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Was unaware of husband’s dealings with Videocon group: Chanda Kochhar to ED

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Former CEO and MD of ICICI Bank, Chanda Kochhar told the Enforcement Directorate (ED) that she was not aware of her husband Deepak Kochhar’s business dealings with Videocon Group MD Venugopal Dhoot.

Chanda Kochhar informed the ED that she was unaware when six high-value loans worth Rs 1,875 crore were approved by the private lender to her husband and Dhoot.

According to a report by ToI, Chanda mentioned that the loan worth Rs 64 crore was given by Videocon group to Deepak Kochhar’s companyNuPower Renewables a day after Rs 300 crore loan was disbursed to Videocon group company by the bank.

The high profile banker further stated that she “didn’t discuss her bank related work with her husband or vice-versa, hence there was no question of taking any favor in lieu of the bank loan.”

The Central Bureau of Investigation (CBI) has alleged that Rs 64 crore loan was used as a kickback to the Kochhar’s.

ED has reportedly also found that Venugopal Dhoot had made payment to Deepak Kochhar’s company via Mauritius.

A letter rogatory or letter of request has been sent to a tax haven to sought payment details.

Meanwhile, on February 22, the CBI had issued lookout circulars (LOCs) against Chanda, her husband Deepak Kochhar and Venugopal Dhoot.

“The LOCs were issued after the FIR was filed in the case. LOCs are mandatory in cases where such economic offences are alleged,” the official said.

“In recent times, keeping an eye on travel plans is a top concern for regulators,” the official added.

Last month, ED had registered a criminal case against the Kochhars, Dhoot, and others to investigate alleged irregularities in sanctioning of Rs 3,250 crore loan by the private lender to the corporate group.

Nisha Shiwani has worked in many companies in various capacities and in her free time loves to express herself through her articles. She is based out of the pink city Jaipur.

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Lenders drag road developers to NCLT, push for asset sales

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Around 15% of the total operational build-operate-transfer (BOT) road assets are struggling due to mismatch in cash flows, leading to issues with the servicing of debt, according to Rajeshwar Burla, assistant vice-president – associate head, Icra Ratings. In the last few months, lenders have taken some road asset special purpose vehicles to National Company Law Tribunal (NCLT), and in certain cases they have initiated process for sales to recover money from the defaulting road developers. Recently, Oriental Bank of Commerce had pressed for insolvency proceedings against L&T Halol Shamlaji Tollway Ltd, a special purpose vehicle of L&T Infrastructure Development Projects at NCLT’s Chennai Bench. Earlier this month, L&T Halol Shamlaji Tollway informed the NCLT that its debt has been restructured and is being timely serviced. An order is awaited in this case. “Asset sale transactions in the recent past are also driven by lenders. In 2018, three assets were sold through substitution route. Of these, one was initiated by the lenders (classified as non-performing asset) as a distressed asset sale and two were initiated by the concessionaire through harmonious substitution,” Burla said. Some of the assets on the block currently are available through substitution at attractive valuations, and hence investors prefer this route. According to an industry player, a few assets or special purpose vehicles are likely to be put on the block in the near future as several road projects are under stress with mismatch in revenues and debt payments. “The total quantum of loans not getting serviced and stressed plants in the power sector is much higher. But the public sector banks are under pressure due to multiple factors and in different sectors. For such lenders, it is important to initiate proceedings against the defaulting SPV or concessionaire,” said a Mumbai-based analyst. On the other hand, some developers with a weak credit profile, have disposed of their assets at a loss as liquidity took precedence over revenues

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Lenders ask Jet Airways’s Naresh Goyal to prune stake below 10%

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It could be the end of the road for Naresh Goyal, the chairman and founder of the struggling Jet Airways. Lenders, led by the State Bank of India (SBI), have asked Goyal to bring down his stake in the cash-strapped company to below 10% as well as exit the Board in a last-ditch effort to rescue the airline from being grounded.

However, the task at hand for the lenders is also getting more difficult as minority partner Etihad Airways has also expressed its desire to exit the venture. While the Abu Dhabi-based investor holds a 24% stake, Goyal owns 51% in Jet Airways.

