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FUTURE RETAIL MAY MISS $14 MILLION COUPON PAYMENT ON BONDS
The Kishore Biyani-promoted company, which had raised $500 million in an
overseas bond issue offering 5.6% returns in January 2020, has one-month grace
period till February 22 to make the semi-annual coupon payment.
* Sangita Mehta
* ET Bureau
* January 24, 2022, 07:35 IST
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Future Retail Ltd may not be able to arrange funds to make $14-million coupon
payments on foreign currency bonds on the due date on Monday, people familiar
with the development said.
The Kishore Biyani-promoted company, which had raised $500 million in an
overseas bond issue offering 5.6% returns in January 2020, has one-month grace
period till February 22 to make the semi-annual coupon payment.
Even that may be difficult if it fails to clear dues of local banks by this
month-end, sources said.
Future Retail, which had missed a Rs 3,494 crore payment to local lenders on
December 31, has time till January 29 to prevent the account from defaulting. If
it misses that, local lenders will classify the account as a non-performing loan
on January 30.
And they may object to the company paying foreign bondholders since both are at
par as secured creditors.
Local banks may convey to Future Retail that their dues should be cleared before
making payments to USD bondholders, said one of the persons cited above.
“Since the company has defaulted to local banks, surely they (local lenders)
will object to hypermarket paying foreign currency bondholders,” an executive at
one of the local lenders told ET.
Another person said the payment to bondholders can be made if the Supreme Court
rules approves the transaction between Future Group and Reliance
Industries-linked entities before February 22, the end of grace period.
Future Retail did not respond to a request for comment till press time Saturday.
The coupon payment was due on Saturday (January 22), but it is rescheduled to
Monday because as per the bond agreement those payments that are due on holidays
get rescheduled to the next working day.
Future Retail has so far managed to make coupon payments to bondholders during
the one-month grace period.
Domestic lenders have not objected to it in the past because circumstances were
different. Either there was a moratorium on loan payments to local banks, or the
company was covered under the one-time restructuring scheme for Covid-hit
companies, which provided for a moratorium in initiate months of implementing
the scheme.
Future Retail, which was over-leveraged, began facing a liquidity crunch in
early March 2020. This, unfortunately, was followed by a nationwide lockdown for
a few months due to Covid-19. This affected its revenues and ability to pay
vendors. However, the Reserve Bank of India soon permitted banks to provide
moratorium on loans availed by Covid-hit companies till August 30, 2020.
Reliance Industries group entities had in August 2020 signed a Rs 24,713-crore
scheme of arrangement with Future Group companies for a multi-stage buyout of
its retail business, but the deal is mired with litigations following
allegations by ecommerce giant Amazon.com that the deal breached its shareholder
agreement with Future Group.
A recent attempt by lenders to recover their dues by selling Future Group’s
small-format stores Easyday and Heritage Fresh, numbering 850 across India, was
also hampered after they failed to receive an implicit backing from Reliance
Industries, as reported.
Amazon.com in a letter on January 19 offered to provide Rs 7,000-crore financial
support to Future Retail but warned that the sale of small-format stores would
violate injections by various courts.
In response, Future Retail said it is willing to accept the financial support
provided Amazon infuses Rs 3,500 crore by Monday, as reported by ET.
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FINANCIAL SERVICES
* 1 hr ago
FUTURE RETAIL MAY MISS $14 MILLION COUPON PAYMENT ON BONDS
* 2 days ago
RUPEE RISES 8 PAISE TO CLOSE AT 74.43 AGAINST US DOLLAR
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* COMPLETE DEARTH OF INVESTMENTS IN INDIA SINCE 10 YEARS: JM FINANCIAL MD SINHA
Dhananjay Sinha, managing director and chief – strategist of JM Financial
Institutional Securities Ltd, believes that for 10 odd years, there has been
a complete dearth of investments in India, which is the longest decline in
the country's investment cycle. Though there are phases where there is high
level of enthusiasm from the private sector, but overall the private capex
has been on a decline for a long period of time. Tune into the interview,
where Sinha shares his views with Amol Dethe, editor of ETBFSI, on FY23,
upcoming Union Budget, and state of the Indian economy.
