OPINION, P6 ECONOMY, P2 EDITORIAL Revisit the corporate governance laws for public sector firms NEW ROLE $8-BILLION GAIN Proctoring software, phased in-person tests to ensure distancing can help conduct NEET/JEE PRITHVI HALDEA INTERNATIONAL, P8 Ashok Lavasa resigns as election commissioner, to join ADB as vice-president Elon Musk becomes fourth-richest person in the world MUMBAI, WEDNESDAY, AUGUST 19, 2020 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. LX NO. 194, 16 PAGES, `7.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 38528.32 ▲ 477.54 NIFTY: 11385.35 ▲ 138.25 NIKKEI 225: 23051.08 ▼ 45.67 HANG SENG: 25367.38 ▲ 20.04 `/$: 74.76 ▲ 0.13 `/€: 88.93 ▼ 0.30 BRENT: $45.24 ▼ $0.13 GOLD: `53776.00 ▲ `1086.00 AGR CASE FE BUREAU New Delhi, August 18 THE SUPREME COURT on Tuesdaybrushed aside technicalities related to the Insolvency and Bankruptcy Code and observed that the adjusted gross revenue (AGR) dues of insolvent companies amount to `45,000 crore and someone needs to pay this. Continuing the hearing forthe second consecutive day, a bench led by Justice Arun Mishra observed,“Howcanwe leave it (dues) like that... You may be entering into so many arrangements but finally someone will have to pay...We will decide it finally,”the bench observed, as counsel for State Bank of India and Reliance Jio Harish Salve presented arguments detailing that IBC provides for spectrum to be used as an asset and Jio does not Continued on Page 2 Telcos may be entering into several arrangements but someone needs to pay AGR dues Govt needs to come out with a proposal for payment or else more companies will file for bankruptcy How will AGR dues then be recovered Who has given powers to NCLT to decideAGR dues are operational credit need to pay the dues of Reliance Communications. Making its stance clear,the bench said that the government needs to come out with a proposal for payment of the dues or else every company will go into liquidation and dues won’t be recovered. The observation of the bench was Parliament has given powers to NCLT to decide AGR dues as operational Govt has recognised the idea of spectrum as security to be used by telcos to raise funds from banks Telcos have not claimed spectrum as an asset, but only the right to use it as an asset Tax demand is also subservient to the dues of financial creditors to the point that even functioning telecom operators like Bharti Airtel and Vodafone Idea have sought 20 years to clear their dues and the DoT has backed them, what happens if theygo into liquidation during this period? Continued on Page 2 TRADE PACTS (%) 32 31 28 28 22 6 10 to 20 to 30 to 40 to 50 or 19 29 39 49 older Data: App Ape Full report on Page 8 Special Features Why you need to have home insurance always Home insurance has add-on covers such as loss of rent, public liability, temporary resettlement cover and key and lock replacement cover which provides wider protection for your home ■ Personal Finance, P9 QuickPicks Railway station revamp: `50K-cr investment target for FY21 THE INDIAN Railway Stations Development Corporation (IRSDC) has set an ambitious target to generate `50,000 crore investments under its station redevelopment programme this fiscal, reports fe Bureau in New Delhi. As many as 50 stations will be offered by IRSDC for commercial development in the year, in collaboration with Railway Land Development Authority. P2 Retail payments: RBI releases framework for umbrella entity THE RESERVE Bank of India (RBI) on Tuesday released the final framework for authorisation of a new umbrella entity (NUE) for retail payments, following the draft released on February 10, reports fe Bureau in Mumbai. The guidelines demand that applicants have at least three years of experience in the payments space and a minimum paid-up capital of `500 crore. P10 Continued on Page 2 Niti: Some FTAs led to roundtripping Eco Survey: FTAs have benefited India % change in Indian imports, y-o-y in FY19 (% annual change, 1993-2018) Manufacturing exports Manufacturing imports 13.4 12.7 Total goods exports 10.9 Total goods imports 8.6 Growth in trade with FTA partners, taking confounding factors into account Source: DGCIS Continued on Page 2 Continued on Page 2 ■ BCCI shares nearly 50% of the title sponsorship amount with the IPL franchises ■ Vivo India had paid `2,199 crore to acquire the IPL title sponsorship rights for five years starting 2018, 454% higher than the contract with PepsiCo ■ Vivo had also bagged the IPL title sponsorship for 2016 and 2017 following Pepsi’s abrupt exit at a reported cost of `100 crore per year ■ The IPLwill be held in the UAE from September 19 to November 10. Dramatic decline FE BUREAU Ad spends fall 39% in first half of 2020 Ad Ex (in ` crore) Ad spends fell 39% y-o-y as Growth rate (%) around `14,000 crore was lost with Covid-hit firms