I-T Dept asserts 1st claim to recover dues from Kingfisher

Asserting its primary claim, the Income Tax Department has maintained that dues to it will have to be settled first by Vijay Mallya-led Kingfisher Airlines , in the wake of a lender consortium of banks laying claim to "Kingfisher House" in Mumbai to recover part of their loans.

Also read: Lenders may put Kingfisher property in Mumbai on the block

Kingfisher Airlines Limited had deducted tax at source from employee's salary and other payments for many years but failed to remit it to the government account following which it owes over Rs 350 crore as taxes, the Department said.

The IT Department had attached all assets of KAL and is in the process of recovering its dues by sale and attachment of assets and properties of the defaulter company, it said.

Kingfisher House, located near the domestic terminal of the Mumbai Airport, is under attachment under the second schedule of the IT Act, 1961, the department said in a statement.

The IT department's claim that the amount due to the government will have "priority" over other debts comes two days after the Karnataka High Court rejected KAL's plea challenging the move by a consortium of banks to take
possession of its prime "Kingfisher House" property to realize part of the debts due to them from the airlines.

The court had said banks could take over the property as per law.

In its statement here, the IT Department said it is a settled proposition of law that the amount due to the government under any statue and, in this case, under the provisions of IT Act, 1961, will have priority over other debts.

As such, it said, the dues of IT Department will have to be settled first before the lender consortium of banks can stake any claim to the property.

KAL owes the amount to the Department on account of alleged TDS defaults committed many years ago and has been held as an assessee in default from the original date of its failure to remit tax. The airlines had deducted tax, hence the claim of the Department on the property also dates back to that period.

It cautioned that any person transacting in the "Kingfisher House" property will be held in violation of second schedule of Income-tax Act, 1961 and will be liable for all the consequences.

KAL has been grounded for more than 15 months and Mallya had stated in September that the airlines was in talks with a foreign investor for potential stake sale but refused to divulge the investor's name.

Kingfisher Air stock price

On December 13, 2013, Kingfisher Airlines closed at Rs 4.19, down Rs 0.1, or 2.33 percent. The 52-week high of the share was Rs 18.09 and the 52-week low was Rs 3.17.

The latest book value of the company is Rs -166.59 per share. At current value, the price-to-book value of the company was -0.03.

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SEBI may re-examine its order on Jet-Etihad: Sources

Dec 14, 2013, 04.58 PM IST

The channel had earlier reported that the CCI has raised red flag over what appeared to be a prima facie case of violation of section 43 (a) by Jet-Etihad.

Tags  Jet Airways, Etihad

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SEBI may re-examine its order on Jet-Etihad: Sources

The channel had earlier reported that the CCI has raised red flag over what appeared to be a prima facie case of violation of section 43 (a) by Jet-Etihad.

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SEBI may re-examine its order on Jet-Etihad: Sources

The channel had earlier reported that the CCI has raised red flag over what appeared to be a prima facie case of violation of section 43 (a) by Jet-Etihad.

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Market regulator SEBI may look to re-examine its order on  Jet Airways and Abu Dhabi carrier Etihad deal. Sources told CNBC-TV18 SEBI is likely to approach the Competition Commission of India (CCI) seeking clarity on its order.

The channel had earlier reported that the CCI has raised red flag over what appeared to be a prima facie case of violation of section 43 (a) by Jet-Etihad.

The deal, involving Abu Dhabi carrier Etihad's purchase of 24 per cent stake in Naresh Goyal-led Jet Airways , was approved last month by the Competition Commission of India (CCI).

This clearance has been challenged in the Competition Appellate Tribunal (Compat) by national carrier Air India's former Executive Director Jitendra Bhargava , while BJP leader Subramanian Swamy has written to the SEBI asking that Etihad be considered a 'person acting in concert' with Jet's current promoters for this deal.

CCI Chairman Ashok Chawla said that the two carriers have been issued show-cause notices on a separate issue relating to their certain commercial agreements.

Sources say SEBI is likely to seek information from the CCI is to how Etihad may have joint control. However, they add that it is up to the government to take a final call on the much-talked about mega aviation deal.

Jet Airways stock price

On December 13, 2013, Jet Airways closed at Rs 272.75, down Rs 20.65, or 7.04 percent. The 52-week high of the share was Rs 688.60 and the 52-week low was Rs 270.20.

The latest book value of the company is Rs -27.75 per share. At current value, the price-to-book value of the company was -9.83.