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RUPEE RISES 8 PAISE TO CLOSE AT 74.43 AGAINST US DOLLAR
At the interbank foreign exchange market, the rupee opened at 74.50 a dollar and
during the day, it witnessed an intra-day high of 74.40 and a low of 74.55
against the American currency.
* PTI
Click Here to Read This Story
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Mumbai, The rupee advanced by 8 paise to close at 74.43 (provisional) against
the US dollar on Friday on the back of easing crude oil prices and dollar
selling by banks and exporters. However, the rupee's further recovery was
restricted by continuous foreign fund outflows and sell-offs in domestic
equities, analysts said.
At the interbank foreign exchange market, the rupee opened at 74.50 a dollar and
during the day, it witnessed an intra-day high of 74.40 and a low of 74.55
against the American currency.
The domestic unit finally settled at 74.43 (provisional) against the American
currency, up 8 paise over its last close of 74.51.
Meanwhile, the US dollar index, which measures the greenback's strength against
the basket of six currencies, fell 0.13 per cent to 95.61.
"The Indian rupee appreciated on back of fall in crude oil prices, corporate
dollar inflows along with exporters dollar selling and debt raising helped the
rupee in trimming weekly losses," said Dilip Parmar, Research Analyst, HDFC
Securities.
During this week, the local currency has depreciated 28 paise against the US
dollar.
On a weekly basis, spot USDINR marked the first loss in the last five weeks on
the back of a surge in virus cases, higher crude oil prices and policy
divergence between US Federal Reserves and Indian RBI, Parmar said.
In the coming days, price action of USDINR will be determined by Crude oil
prices, Federal Open Market Committee (FOMC) meeting outcome, risk sentiments
and dollar inflows, he added.
Brent crude futures, the global oil benchmark, fell 1.95 per cent to USD 86.66
per barrel.
On the domestic equity market front, the BSE Sensex ended 427.44 points or 0.72
per cent lower at 59,037.18, while the broader NSE Nifty declined 139.85 points
or 0.79 per cent to 17,617.15. PTI DRR
Foreign institutional investors were net sellers in the capital market on
Thursday, as they offloaded shares worth Rs 4,679.84 crore, as per stock
exchange data.
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BUDGET 2022: CRYPTO STARTUPS AND EXCHANGES SEEK CLARITY ON TAXING, BUYING AND
SELLING CRYPTOCURRENCIES
The crypto industry is hopeful the Union Budget will bring in regulatory clarity
about the emerging asset class
* Sunainaa Chadha
* TIMESOFINDIA.COM
Click Here to Read This Story
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NEW DELHI: The cryptocurrency bill may not be introduced in the Budget session
of Parliament as the Centre needs more time to build consensus on the regulatory
framework for these digital assets in India. The government is reportedly also
waiting for the Reserve Bank of India to first conduct a pilot launch of its own
digital currency. The crypto assets in India are currently estimated at around
Rs 45,000 crore with about 15 million investors.
The Budget Session will begin on January 31 and conclude on April 8.Finance
Minister Nirmala Sitharaman will present the Budget on February 1. The crypto
industry is hopeful the Union Budget will bring in regulatory clarity about the
emerging asset class. The government is planning changes in the income tax laws
to bring cryptocurrencies under the tax net, Revenue Secretary Tarun Bajaj had
recently told PTI.
Crypto companies in India believe that India has the potential to emerge as a
major player in the crypto market and wants the government to put in place a
framework for large scale adoption of the same.
"Today, leading crypto exchanges follow strict self-regulatory practices to
ensure customer protection. We hope the upcoming Union Budget will bring in
regulatory clarity and help standardize best practices, address misconceptions
around this emerging asset class. We believe a regularised environment will
encourage more Indians to start their crypto investing journey, promoting
financial inclusion in line with the government's vision," said Sharan Nair,
Chief Business Officer, CoinSwitch Kuber.
Currently, there is no provision under the Income Tax Act for taxing
cryptocurrencies. The most likely tax position is that income on transfer of
cryptocurrencies should be taxed as capital gains unless a seller is a trader by
occupation, which later should be taxed as business income.
" We expect detailed clarity on how the crrypto industry be regulated and an
introduction to a tax regime that would be more fruitful. 2021 was the most
significant year in terms of how things shaped up for the crypto industry in
India and as a crypto community. With a robust mechanism in place, 2022 would be
the year of mainstream crypto adoption,"Gaurav Dahake, CEO & Founder Bitbns, a
crypto exchange.