Lenders have also sought the rejig of the company’s existing Board, which would involve the stepping down of Goyal, his wife Anita and his associates. After the Board rejig, banks are planning to infuse fresh capital between Rs 800-1,000 crore to keep the airline afloat.

“We have told Goyal and his wife and other board members to step down so that a professionally run board can be in place to run Jet Airways. All interested investors want Goyal to give up management control. In the interim period, until a new investor comes in, banks will hold a majority stake in the airline,” said a banker who is part of the consortium members.

Banks are yet to take a call on whether it wants to acquire Etihad’s stake in Jet Airways. Etihad has told lenders that it will not infuse additional funds into the ailing airline and, in fact, wants to sell its stake, the source added.

The restructuring plan will see the induction of two bankers on the Board. Jet Airways Board has nine members, including Goyal, his wife Anita (non-executive member), Rajshree Pathy (chairman of Rajshree Sugars and Chemicals Ltd) and Gaurang Shetty (whole time director). Etihad is represented by two board members – Robin Kamar and Kevin Knight. The other independent directors on the board include Dr Nasim Zaidi (Chief Election Commissioner of India from 2015 till 2017), retired bureaucrat Ashok Chawla and Sharad Sharma (former SBI official).

“A few investors are interested. Domestic airlines may also be keen to pick up stake in Jet Airways,” said another banker who refused to reveal the names of likely investors.

Meanwhile, 260 pilots of Jet Airways have appeared for an interview conducted by SpiceJet in Mumbai on Wednesday. The low-cost carrier is looking to expand. Jet Airways’ pilots have threatened that they will not fly from April 1 if the management fails to provide clarity on the revival plan along with the deadline to clear their salary dues by March 31. Meanwhile the government reportedly has asked SpiceJet to fly the grounded Jet Airways aircrafts .

 

While the lenders are working hard on a resolution plan, they are not being able to broker a deal between Goyal and Etihad. Some agreement has to be reached to prevent Jet Airways from going into the National Company Law Tribunal (NCLT).

Earlier, SBI chairman Rajnish Kumar told reporters in Delhi that “it is in everybody’s interest that Jet Airways continues to fly and we will make every effort to see that the airline is rescued. No lender wants to take Jet Airways to the bankruptcy courts. In a service industry where businesses operate with few physical assets of their own and rely a lot on brand name and customer confidence, bankruptcy proceedings could hurt the airline’s ability to remain in business.”

Kumar was in Delhi on Wednesday where he met finance minister Arun Jaitley along with aviation secretary Pradip Singh Kharola and Nripendra Misra, principal secretary to Prime Minister Narendra Modi.

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Centre likely to miss direct tax collection target by Rs 50,000 cr

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The central government is unlikely to meet its direct tax collection targetThe central government is unlikely to meet its direct tax collection target for the financial year 2018-19, given the subdued revenue mop-up so far. As on March 15, the Income-Tax Department had collected Rs 9.23 lakh crore out of the revised direct tax collection target of Rs 12 lakh crore for the current fiscal.

“The direct tax revenue growth is at 13.4% so far against the revised target of 19.8% for the full year,” a finance ministry official said.

“The net direct tax collection for the current fiscal year until March 15 was at Rs 9.23 lakh crore against Rs 8.14 lakh crore collected during the same period last year. Corporate tax collection during this period stood at Rs 5.24 lakh crore while income tax collection was at Rs 3.87 lakh crore,” a source said.

The finance ministry officials said that Central Board of Direct Taxes (CBDT), the apex body of the I-T Department, is expecting around Rs 2 lakh crore more collection, mainly from advance tax payments. The last date for payment of the fourth quarter advance tax installment was March 15.

“It takes a couple of days for the payments to show. Apart from advance tax collections, the tax department is focusing on the tax deducted at source (TDS), self-assessment and regular assessment collections. The collections normally increase as March ends,” the official said.

“It appears that the CBDT won’t be able to meet the revised target of 19.8% growth for direct taxes. The focus is now on achieving at least the original budgeted target of Rs 11.50 lakh crore or get closer to it,” another official said, adding that 14.6% growth in direct taxes may be achieved for the full year.

The finance ministry had revised its direct tax collection target to Rs 12 lakh crore in the revised estimate in the interim Budget from the earlier budgeted target of Rs 11.5 lakh crore.