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DoT reapproaches TRAI for views on CDMA spectrum base price

With TRAI turning a blind eye to its previous requests, the DoT has approached the sectoral regulator for the fourth time in six months seeking its recommendations on base price of CDMA spectrum.

"DoT has sent a fresh reference to TRAI yesterday for its recommendation on 800 Mhz (CDMA) band spectrum base price," official sources told PTI.

The Telecom Regulatory Authority of India in September did not favour auction of CDMA spectrum and recommended that the DoT should explore using part of these airwaves for E-GSM services.

The DoT in its reference back to Trai in October had asked for CDMA spectrum base price as sought by the Empowered Group of Ministers on telecom, headed by Finance Minister P Chidambaram.

However, the regulator maintained its earlier stand. TRAI's views were discussed by inter-ministerial panel Telecom Commission in its meeting on October 3 and November 6.

After examining Trai's suggestions, the panel asked the DoT to seek base price of CDMA spectrum from the regulator again. The DoT on November 12 informed the Trai about TC decision and explained that E-GSM band required vacation of spectrum by the Defence Ministry, which is likely to take time. in this scenario, keeping unsold spectrum in the 800 Mhz (CDMA) band would result in revenues foregone for government.

The department had said that Trai should suggest base price preferably within 15 days for CDMA spectrum so that it can be discussed and put for auction in January 2014.

The regulator wrote a strongly-worded letter to the DoT and, as per sources, said: "There is no provision in the TRAI Act which enables the stipulation of time limits.

"There is also no provision which allows for a preference on time limits to be indicated by the DoT...Hence, it is clearly not appropriate for the DoT to presume that it can suggest a time limit, even as a preference."

The EGoM in its meeting on November 22 again asked the DoT to approach TRAI afresh for CDMA spectrum base price so that it can be put for auction.

The Cabinet in its December 9 meeting is also learnt to have directed the Telecom Ministry to decide on CDMA spectrum base price expeditiously.

The DoT has yesterday come out with the schedule for GSM spectrum auction. However, CDMA auction is dependent on TRAI's recommendations.

Pure play CDMA operator Sistema Shyam Teleservices, which operates under MTS brand name, has been demanding additional these airwaves to expand its services. It has alleged that Trai is favouring GSM players, who have been demanding 10 Mhz of airwaves from this frequency band.

SSTL CEO Dmitry Shukov has earlier said he has no issues if both CDMA and GSM operators are allowed to bid for 800 Mhz band but the extent of discount suggested by Trai for GSM spectrum should be conferred on to CDMA airwaves as well.

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SP ups TCS, Infosys, Wipro credit rating to A from BBB+

Dec 13, 2013, 08.30 PM IST

The agency also raised the local currency ratings of the three companies to 'stable' and removed them from CreditWatch, where they were placed with positive implications on November 26, S&P said in a statement issued from Singapore.

Tags  BBB+, S&P, CreditWatch, Abhishek Dangra

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S&P ups TCS, Infosys, Wipro credit rating to A from BBB+

The agency also raised the local currency ratings of the three companies to 'stable' and removed them from CreditWatch, where they were placed with positive implications on November 26, S&P said in a statement issued from Singapore.

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S&P ups TCS, Infosys, Wipro credit rating to A from BBB+

The agency also raised the local currency ratings of the three companies to 'stable' and removed them from CreditWatch, where they were placed with positive implications on November 26, S&P said in a statement issued from Singapore.

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Rating agency Standard & Poor's today revised upwards the long-term corporate credit ratings of software majors TCS , Infosys and Wipro to 'A' from 'BBB+.' However, it retained the negative outlook on their foreign currency ratings, citing the negative outlook on the sovereign.

Also Read: Overseas investment by Indian firms at USD 2.28 bn in Nov

The agency also raised the local currency ratings of the three companies to 'stable' and removed them from CreditWatch, where they were placed with positive implications on November 26, S&P said in a statement issued from Singapore.

"We upgrade the long-term corporate credit ratings of TCS, Infosys and Wipro because we believe these companies have the business and financial flexibility to withstand a significant period of sovereign stress and still have enough liquidity to honor all its obligations in a timely manner," said S&P credit analyst Abhishek Dangra.

He said S&P rates these companies above the sovereign credit rating because it expects these firms to pass the hypothetical stress scenario, including a 20 percent fall in Ebitda margins and a 10 percent fall in the value of their rupee deposits with banks in the country.

"In our test of hypothetical sovereign stress, these companies have sufficient financial strength to be rated up to two notches above the 'BBB+' transfer and convertibility assessment of the country," Dangra said.

