Jubilant Life to consolidate pharma biz under S'pore unit

Jubilant Life Sciences (JLL) today said the company's board has approved a proposal to transfer its active pharmaceutical ingredient (API) and dosage form business to its Singapore-based subsidiary for a total consideration of Rs 1,145.10 crore.

The company's board also approved the transfer of shares held by it in US-based Jubilant Pharma Holding Inc, USA and Jubilant Pharnma NV, Belgium, to a wholly-owned subsidiary of Jubilant Pharma Ltd, Singapore, JLL said in a filing to BSE.

"The board has approved to transfer the API, dosage form business of JLL by way of a slump sale on a going concern basis and shares held by JLL in Jubilant Pharma Holding Inc and Jubilant Pharnma NV to a wholly-owned subsidiary of Jubilant Pharma Ltd, Singapore for a total consideration of Rs 1,145.10 crore," it added.

This transfer would be subject to approval of the shareholders etc.

The business and share transfer would be done to a new company to be incorporated in India as a wholly owned subsidiary of Jubilant Pharma Limited, Singapore a wholly-owned subsidiary of JLL. The Singapore unit has already received approval from the Foreign Investment Promotion Board (FIPB).

"This will enable the company to consolidate its API, solid dosage form, radiopharma...liquid businesses under Jubilant Pharma Ltd, Singapore to explore, identify and implement the options and opportunities of raising money including by way of listing the pharma business for its growth and reduction of overall consolidated debt of the company," the company said.

Shares of JLL today closed at Rs 82.70 apiece on the BSE, up 4.55 per cent from their previous close.

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Essar Oil moves SC for extension to pay sales tax dues

Essar Oil  today moved the Supreme Court seeking more time for paying outstanding sales tax dues to Gujarat government on the ground that it is facing financial constraints due to economic slowdown and not given tax benefits unlike other refineries.

"We will see to it," a bench of justices A K Patnaik and J S Khehar said. It asked the counsel for the state government to take instruction on the plea of the company and ordered listing of the matter for hearing on November 11.

Senior advocate Mukul Rohatgi, appearing for the firm, said the state government may be asked not to take coercive steps, like locking down the Vadinar refinery, as nearly 10,000 people are employed there.

"Almost all state governments are giving huge incentives to firms which are in the business of refineries and power generations," he said.

"Currently there is a slowdown in the world economy and there is also volatility in rupee and crude prices. The applicant (Essar Oil) has almost fully exhausted its sanctioned working capital limits and it is finding it exceedingly difficult to raise additional working capital finance necessary to carry on its day-to-day business operations," the company said in its application.

Essar Oil also sought a direction to the state government to form a three-member committee to make recommendations for extending a viability support package to it for ensuring that it continues to carry on its business as a growing concern.

It has sought a direction to the state government not to take any coercive action against the company for non-payment of the sales tax dues.

In January 2012, Essar Oil had lost the case on rebate of Rs 6,165 crore sales tax dues. The company paid Rs 1,000 crore then and in September 2012 the apex directed it to pay the remaining Rs 5,165 crore in eight quarterly installments with an interest of 10 per cent applicable from January 2012.

Essar Oil said that it has paid Rs 2,941 crore of tax dues and Rs 756 crore of interest but is now unable to pay the fourth installment.

Earlier, the apex court had directed the company to pay sales tax dues of Rs 5,165 crore in eight quarterly instalments to the Gujarat government.

The order was passed after the company sought at least three years time to pay the dues. The Gujarat government had sought the payment of dues within six months.

Essar Oil Ltd had approached the apex court against the order of the Gujarat High Court which had refused any relief to it for making the payment in instalments.

Essar Oil had availed Gujarat government's 'Capital Investment Incentive to Premier/Prestigious Unit Scheme, 1995-2000' for its Rs 1900-crore Vadinar plant in Jamnagar district as a 100 per cent export-oriented unit for refining of petroleum products with a capacity of 9 million tonnes per annum.

