Translate

Sunday, July 14, 2019

economic news of india - world economic news - economics news for students - indian economy news

economic news of india - world economic news - economics news for students - indian economy news


Deloitte may've been misreading India's rule book all along

Posted:

India has told a tribunal the local auditing affiliate of international accounting group Deloitte Touche Tohmatsu is misreading a key federal law as the firm seeks to avoid a five-year ban on new business, according to legal documents reviewed by Reuters on Sunday.Deloitte Haskins & Sells LLP is contesting the government's call for the ban on the auditor for its alleged involvement in a financial fraud.The government has said it detected several violations of auditing standards by Deloitte and a KPMG affiliate while investigating fraud at IFIN, a unit of Infrastructure Leasing & Financial Services, whose debt defaults last year triggered fears of a financial contagion. Both auditors deny wrongdoing.Deloitte's filing showed it last month argued the government case should be dismissed because it came after the auditor's 10-year stint at IFIN ended. The last audit it did was for the fiscal year to March 2018.The alleged fraud began to be exposed last autumn and Deloitte said the law only allowed such a ban to be imposed if the auditor was actively auditing the company at the time, and didn't allow the government to take into account the firm's work over previous years.India's Ministry of Corporate Affairs has countered, saying the law can't be read in such a "narrow and pedantic manner", according to its June 28 tribunal filing, which has been reviewed by Reuters and is not public."A fraud that continues till date on account of errant past auditor ... can undoubtedly be covered" under Indian law provisions, the government said in its 13-page filing, adding Deloitte was misreading and incorrectly interpreting the law.The law was intended to "weed out an errant auditor from practicing so that corporate democracy, transparency and the economy of the country is not destabilizing", it added.The case will next be heard on Monday at the National Company Law Tribunal in Mumbai."ORGANIZED CRIME"A spokesman for Deloitte told Reuters on Sunday it had been advised the government's case was "not maintainable", declining to comment further. It has previously said "it has been thorough and diligent" in its duties as an auditor.India detected auditing failures as part of its wide-ranging probe into alleged fraud and mismanagement at IFIN, which has also been investigated by several other agencies including the Serious Fraud Investigation Office and the central bank.The auditing firms gave clean audit reports and "miserably failed to fulfil the duty entrusted to them," the government has alleged, saying the fraud at IFIN was "nothing short of organized crime, actively aided and abetted by the statutory auditors".In its filing, the government also said that if Deloitte's interpretation of law was to be accepted, it would mean any auditor who commits fraud, but resigns before legal proceedings are initiated against it, can't be banned in the country.The KPMG affiliate accused in the case, BSR & Associates, has also denied the allegations and said it performed IFIN's audit in accordance with the applicable auditing standards and legal framework. BSR audited IFIN alongside Deloitte in the year to March 2018, and then was the sole auditor for the 2018-19 year. It resigned days after the government filed the tribunal case last month.Whichever way the Indian tribunal rules, the government's allegations have already cast a shadow on local operations of big foreign auditors, who audit many of the foreign companies in India, as well as large domestic firms."We are already seeing evidence of some of our global clients being spooked by this and the extent of the punishment being sought," said a senior partner with a global audit firm.

Tide to Tinder; everyone wants in on your chat

Posted:

Top consumer companies such as Tinder, McDonald's, Tide, Reebok and Zomato are finding a backdoor to advertise on WhatsApp, the most-used messaging app, through fun and quirky stickers and GIFs.These companies hope to make their presence felt through branded GIFs and stickers that will be made available through keyboard applications that people can download, access and add stickers and GIFs to their messages."These formats come from the idea that communication should be informal, casual and emotionally connected.It adds the right kind of humour to conversations. Brands need to leverage this trend. We do two to three campaigns every month on stickers and GIFs, but budgets are very small," said Sharadh Manian, GM at digital agency SVG Media.WhatsApp has about 350-400 million users in India with no advertising model. Its business product prohibits spread of promotional content, restricting mass distribution of brand messages."People in India want conversational content. If you see the student population, they talk in stickers. It is an entry for brands into WhatsApp as it does not allow advertising yet. Being part of daily conversations improves brand positioning," said Ankit Prasad, founder of Bobble AI, a keyboard startup that works with brands to make personalised stickers and GIFs. It claims to have 5 million daily active users.Until now, stickers and GIFs have had international themes, which are not able to meet local demand. Indian startups such as Bobble AI, GifsKey and Xploree have become the primary sources of localised stickers and GIFs, apart from dozens of applications available on app stores. "We are thinking of making stickers for brands that go well with different festivals or occasions.For example, a sweet company may want to create a sticker for Diwali. Viral content is always helpful for brands," said Bhawna Bansal, founder at Stickotext.Google acquired Tenor, which powers a variety of GIF keyboards on phones and messengers, last year.GIF search engine giant Giphy is one of the major competitors of Tenor. In China, GIFs and stickers have been very popular on applications like WeChat.In India, as the trend is still picking up, most brands are experimenting with the format as it is yet to be proven. Companies are launching these campaigns from their experimental budgets."If a brand wants to be part of a conversation, it has to be smooth, not intrusive.I think it has potential for brands who have a heart and tone of voice, who are fun brands," said Syed Hasan, A&B Advertising. "However, the kind of budgets that are being put behind these are minuscule

Apple's looking for value, not volume in India

Posted:

Apple has taken four of its 'lower priced' smartphones off the shelves in India, making it more expensive to buy an entry-level iPhone.As part of its new strategy to focus on driving value in India instead of chasing volumes, Apple has stopped selling the iPhone SE, 6, 6Plus and 6sPlus, three senior industry executives said. This will increase the entry level price of an iPhone in India by almost Rs 8,000.The executives said supplies of these models stopped last month. Apple's distributors and sales team have informed traders that the new entry model will be the iPhone 6s, as and when the existing stock of the earlier models gets sold.The iPhone 6s currently sells for about Rs 29,500, while the iPhone SE, the earlier entry model, used to sell for Rs 21,000-22,000.The four models are out of stock on Amazon India, while on Flipkart, the iPhone SE and 6Plus are out of stock and not all variants of the other two models are available. All four models continue to be listed as available in the US, according to Apple's website.The decision was taken after Apple improved its revenue and profit in India in 2018-19, even though iPhone sales volumes took a hit, with the focus more on pushing the latest and higher-priced models. An industry executive said Apple India's sales in the April-June quarter had gone up after it undertook apromotion to drop iPhone XR prices.Apple is yet to file its India financials for FY19 with the Registrar of Companies. In FY18, Apple India's revenue increased 12% to Rs 13,097 crore while net profit more than doubled to Rs 896 crore, as per RoC disclosures.Cupertino, California-based Apple reduced the number of distributors in India to two from five last year and decided to rein in arbitrary discounts to reinforce the brand's premium."Cupertino does not want Apple India to chase volumes by discounting at the cost of profit," said one leading trade partner of Apple. "These models which are being phased out will increase the average selling price of iPhones in India and boost both profit and revenue." Apple India declined to comment on the matter.Apple used to assemble the iPhone SE in India along with the 6s and 7. The idle capacity may now be used to expand production of other models, one executive said.Another executive said Apple has certainly not given up on the potential of the Indian market and will continue to roll out affordability programmes like buy-back and cashback offers.The company will localise its upcoming iPhone operating system iOS 13 for the first time for Indian consumers, with support for 22 Indian languages, maps for navigation and virtual assistant Siri, which can now talk and understand Indian English."These initiatives highlight how Apple still considers India an important market for business. Just that the priority has changed from just selling a box to improving overall-sales experience, brand positioning and financials," he said.Analysts estimated that iPhone shipments fell in India last year and continue to plunge this year.The company, however, has expanded its iPhone assembling operations in the country and soon plans to start offering the newer and super-premium models too.