These companies also pass the transfer and convertibility assessment stress tests, which assume that they can access only 25 percent of their export revenue and have no access to cash flows and assets in the country. The rating revision was unsolicited, he said.

TCS stock price

On December 13, 2013, Tata Consultancy Services closed at Rs 2002.90, down Rs 23.95, or 1.18 percent. The 52-week high of the share was Rs 2258.05 and the 52-week low was Rs 1197.60.

The company's trailing 12-month (TTM) EPS was at Rs 77.28 per share as per the quarter ended September 2013. The stock's price-to-earnings (P/E) ratio was 25.92. The latest book value of the company is Rs 165.73 per share. At current value, the price-to-book value of the company is 12.09.

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Forced philanthropy is not the right approach: Whole Foods

Can the business of business continue to be just business in complete disregard of environment and society? That's the question behind the concept of 'conscious capitalism' pioneered by the USD 8 billion multinational US foods chain - Whole Foods. CNBC-TV18 caught up with the co-CEO of Whole Foods Walter Robb to talk about capitalism, philanthropy and the Indian government's urge towards corporate social responsibility.

Below is the verbatim transcript of the interview on the channel

Q: What's your view on unchecked capitalism?

A: Unchecked capitalism or capitalism without a contest, you saw many situations whether in equities or that happen as a result of no checks and balances or lack of conscience so to speak. I don't know whether it's reached a tipping point but there are number of companies Southwest Airlines, Starbucks that are well-known names who are embracing some version of these principals in their practices in the market place and are succeeding. So, I think the conversation is alive and well.

The business of business should be about doing business consciously, doing business with a sense of responsibility beyond just the profit that you make. These principles would resonate deeply with Indians who have got such a long history of consciousness, it is the home of Buddhism, great religious traditions of the world have come out of this country. So, the idea of bringing these two together seems very natural for Indian businesses to embrace that.

Q: It is interesting you say that because the general feeling within the government so far has been that the corporate sector is not doing as much as they ought to and that is there is going to be a new provision in one of our key economic legislations which will mandate companies to set aside 2 percent of their net profits for philanthropy. Forced philanthropy, is that a solution?

A: I am more of a carrot than a stick guy. I don't think it is the right approach.

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Coal India unlikely to meet its output target for FY'14

State-owned Coal India is unlikely to meet its output target of 482 million tonnes for the current fiscal due to factors like production loss after Cyclone Phailin and an agitation by contract workers in  subsidiary.

"At the current production rate, the shortfall in production is likely to be more than 10 million tonnes (MT)," a company source said. The source added that that achieving the target looks difficult, but the company is trying its best.

Also Read: CCI slaps Rs 1773cr penalty on Coal India

Coal India Ltd (CIL) suffered a production loss of over one million tonne due to shutdown of mining activities in Talcher Coalfields in Odisha. CIL had earlier this month said the production target for the current fiscal looks challenging. This followed Coal Minister Sriprakash Jaiswal asking the nstate-owned company to ensure that the output target for FY 2014 is met.

Mining activities at Talcher Coalfields in Odisha, including coal transportation, came to a halt on November 29 following violence by a group of labourers protesting the arrest of some of their colleagues at Jagannath area in Angul district.

The mining activities in around six coal blocks (in Talcher Coalfields) of Coal India subsidiary Mahanadi Coalfields Ltd were affected due to violence. According to a CIL official, the PSU suffered production loss in October due to Cyclone Phailin, which affected the key coal producing states of Odisha, Jharkhand and West Bengal.

Jaiswal had earlier said that though production at CIL had been hit in October due to Cyclone Phailin. CIL, which accounts for over 80 percent of the domestic production, contributed 452.5 MT of coal in the previous financial year compared with the target of 464 MT.

Coal India stock price

On December 12, 2013, Coal India closed at Rs 281.55, down Rs 7.2, or 2.49 percent. The 52-week high of the share was Rs 372.10 and the 52-week low was Rs 238.35.

The company's trailing 12-month (TTM) EPS was at Rs 13.90 per share as per the quarter ended September 2013. The stock's price-to-earnings (P/E) ratio was 20.26. The latest book value of the company is Rs 32.48 per share. At current value, the price-to-book value of the company is 8.67.

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Subrata Roy can't travel abroad: Supreme Court

Sahara today submitted fresh title deeds to Sebi for properties worth Rs 21,000 crore over the debenture refund case. But there is no respite for Subrata Roy as the Supreme Court (SC) refused to allow him to travel abroad.

