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QBiz: LS Passes Taxation Laws Bill; Karvy Clients Get Back Shares

1. Corporate Tax Move to Help Economy: FM

The Lok Sabha on Monday, 2 December passed the Taxation Laws (Amendment) Bill, 2019 to replace the 20 September ordinance that sharply reduced corporate tax rates after a stormy debate in the House during which finance minister Nirmala Sitharaman said the decision was aimed at attracting investment to spur growth and create jobs.

She said the decision to reduce corporate tax was a strategic one — to make India a competitive investment destinations for multi-national companies looking for an alternative to China amid the ongoing Sino-US trade war. She said India was not the only country in Southeast Asia which has opted for lower tax rates.

(Source: Hindustan Times)

2. Consider Using Stress Fund for Amrapali Flats, SC Tells Govt

Facing a fund crunch with cautious buyers so far paying up Rs 103 crore out of their dues of Rs 3,600 crore and NBCC refusing to invest money, the Supreme Court on Monday, 2 December asked the Centre to consider using its stress fund for construction of stuck Amrapali housing projects.

A bench of Justices Arun Mishra and UU Lalit directed the homebuyers to deposit their dues in the apex court by the end of January and granted a last chance to some entities, including Amrapali Group directors, to deposit the money they creamed off by diverting homebuyers’ money. It made it clear that the beneficiaries would be sent to jail like the CMD of the group in case they failed to comply.

(Source: The Times of India)

3. Majority of Karvy Clients Get Back Pledged Shares

Share depositories have transferred the majority of shares owned by clients of Karvy Stock Broking back to their demat accounts after a directive from Sebi, said two people with direct knowledge of the matter.

The shares, which were illegally pledged with lenders, were deposited back into the investors’ accounts before Karvy’s creditors could stake claim. Bajaj Finance — one of the lenders to Karvy — has challenged the Sebi directive in the Securities Appellate Tribunal (SAT), which heard the matter and reserved its order till 3 December.

Karvy had pledged securities worth ₹2,300 crore of over 95,000 clients with ICICI Bank, HDFC Bank, IndusInd Bank and Bajaj Finance as collateral to raise over ₹600 crore in loans for itself. This was revealed in the Sebi probe into client positions of select retail brokers, which is yet to be published. In an ex-parte order on 22 November, Sebi barred the Hyderabad-based financial services firm from taking on new clients.

(Source: The Economic Times)

4. Tariff Hike Lifts Stocks of Telcos

Shares of Bharti Airtel, Vodafone Idea and Reliance Jio Infocomm parent Reliance Industries surged 10%, 24% and 4% intra-day, respectively, as investors bought in on hopes that sharp increases in tariffs this week will lead to improved finances for an industry plagued by high debt and intense competition.

Some of those gains were lost amid concerns about dues owed to the government on account of adjusted gross revenue (AGR).

Analysts expect the tariff hikes of up to 50% announced on Sunday — the biggest in the telecom sector’s history and the first since Jio’s entry three years ago — to yield a Rs 25-30 increase in blended average revenue per user (ARPU) for Vodafone Idea and Bharti Airtel, and lift their earnings before interest, tax, depreciation and amortisation (Ebitda) by about Rs 9,500 crore and Rs 8,500 crore, respectively.

(Source: The Economic Times)

5. PMC Bank Administrator to Sell 2 Aircraft, 1 Yacht

The Reserve Bank of India (RBI)-appointed administrator for Punjab & Maharashtra Co-operative (PMC) Bank on Monday, 2 December invited bids from advisers to carry out the sale of two aircraft and a yacht.

The assets on sale belong to Housing Development Infrastructure (HDIL) Group promoters Rakesh and Sarang Wadhawan, the prime accused in the Rs 4,355-crore scam.

“For the purpose, the administrator intends to appoint national/international adviser cum process coordinator that shall be a reputed firm having prior experience of providing such services to sell such assets,” administrator JB Bhoria said in a public notice.

(Source: The Financial Express)

6. CAG: Advance Payments by PSUs Saved Railways from Showing a Negative Balance in FY1

Advances from public sector units saved the Indian Railways from showing a negative balance of over Rs 5,500 crore in 2017-2018, said a Comptroller and Auditor General (CAG) report tabled in Parliament on Monday, 2 December.

The Railways would have ended the year with a negative balance of Rs 5,676.29 crore instead of the surplus of Rs 1,665.61 crore but for the advance received from NTPC and Ircon, said the report.

In March 2018, NTPC paid the Railways Rs 5,000 crore as advance for moving freight in 2018-19; this was added to IR’s earnings of 2017-18.

(Source: The Hindu BusinessLine)

7. Yes Bank’s Line-up of Little-Known Suitors Raises More Questions

Yes Bank Ltd’s proactive disclosure of potential investors attracted scrutiny on Monday 2 December, with analysts questioning the quality of suitors who have promised a total of $2 billion.

The troubled private lender on Friday listed the likely investors, including a group of offshore family offices offering $1.7 billion and six other investors offering a total of $300 million.

Analysts at financial services firm Macquarie led by Suresh Ganapathy wrote in a note on Monday that for nearly 85% of the proposed commitments, quality is a big concern.

(Source: Mint)

8. US Proposes Duties on $2.4 Billion of French Goods Over Tech Tax

The US proposed tariffs on roughly $2.4 billion in French products, in response to a tax on digital revenues that hits large American tech companies including Google, Apple Inc., Facebook Inc. and Inc.

“France’s digital services tax discriminates against US companies," the office of the United States Trade Representative said in a statement on Monday, 2 December.

USTR Robert Lighthizer said the agency is also exploring whether to open investigations into similar digital taxes by Austria, Italy and Turkey. The move comes hours after President Donald Trump announced a barrage of other tariffs on steel and aluminum from Argentina and Brazil.

(Source: Mint)

9. Foreign Investors Bring Cheer to Indian Market in Nov, FPI in Equity at 8-Month High

The foreign portfolio investors are gradually bouncing back to Indian markets after the Narendra Modi-led government has announced measures to attract investments. India received foreign portfolio investments of Rs 22,999 crore in November, which is the highest since April 2019, according to the National Securities Depository Limited (NSDL).

Such investments drastically fell after Finance Minister Nirmala Sitharaman announced the super-rich tax on institutional investors. The tax surcharge for foreign entities which are registered as non-corporates, spooked investors as the surcharge could have impacted 40 percent of the FPIs. Initially, the government had left no possibility of withdrawing the decision but seeing the widespread pessimism in the FPI market, the government rolled it back.

(Source: The Financial Express)

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