Chandrayaan-2 launch called off due to technical snag

Posted:

The Indian Space Research Organisation has put off the launch of its second moon mission, Chandrayaan II, after it detected technical snags just an hour ahead of the launch in the early hours of Monday.Around 2 am, an official from ISRO said the space agency would not be able to proceed with the launch within the slated window. The countdown was frozen at 56:24.A technical snag was observed in launch vehicle system at T-56 minute. As a measure of abundant precaution, Chandrayaan 2 launch has been called off for today. Revised launch date will be announced later, read a statement from the space agency.A battery of press corps and public had assembled at the Satish Dhawan Space Centre in Sriharikota around midi night to cover the launch.A source in ISRO said technical snags were noticed while fuelling the rocket with cryogenic fuel, adding that scientists need to approach the vehicle to assess the problem. "This process may take days and only after that we will decide on a launch date," said a source.The GSLV MK-III was slated to carrying an orbiter, lander and a rover in a stepped up moon mission to uncover lunar secrets launched into space. The Chandrayaan-II, a Rs 978-crore project, will place the country in a niche league of nations populated by the US, Russia and China that have successfully conducted a moon-landing. Beyond that, the lander will touch in the region of the south pole of the moon, an unexplored territory, according to ISRO.The target is find more evidence of water, clues about the moon's evolution and work the natural satellite as a test bed for more space missions concerning the solar system.Chandrayaan will primarily study the elements on the moon, map its topography through high-resolution pictures, study its minerals and most importantly, confirm sub-surface water/ice presence.

Jet Airways audit shows diversion of funds, fraudulent billing

Posted:

MUMBAI: A State Bank of India commissioned forensic audit of Jet Airways books has revealed misappropriation of funds relating to provision of loans and fraudulent billing for JP Miles, according to two people with direct knowledge of the matter.The report also highlights that invoices raised were not verified leading to excess billing and fuel expenses were raised substantially for Jet even when they remained static for other airlines."Provision has been made for Rs 3,353-crore loan given to Jet Lite over four years. Board resolution, shareholder approval for making the provision was not made available to the auditors," the forensic audit conducted by EY says. ET has seen a copy of the report. "Loans were given to Jet Lite despite Jet Airways recording losses in fiscal year 2015 and declining profit over the years," the report added.The government had recently ordered a probe into Jet Airways for alleged siphoning off funds and for financial irregularities. The MCA ordered the SFIO probe under Section 212 (1) C of the Companies Act, based on its inspection report. The report indicated "prima facie" that the company was involved in "malpractices, mismanagement through siphoning off funds… preferential and related party transactions, prejudicial to public interest."The forensic audit also says that invoices raised on Jet Privilege were not verified, resulting in excess billing of nearly 1crore during July-September 2015.Monthly invoice of Rs 15 crore was accounted for by Jet Airways for commercial activities without relevant documents supporting them. The report also says that the company was billed Rs 140 crore fraudulent JP miles leading to a loss of Rs 46 crore. Multiple other discrepancies were noted in the miles accrued versus what the company reported. 70220925 "There has been a systematic effort to siphon money from the company. In the limited analysis conducted it is clear that multiple methods were used to take out funds from Jet Airways," said a person aware of the development.SBI did not respond to an ET query. An official spokesperson for EY India said, "We are bound by our client confidentiality obligations and are unable to comment."

Tatas may have to take a call on debt-heavy Tata Communications

Posted:

MUMBAI: Tata Sons is grappling with what to do with loss-making Tata Communications and one option being considered is to combine some businesses of the digital infrastructure company with Tata Consultancy Services and sell off the rest, people familiar with the matter said."Some similar services of Tata Communications may be merged with TCS and the rest of the business sold as separate business ventures. But it may not be an easy plan to execute, given the government shareholding in the company," said one person.Tata Communications, whose CEO Vinod Kumar resigned abruptly last week, owns and operates a sub-sea fibre network that carries about 30% of the world's Internet routes. Its services including cloud platforms, real-time connectivity and hosted data centres are currently offered together with software company TCS, the people said.The government, which holds a 26% stake in Tata Communications, appears to be on the same page as the salt-to-steel conglomerate. A senior official at the department of telecommunications said the Tatas must exit Tata Communications, especially after the consumer mobility business of Tata Teleservices (TTSL) was sold to Bharti Airtel."Telecom is all about footprint. The Tatas need to exit the business altogether now that TTSL is gone. The government should be given its valuation of 26% stake," the official said. He added that the government has set a target of Rs 1.05 lakh crore from asset sales in FY20. Tata Sons, India's oldest business house, and Tata Communications declined to comment on the matter.Tata Sons officials said that the group's top brass, including chairman N Chandrasekaran, had set deadlines to turn around Tata Communications, failing which a decision would be taken on its viability. This is in line with the group's decision to restructure the $104 billion conglomerate into 10 verticals such as consumer, trading and investments, to help its 100 companies synergise operations and cut costs.