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Cabinet nod to Jet-Etihad stake sale deal

Paving the way for the biggest ever foreign investment in India's aviation sector, the Union Cabinet tonight cleared Jet Airways ' proposed sale of 24 percent equity to Abu Dhabi-based Etihad, days after the Rs 2,058 crore deal got regulatory clearances.

Also Read: Tata set to fly again, may face regulatory hurdle though

"Yes, it has been cleared," said Civil Aviation Minister Ajit Singh after a meeting of the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Manmohan Singh. Replying to questions, he said the deal has "gone through all the regulatory processes" and would be "good for civil aviation and good for the passengers".

The proposal was of Etihad to subscribe 27,263,372 Jet shares of Rs 10 each, amounting to 24 percent of post-issue paid-up equity share capital for Rs 2,057.66 crore. CCEA gave its nod on the conditions that, among other things, Jet and Etihad would adhere to RBI policy guidelines and SEBI regulations, comply with all Indian laws and take prior FIPB approvals for any further changes in the shareholders agreement, commercial cooperation agreement, articles of association, investment agreement and shareholding patterns, the sources said.

The deal has already been cleared by the Securities and Exchange Board of India (SEBI) and the Foreign Investment Promotion Board (FIPB), with the minister saying that approval to the deal was delayed as it had to go through all regulatory processes, including twice to FIPB.

Asked about the ongoing vetting of the deal by the Competition Commission, Singh said, "It is a continuing thing. Any time competition related issues come up, they have to look into it."

Once the deal is clinched after CCEA approval, Jet promoter Naresh Goyal would hold 51 per cent stake and Etihad 24, with 25 percent remaining with the public.

The Jet-Etihad deal is so far the single-largest FDI in Indian aviation sector with Malaysian carrier AirAsia announcing that it would initially invest USD 30 million (over Rs 185 crore) in AirAsia India, its joint venture with Tata Sons and Telstra Tradeplace.

There is no clarity yet on the quantum of investment by Tata and Singapore Airlines on their plans to launch an Indian carrier. The Central Vigilance Commission is also understood to be considering closing the complaints of alleged irregularities in the Jet-Etihad deal lodged by BJP MP Nishikant Dubey, after examining clarifications sent on them by the Civil Aviation Ministry.

The stake sale deal was announced in April but had remained stuck due to objections from regulators, as it was felt that Etihad would yield effective control of Jet Airways. The terms of the deal have been amended since then, leading to regulatory approvals.

Some politicians, including Dubey and Subramanian Swamy, had also questioned the timing of the stake sale deal which had come soon after the signing of a new bilateral air services agreement between India and Abu Dhabi. The Union Cabinet had in September cleared the bilateral accord, allowing the countries to fly 50,000 additional seats between India and Abu Dhabi each week over the next three years, up from 13,700 earlier. The air services agreement was signed on April 24.

The FIPB had cleared the deal on July 29 with some major riders to maintain effective Indian control over the airline after the stake sale to Etihad. Under the conditions set by FIPB, Jet would have to seek prior government approval to make any changes in the Share Holders Agreement (SHA) with Etihad or any change in share-holding of the company.

The conditions also include that all shareholder disputes and disputes under SHA would have to be adjudicated under Indian law, as opposed to English law as was proposed in the SHA earlier.

Jet and Etihad were also asked to submit revised Articles of Association and finalise the composition of Jet Board by carrying out the recommended changes.

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What experts feel about Cabinet clearing Jet-Etihad deal

The Union Cabinet on Thursday cleared Jet Airways ' proposed sale of 24 percent equity to Abu Dhabi-based Etihad, days after the Rs 2,058 crore deal got regulatory clearances.

