ECONOMY

Monthly Archives: APRIL 2016


No plans to return to India,I am in‘forced exile’:Mallya
29.04.16 - pt team
No plans to return to India,I am in‘forced exile’:Mallya



Embattled tycoon Vijay Mallya has said he is in a "forced exile” and has no plans to return to India where things are flying at him "fast and furious.”

Mallya, whose passport was revoked this month, said he wanted a "reasonable” settlement with creditor banks for his defunct airline, but they "are not getting any money” by taking his passport or arresting him.

"I definitely would like to return to India. Right now, things are flying at me fast and furious. My passport has been revoked. I don’t know what the government is going to do next,” he told the Financial Times.

Mallya, 60, said he remains an Indian patriot, who is "proud to fly the Indian flag”, but as the outcry around him continues, he is more than happy to stay safe in the UK and has no plans to leave that country.

"It is important to understand the environment in India today. The electronic media is playing a huge role not just in moulding public opinion, but in inflaming the government to a very large extent,” he said in what FT termed as a four-hour interview in Mayfair, Central London.

The Indian government yesterday wrote to Britain seeking deportation of the liquor baron against whom a non-bailable warrant has been issued in a money-laundering investigation.

Vijay, who flew first class from Delhi to London on March 2 as a group of state-owned banks knocked on the door of the Supreme Court to recover about Rs. 9,000 crore owed by his collapsed Kingfisher Airlines Ltd, said he was "absolutely not guilty of any of these preposterous charges of diverting funds from Kingfisher, buying properties or stuff like that.”

The government, he said, can appoint the world’s best forensic auditor to audit the accounts of Kingfisher and audit how banks loans were utilised. "I am sure they are not going to find anything, because that’s the truth.”

He said he has always maintained that "notwithstanding anything else”, he was interested in settlement with Kingfisher bankers. Asked who was behind his woes, he said, "I wish I knew.”

Pressed if the people after him were bureaucrats or Prime Minister Narendra Modi, he said, "All I can say is the manner in which my passport was first suspended and then revoked was done in an extraordinary haste.”

"First, notice of suspension came on a public holiday last week... I replied. And my reply was not considered and the passport was revoked on Saturday,” he said.

Asked if he had made mistakes, Mallya said, "I must have made many mistakes.” On being asked if he misjudged public mood as it turned against flamboyant multi-millionaires in business in India, he said he cannot understand why he was labelled as a wilful defaulter.

"We have invested over 610 million pound into Kingfisher Airlines, we tried everything conceivably possible to save the airlines. A combination of macroeconomic factors and then government policies unfortunately could not save Kingfisher. (Though) I have lived my life in my normal life... people think I am flamboyant, actually I am quite simple,” he explained.

Stating that he has worked hard all his life, he said he wanted "to try and settle with the banks and live my life in peace. That’s my focus right now".

Mallya said he has acted as a brand ambassador for his brands in the ‘media dark environments’ while referring to prohibition on advertising for alcohol.

Trying to explain that the 'King of Good Times' label was actually a slogan for the Kingfisher beer brand, he expressed dismay as to what could have gone wrong.

He made it clear that he does not intend to sell his current businesses in India. "These businesses are doing very well. If I had a passport, I could. But right now, I am in a forced exile,” he said.

"( I am) willing to clear my name.” Mallya added that he has expressed willingness to settle with banks and a "very sincere” settlement offer was proposed to the Supreme Court of India.The apex court has directed the Debt Recovery Tribunal to dispose of the main matter in two months.

"Notwithstanding that legal process, my offer for settlement stands,” he said, adding that the filings before DRT by the consortium of bankers is of principal amount of a little over 500 million pound and the rest is towards unapplied interests.

Asked about Rs 9,000 crore outstanding claimed by banks, he said, "I don’t know whether it’s the banks or the media or the combination of the two... I have never been able to understand where this Rs 9,000 crore or 900 million pound figure came from. But as I said, if there is a reason and rationale all around, the banks can be settled along with other creditors.”

”...we wish to settle at a reasonable number that we can afford and banks can justify on the basis of settlements done before... would like to repeat that I will reach out if they are interested in making a settlement,”  Mallya clarified.

Asked if he would consider raising his offer to settle outstanding loans, he said, "The banks also need to consider that there are other creditors which also need to be paid off and satisfied. I can’t be seen giving preference to the banks just because of this extraordinary pressure on me by government agencies.”




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India asks UK to deport Vijay Mallya
28.04.16 -
India asks UK to deport Vijay Mallya



India said on Thursday it had asked Britain to deport Vijay Mallya, the liquor tycoon who flew to London last month as bankers pressed him to repay about $1.4 billion owed by his defunct Kingfisher Airlines.
 
According to a report by Reuters the Ministry of External Affairs has written to the British High Commission seeking Mallya's return so that "his presence can be secured for investigations against him" under India's anti-moneylaundering law, spokesman Vikas Swarup told reporters.
 
The liquor tycoon and Formula 1 boss has not disclosed his whereabouts since flying first class from Delhi to London on March 2, leaving the Indian government and bankers red faced as they try to crack down on high-profile defaulters.
 
The foreign ministry last Sunday revoked Mallya's diplomatic passport that he carried as a member of parliament's upper house. The move was a step towards launching a bid to bring home Mallya, who is the subject of a non-bailable warrant issued by a special judge in Mumbai.
 
The Enforcement Directorate, a government agency set up to fight financial crime, has accused Mallya's UB Group of using 4.3 billion rupees ($64.5 million) of bank loans to Kingfisher to buy property overseas.
 