cutting costs. There was a 65% fall in 53,138 Q2 2020. Digital media, which 49,480 grows at 25-30% annually, saw a 7% fall in Jan-June; the fall was 47% for traditional media. Ad-spend will now fall 14-18% vs the 10.4% growth forecast 12 7 at the beginning of the year, according to the Pitch Madison Advertising Report half-yearly review. The upcoming festive season and IPL are expected to drive a 60-70% growth in the second half of the year over 2016 2017 the first half. 60,908 15 2018 67,603 « 5 WITHAWINNING BID of`222 crore,Tencent-backedDream11 hasbaggedthetitlesponsorship for the 13th edition of the IndianPremierleague(IPL).The amountisnotjusthalfthe`440 crore paid byVivo,the association with the tournament will give the fantasy sports platform respect and mileage. As brand strategist Ambi Parameswaranpointsout,big respected brands like Tata or Coca-Cola don’t need IPL to reinforce credibility. “Even Byju’s is today a household name.ButlikeVivoorOppowho need legitimacy and respect, even Dream11 probably wants respect and credibility,” Parameswaran said.“For Dream11, this is a big leap forward in legitimacy as fantasy leagues have always had the overhang of quasi-betting and amateur gambling,” Sandeep Goyal chairman, Mogae Media, said. While BCCI would be relieved the sponsorship has been closed out,Santosh N, MD at D and P India Advisory, said if it is a 1-yearcontract,the `222-crore bidwill become the base price fornextyear. ASMITA DEY New Delhi, August 18 « 13 viewers watched the 12th edition of IPL on Star network channels last year, about 12% more than in the previous season, BARC data showed « 15 ■ As many as 462 million IN A SETBACK for Vedanta Group,the Madras High Court on Tuesday rejected its plea to reopen the Sterlite Copper plant at Tuticorin in Tamil Nadu. The plant was shut down by the Tamil Nadu government in May 2018, citing alleged violation of environmental norms. Disallowing reopening of Sterlite Copper smelting plant,a division bench of Justices TS Sivagnanam and V Bhavani Subbaroyan dismissed all petitions filed by the Vedanta Group which had moved the court challenging the state government’s closure order of May 28, 2018 and other connected orders including that of the TNPCB, which ordered the sealing of the plant. The Tamil Nadu government had issued orders to permanently seal the existing copper smelter plant at Tuticorin after 13 anti-Sterlite protesters were shot down in police firing on May 22, 2018. Initially, the plant remained shut since April 9, 2018 aftertheTamil Nadu Pollution Control Board (TNPCB) rejected the Consent to Operate (CTO) for the plant and issued a direction for closure and disconnection of power supply at the plant. « 17 THE CALLS FOR a less liberal foreign trade policy are getting louder and reaching a crescendo,with more sections withinthegovernmentextendingallegiancetothenew-found cause.The Niti Aayog has suggested to the Prime Minister’s Office (PMO) that a panel be set up to review India's free trade agreements (FTAs), including with Asean, to“contain roundtripping of imports" into the country.Inarecentpresentation to the PMO, Niti Aayog chief executive Amitabh Kant is learnt to have said the panel could be set up under Niti vicechairman Rajiv Kumar for the “evaluation of the performance of FTAs”. Withthis,Nitijoinsindustry bodiesandvariousministries— from steel to dairy— in seeking a re-examination of various FTAs on ground s that these pactshaveonlyworsenedIndia’s trade imbalanceovertheyears. But this view is patently at oddswith that of the Economic Survey for 2019-20, which insists FTAs have actuallybenefitted India. Taking into account certain confoundingfactors,theSurvey pointed out that between 1993 and 2018, India’s annual exports of manufactured productstoitstradingpartners,with which it had signed the FTAs, jumped by 13.4% and total merchandise despatches rose 10.9%. Vietnam 43.3 TikTok Hong Kong 68.5 LinkedIn BANIKINKAR PATTANAYAK New Delhi, August 18 BCCI happy to find a sponsor, even if at half what Vivo paid « By age group 118 Monthly active users of the Android app in the US, July Oracle is weighing a potential bid for part ofTikTok’s business, seeking to rival Microsoft in the race to buy the app, said people familiar with the matter, reports Bloomberg. It has approached other parties to partner with it in a bid for the app’s operations in the US, Canada, Australia and New Zealand. Eco Survey argued FTAs beneficial but Niti wants a review Singapore Oracles joins race to buy TikTok China -7.9 ● MORE SUITORS Home Insurance Salve submits: SC says: Dream11 wins IPL title sponsorship for `222 cr 11 2019 55,00058,000 -14 -18 Source: Pitch Madison Report INDIABULLS REAL ESTATE (IBREL) and two subsidiaries of the Bengaluru-based Embassy Group — NAM Estates Pvt Ltd (NAM) and Embassy One