"Much clarity is required in the Budget 2022 on issues such as the treatment of
capital gains or business income, classification as speculative income,
allowability of set-off and carry forward of losses, and the applicability of
deemed gift tax provisions. The Budget may introduce special income tax rates to
tax profits from Crypto transactions and may impose conditions such as crypto
purchase/sale transactions, which can be through recognized platforms/exchanges
only. It is also expected that the Budget may contain disclosure requirements in
Income Tax returns for crypto holdings (in Indian or Foreign exchanges) by
Indian residents," said Harsh Bhuta, Partner at Bhuta Shah & Co LLP.
" We wish for clarity regarding the taxation on buying and selling cryptos.
Since regulations are the major hindrances to these currencies' growth,
optimistically looking towards progressive regulations," said Edul Patel, CEO
and Co-founder of Mudrex, a crypto investing platform.
"Taxing cryptocurrency investments as asset class will be the most viable option
for the Indian government as per which if tokens are sold within 3 years of
holding period, it will be taxed as STCG, if not then LTCG. Also, NFT
transactions should be treated as an asset class," said Abhinav Soomaney,
Forensic and Crypto Expert.
"The government may consider levying TDS/TCS on sale and purchase of
cryptocurrencies above a certain threshold, and whether such transactions could
be brought within the ambit of Specified Financial Transaction (SFT)," said L
Badri Narayanan, Executive Partner, Lakshmikumaran & Sridharan Attorneys.
At the virtual summit of the World Economic Forum on January 17, Prime Minister
Narendra Modi called for synchronised global action to regulate cryptocurrencies
while the Reserve Bank of India has time and again said it is in favour of
banning “private cryptocurrencies.”
Sathvik Vishwanath, Co-Founder and CEO, Unocoin is not expecting anything
amazing to come out of the Budget this time. "If at all, the income tax
confusions may get cleared up," he said.
"Various governments from developed nations across the world have created the
distinction between income generated from crypto as business income or long-term
capital gains tax. For the benefit of millions of Indian investors who are
invested in crypto, we hope there will be adequate clarification on whether or
not the income qualifies as business income. Similarly, clear guidelines and an
explicit inclusion of crypto assets, and their corresponding treatment in the
current GST and income tax guidelines will be hugely beneficial to the many
crypto businesses operating in the country as well," said Manhar Garegrat,
Executive Director - Policy and Special Projects, at CoinDCX.
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INDIAN STOCKS DIP FOR 4TH STRAIGHT DAY; SENSEX TUMBLES 593 POINTS
After losing 1,844 points in the previous three sessions, the Sensex opened the
trading on Friday over 400 points down at 59,039.37 points and tumbled to a low
of 58,683.01 points in the early morning trade.
* ANI
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Mumbai [India], January 21 (ANI): The Indian equities markets were under heavy
selling pressure for the fourth consecutive day on Friday with benchmark Sensex
slumping 593 points.
After losing 1,844 points in the previous three sessions, the Sensex opened the
trading on Friday over 400 points down at 59,039.37 points and tumbled to a low
of 58,683.01 points in the early morning trade.
The 30 stock S&P BSE Sensex of the Bombay Stock Exchange was trading at
58,871.22 points at 10.53 am, which is 593.4 points or 1.00 per cent down from
its previous day's close at 59,464.62 points.
The benchmark Sensex had lost 634.20 points or 1.06 per cent on Thursday.
The broader Nifty 50 of the National Stock Exchange was trading at 17,568.65
points, which is 188.35 points or 1.06 per cent lower from its previous day's
close at 17,757 points.
There was heavy selling pressure in IT, metal, financial and banking stocks.
Bajaj Finserv tumbled 4.20 per cent to Rs 16,535.45. Tech Mahindra tumbled 3.44
per cent to Rs 1610.80. Tata Steel slumped 2.19 per cent to Rs 1172.40.
IndusInd Bank 2.50 per cent down at Rs 856.30; Bharti Airtel 2.35 per cent down
at Rs 698.50; Axis Bank 2.31 per cent down at Rs 711.95; Dr Reddy's Laboratories
2.03 per cent down at Rs 4502; Titan 1.91 per cent down at Rs 2517.35 and State
Bank of India 1.78 per cent down at Rs 502.45 were among the major Sensex
losers.