Also Read: Cabinet nod to Jet-Etihad stake sale deal

The proposal was of Etihad to subscribe 27,263,372 Jet shares of Rs 10 each, amounting to 24 percent of post-issue paid-up equity share capital for Rs 2,057.66 crore. CCEA gave its nod on the conditions that, among other things, Jet and Etihad would adhere to RBI policy guidelines and SEBI regulations, comply with all Indian laws and take prior FIPB approvals for any further changes in the shareholders agreement, commercial cooperation agreement, articles of association, investment agreement and shareholding patterns, the sources said. The deal has already been cleared by SEBI and FIPB.

Once the deal is clinched after CCEA approval, Jet promoter Naresh Goyal would hold 51 percent stake and Etihad 24, with 25 percent remaining with the public.

To know what experts Ajay Prasad, former aviation secretary; Saroj Datta, former ED, Jet Airways; Jitendra Bhargava, Former ED, Air India; and Kapil Kaul, CAPA, feel about the Cabinet nod to the Jet-Etihad stake sale deal, watch videos.

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No plans to reduce workforce: Ranbaxy

Pharmaceuticals major Ranbaxy Laboratories today said it has no plans to reduce its workforce and is focusing on improving performance and productivity.

Daiichi to cooperate with USFDA to resolve Ranbaxy concerns

"Ranbaxy has no plans to reduce its workforce either in the next 3 or 12 months," a Ranbaxy spokesperson told PTI in an emailed response.

The company has been reported to be retrenching staff.

Denying that any such step was taken or planned, the spokesperson added: "We will continue to improve our productivity and performance and ensure optimal use of resources for sustainable, long-term growth."

Company CEO and MD Arun Sawhney had said in his address to shareholders in the annual report that it has a team of over 14,600 people globally, represented by more than 50 nationalities.

"Today, there is a sharper focus on training, learning and development to build leaders and a skilled workforce that can compete in the competitive global environment," he had said.

Sawhney had also said that the company had initiated a project aimed at designing a new organisation structure to remain relevant and succeed in today's 'volatile competitive market'.

The project was initiated as a "strong need was felt to realign the organisation and simplify structures and work processes, increase collaboration, accountability and maximise efficiencies across the company, thereby making Ranbaxy a responsive, nimble-footed and successful organisation".

Ranbaxy has been facing a series of issues with the USFDA, which had last month banned drugs produced at its Mohali plant in Punjab for violation of current good manufacturing practises.

In May this year, Ranbaxy had pleaded guilty to 'felony charges' relating to manufacture and distribution of certain 'adulterated' drugs made at two units in India to US authorities and had agreed to pay USD 500 million as penalty.

The company had admitted to past "shortcomings" but said it has rectified those and insisted that its drugs were safe and efficacious. It had also offered to co-operate fully with any regulator from anywhere in the world wanting to investigate its manufacturing practises.

The company's Japanese parent Daiichi Sankyo has also said on September 24, that it will work with US authorities to resolve the issue of a ban imposed by the USFDA on the import of drugs from the Mohali plant of its Indian unit Ranbaxy Laboratories.

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Decision on future of Walmart partnership this month:Bharti

India's Bharti Enterprises will take a decision this month on the shape of its partnership with global retail giant Walmart, including joining hands for operations in the country's multi-brand segment.

Walmart seeks time to convert $100 mn Bharti debentures

The group, which has a 50:50 joint venture with Walmart for wholesale cash and carry, is understood to be anxious after their partnership came to a standstill, with no new stores being opened. "Within October, I would say, Walmart should have taken a decision of their vision for India and Bharti could have taken a decision whether it matches our aspirations," Bharti Enterprises Chairman and Group CEO, Sunil Bharti Mittal said on the sidelines of the 2nd India-Africa Business Council (IABC) meeting here.