“The revised direct tax revenue target of 19.8% was overambitious. The growth rate in the direct tax revenues is likely to be around 14%. This looks reasonable given that the nominal Gross Domestic Product (GDP) growth rate for the current year may be around 11% plus, implying tax buoyancy of 1.2%,” said D K Srivasatava, chief policy advisor, EY.

In 2017-18, direct tax collection was Rs 10.02 lakh crore, which exceeded the then revised budgeted target of Rs 9.8 lakh crore. for the financial year 2018-19, given the subdued revenue mop-up so far. As on March 15, the Income-Tax Department had collected Rs 9.23 lakh crore out of the revised direct tax collection target of Rs 12 lakh crore for the current fiscal.

“The direct tax revenue growth is at 13.4% so far against the revised target of 19.8% for the full year,” a finance ministry official said.

“The net direct tax collection for the current fiscal year until March 15 was at Rs 9.23 lakh crore against Rs 8.14 lakh crore collected during the same period last year. Corporate tax collection during this period stood at Rs 5.24 lakh crore while income tax collection was at Rs 3.87 lakh crore,” a source said.

The finance ministry officials said that Central Board of Direct Taxes (CBDT), the apex body of the I-T Department, is expecting around Rs 2 lakh crore more collection, mainly from advance tax payments. The last date for payment of the fourth quarter advance tax installment was March 15.

“It takes a couple of days for the payments to show. Apart from advance tax collections, the tax department is focusing on the tax deducted at source (TDS), self-assessment and regular assessment collections. The collections normally increase as March ends,” the official said.

“It appears that the CBDT won’t be able to meet the revised target of 19.8% growth for direct taxes. The focus is now on achieving at least the original budgeted target of Rs 11.50 lakh crore or get closer to it,” another official said, adding that 14.6% growth in direct taxes may be achieved for the full year.

The central government is unlikely to meet its direct tax collection target for the financial year 2018-19, given the subdued revenue mop-up so far. As on March 15, the Income-Tax Department had collected Rs 9.23 lakh crore out of the revised direct tax collection target of Rs 12 lakh crore for the current fiscal.

“The direct tax revenue growth is at 13.4% so far against the revised target of 19.8% for the full year,” a finance ministry official said.

“The net direct tax collection for the current fiscal year until March 15 was at Rs 9.23 lakh crore against Rs 8.14 lakh crore collected during the same period last year. Corporate tax collection during this period stood at Rs 5.24 lakh crore while income tax collection was at Rs 3.87 lakh crore,” a source said.

The finance ministry officials said that Central Board of Direct Taxes (CBDT), the apex body of the I-T Department, is expecting around Rs 2 lakh crore more collection, mainly from advance tax payments. The last date for payment of the fourth quarter advance tax installment was March 15.

“It takes a couple of days for the payments to show. Apart from advance tax collections, the tax department is focusing on the tax deducted at source (TDS), self-assessment and regular assessment collections. The collections normally increase as March ends,” the official said.

“It appears that the CBDT won’t be able to meet the revised target of 19.8% growth for direct taxes. The focus is now on achieving at least the original budgeted target of Rs 11.50 lakh crore or get closer to it,” another official said, adding that 14.6% growth in direct taxes may be achieved for the full year.

The finance ministry had revised its direct tax collection target to Rs 12 lakh crore in the revised estimate in the interim Budget from the earlier budgeted target of Rs 11.5 lakh crore.

“The revised direct tax revenue target of 19.8% was overambitious. The growth rate in the direct tax revenues is likely to be around 14%. This looks reasonable given that the nominal Gross Domestic Product (GDP) growth rate for the current year may be around 11% plus, implying tax buoyancy of 1.2%,” said D K Srivasatava, chief policy advisor, EY.

In 2017-18, direct tax collection was Rs 10.02 lakh crore, which exceeded theThe central government is unlikely to meet its direct tax collection target for the financial year 2018-19, given the subdued revenue mop-up so far. As on March 15, the Income-Tax Department had collected Rs 9.23 lakh crore out of the revised direct tax collection target of Rs 12 lakh crore for the current fiscal.