The index heavyweight Reliance Industries, which is scheduled to announce its Q3
results later in the day, was trading 0.32 per cent down at Rs 2470.75.
Hindustan Unilever jumped 2.01 per cent to Rs 2307 a day after the company
announced its financial results. Hindustan Unilever on Thursday reported better
than expected Rs 2,243 crore net profit for the third quarter of 2021-22, which
is 16.76 per cent higher when compared with Rs 1,921 crore profit recorded
during the corresponding quarter of last fiscal.
Maruti Suzuki was trading 1.33 per cent higher at Rs 8143.55. Power Grid
Corporation 0.65 per cent higher at Rs 216; NTPC 0.22 per cent higher at Rs
135.20; HDFC 0.13 per cent higher at Rs 2572.15 and ITC 0.07 per cent higher at
Rs 218.90 were among the major Sensex gainers. (ANI)
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IND DIRECTORS QUIT PTC’S FINANCE ARM
Shares of PTC India Financial Services, a lending subsidiary of Power Trading
Corporation, fell more than 18% on Thursday after three independent directors
quit over corporate governance issues and concerns about the conduct of the MD.
* TNN
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MUMBAI: Shares of PTC India Financial Services, a lending subsidiary of Power
Trading Corporation, fell more than 18% on Thursday after three independent
directors quit over corporate governance issues and concerns about the conduct
of the MD.
The company said in an exchange filing, “We refute the allegations by the
outgoing directors, which were due to our adherence to best corporate governance
practices under the guidance of promoter, regulator and the government of India.
The matter will be addressed at the board level and an update will be
communicated to all stakeholders appropriately.”
The independent directors were former LIC MD Thomas Matthew T, Kamlesh Shivji
Vikamsey and Santosh B Nayar. One of the outgoing directors, Mathew, said in his
letter that the MD did not allow Ratnesh to function as director finance and CFO
despite his appointment being done following a board process.
“Only on January 10, 2022, we were informed by the company secretary that
Ratnesh had rejoined NTPC on December 6, 2021. No explanations were given as to
why he re-joined NTPC and the circumstances that led to his returning to NTPC,”
the letter said.
Mathew also said that there were issues regarding a loan to NSL Nagapatnam Power
& Infratech, which was headed for insolvency. He said that the management had
held back a forensic report on the company for more than two years.
Subsequently, a two-member committee looking into this non-disclosure
recommended that the loan account be reported to the RBI as suspected fraud. In
addition to these issues, he had highlighted other transactions where the board
members had concern over the performance of the company’s management.
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CRYPTOCURRENCIES CRASH 40% FROM PEAK, FACE MORE VOLATILITY
The recent drop follows recent crashes brought on by Tesla, making a U-turn on
accepting Bitcoin as payment for its products, and China clamping down on
initial coin offerings and block exchanges.
* ETBFSI
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Bitcoin and other leading crypto coins experienced a significant drop in share
price after investors began global rate tightening, dumping mining equipment as
China announced fresh regulations and Tesla founder Elon Musk making a U-Turn on
cryptocurrencies.
Bloomberg galaxy cryptocurrency index, which is designed to measure the
performance of the largest cryptocurrencies traded in US dollars, is down 40 per
cent since the peak recorded in November 10, 2021. The index has lost 11 per
cent since the beginning of 2022.
The recent drop follows recent crashes brought on by Tesla making a U-turn on
accepting Bitcoin as payment for its products, and China clamping down on
initial coin offerings and block exchanges.
A further blow was dealt when China ordered Bitcoin mining in its Sichuan
province to shut down completely and told banks to stop supporting crypto
transactions, in a latest wave of restrictions on cryptos.
Now the country’s central bank, People’s Bank of China, has effectively banned
digital coins after announcing that all transactions of cryptocurrencies are
illegal.
The decision has already had an impact on the global crypto market.
China’s crackdown on cryptos comes days after Musk’s shock announcement.
Musk’s decision signifies a sharp u-turn for Tesla who only started accepting
Bitcoin as payment for its services in February 2021.