He said: "We are awaiting Walmart's final response to Indian retail and then we will evaluate our options." While Mittal didn't elaborate on the future course of action, sources said the Indian partner is getting anxious as Walmart's indecision is affecting even their cash-and-carry venture, which runs Best Price Modern Wholesale stores. "For the last several months, nothing has happened. No stores are being opened and it can't be in a standstill...some decision will have to be taken, it can't carry on being in the speculative phase," a source said. Bharti Walmart runs 20 Best Price Modern Wholesale stores in cities such as Amritsar, Jalandhar, Kota, Bhopal, Ludhiana, Raipur, Vijayawada, Agra, Meerut, Lucknow, Jammu, Guntur, Aurangabad, Amravati, Hyderabad and Rajahmundry.

After the government allowed 51 percent foreign direct investment in multi-brand retail in September last year, Walmart has sought clarity on aspects of the policy, specially the sourcing clause. In July, it expressed inability to meet the norm requiring 30 percent procurement from small industries, saying it could source only about 20 percent. The government subsequently diluted the clause to allow global multi-brand retailers to source 30 percent of their products from small and medium enterprises only at the start of the business. Walmart has also been probing alleged corruption practices at its local arm, after which its India head Raj Jain and CFO Pankaj Madan quit the company.

The company's USD 100 million investment in Cedar Support Services Ltd, a subsidiary of Bharti Ventures, is also being probed by the Enforcement Directorate for alleged violation of norms.

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HC stops Nokia from selling, transferring ownership rights

The Delhi High Court has restrained Finnish mobile maker Nokia from selling or transferring its ownership rights in India relating to movable and immovable assets in an alleged tax evasion case.

A bench of justices Sanjiv Khanna and Sanjeev Sachdeva, while hearing a plea of Nokia India Pvt Ltd against the Income tax department's recent order attaching (freezing) its all 15 bank accounts, also asked the handset firm to inform the assessing officer two days in advance before repatriating any money abroad.

The bench also asked the company not to transfer dividend abroad without its permission.

"The petitioner(Nokia India) will not surrender the lease- hold rights or transfer the ownership rights in respect of any of the immovable asset transfer and the fixed asset to any third person. The petitioner will not transfer, sell or alienate movable plant or machinery located in the immovable properties mentioned in the....of the impugned order," the court said in a recent order.

"The petitioner before repatriating any money abroad will inform the assessing officer (AO) at least two working days in advance," the court said and gave liberty to the AO to approach it in case he finds the transfer of money "concerning or questionable".

In addition, the court said "no dividend will be transferred abroad without permission of the court till the next date of hearing" and posted the matter for November 12.

Granting minor relief to Nokia India, the court said "the petitioner will be entitled to receive debts-created receivables, loans and advances but the amount so received will be deposited in the bank accounts mention in Sub para...of the impugned order.

"The petitioner will be entitled to operate the bank accounts in normal course of business and will file monthly statement of bank accounts with the AO in hard copy as well as by sending details via e-mails...," the court said.

The issue related to the Income Tax department's Rs 2080 crore tax demand notice to the Finnish mobile firm.

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TRAI's Khullar came up with a reasonable price: Sunil Jain

An internal panel of Department of Telecommunications, in its report submitted today, questioned the sharp reduction in reserve price of spectrum of up to 62 percent by telecom regulator Trai. Sunil Jain, Editor, Financial Express, says this industry has been starved of spectrum because of A Raja and had to pay excessive prices in 2010 because they had no other option. After 2010, the industry just got stuck in this high price and as a result of which nobody got spectrum, he adds.

Also Read: DoT panel questions spectrum price cut, other TRAI recos

Hence Rahul Khullar had to come up with this reasonable price, but the panel rejected it, says Jain. "In every auction so far, the base price and the final price that you get is multiples of that depending on how the economic conditions are," he says. If the Telecom Commission went along with the panel, it would be very surprising, he adds.

Below is the verbatim transcript of Sunil Jain's interview on CNBC-TV18

Q: We are back at square one now. Rahul Khullar some would say had done the bold thing which was to actually cut the reserve prices or recommend a cut in reserve prices. The DoT panel saying no can do, where do we go from here?

