Ban on audit firms may not hit their entire network
Any ban on audit firms may not impact those entities that are part of their networks or their lead partners, a senior government official said. This implies that disruption from a possible prohibition on Deloitte Haskins & Sells and BSR & Co, a KPMG network firm, may not be as widespread as earlier presumed.
On the other hand, the government is set to tighten restrictions on audit firms to minimise conflicts of interest, the official said. These will apply to non-audit services offered to the companies they’re auditing, he said. Earlier, this month, the Reserve Bank of India had barred audit firm SR Batliboi & Co, an EY member firm, from auditing commercial banks for a year starting April 1, citing lapses in a statutory audit.
Emami’s stake dilution to gain investor’s confidence: Promoter
The promoter’s decision to pare 10 per cent stake in Emami has been taken in order to infuse confidence among the investors and intends to raise its stake in future.
“This round of 10 per cent divestment was not desired and not planned. But this was necessitated due to sudden sharp erosion of stock value. We decided to sell our stake to infuse confidence among the investors,” an Emami group promoter family member told on condition of anonymity.
“We can always raise our stake in future once the current storm settles. We are already exploring all options including strategic divestment, IPO or exit in group assets in 6-8 months,” he said.
Indian MNCs openly allying with the LGBT cause
Indian companies, especially multinational corporations (MNCs), have gone from being tacit supporters of LGBT (Lesbian, Gay, Bisexual and Transgender) rights to openly allying with the cause. This comes almost one year after the Supreme Court decriminalised homosexuality.
Coverage for same-sex partners under medical insurance and LGBT employee networks have been around for some time, but companies are now encouraging employees to speak openly about their identity.
LGBT employees at Accenture can share their journeys on a virtual platform, and even answer questions from ‘allies’ – non-LGBT people who support the cause.
IBC & RESTRUCTURING RELATED NEWS
Government pays back some IL&FS lenders, may have to shell out Rs 250 crore more
The government has paid up Rs 25 crore to Asian Development Bank (ADB) and German development bank KfW on sovereign guarantees issued on behalf of the now financially distressed Infrastructure Leasing & Financial Services (IL&FS) and is staring at another Rs 250 crore payout towards guaranteed IL&FS loans.
The government paid this sum in installments between October 2018 and March 2019 after IL&FS defaulted on loan repayments, sources close to the development said.
NCLT approves Dhanuka Lab’s Rs 1,116 crore plan to buy debt-hit Orchid Pharma
The National Company Law Tribunal (NCLT) on Monday approved Gurgaon-based Dhanuka Laboratories’ Rs 1,116 crore resolution plan to take over the debt ridden Orchid Pharma in what could be termed as yet another case resolved under the Insolvency and Bankruptcy Code (IBC).
The Chennai bench of NCLT held the view that a majority of the financial creditors had approved the bid by Dhanuka overruling an objection filed by Accord Life Spec.
As per the terms set, the lenders will get about Rs 1,116 crore including Rs 570 crore quoted by Dhanuka Lab. A consortium of 24 banks has lent a total of over Rs 3,200 crore to the drug maker and the lenders will be taking a haircut of around 65%.
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L&T tightens grip on Mindtree with 51% stake
Larsen and Toubro (L&T) has increased its stake to 51 per cent in IT services firm Mindtree.
The engineering conglomerate bought Arohi Asset Management’s 1.22 per cent stake, held in the company via Ontario Teachers’ Pension Plan, through its ongoing open offer.
ET on Tuesday reported that L&T’s stake in Mindtree had reached 48 per cent after Singapore-based public market fund Nalanda Capital offloaded its entire 10.6 per cent stake in the Bengaluru-based software services company.
MSME & STARTUPS RELATED NEWS
RBI panel suggests measures to boost MSMEs
The Reserve Bank of India on Tuesday issued a report of the expert committee on Micro, Small and Medium Enterprises (MSME).
The panel in the detailed report recommended a government-sponsored Fund of Funds (FoF) of Rs 10,000 crore to support Venture Capitalists or PE firms investing in the MSME sector.
It also recommended setting up a distressed asset fund of Rs 5,000 crore to assist units in clusters where a change in the external environment has led to a large number of MSMEs becoming non-performing assets (NPA).
Budget may keep Status quo on angel tax for startups
The Union Budget on July 5 was likely to maintain a status quo on angel tax for startups, sources said and added the problematic issues were taken care of in February this year.
It indicates no change in Section 68 of the Income Tax Act, 1961, under which any unexplained funding raised by a startup can be held as income and taxable.