Recently, the apex court held that the plea against Subrata Roy for allegedly interfering with the probe in 2G scam is maintainable. Sahara Chief is facing the heat of the court for not refunding investors' money.

A bench of Justice GS Singhvi and KS Radhakrishnan also issued notice to Roy and his two employees, who were working with his news channel, seeking their response on why probe be not initiated against them. ( Read More )

(With inputs from PTI)

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QIP issue to come before March 2014: SBI

Dec 11, 2013, 10.22 PM IST

The bank had earlier this week secured government approval to raise Rs 9,576 crore through Qualified Institutional Placement (QIP).

Tags  SBI, QIP, Arundhati Bhattacharya, Delhi Economic Conclave

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QIP issue to come before March 2014: SBI

The bank had earlier this week secured government approval to raise Rs 9,576 crore through Qualified Institutional Placement (QIP).

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QIP issue to come before March 2014: SBI

The bank had earlier this week secured government approval to raise Rs 9,576 crore through Qualified Institutional Placement (QIP).

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Country's largest lender SBI  Wednesday said it will raise Rs 9,576 crore through institutional placement of shares and the issue would come out before March 2014.

"We have got approval from the board as well as the government. The QIP should happen this fiscal. It could happen before March," State Bank of India Chairperson, Arundhati Bhattacharya said on the sidelines of Delhi Economic Conclave.

Also Read: SBI panel says nothing wrong in loan sanctioned by Acharya

The bank had earlier this week secured government approval to raise Rs 9,576 crore through Qualified Institutional Placement (QIP).

The government's holding in the bank will not decline below to 58 per cent pursuant to the QIP. The government at present holds 62.31 per cent in SBI.

The government will infuse Rs 2,000 crore in the SBI this year and towards this it will issue preferential shares worth the same quantum to the government.

In October, the SBI board had approved infusion of Rs 2,000 crore by allotting preferential equity shares to the government.

SBI stock price

On December 11, 2013, State Bank of India closed at Rs 1796.70, down Rs 47.85, or 2.59 percent. The 52-week high of the share was Rs 2550.00 and the 52-week low was Rs 1452.90.

The company's trailing 12-month (TTM) EPS was at Rs 179.98 per share as per the quarter ended September 2013. The stock's price-to-earnings (P/E) ratio was 9.98. The latest book value of the company is Rs 1445.60 per share. At current value, the price-to-book value of the company is 1.24.

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CCI move will force CIL to treat customers at par: APP

Coal India (CIL) has been slapped with a massive fine by the Competition Commission of India (CCI) after power producers accused the company of abusing its dominant position . Speaking to CNBC-TV18, Ashok Khurana, Director-General, Association of Power Producers highlighted that CIL's fuel supply agreements (FSA) are inequitable and completely imbalanced. "Many a times, they specify X grade and supply X minus one, X minus two grade and charge for the higher GTV. But you can't appeal to anyone," he said.

Post the CCI decision, Khurana is hopeful that the company will re-draft the agreement and make it more equitable and ensure greater transparency. "The Minister of Power has assured us that all the FSAs would be aligned to the PSUs. It has not been done till date; now with this order backing, at least Coal India will revise all the FSAs and will treat all the customers at par," he said.

Below is the edited transcript of Ashok Khurana's interview with CNBC-TV18

Q: Could you tell us what exactly were the problems that power companies were facing and what is the first reaction to the CCI's order?

A: We welcome this imposition of penalty because for last five to seven years Coal India has been abusing its monopoly position. The fuel supply agreements (FSAs) are one sided and inequitable. Their policy has been on the quantity and the quality take it or leave it because there is no other place to go. The CCI has now clearly said that there should be grading and sampling and Coal India after the NTPC fight had also agreed for a third party inspection.

Coal India's FSAs are unbankable, inequitable and completely imbalanced. It favours Coal India only. Therefore this decision will actually make Coal India re-draft the agreement, make it more equitable and at least provide the quantity and quality as specified in the FSA. Many a times, they specify X grade and they supply X minus one, X minus two grade and charge for the higher GTV over there. You can't appeal to anyone.

Q: You mentioned that this will prompt Coal India to redraft the agreement. What are the changes you will seek? We understand transportation, other expenses all of this could be renegotiated? Could that be brought back to the table now?

A: With Coal India there is no question of renegotiation. Atleast there should be transparency. There is no transparency as far as the breakup of these provisions is concerned. There is complete opacity of pricing in Coal India today.