“The direct tax revenue growth is at 13.4% so far against the revised target of 19.8% for the full year,” a finance ministry official said.

“The net direct tax collection for the current fiscal year until March 15 was at Rs 9.23 lakh crore against Rs 8.14 lakh crore collected during the same period last year. Corporate tax collection during this period stood at Rs 5.24 lakh crore while income tax collection was at Rs 3.87 lakh crore,” a source said.

The finance ministry officials said that Central Board of Direct Taxes (CBDT), the apex body of the I-T Department, is expecting around Rs 2 lakh crore more collection, mainly from advance tax payments. The last date for payment of the fourth quarter advance tax installment was March 15.

“It takes a couple of days for the payments to show. Apart from advance tax collections, the tax department is focusing on the tax deducted at source (TDS), self-assessment and regular assessment collections. The collections normally increase as March ends,” the official said.

“It appears that the CBDT won’t be able to meet the revised target of 19.8% growth for direct taxes. The focus is now on achieving at least the original budgeted target of Rs 11.50 lakh crore or get closer to it,” another official said, adding that 14.6% growth in direct taxes may be achieved for the full year.
The central government is unlikely to meet its direct tax collection target for the financial year 2018-19, given the subdued revenue mop-up so far. As on March 15, the Income-Tax Department had collected Rs 9.23 lakh crore out of the revised direct tax collection target of Rs 12 lakh crore for the current fiscal.

“The direct tax revenue growth is at 13.4% so far against the revised target of 19.8% for the full year,” a finance ministry official said.

“The net direct tax collection for the current fiscal year until March 15 was at Rs 9.23 lakh crore against Rs 8.14 lakh crore collected during the same period last year. Corporate tax collection during this period stood at Rs 5.24 lakh crore while income tax collection was at Rs 3.87 lakh crore,” a source said.

The finance ministry officials said that Central Board of Direct Taxes (CBDT), the apex body of the I-T Department, is expecting around Rs 2 lakh crore more collection, mainly from advance tax payments. The last date for payment of the fourth quarter advance tax installment was March 15.

“It takes a couple of days for the payments to show. Apart from advance tax collections, the tax department is focusing on the tax deducted at source (TDS), self-assessment and regular assessment collections. The collections normally increase as March ends,” the official said.

“It appears that the CBDT won’t be able to meet the revised target of 19.8% growth for direct taxes. The focus is now on achieving at least the original budgeted target of Rs 11.50 lakh crore or get closer to it,” another official said, adding that 14.6% growth in direct taxes may be achieved for the full year.

The finance ministry had revised its direct tax collection target to Rs 12 lakh crore in the revised estimate in the interim Budget from the earlier budgeted target of Rs 11.5 lakh crore.

“The revised direct tax revenue target of 19.8% was overambitious. The growth rate in the direct tax revenues is likely to be around 14%. This looks reasonable given that the nominal Gross Domestic Product (GDP) growth rate for the current year may be around 11% plus, implying tax buoyancy of 1.2%,” said D K Srivasatava, chief policy advisor, EY.

In 2017-18, direct tax collection was Rs 10.02 lakh crore, which exceeded the then revised budgeted target of Rs 9.8 lakh crore.

The finance ministry had revised its direct tax collection target to Rs 12 lakh crore in the revised estimate in the interim Budget from the earlier budgeted target of Rs 11.5 lakh crore.

“The revised direct tax revenue target of 19.8% was overambitious. The growth rate in the direct tax revenues is likely to be around 14%. This looks reasonable given that the nominal Gross Domestic Product (GDP) growth rate for the current year may be around 11% plus, implying tax buoyancy of 1.2%,” said D K Srivasatava, chief policy advisor, EY.

In 2017-18, direct tax collection was Rs 10.02 lakh crore, which exceeded the then revised budgeted target of Rs 9.8 lakh crore. then revised budgeted target of Rs 9.8 lakh crore.
The finance ministry had revised its direct tax collection target to Rs 12 lakh crore in the revised estimate in the interim Budget from the earlier budgeted target of Rs 11.5 lakh crore.

