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Air India listing open after failed disinvestment

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Government is open to listing ailing state carrier Air India, after failing to attract buyers for a 76 per cent stake in the company. While the government is considering several proposals related to reviving the divestment process, it will not allow complete foreign ownership of the airline, a source said.

One of the proposals would involve the government retaining a share in the debt-laden carrier and selling it at a later date so it can capitalise on any financial upside that may occur from listing the airline, the source said.

The government may also consider reducing the debt it passes on to potential buyers and restructuring the large workforce, another senior government official said in a statement.

“We will take a decision in next few days on changing conditions before inviting fresh bids,” the official said, adding that the government is committed to selling its stake in the national carrier in the current financial year but could defer it if it fails to get the right price.

The government in March finalised plans to divest a majority stake in Air India and offload about $5.1 billion of its debt, but prospective buyers stayed away, with some citing onerous terms as a reason for their lack of interest.

Air India, known for its Maharaja mascot, has some of India’s most lucrative international and domestic landing and parking slots that are key for airlines.

The terms had also stipulated that the government would have continued to hold a 24 per cent stake, with the need for the bidder to abide by conditions, not yet detailed, designed to safeguard employee interests.

The government will soon arrange a bank loan for Air India, the second official said, to meet working capital needs and buy time for a few months before inviting fresh bids.

“The heavens would not fall if the stake sale is deferred to the next fiscal year,” the official said adding that ahead of national elections next year, the government could not take the risk of selling the national carrier at a low price.

This could cost the government politically and hurt the process of further privatisation of other state companies, he said.

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ICICI Bank chief Kochhar to be on leave pending enquiry; Bakhshi appointed COO

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ICICI Bank today announced that its CEO Chanda Kochhar has decided to go on leave till the completion of an external enquiry into alleged conflict of interest in extending loans to some corporates like Videocon and named Sandeep Bakhshi as the chief operating officer.

Bakhshi, who has been the MD and CEO of ICICI Bank’s life insurance arm, would handle “all the businesses and corporate centre functions” of the bank. His appointment is for a period of five years starting tomorrow, subject to various approvals.

“All executive directors on the board of ICICI Bank and the executive management will report to him. Bakhshi will report to Chanda Kochhar, who will continue in her role as MD and CEO of ICICI Bank,” the bank said in a statement.

In Kochhar’s absence, he would report to the board.

The latest development also comes in the backdrop of  Kochhar and her family members facing allegations of quid pro quo and conflict of interest with respect to a loan extended to certain entities, including the Videocon group.

Multiple agencies, including the CBI and regulator Sebi, are already probing the alleged lapses involving Kochhar and her family members.

“Kochhar has decided to go on leave till completion of the enquiry as announced on May 30. The board has noted and accepted this. During her period of leave, the COO will report to the board,” the statement said.

The current tenure of Kochhar, who has been at the helm since 2009 and has been on “annual leave” for some time now, ends next March.

Apart from being the COO, Bakhshi would be a whole-time director and a board member. He has been with the ICICI Group for over three decades and was the deputy managing director of the bank before going to head the life insurance business in 2010.

At ICICI Prudential Life, the bank’s executive director N S Kannan would replace Bakhshi as the MD and CEO.
Kochhar, a career ICICI Group employee has been under the cloud since late March, when allegations of conflicts of interest and possible quid pro quo in lending to Videocon group, along with lack of disclosures by the bank, made headlines.

Following reports of allegations based on an activist’s complaint, the bank board earlier had come out strongly in support of her.

Complicating the matters for her, the bank received another complaint against Kochhar by an internal whistle-blower, who made allegations of not following the bank’s code of conduct, late May.

This led the board to announce a detailed probe by an external expert into the allegations. Retired Supreme Court judge B N Srikrishna would be heading the probe panel.

According to sources, he has accepted the request from the bank and the terms of reference for the panel are to be decided by the audit and governance committee of the bank.

While the contents of the whistle-blower’s complaint are not known, the first set of allegations against Kochhar pertains to alleged impropriety while lending to the cash-strapped Videocon Group and companies associated with the Ruia family, the promoters of beleaguered Essar Group.