Tweet Buster: Right time to enter stocks & economic revival soon?

Posted:

NEW DELHI: Indian markets witnessed bulls hammering during the week gone by as investors gave a thumbs down to Union Budget amid somber global mood following weak China data that raised concerns over slowing global economy.Both Sensex and Nifty extended their weekly loss into the second week, falling 1.97 per cent and 2.18 per cent, respectively. This week's Tweet Buster explores where could market head and what should be your investment strategy amid all this. So, let's dive in.Shyam Sekhar, co-founder, iThought said selling in market would soon end. Selling is also like Rainfall. Somewhere, the precipitation will have to end. The Monsoon like selling in markets… https://t.co/Te88UUg5Q6— Shyam Sekhar (@shyamsek) 1562835378000 Sandip Sabharwal, independent market adviser, also believes the economic revival was around the corner.Many are indicating a significant easing of financial conditions since Mid June. This combined with falling bond yi… https://t.co/gtWAVUxsbp— sandip sabharwal (@sandipsabharwal) 1563032339000 Sabharwal says had the government's tax policy been more supportive, growth and employment generation would have been much higher.Markets and the Economy should still do well Largely due to the significant monetary stimulus If the tax policy of… https://t.co/yybY9fIkDA— sandip sabharwal (@sandipsabharwal) 1562857644000 Amid all this, there are a few investment tips to navigate over the next couple of days.Research, says Sekhar, is the key to making the right investment decisions. Sekhar said, "Rarely, is the road to investment easy. It must not be."Before reaching an investment idea, one has to go through a lot of search, struggle & study. If we reach stock ide… https://t.co/Ni8aGxbK9I— Shyam Sekhar (@shyamsek) 1562732333000 Sekhar said, "Reacting to big mistakes is far more important than living with them."One stock loses two thirds of its value over 10 years. Another loses two thirds of its value over one year. Which… https://t.co/5VulQCD1rW— Shyam Sekhar (@shyamsek) 1563066481000 Sabharwal warns against investing in bond funds.Indian 10 yr bond yield moves below the 6.5% level to end at 6.49%. Next level, where it could possibly bottom out… https://t.co/g7MF5R3ZMD— sandip sabharwal (@sandipsabharwal) 1562845064000 Now, is the time to invest in consumption stocks, Sabharwal added.Warning by #Titan sends all high priced consumption stocks into a tailspin Normally a 25% correction from the top… https://t.co/YiVArivmIq— sandip sabharwal (@sandipsabharwal) 1562647732000 Lastly, Sanjay Bakshi tells you why borrowing by governments in foreign currencies might not be a good idea.Completely agree. Borrowing by governments in foreign currencies has three problems. One, most likely it's variabl… https://t.co/MYASW7dgIZ— Fundoo Professor (@Sanjay__Bakshi) 1562725473000

Turbulence at IndiGo: Regulators intensify scrutiny of lapses

Posted:

New Delhi: With promoter spat intensifying at the country's largest airline IndiGo, markets watchdog Sebi and the corporate affairs ministry have started digging deep into allegations of governance lapses and violations that could force the government to override existing arrangements and pacts at InterGlobe Aviation, officials said.Bringing into public the differences between long-time friends and promoters of IndiGo into the open, Rakesh Gangwal has sought Sebi's intervention into alleged corporate governance lapses at the company and even said that 'paan ki dukaan' (betel shop) would have managed things with more grace.InterGlobe Aviation, which got listed in 2015, has come under intense regulatory scanner and there are indications of multiple violations of Sebi norms. The role of each and every entity associated with all board members and entities linked to the promoters are being probed amid signs of lapses in complying with governance requirements, fair market trade and insider trading norms, the officials said.One of the major issues raised by Gangwal was about related party transactions involving co-founder Rahul Bhatia's InterGlobe Enterprises (IGE) Group and the allegations have been refuted by the Bhatia camp.An official said the corporate affairs ministry would be seeking a "para-wise comments" from the company on Gangwal's complaint and would also be looking at the related party transactions.With the promoter feud igniting concerns over corporate governance practices at InterGlobe Aviation, the ministry would examine whether memorandum, articles, agreements and resolutions are in consonance with provisions of the Companies Act.The company could face strict regulatory action, including overriding of existing pacts, in case there are violations of the Act.The official said the ministry can even invoke powers under Section 6 of the Companies Act, 2013.Section 6 provides powers to override any memorandum, articles, agreements or resolutions passed at general meeting or by the board of directors in case they violate norms. Following Gangwal's letter to Sebi, the ministry and others, the markets regulator has sought response from the company by July 19.Against this backdrop, Sebi has also widended its probe, launched a few months ago, into suspicious insider trading violations in the shares of InterGlobe Aviation.The officials said that a number of executives and board members are likely to be summoned by the markets regulator.Among the issues flagged by Gangwal are that various related party transactions with the IGE Group were executed without seeking the audit committee's approval and without seeking competitive bids from third parties, and non-appointment of an independent woman director.Regarding the board's decision to reject request for an extraordinary general meeting, Gangwal alleged that legal requirements and basic governance norms were violated by not providing board members timely material facts prior to voting by board.On July 12, Bhatia' IGE Group said the company is well run, financially sound and managed by a competent set of managers as it termed Gangwal's allegations of governance lapses as much ado about nothing.Gangwal and his affiliates own around 37 per cent stake in InterGlobe Aviation while Bhatia and his IGE Group has about 38 per cent shareholding.

Apple stops selling iPhone SE, 6, 6Plus, 6sPlus in India

Posted:

Apple has taken four of its 'lower priced' smartphones off the shelves in India, making it more expensive to buy an entry-level iPhone.As part of its new strategy to focus on driving value in India instead of chasing volumes, Apple has stopped selling the iPhone SE, 6, 6Plus and 6sPlus, three senior industry executives said. This will increase the entry level price of an iPhone in India by almost Rs 8,000.The executives said supplies of these models stopped last month. Apple's distributors and sales team have informed traders that the new entry model will be the iPhone 6s, as and when the existing stock of the earlier models gets sold.The iPhone 6s currently sells for about Rs 29,500, while the iPhone SE, the earlier entry model, used to sell for Rs 21,000-22,000.The four models are out of stock on Amazon India, while on Flipkart, the iPhone SE and 6Plus are out of stock and not all variants of the other two models are available. All four models continue to be listed as available in the US, according to Apple's website.The decision was taken after Apple improved its revenue and profit in India in 2018-19, even though iPhone sales volumes took a hit, with the focus more on pushing the latest and higher-priced models. An industry executive said Apple India's sales in the April-June quarter had gone up after it undertook apromotion to drop iPhone XR prices.Apple is yet to file its India financials for FY19 with the Registrar of Companies. In FY18, Apple India's revenue increased 12% to Rs 13,097 crore while net profit more than doubled to Rs 896 crore, as per RoC disclosures.Cupertino, California-based Apple reduced the number of distributors in India to two from five last year and decided to rein in arbitrary discounts to reinforce the brand's premium."Cupertino does not want Apple India to chase volumes by discounting at the cost of profit," said one leading trade partner of Apple. "These models which are being phased out will increase the average selling price of iPhones in India and boost both profit and revenue." Apple India declined to comment on the matter.Apple used to assemble the iPhone SE in India along with the 6s and 7. The idle capacity may now be used to expand production of other models, one executive said.Another executive said Apple has certainly not given up on the potential of the Indian market and will continue to roll out affordability programmes like buy-back and cashback offers.The company will localise its upcoming iPhone operating system iOS 13 for the first time for Indian consumers, with support for 22 Indian languages, maps for navigation and virtual assistant Siri, which can now talk and understand Indian English."These initiatives highlight how Apple still considers India an important market for business. Just that the priority has changed from just selling a box to improving overall-sales experience, brand positioning and financials," he said.Analysts estimated that iPhone shipments fell in India last year and continue to plunge this year.The company, however, has expanded its iPhone assembling operations in the country and soon plans to start offering the newer and super-premium models too.