“The revised direct tax revenue target of 19.8% was overambitious. The growth rate in the direct tax revenues is likely to be around 14%. This looks reasonable given that the nominal Gross Domestic Product (GDP) growth rate for the current year may be around 11% plus, implying tax buoyancy of 1.2%,” said D K Srivasatava, chief policy advisor, EY.

In 2017-18, direct tax collection was Rs 10.02 lakh crore, which exceeded the then revised budgeted target of Rs 9.8 lakh crore.

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Weak LNG prices to lift city gas distribution companies margins

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Also, an increase in piped natural gas and compressed natural gas consumption should also drive up the operating profit margins of gas distribution firms, said a Crisil report
22-25% – Decline in liquefied natural gas prices since January
5-7% – Expected rise in piped natural gas consumption

Up to 7% likely increase in compressed natural gas consumption
250-300 basis points – Expected rise in profit margins of city gas distribution firms in first half of fiscal 2020
$6.5-7 per mmBtu – estimated spot LNG prices in first half of next fiscal

The margin improvement would be more pronounced for CGD entities with higher share of industrial consumers of PNG,” — Prasad Koparkar, senior director, Crisil Research

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Kumar Birla distances himself from debt-hit Kesoram Industries

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As the health of Kesoram Industries, the flagship of Basant Kumar Birla’s empire, deteriorates, his grandson Kumar Mangalam Birla is fast distancing himself from the entity.

As the cement and tyre maker veers close to default risk with mounting losses of its tyre division, K M Birla, the head of Aditya Birla Group and B K Birla’s male heir, has taken additional steps to physically move away from the company.

After resigning from the Board of Pilani Investment and Industries Corp, the holding company for several Birla group companies including Kesoram, in August last year, K M Birla has now asked the market regulator Securities Exhange Board of India to remove him from the list of promoters of Kesoram because of his miniscule holdings.

K M Birla’s move comes at a time of deteriorating financial health of Kesoram, which has just suffered a rating downgrade on Friday implying default risk.

With a debt burden of Rs 900 crore, Kesoram, despite having a profitable cement business, now has “moderate risk of default” due to mounting losses of its ailing tyre business.

“In nine months of FY19, the loss before interest and tax from the tyre division increased to Rs 71.22 crore as against expectation of improvement. The ratings remain constrained by the leveraged capital structure and continued cash losses, tyre segment exposed to risk of volatility in raw material prices & high competition and cyclicality of the cement industry,” rating agency CARE has said while downgrading long-term debt from “moderate degree of safety” of BBB to “moderate risk of default” under BB+.

The rating might get revised once the impact of proposed demerger of the tyre business pans out, CARE said.

Rapid fall in the fortunes of the company along with K M Birla, head of one of India’s largest industrial conglomerate distancing himself from the empire of his grandfather has forced B K Birla, who is 98 years of age now, to continue as the chairman of the company.

As per his grandfather’s earlier wish, K M Birla was supposed to take over as chairman which he had turned down, forcing B K Birla to elevate his daughter Manjushree to vice chairmanship.

Despite distancing himself, K M Birla wrested control over Kesoram with his group investment company Manav Investment and Trading Co now owning 23.82% stake.

On Sunday, Manav Investment disclosed to the exchanges that it has made an additional pledge of 3.03% shares of Kesoram with IndusInd Bank, raising its pledged portion to 16.64%.

Kesoram, as of December end had 21.38% of its shares held by the promoters pledged with the banks.

Rise in pledged component of shares indicates rise in indebtedness, which touched Rs 3,520.41 crore as on December end.

“The debt coverage indicators remained weak and the company met its obligations timely through infusion of funds by the promoters,” the rating agency noted.

“To support the company in view of the losses, the promoters infused equity of Rs 312 crore in March 2018 through preferential allotment and warrants and Rs.23.73 crore was infused as an unsecured loan. In the first half of FY19 also, Rs 150 crore was advanced to Kesoram through promoter group entities,” it said.

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SpiceJet may have to shell out more for leasing aircraft

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SpiceJet, which grounded 13 Boeing Max 737 planes, may have to shell out more for leasing aircraft as rentals have shot through the roof.

The grounding of over 300 of Boeing 737 Max 8 planes across the globe, following two crashes, has sent aircraft lease rentals soaring, according to airline insiders.