However, the statement from the bank did not have any mention of it.

The cases under scanner include the bank extending Rs 3,250 crore to Videocon Group in 2012 and the involvement of Chanda Kochhar’s family members, including her husband Deepak Kochhar, in first sanctioning the loan and then restructuring the same through Avista Advisory, a company run by his younger brother Rajiv Kochhar.

There are also allegations that NuPower — a company floated by Videocon group and Deepak — got investments of Rs 325 crore from the Mauritius-based Firstland Holdings, a firm owned by Nishant Kanodia, the son-in-law of Essar Group co-founder Ravi Ruia.

Earlier this month, Finance Minister Piyush Goyal said the law would take its course in the alleged case of nepotism at ICICI Bank, even though it was a good bank with “very robust processes”.

Kochhar is credited for consolidating the operations of the bank after the departure of K V Kamath.

The bank, with roots in development finance, has also seen a massive rise in its sour assets, courtesy mainly on exposure to the infrastructure sector, along with its peers, which led to a massive drop in profit in recent quarters.

Selling off stakes in group companies — it listed the life general insurance arms as well as brokerage businesses in quick succession — gave it the wherewithal to withstand the high provisioning required recently.

In the run up to the board meeting, ICICI Bank shares today jumped over 3.6 per cent to Rs 292.50 on the BSE.

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Tesla CEO Elon Musk alleges employee sabotage

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Tesla Inc’s chief executive Elon Musk accused an employee of “extensive and damaging sabotage” to the company’s operations in an email which was sent on Monday to company employees.

Musk, in his mail had mentioned that an employee had made code changes to the company’s operating system and exported “large amounts of highly sensitive Tesla data to unknown third parties.”

The company is in the process of investigating whether the employee “was working with any outside organizations,” the email said.

“As you know, there are a long list of organizations that want Tesla to die,” Musk wrote, listing Wall Street short-sellers, oil and gas companies, and car company rivals.

A company spokeswoman did not respond to the questions when asked for comments on the whole situation.

The accusations of sabotaging the codes of the company came a week after Elon Musk announced layoffs for at least 9 percent of the company’s workforce. Although, Musk said that the reorganization does not impact production associates and is not expected to delay manufacturing targets, thousands of employees are likely to lose their jobs.

Tesla has been struggling to ramp up the production of its Model 3 sedan, which was initially intended for mass production and is going to be critical to helping the company achieve long-term profitability.

Tesla’s stock price slipped 53 cents to $370.30 in after-hours trading after the news came out.

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Mitra: Exporter refunds worth Rs 25000 crore stuck for GSTN

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West Bengal Finance Minister Amit Mitra today said that exporters across the country were awaiting refunds to the tune of Rs 25,000 crore, which have been stuck due to the “inability” of the GST Network (GSTN). “There have been three lakh applications from exporters of the country, involving Rs 25,000 crore, which are awaiting refunds,” Mitra, also a GST Council member, said here during an exports conclave, a part of the Bengal Global Business Summit 2019 roadshow.

The GSTN auto verifies refund claims, but it is unable to do so, and therefore, manual verification is relied upon that leads to a huge pileup of applications and impacts the working capital of the exporters, the minister said.

He said an average of only 35-40 per cent of these applications have come to states for manual verification, and the situation remains grim for West Bengal as well. Mitra has been critical of the GST implementation in the past, too, accusing the Centre of its “hurried” introduction without adequate infrastructure, which has made the indirect tax system more “primitive” than the VAT regime.

He also said that he will raise the issue with the GSTN.

Mitra had earlier assured the state’s exporters of some advance credit to partially tide over their crisis. The Bengal minister said the state was aiming to double exports from the existing USD 9.15 billion, over the next three years.

Towards this goal, it has decided to adopt measures to improve infrastructure for exporters at the district level.

The WBIDC and MSME will work together to set up export facilitation centres at district headquarters, he said. Mitra added that steel, foundry, garments and leather are among a few focus sectors to push exports from the state.

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