A: The DoT panel is clearly smoking something which is banned. You have had an industry which from 2008 has been nearly starved of spectrum thanks to Mr Raja. Because of that they paid these excessive prices in 2010 because they had no other option. So, after 2010 the industry just got stuck in this high price. As a result of it nobody got spectrum. Even the government auction had failed because of that. So, Rahul Khullar finally had the good sense to come up with a reasonable price and this panel goes and rejects it.

My view is that this panel will be rejected by the Telecom Commission when it meets on Thursday. The government cannot afford to have an industry which has been bleeding for the last four or five years. There is just too much riding on it. The government needs to get sentiment back and for some reason the base price seems to be the auction price according to the panel. In every auction that we have seen so far you have a base price and the final price that you get is multiples of that depending on how the economic conditions are. I would be very surprised if the Telecom Commission went along with the panel.

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TRAI may implement cap on ads on TV channels from tomorrow

Broadcast regulator TRAI is likely to implement the 12-minute per hour cap on advertisements for non-news TV channels from tomorrow as the deadline agreed to by broadcasters to bring down the time allotted to commercials ended today.

However the fate of TRAI's Quality of Service (QoS) regulation, which mandates channels to show not more than 12 minutes of ads and promotional content per hour, still hangs in balance as some broadcasters have appealed to Telecom Disputes Settlement and Appellate Tribunal (TDSAT) against it.

According to the sources in TRAI, the law pertaining to ad cap has not been stayed by the TDSAT. Hence, it would be implemented. As per the regulation, channels will have to submit a weekly report on quantum of ads shown every hour.

However, the News Broadcasters Association (NBA), which represents news channels, had got some relief on August 30 from the TDSAT which has directed "till further orders, the TRAI shall not take any coercive measures against the appellants or its members to make them abide by the impugned Regulations".

Moreover, it had also exempted news broadcasters" from submitting the weekly report to the TRAI". Meanwhile, it had asked news broadcasters to "faithfully maintain record of the time of advertisement per hour for examination by the Tribunal at the time of hearing of the Appeal".

I&B minister Manish Tewari too had said in the past that the demand of news channels, which have held that the rule would have an adverse effect on the financial viability of the electronic news media, should be looked into.

Sources said that while Indian Broadcasting Foundation (IBF) had in the past agreed to make sure its members bring down the ad content to required levels by October 1, there is no consensus among its members.

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Walmart seeks time to convert $100 mn Bharti debentures

US retail giant Walmart has asked the government for more time to convert USD 100 million of debentures held in a Bharti Group unit, an investment that's being investigated for alleged violation of norms.

Walmart invested in compulsory convertible debentures (CCDs) issued by Cedar Support Services Ltd, a subsidiary of Bharti Ventures, in 2010. The deadline for conversion of the CDDs into equities ended today. "As permitted by law, we have filed for an extension of the conversion date for the CCDs. We have nothing further to share at this time," a Walmart India spokesperson told PTI.

A Bharti Group spokesperson declined to comment. Communist Party of India Rajya Sabha member MP Achuthan wrote to Prime Minister Manmohan Singh last year saying the investment was "illegal" and flouted then FDI rules. The transaction is being probed by the Enforcement Directorate for alleged violation of norms.

Walmart and Bharti Enterprises have a 50:50 joint venture - Bharti Walmart - that operates wholesale stores under the Best Price brand in India. According to recent reports, the two partners were speculated to be preparing to end their six-year old venture. The US retail giant had, however, insisted it was optimistic about expanding its wholesale cash and carry business in India.

After the government allowed 51 percent FDI in multi-brand retail, Walmart has been seeking clarity on aspects of the policy. In July, the company expressed inability to meet a sourcing norm that required 30 percent procurement from small industries, saying it could procure only about 20 percent.

Earlier this month, the government diluted the clause and allowed global multi-brand retailers to source 30 percent of their products from small and medium enterprises only at the start of the business.

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