Two senior executives of different domestic airlines, who spoke to DNA Money anonymously, said post the decision by most carriers around the globe to not fly the Max 8 planes till the fault in its software was fixed has led to a scarcity of Boeing planes in the market.

One of them said this crunch in availability of Boeings has bloated aircraft rental costs.

Following two air crashes, which involved Boeing 737 Max 8, in less than five months aviation authorities of many countries – India, China, Australia, UK, Germany, Indonesia and others – have ordered grounding of the Max 8.

One of the airline executives DNA Money spoke to, said all the carriers, which have grounded Max 8 aircraft would be looking to lease planes to continue their flight services.

Even SpiceJet is reportedly considering hiring planes to operate the flights for which it has already sold tickets.

“SpiceJet will reach out to airlines and lessors for available capacity,” he said.

Airlines mostly do not own aircraft. They order them from an aerospace company and then sell and lease back the planes from lessors like B&B Air Acquisition, BOC Aviation and others.

According to reports, SpiceJet may wet lease planes to continue its services. Acquiring planes on wet lease means getting the aircraft along with crew (both pilots and cabin crew) and is usually from an airline. Dry lease involves only aircraft.

According to the an executive, the rentals for aircraft aged five years or more were currently “roughly” starting from “$350,000-$400,000 per month”. This, he said, was higher than the rentals for similarly aged planes before the grounding of Max 8s.

A second executive said last year the average rentals for planes above five years was around $200,000-$250,000 per month.

“Depending on the age of the aircraft, it (lease rentals) should not be more than $400,000 a month. Older aircraft of 5-6 years old would be $200,000-$250,000 per month. If it is starting from $350,000-$400,000 per month, it is on the higher side,” he said.

“One thing is certain, aircraft leasing cost has increased due to the shortage of aircraft in the market after countries have stopped flying of Max 8s in their airspaces,” said a senior official of local airline.

Executive of another airline echoed; “If you ask me, I would say there is a shortage for Boeing because around 350 Boeing 737 Max 8s have been grounded around the world. Obviously, there will be some shortage. There is no doubt about it”.

He, however, could not confirm whether aircraft leases had gone northwards due to the shortage.

Budget carrier SpiceJet has grounded 13 Max 8. As of early this month, its fleet size was 78 aircraft. Jet Airways, which has grounded around 50 aircraft, had five Boeing 737 Max 8 in service.

Globally, the Seattle-based aerospace company had more than 300 Boeing 737 Max 8 in services and several of them were to be delivered in the current year.

According to an estimate of Wall Street firms Melius Research and Jefferies, if the Max 8 were to be grounded for three months, then the cost to the manufacturer of the Boeing planes would reportedly be between $1 billion and $5 billion.

The airline executive expects Boeing to put Max 8 back in the air in a few months after addressing its software issue. The US-based aerospace firm has orders for more than 5,000 of these planes.

In a similar incident that occurred in 2013, Boeing had grounded its entire fleet of 787 Dreamliner, which was in service, till it found a solution to the problem of batteries catching fire. However, the cost borne by it was not much then as only 50 Dreamliners were in service in 2013.

“Boeing will take months to fix the problem (of Max 8). Meanwhile, all its airline customers will also demand compensation for losses due to the grounding of the aircraft,” said the airline executive.

MID-AIR SCARE

  • $400,000 per month – rental for aircraft aged five years or more
  • Over 300 – Number of grounded Boeing Max 737 planes globally

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Jet Airways grounds four more aircraft due to non-payment of amounts to lessors

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Beleaguered carrier Jet Airways said on Monday it has grounded four more aircraft due to non-payment of amounts outstanding to lessors under their respective lease agreements.

Facing the worst financial crisis of its 25-year existence, the airline has grounded about half its fleet, cancelled flights, delayed salaries and defaulted on loan and other payments.

“Further to our letter on March 13, we now write to inform you that an additional four aircraft have been grounded due to non-payment of amounts outstanding to lessors under their respective lease agreements,” Kuldeep Sharma,Jet Airways‘ Vice President for Global Compliance and Company Secretary, informed stock exchanges in regulatory filings.

