s most prestigious awards show.
  • “Roma’’ has a 33 percent chance of winning, according to the Hollywood Reporter, while the Gold Derby gives it a 4-1 shot.
  • A victory Sunday would complete Netflix’s transformation from Silicon Valley interloper to the consummate Hollywood insider, and signal the dawn of a new era in the entertainment business.

Whether or not Netflix wins, an online movie will certainly be crowned best picture sooner or later.