Creditors, led by State Bank of India (SBI.NS), have rejected an offer of partial repayment by Mallya, who had given a personal guarantee for the Kingfisher loan. They have demanded that the former billionaire attend a hearing in India's Supreme Court.
 
Mallya, traced by Indian reporters to a country residence in Hertfordshire, has said he would comply with the law.
 
The British Home Office, which adjudicates in such cases, declined to comment. A spokesman said its policy was neither to confirm nor deny that extradition requests have been made. (Courtesy : http://in.reuters.com)




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Jaitley stays firm against Jewellers
10.04.16 - pt team
Jaitley stays firm against Jewellers



Refusing to relent on excise duty levy on non-silver jewellery goods, Finance Minister Arun Jaitley today said a "luxury item" cannot remain out of tax ambit when taxes need to be paid on many essentials.

A large section of jewellers and bullion traders have been on strike for over a month seeking withdrawal of one per cent excise duty on non-silver jewellery items.

They are also opposing mandatory quoting of PAN by customers for transactions of Rs two lakh and above.
"How can a luxury item remain out of tax when essential items like cement, cloth and many others have to pay manufacturing tax. If we do not bring GST on gold, taxation on other items will have to be increased," Jaitley said at a media interaction at the Press Club here.

He said there was no reason why luxury items should be exempted when the country was moving toward GST.

Jaitley said the Centre has given a benefit that excise would be similar to VAT on gold and has tried to allay fears that 'karigars' would be affected from the new taxation.

The Union Finance Minister in his Budget proposals on February 29 had announced levy of one per cent excise duty on non-silver jewellery.

The government had last month constituted a panel under former Chief Economic Advisor Ashok Lahiri to look into the demands of jewellers and the panel has been asked to submit its report within 60 days.




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Defaulters Should Not Be Named And Shamed : Raghuram Rajan
05.04.16 - pt team
Defaulters Should Not Be Named And Shamed : Raghuram Rajan



RBI Governor Raghuram Rajan has advocated on Tuesday that the Supreme Court should keep confidential the list of defaulters that owe Rs 500 crore or more to public sector banks. 

Citing the example of credit card default, Dr Rajan said, "Sometimes you default on your credit card bill you just forgot. Would you like the credit card default to be put up in public?"
 
"Act of default happens in business and sometimes it is not your fault," he said. 
 
The list of big defaulters was submitted by the RBI to the top court last month. 

Dr Rajan said promoters can default on bank loans on account of multiple reasons. "I get letter a day saying it is not our fault. Demand is weak, prices are low, there is dumping going by foreign countries, government permissions did not come through...variety of reasons why projects get into trouble." 

"Putting up the promoters names for all to see without details of why they defaulted" could hurt the business activity in the country, he added.  

"After all if you are a promoter why would you take any risks if slightest chance of default your name is put up in public for shame," Dr Rajan added.  "We believe that simply act of default without understanding the severity etc. if it is just put out for the public to consume it may create a both loss of business as well and undue  anxiety and panic." 

"Sometimes details are hard for lay persons to understand because they are intricate details. Are you going to go into the business of every promoter to understand why they defaulted?" he said.   

According to the RBI chief, the central bank has "no problems if the intent is to publish the wilful defaulters list where the promoter in the eyes of the bank has taken the bank for granted. The bank has gone through a legitimate process to declare the promoter a wilful defaulter."

"Some courts have prevented banks from making those list (wilful defaulters) public. If there a judgement along those lines, we don't have any problem," Dr Rajan added.  




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Tobacco Companies Shut Factories; Opposing Cigarette Larger Pictorial Warnings
01.04.16 -
Tobacco Companies Shut Factories; Opposing Cigarette Larger Pictorial Warnings



Major cigarette manufacturers including ITC, Godfrey Philips and VST have decided to shut all their factories and stop manufacturing with effect from today in the wake of larger pictorial warnings covering 85 per cent of the packaging space coming into force. 

The companies, which are members of Tobacco Institute of India, who account for more than 98 per cent of the country's domestic sales of duty paid cigarettes in India claimed the estimated production revenue loss of over Rs 350 crore per day for the tobacco product manufacturers. 

"Owing to ambiguity on the policy related to revision of Graphic Health Warnings on tobacco product packs, the members are unable to continue manufacturing cigarettes from April 1, 2016," Tobacco Institute of India (TII) said in a statement. 

TII Director Syed Mahmood Ahmad said Indian tobacco industry had written to Ministry of Health and Family Welfare on March 15, seeking clarification on the matter. 

Fearing, potential violation of rules by continuing production, TII members have decided to shut their factories, the statement said. 

"The move will result in an estimated loss of Rs 350 crore per day in production turnover for Indian tobacco industry," it said. 

The notification by Health Ministry on September 24, 2015, for implementation of the Cigarettes and Other Tobacco Products (Packaging and Labeling) Amendment Rules, 2014, comes into force from today. These prescribe larger pictorial warnings on tobacco products. 

The ministry had made a commitment to Rajasthan High Court on March 28 that it will implement the said rules from April 1, 2016. 

The Parliamentary Committee on Subordinate Legislation had described as "too harsh" the government's proposal that 85 per cent of the packaging surface carry pictorial warnings and recommended that the message occupy 50 per cent of the space. 

The stand had evoked sharp criticism from MPs and health experts. 

TII said, "the extreme 85 per cent warnings will promote illegal cigarette trade and adversely affect the livelihood of 45.7 million people dependent on tobacco which included farmers, labour, workers, trade and others." 

It further claimed that "illegal cigarettes account for one fifth of the total cigarette industry resulting in annual revenue loss of Rs 9,000 crore to the national exchequer."




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