This decision will actually bring about some transparency. The CCI has clearly said about grading and sampling that means there will be third party inspection. They have to supply coal according to what they are charging us. So, it will not be take it or leave it situation. Atleast now the procurers post this decision will have some backing of CCI to ask questions from a monopoly supplier.

Q: The CCI order says that it is directed Coal India (CIL) to ensure parity between old and new power producers as well as private and PSU power producers as far as practicable, do you see that happening and if so what do you expect?

A: We have been fighting for it. The Minister of Power has assured us that all the FSAs would be aligned to the PSUs. It has not been done till date; now with this order backing, at least Coal India will revise all the FSA and will treat all the customers at par.

Q: Do you expect things now to change on the ground after this fine is paid? As you said you are not hoping for renegotiation with Coal India but atleast more transparency, do you see that happening?

A: We hope so because Coal India cannot refuse everyone. They refused NTPC first. If they don't do it we will go back to CCI.

Coal India stock price

On December 10, 2013, Coal India closed at Rs 285.45, down Rs 4.95, or 1.7 percent. The 52-week high of the share was Rs 372.10 and the 52-week low was Rs 238.35.

The company's trailing 12-month (TTM) EPS was at Rs 13.90 per share as per the quarter ended September 2013. The stock's price-to-earnings (P/E) ratio was 20.54. The latest book value of the company is Rs 32.48 per share. At current value, the price-to-book value of the company is 8.79.

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Large scale coal washing final solution to CIL's worry: Pro

Competition Commission slapped a fine of Rs 1,773 crore on Coal India (CIL) for misusing its dominant position in supply of the dry fuel. Speaking to CNBC-TV18 on the issue, Partha S Bhattacharyya, former chairman, Coal India says the quality of coal has always been a concern and the only solution to this problem is large scale washing of coal.

According to him, coal is obtained from open cast mining which contaminates and degrades the quality of coal but power sector has never really asked for washed coal and therefore, Coal India alone is not responsible for the poor quality of the dry fuel.
 
Below is the verbatim transcript of the interview

Q: CCI has slapped CIL with a penalty of Rs 1,773 crore. It believes that CIL is in violation of the Companies Act as far as two specific fuel supply agreements (FSAs) are concerned. This may force CIL to review its FSAs in general. What is your first reaction to this and do you believe CIL is likely to appeal or should appeal?

A: I would agree to the extent that quality of coal has always been an issue. We have not yet found a holistic solution to the problem but for that, CIL alone is not to be blamed.

In a situation where most of the coal is coming from open cast mining, where you are doing drilling, exploration and blasting, there is always a possibility of contamination and quality degradation. So, the basic answer to the solution is to go for large scale washing of coal and that is what Coal India should have done.

Washed coal has never been seriously demanded by the power sector. To that extent, the power sector is also partially responsible to allow continuation of supply of coal from the mines straight away without washing.

Q: May be the power sector didn't really have a choice which is why the CCI believes that this is abuse of dominant position?

A: I would not question CCI's judgement. CCI must have looked at it from a holistic basis. Washing of coal is the final answer to the solution and neither has power sector demanded washed coal seriously nor has Coal India gone in for large scale washing.

To that extent, to find a wholistic solution to the quality issue what should have been done has not been done.

Q: What is this likely to mean as far as FSAs are concerned because the competition regulator has also said that you need to review FSAs both for the private sector as well as the public sector? What kind of larger implications will this order have?

A: Since I have not seen the order and neither I have discussed the matter with the current management of CIL, I don't know what view they will take, whether there is a permission for appealing whatever it is I do not know.

However, one thing is for sure that quality has been an issue, I cannot ignore that, it has been an issue all the time and the fundamental solution to the problem of going for large scale washing has neither been insisted upon by the consumer nor done by the producer and that is the basic problem.

Q: CCI order also seems to suggest that there is discrimination between the manner in which PSUs are treated and private companies are treated the power producing companies. Is this perception correct and what can the company do to address the issue?

A: The law of the land does not allow any PSU to differentially treat among its consumers whether it is public sector or private sector. That is not done and that should not happen. If the FSAs are biased towards PSUs, it is not the right thing to happen. I don't remember any clause of the PSU to the best of my knowledge or information which is biased towards other government sector and biased against private sector.

The basic issue is joint sampling and analysis. The right for asking for joint sampling and analysis is with the consumer of certain size irrespective of whether it is a PSU or a non-PSU.

So, I am not really clear as which provision the CCI is referring to where discrimination exists, but if there is a discrimination that should be sorted out.

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