The company is actively engaged with all its aircraft lessors and regularly provides them with updates on the efforts undertaken to improve its liquidity, he said adding aircraft lessors have been supportive of the company’s efforts in this regard.

Jet said it is also making all efforts to minimise disruption to its network and proactively informing and re-accommodating its passengers. The Company also continues to provide required and periodic updates to the Directorate General of Civil Aviation (DGCA) in this regard.

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I-T department to kickstart faceless verification of returns

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In a major step towards income-tax proceedings becoming completely faceless, the Income Tax Department under the finance ministry will launch a new mechanism to verify taxpayers’ returns shortly.

A notification in this regard was issued by the finance ministry on Wednesday.

A Central Vigilance Commission (CVC) has been set up by the department to carry out e-verification of the ‘red-flagged’ cases of income-tax returns. The new facility will verify income-tax returns of individuals as well as companies.

The system will red-flag returns filed by taxpayers on the basis of around 200 odd risk assessment parameters set by the department. These cases will be taken up for e-verification by taxman.

Currently, while a large number of returns may have discrepancies, only about 0.5% of the total returns filed are picked up for a random scrutiny. The manual verification of all the returns, however, is not possible.

“Now with the new e-verification system, all the income-tax returns filed by taxpayers will be matched with the financial data available with the department, which it gets from various sources. If any discrepancy is found, the system-generated e-mail notices will be sent to taxpayers seeking responses. The entire process will be faceless without involving any human interaction,” said a senior official privy to the developments.

The new system of online verification will have the system-generated questionnaires with multiple choice questions. The replies of assessees would be in the machine-readable XML format, eliminating the need for manual reading of the responses.

The department had been working on the plan to make the entire process of verification as well as scrutiny completely faceless. While presenting the Budget on February 1, interim finance minister Piyush Goyal had said that within the next two years, almost all verification and assessment of returns selected for scrutiny will be done electronically through anonymised back office, manned by tax experts and officials, without any personal interface between taxpayers and tax officers.

“With the e-verification process kicking in, the verification process will become faster, crisper, transparent and efficient. This will also help in taxpayers filing their income details correctly,” said Aditya Vikram, member (I-T), Central Board of Direct Taxes (CBDT). CBDT is the apex policy making body of the I-T department.

The e-verification notices will be sent under section 133C of the Income-Tax Act, 1961. The cases where the reply of the assessee is found to be satisfactory will be closed and wouldn’t be pursued by the department. The other cases where the reply is not satisfactory will be sent to the assessing officer for scrutiny, which is a long-drawn statutory process under section 143 of the I-T Act.

The CVC, located in Ghaziabad in the National Capital Region, will have powers to call for any information from banks or any other financial institution. It will be headed by an I-T commissioner.

The next step will be to make the scrutiny process fully automated and completely faceless where the assessee wouldn’t know who is the assessing officer.

This will be a part of the next generation of Central Processing Centre (CPC) to come up at Bengaluru. The centre will allow faster processing of income-tax returns. The finance ministry’s revenue department plans to put in place a mechanism in the next two years to ensure that income tax returns are processed and refunds are issued 24 hours.

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Cube Highways to acquire RInfra’s Delhi-Agra Toll Road for Rs 3,600 cr

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Singapore-based Cube Highways and Infrastructure III Pte Ltd is set to acquire Delhi-Agra Toll Road from Reliance Infrastructure (RInfra) at an enterprise value of Rs 3,609 crore and both have entered into a definitive binding agreement for the same.

Cube Highways and Infrastructure III Pte Ltd has been formed by global infrastructure fund I Squared Capital and a wholly-owned subsidiary of Abu Dhabi Investment Authority (ADIA).

“The total deal enterprise value is over Rs 3,600 crore. In addition, National Highways Authority of India (NHAI) claims of Rs 1,200 crore to be filed by DA (Delhi-Agra) Toll Road Pvt Ltd will flow directly to Reliance Infrastructure,” RInfra said in a regulatory filing on Thursday.

The enterprise value includes equity interests of approximately Rs 1,689 crore.

This transaction of selling 100% stake in the special purpose vehicle road project is as per Anil Ambani-promoted company’s strategic plan to monetise non-core businesses. Almost a year ago, RInfra had announced its plans to focus on engineering, procurement and construction (EPC) business.