CommercialPropertyDevelopments Private Limited (NAM Opco) — on Tuesday announced they have entered into definitive merger documentation to amalgamate ongoing, completed and planned residential and commercial projects. Jitendra Virwani along with otherpromoterentitiesofNAM willbecomethenewpromoters of IBREL upon completion of merger, and Sameer Gehlaut along with existing IBREL promotergroup entities shall initiate the process of reclassification as required. The combined IBREL entity shallbecomeoneofIndia’sleading real estate development platforms, with 80.8 million square feet of launched and planned development potential.The combined entity shall benefit from a pan-India presenceacrosskeymarketsincludingasignificantpresenceinthe commercial and residential market of Bengaluru. FE BUREAU Chennai, August 18 WINNING BID « FE BUREAU Mumbai, August 18 High court upholds closure of Sterlite unit Govt told to explain how insolvent firms will repay dues. SC will decide if AGR dues to be treated as ‘operational’ or ‘financial’ creditors Embassy Group, Indiabulls to merge assets ● PLEA REJECTED SC wants dues paid, IBC may take a hit ● NEW OWNERS 2020E TRADE WARS US tightens curbs on Huawei DAVID SHEPARDSON Washington, August 17 THE TRUMP ADMINISTRATIONonMondayannouncedit will further tighten restrictions on Huawei Technologies Co,aimed at cracking down on its access to commercially available chips. The US Commerce Department actions expand restrictionsannouncedinMayaimed at preventing the Chinese telecommunications giant from obtaining semiconductors without a special license including chips made by foreign firms that have been developed or produced with U.S. software or technology. The administration also added 38 Huawei affiliates in 21 countries to the US government's economic blacklist,the sourcessaid,raisingthetotalto 152 affiliates since Huawei was first added in May 2019. Commerce secretary Wilbur Ross told Fox Business the restrictions on Huaweidesigned chips imposed in May“led them to do some evasivemeasures.Theyweregoing through third parties,” Ross said. "The new rule makes it clear that any use of American software or American fabrication equipment is banned and requires a license." Continued on Page 2 ● POST-COVID Amit Shah admitted to AIIMS, will work from hospital PRESS TRUST OF INDIA New Delhi, August 18 UNION HOME MINISTERAmit Shah has been admitted to AIIMS here forpost-Covid care after complaining of fatigue and body ache, hospital authorities said on Tuesday. According to a statement issued byAIIMS,he is comfortableand iscontinuinghiswork from hospital. “Home MinisterAmit Shah has been complaining of fatigue and body aches for the last 3-4 days. He has tested negative for COVID-19. “He has been admitted to AIIMS for post COVID care.He is comfortable and is continuinghisworkfromhospital,”the statement said. Shah, who was earlier undergoing treatment for coronavirus infection at Medanta Hospital, on Friday saidthathehastestednegative for the disease. Shah, 55, had also said that on the advice of doctors,hewill be in home isolation for the next few days. INDIAN RED TAPE What a 38-year-old turmeric scandal says about doing business UPMANYU TRIVEDI & RUTH CARSON New Delhi/Singapore, August 18 PRIME MINISTER NARENDRA Modi is eager to convince global companies and investors that India is a business-friendly alternative to China. A top court ruling this summer told another story, highlighting the infamous judicial delays that threaten to stymie businesses and scuttled deals. The Supreme Court ended the 38-year saga of an alleged turmeric forger, who was arrested in 1982 and,eventually, sentenced to a month in jail and a `500 fine. After a decade,the top court reversed his conviction; the two lower courts took around 14 years each to render verdicts. The lifespan of the turmeric case is extreme but not unique among the nearly 40 million cases pending Clogged courts Over 38 million cases pending in three tiers of judiciary 33,645,553 Cases 45,07,373 60,444 Supreme court High courts District courts Source: National Judicial Data Grid/Bloomberg across the country’s threetiered judicial system.Among cases in 25 state high courts, roughly 173,000 have been pending for more than 20 years, and roughly half of those for more than 30, government data showed. The World Bank ranks India in the top one-third of countries for overall ease-ofdoing-business, but when it comes to enforcing contracts — a measure of legal efficiency — the country lands in the bottom 15%, worse than Pakistan, Syria and Senegal. “It’s pretty incredible,” said Vishnu Varathan,head of economics and strategy at Mizuho Bank in Singapore. “The complexity, the unnecessary delays — it shows how India lags countries like China in their judicial system and just how much further they have to go.” Continued on Page 2