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Rs 8,040 cr loan given to Mallya in 2004, declared NPA in 2009

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New Delhi, March 17 : Loans totalling over Rs 8,000 crore were given to absconding industrialist Vijay Mallya during the tenure of the previous UPA government at the Centre, Parliament was informed on Friday.

In response to a supplementary on the matter, Minister of State for Finance Santosh Gangwar, without naming Mallya, told the Lok Sabha during Question Hour that the loan of Rs 8,040 crore to the industrialist was declared a non-performing asset (NPA) in 2009 and was restructured in 2010.

The loan, granted in September 2004, was reviewed in February 2008, the Minister said.

“Our government has taken action against him (Mallya). He is currently living in the UK. Various agencies have issued summons to him. Following our requests, the Ministry of External Affairs has revoked his passport and we are taking action so that he faces justice,” he said.

He also said that of the 9,150 wilful defaulters of state-run banks till December 31, 2016, suits have been filed against 8,364 defaulters who had taken loans amounting to Rs 85,258 crore.

Police FIRs have been lodged against 2,024 wilful defaulters who took loans worth Rs 29,557 crore.

Action against 6,207 wilful defaulters have been taken under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, Gangwar added.

Meanwhile, in a series of tweets last week, Mallya offered to negotiate with banks for one-time settlement of dues and sought the Supreme Court’s intervention.

“Public sector banks have policies for one-time settlements. Hundreds of borrowers have settled. Why should this be denied to us? Our substantial offer before the Supreme Court was rejected by banks without consideration,” Mallya tweeted.

Mallya’s renewed offer came a day after the consortium of 17 banks led by the State Bank of India (SBI) told the apex court that “he had taken it for a ride” and urged the apex court to initiate contempt proceedings against the business tycoon for “wilfully” flouting its orders.

Banks had previously turned down Mallya’s offer of Rs 6,868 crore in April 2016, to settle the dues that are in excess of Rs 9,000 crore, including interest.

The loans were advanced to his now-defunct Kingfisher Airlines between 2006-2012.

The SBI-led consortium’s attempt to auction properties of the industrialist in order to recover loans made to his Kingfisher Airlines, failed again last week as these had no takers despite around a 10 per cent cut in their reserve price.

Finance Minister Arun Jaitley told the Lok Sabha last week that relevant agencies were trying to get Mallya back in India through the extradition or deportation route.

“In the last two-and-a-half years, the government has taken a series of steps. Under the Prevention of Money Laundering Act, attachment orders against Mallya have been issued by the Enforcement Directorate. Assets worth Rs 8,040 crore were attached,” Jaitley had said.

The Karnataka High Court last week ordered a bailable warrant against Mallya through the diplomatic process, with the bail amount set at Rs 50 lakh for him to appear before the court.

The liquor baron left the country in March 2016 and is currently said to be living in Britain.

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Vodafone retrospective tax decision was erroneous: Jaitley

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The decision taken by the previous UPA government to tax British telecom multinational Vodafone Group retrospectively was an “erroneous” one, the likes of which the ruling NDA would be loath to repeat, Finance Minister Arun Jaitley said on Saturday.

He was responding to a question from the audience here on the issue at the ET Global Business Summit here.

“I always felt Vodafone tax decision was an erroneous decision. This government decided it will not be taking any retrospective decision,” Jaitley said.

It was precisely for this reason that the Long Term Capital Gains Tax reintroduced in the Budget earlier this month had been exempted for investments made up to January 31, 2018, he added.

The Budget 2018-19 has proposed to tax long-term capital gains on equities exceeding Rs 1 lakh at 10 per cent, which is expected to bring in revenue of Rs 20,000 crore.

However, capital gains made on shares until January 31, 2018, will be “grandfathered”, Jaitley said while presenting the budget, adding “we have protected all investments coming in before February 1”.

Vodafone is facing tax claims and interest totalling more than Rs 22,000 crore in India, which includes Rs 14,200 crore for acquiring Hutchison’s stake in 2007.

The UPA government had said that the Hutchison-Vodafone deal was liable for tax deduction at source (TDS) under the Income Tax (IT) Act. While the Supreme Court subsequently quashed the demand in January 2012, the government amended the IT Act retrospectively, putting the liability back on Vodafone Group.

The company last year said an international arbitration tribunal would begin trial on Vodafone’s challenge to India’s retrospective legislation to seek Rs 22,100 crore in taxes.

In this connection, the UK India Business Council (UKIBC) has said thatb predictability and clarity regarding retrospective taxation would help British companies to invest more in India.

“I think that if there was more clarity, certainty, predictability around retrospective taxation and (resolving) the Vodafone issue that would help the UK companies make their investment decisions in India,” UKIBC Managing Director Richard McCallum told IANS over a telephonic interaction on Friday.