It came after the electric car company bought $1.5b (£1.06b) of Bitcoin shares,
which in turn sent the market price of both the crypto and Tesla soaring.
Yet the impact on the environment of Bitcoin mining - a complicated process of
minting new digital tokens - has seen Tesla withdraw this option for customers.
The billionaire entrepreneur said: “We are concerned about rapidly increasing
use of fossil fuel for Bitcoin mining and transactions, especially coal, which
has the worst emissions of any fuel.”
Musk reaffirmed his belief that cryptocurrency has a “promising future” but that
it “cannot come at great cost to the environment”, in his Twitter post.
Federal Reserve action
The cryptocurrencies have also been hit by the US Federal Reserve’s change of
stance in the December policy meeting, in which the Fed announced interest rates
3 to 4 times in 2022, about 25 basis points each time.
This spells bad news for risky assets such as cryptocurrencies as it will
increase the cost of borrowing for leveraged trades and the liquidity will
reduce with the Fed not rolling over the maturing government bonds. The higher
interest rates would see the fund managers reallocating funds to fixed income.
India crackdown
The Indian government is also against cryptocurrencies with tax authorities
demanding GST at the rate of 18 per cent on the commission charged by these
crypto exchanges.
Also, there remains ambiguity over how the crypto gains or losses will be taxed.
It is also not clear whether cryptocurrency is a legal asset in India. The
government plans to bring a bill in Parliament but it has been deferred. If the
income is non-speculative, then capital gains tax could be charged on the gains
whereas if these are treated as speculative income then can be taxed at the
corporate tax rate.
The bigger worry is money laundering and other illicit activities taking place
with cryptocurrencies.
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ALL 3 INDEPENDENT DIRECTORS OF PTC INDIA FINANCIAL SERVICES RESIGN
The three independent directors who have resigned from the board with immediate
effect are Kamlesh Shivji Vikamsey, Santosh B Nayar and Thomas Mathew T,
according to a regulatory filing by the company.
* PTI
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New Delhi: In an unusual development, all three independent directors on the
board of PTC India Financial Services (PFS) on Wednesday resigned over corporate
governance issues and other matters.
The three independent directors who have resigned from the board with immediate
effect are Kamlesh Shivji Vikamsey, Santosh B Nayar and Thomas Mathew T,
according to a regulatory filing by the company.
PFS, promoted by PTC India Ltd (PTC), is registered with the RBI as a
Non-Banking Financial Company (NBFC). The systemically important non-deposit
taking NBFC has been classified as an 'Infrastructure Finance Company (IFC)' by
the RBI.
In recent memory, it is possibly the first instance where all the independent
directors of a company have resigned enmasse.
The directors have also sent of their resignation letters to the Reserve Bank of
India (RBI), Securities and Exchange Board of India (Sebi) and Ministry of
Corporate Affairs.
The company has submitted copies of the resignation letters to the stock
exchanges.
In the resignation letters, they have alleged that certain actions of the
Chairman of the Board and Managing Director of the company are "ultra-vires" and
"in violation" of the provisions of the Companies Act, 2013.
Pawan Singh is the Managing Director and Chief Executive Officer of the company.
The two nominee directors on the board of the company are Rajib Kumar Mishra and
Pankaj Goel.
The independent directors have also referred to the issues regarding Rs 125
crore-bridge loan given to NSL Nagapatnam Power and Infratech Pvt Ltd, besides
alleging that "no action" has been taken on certain corporate governance issues.
Pointing out that independent directors' communication were "blatantly ignored,
they said, "such non-cooperation on the part of the management and the company
is unfortunate and a deterrent to the spirit of the law and impedes the
functioning of the independent directors on the board of the listed company".
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DIGITAL PAYMENTS ADOPTION ACCELERATE: RBI-DPI
There has been a significant growth in adoption as well as deepening of digital
payments across the country, showed the Reserve Bank of India - Digital Payments
Index (RBI-DPI) on Wednesday.
* IANS
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Mumbai, There has been a significant growth in adoption as well as deepening of
digital payments across the country, showed the Reserve Bank of India - Digital
Payments Index (RBI-DPI) on Wednesday.
Accordingly, the index reading for September 2021 rose to 304.06 (index value)
from 270.59 in March 2021.
"The RBI-DPI Index continues to demonstrate significant growth in adoption and
deepening of digital payments across the country," the RBI said in a statement.