Many startups, including those from the software industry, are seeking exemption from Section 68 of the I-T Act. They want the Central Board of Direct Taxes (CBDT) to issue a circular stating that “Investments received by a startup, as recognised by the DIPP from resident investors up to Rs 10 crore per year, will be exempt from Section 56(2)(viib) (angel tax) and Section 68 as a class of people notified by the central government.”
RBI panel proposes Rs 10,000 crore govt fund to develop MSMEs
A panel constituted by the Reserve Bank of India (RBI) to suggest measures to develop micro, small and medium enterprises (MSMEs) has proposed a Rs 10,000-crore government fund. The idea is that this will support venture capital and private equity funds investing in the MSME sector. The panel has also recommended a Rs 5,000-crore distress asset fund to assist in clusters where several small businesses are affected because of external factors, such as a change in environmental laws.
Simpler set of laws soon for MSME sector
A Reserve Bank of India constituted expert committee on micro, small and medium enterprises (MSMEs) has proposed a simplified framework of laws under an MSME code and the complete overhaul of existing provisions.
The committee, calling the current legislation “complex and scattered,” has proposed a revamped framework which would be based on “policy and transparency system”, according to the panel report made public by RBI on Tuesday.
MSME Day: Here in India to close large developmental gaps, says IFC
Since 1956, the International Finance Corporation (IFC), a part of the World Bank Group, has invested in nearly 400 companies in India, providing almost $15 billion in financing from its own account and mobilization of external resources.
IFC deals exclusively with the private sector, while the World Bank works only with the Government. “In every country, the private sector is largely composed of SMEs and in India about 90% of job creation is in the private sector of which 40% belong to the SMEs. Small Business always plays a very major role, especially in the development and that is always the focus of IFC. We are not a retail bank and do not deal with SMEs individually, but work on an aggregate basis,” says Jun Zhang, Country Head-India, IFC.
RBI panel wants govt loan portal to reach out to startups
Government-promoted online loan application platform Psbloansin59minutes should expand coverage and extend loans to startups, an expert committee on micro, small and medium enterprises said on Tuesday.
Psbloansin59Minutes, which caters to funding for MSMEs, also needs to track data from other sources besides tax filings through the Goods and Services Tax (GST) network and bank statements, the panel said in a report. “The committee recommends that the portal should also cater to new entrepreneurs, including those applying for loans under the Pradhan Mantri Mudra Loan Yojana and Stand-Up India,” it said.
Sebi to tighten disclosure norms for pledged shares
The Securities and Exchange Board of India (Sebi) is set to tighten disclosure norms for pledged shares to cover innovative and complex structures, said people with knowledge of the matter.
The board, which is likely to meet on June 27, is expected to discuss the proposal on pledged shares, tweak differential voting rights so founders can retain control and also discuss rules on royalty payments by listed companies, they said.
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Indian Accounting Standards may pose challenge for new IL&FS management
Amid regulatory scrutiny and resignation of one of its statutory auditors, the audit committee of the Uday Kotak-led board at Infrastructure Leasing & Financial Services (IL&FS) is closely monitoring the preparation of the financial statements of three group companies.
The three companies — IL&FS, IL&FS Financial Services (IFIN) and IL&FS Transportation Network (ITNL) — will be taking the last audited results as the base to prepare these statements.
Getting the accounts ready according to the Indian Accounting Standards (Ind-AS) principles will entail making multiple changes in the way financial statements are reported compared for fiscal 2018.
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Centre plans to set up common online platform for RERA of all states, UTs
The Centre has planned to set up a common online platform for the Real Estate Regulatory Authority (RERA) of all states and UTs, a move which will provide an opportunity to home-buyers, builders and authorities to exchange views. Announcing the government’s plan here, Housing and Urban Affairs Secretary Durga Shanker Mishra said that with this platform, the real estate law will become “more strong”.
Under the Real Estate (Regulation and Development) Act, 2016, all states are mandated to constitute their respective real estate regulator RERA which provides proper protection to home buyers.
Sebi bans GV Films, 5 others from securities markets for GDR manipulation
Amount lost in bank frauds of above Rs 1 lakh on decline
European watchdogs demand detail on Facebook’s cryptocurrency
Currency in circulation rises 22% in May over pre-demonetisation level
Press Note 2 clarificatory, India willing to engage with trade partners on FDI, data, e-comm issues: Piyush Goyal
Interim Budget highlights: Recap of key announcements made by Piyush Goyal
IBC has brought discipline in the ecosystem: Rajesh Narain Gupta, managing partner of law firm SNG & Partners