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Equities recoup on value buying after 3 weeks of losses

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Mumbai, Feb 24: After three weeks of consecutive losses, the key Indian equity indices bounced back from their lows to close this week with humble gains on value buying by investors.

Market observers said futures and options (F&O) expiry infused volatility in the domestic markets, amid global cues and a slew of domestic developments like the $1.8 billion fraud reported by the Punjab National Bank (PNB) and a weakening rupee due to the continuous outflow of foreign funds.

However, losses were trimmed as bargain-hunting by investors on the last trading day of the week lifted the benchmark indices.

On a weekly basis, the barometer 30-scrip Sensitive Index (Sensex) of the Bombay Stock Exchange (BSE) edged higher by 131.39 points or 0.39 per cent to close at 34,142.15 points.

The wider Nifty50 of the National Stock Exchange (NSE) closed trade at 10,491.05 points — up 38.75 points or 0.37 per cent from its previous week’s close.

“The week gone by saw the Nifty bouncing back from a low of 10,302 to finally end with a modest gain. This week’s gains came after three weeks of losses,” Deepak Jasani, Head, Retail Research, HDFC Securities, told IANS.

According to D.K. Aggarwal, Chairman and Managing Director of SMC Investments and Advisors, markets across the globe fluctuated wildly — highlighting the market’s fragility — as investors continued to assess the quickening pace of economic growth and the prospects of the US Federal Reserve’s tightening efforts.

“Back home, the sentiment of market participants have been dented by factors such as surging US bond yields, a multi-crore fraud in India’s second-largest public sector lender PNB and the return of long-term capital gains (LTCG) tax on equities, which put a break on the record-setting market rally,” he added.

During the eight trading sessions following the detection of a $1.8 billion fraud in one of the branches of the PNB, the bank’s shares on the BSE have plunged almost 30 per cent to Rs 113.40 per share.

Gitanjali Gems, the other listed entity involved in the fraud case, also witnessed an eight-day fall in its shares, nosediving 60.54 per cent to Rs 24.80 per share.

“The consolidation in the domestic market continued due to the NPA (non-performing assets) issue in public-sector banks, trade deficit, conflict between NSE and SGX, rise in bond yield and depreciation in rupee due to selling by FIIs (foreign institutional investors),” said Vinod Nair, Head of Research, Geojit Financial Services.

On the currency front, the rupee weakened by 51-52 paise to close at 64.73 against the US dollar from last week’s close of 64.21-22.

Provisional figures from the stock exchanges showed that FIIs sold-off scrips worth Rs 5,781.98 crore, while domestic institutional investors (DIIs) purchased scrips worth Rs 5,972.69 crore during the week.

Figures from the National Securities Depository (NSDL) revealed that foreign portfolio investors off-loaded equities worth Rs 3,054.94 crore, or $468.06 million, during February 20-23.

Sectorwise, Jasani said: “The top sectoral gainers were IT, metal and Bank Nifty indices. The top losers were auto, realty and pharma indices.”

The top weekly Sensex gainers were: Tata Consultancy Services (up 4.76 per cent at Rs 3,076.90); Yes Bank (up 3.75 per cent at Rs 323.60); Infosys (up 2.74 per cent at Rs 1,155.65); Kotak Bank (up 2.67 per cent at Rs 1,079.85); and Coal India (up 2.49 per cent at Rs 310.55).

The losers were: Bajaj Auto (down 3.70 per cent at Rs 2,988); Asian Paints (down 3.65 per cent at Rs 1,101.90); Mahindra and Mahindra (down 3.29 per cent at Rs 719.30); Tata Motors (down 2.73 per cent at Rs 360.45); and Tata Motors (DVR) (down 2.32 per cent at Rs 203.85).

IANS

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In the Indian system politicians are accountable but regulators are not: FM Jaitely on Banking frauds

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Finance Minister Arun Jaitely at Global Business Summit (Photo-ANI)

Finance Minister Arun Jaitley on Saturday told that cases of periodical willful default are much more dangerous than business failure and bank frauds.

Speaking at Global Business Summit the leader pointed out that these kinds of incidents not only harm the economic atmosphere like the ease of doing business but also scars the economy.

The finance minister Jaitley also said, “If a fraud is taking place in multiple branches of banking system & no one raised the red flag, doesn’t that become worrisome for a country. Similarly, top management who were indifferent, multiple layers of auditing system which chose to look another way, it creates a worrisome situation.”

The leader also referred that Regulators plays important roles and decide the rules of the game and they have to have a third eye which perpetually is open.

“Unfortunately, in the Indian system we politicians are accountable but regulators are not,” he added.

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