The proceeds from the sale of this 180 kilometre-long Delhi Agra Toll Road will be utilised to partially repay company’s debt. “Debt of RInfra will reduce by over 25% to only less than Rs 5,000 crore against the net worth of around Rs 23,700 crore,” RInfra’s statement said.

This is not the first business that the company has sold to pare its debt. In August 2018, Adani Transmission Ltd (ATL) acquired Mumbai power generation, transmission and distribution business from RInfra for Rs 18,800 crore. Post that transaction, RInfra reduced its debt liabilities by Rs 13,800 crore.

RInfra has eleven road projects worth Rs 11,430 crore with a cumulative length of 968 km, according to the company’s website. Seven of the projects are operational, while four (including Delhi-Agra) are under construction. Though this six-lane Delhi Agra Toll Road is still being built, the tolling operation had commenced in October 2012 and witnesses heavy traffic flow. As per the concession agreement inked with NHAI, the concession period is till 2038.

The divestment will be undertaken after the commercial operation date for the Delhi-Agra Toll Road is achieved.

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JFL’s Hong’s Kitchen to take on Mainland China, 5 Spice, others

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Jubilant FoodWorks Ltd’s (JFL) foray into the Chinese eatery space with Hong’s Kitchen is set to create a stir in the market that’s dominated by established players and start-ups. Analysts tracking JFL’s business are of the view that the company’s new eatery brand will be a strong contender in the Chinese cuisine category which is also the second most consumed cuisine in the country.

Abneesh Roy, research analyst and senior vice president- Institutional Equities, Edelweiss Securities Ltd, said that Hong’s Kitchen will potentially be a strong alternative to large organised brands such as Mainland China, Yo! China, 5 Spice. “… as well as for small-format Chinese fast food start-ups such as Wok Express, Swiggy’s The Bowl Company, Faasos’s Mandarin Oak and several others that have cropped up in the country, apart from local restaurants and street-side vendors that serve Indo-Chinese fusion food,” Roy said in the note.

A part of Jubilant Bhartia group, JFL is one of India’s largest food service company that operates the pizza chain Domino’s and quick service restaurant chain Dunkin’ Donuts. Hong’s Kitchen is JFL’s first ‘own brand’ that serves Chinese cuisine. It’s first outlet opened at Eros mall, Gurugram on Wednesday.

According to Shyam S Bhartia, chairman and Hari S Bhartia, co-chairman, JFL, the company’s first indigenous restaurant brand underlines their confidence in the growth potential of the Indian food service market in the coming years. “Hong’s Kitchen will help us venture into the Chinese cuisine space for the first time and hence together with the existing brands of Domino’s and Dunkin’ help build a stronger portfolio,” the duo said in a company statement.

Experts believe that there is a big gap between the pricing and offerings of street vendors and premium fine dining restaurants. What also works for the new brand is the restaurant’s young, international-looking and trendy design that’s inspired by the colours and the hustle of Asian street markets.

JFL’s chief executive officer and whole-time director, Pratik Pota, said, “Hong’s Kitchen, with its fast-casual format, will address the vast, unaddressed market through great-tasting and affordably priced Chinese food that’s customised for Indian tastes.”

The key thing to watch for will be pricing, new store openings, capital expenditure (capex) per store, advertising spends, delivery etc. “In the first few years, any new chain makes losses. However, Jubilant already has huge economies of scale in terms of sourcing and real estate and hopefully will try to occupy gaps between street food and fine dining offerings. This will help in keeping margin hit on the lower side,” Roy said in the note.

Going with its strategy of not relying completely on third-party online food delivery platforms, JFL has not yet made the menu items offered by Hong’s Kitchen available on Zomato, Swiggy and other food delivery applications. Instead, the company has its own app on Google Play and Apple App Store for online food ordering in addition to a hotline for phone orders. The minimum order size for online delivery has been kept at Rs 99 and the company is not charging additional delivery/ packing/ other charges.

The menu includes both vegetarian and non-vegetarian food offered at attractive price points. The pricing starts from Rs 99 to Rs 199 for momos and spring rolls going up to between Rs 199 and Rs 349 for noodles and rice, main dishes, combos and chef’s specials.

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