Starting from March 2018, the index stood at 153.47 in March 2019, 173.49 in
September 2019.
This improved to 207.84 in March 2020, 217.74 in September 2020 and further
increased to 270.59 in March 2021.
Earlier, the RBI had announced construction of the composite index with March
2018 as base to capture the extent of digitisation of payments across the
country.
The RBI-DPI comprises of five broad parameters that enable measurement of
deepening and penetration of digital payments in the country over different time
periods.Notably, these parameters are 'payment enablers', 'payment
infrastructure -- demand side factors', 'payment infrastructure - suppy side
factors', 'payment performance' and 'consumer centricity'.Each of these
parameters have sub-parameters which, in turn, consist of various measurable
indicators.
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INDIA'S CRYPTOCURRENCY SECTOR LIKELY TO UPDATE CODE OF CONDUCT
An industry body made up of crypto selling platforms may appoint tax experts
from Big Four audit firms for guidance, add warning labels while onboarding new
customers.
* Apoorva Mittal
* ETtech
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Mumbai: Indian cryptocurrency exchanges are weighing updates to their
self-regulatory code of conduct to avoid run-ins with regulators.
The move comes amid heightened scrutiny of the sector from regulatory bodies,
including the income tax department, enforcement directorate, and others.
ET reported on Monday that the government may delay tabling the Cryptocurrency
Bill in the upcoming budget session of Parliament as it wants to hold more
discussions and build consensus on a regulatory framework for the nascent
sector.
Leading cryptocurrency firms such as WazirX, CoinDCX and CoinSwitch Kuber, as
well as other members of the Blockchain and Crypto Assets Council (BACC), are
working to update the ‘Code of Conduct (COC)’, sources aware of the matter told
ET. BACC is part of the industry body, the Internet and Mobile Association of
India (IAMAI). BACC has acted as a voluntary Self-Regulatory Organisation (SRO)
for the industry in the absence of formal regulations.
IAMAI and BACC did not respond to ET's queries seeking comment.
On Monday, Prime Minister Narendra Modi called for global corporations to
regulate the fast-growing industry at the World Economic Forum’s Davos Agenda
2022 virtual event.
Crypto-selling platforms may add warnings and appropriate banners that highlight
volatile nature of the industry while onboarding new customers on their
platform, a person familiar with the discussions said. Guidelines are being
framed on customer protection measures including protection of customer funds,
transaction settlement, and consumer-facing communication, said another person
directly familiar with the discussions.
“At present, there is no standardised format for terms and conditions and risk
warnings,” one of the people said, requesting anonymity due to the sensitivity
of the talks. “We are trying to bring that as well into the guidelines so that
the warnings customers get are the same.”
Discussions are also on to appoint a tax expert from one of the Big Four audit
firms to conduct an audit and tax compliance strategies to members.
Some crypto selling platforms have been under scrutiny by the Directorate
General of Goods and Services Tax Intelligence (DGGI) for alleged tax evasion.
The idea behind tweaking the code is to also address concerns raised in the
discussions held between crypto selling platforms and the Reserve Bank of India
(RBI) last year as well as in the Parliamentary Standing Committee around
investor protection and regulating the broader industry.
The key areas being debated by members of the BACC, which comprise crypto
exchanges, decentralised finance startups, and NFT marketplaces, include
measures to enhance consumer protection by introducing warnings and having
standardised tax practises.
“When you look at the fundamental issue which the RBI and the government had
raised was whether the investor is informed well enough about the risks
associated with investing in crypto,” said one of the industry sources working
with the crypto companies. “Either through your ads or through onboarding
process or through Know Your Customer process, are you embedding this fact that
what you're doing and proposing is risky?"
The code of conduct adopted by members of the BACC acts as a guide in the
absence of any formal regulations.
In the last six months, crypto selling platforms have been under the lens of
various government bodies due to the rising adoption of crypto by retail users.
The self-regulatory code acts as a guide for the industry to introduce uniform
practises. Compliance with the COC is voluntary. Of late, exchanges have become
stricter about pulling up members that violate the code or bring the broader
industry under the scanner of regulators.
The updated code will also include the Advertising Standards Council of India
(ASCI) guidelines on crypto ads, which are expected to be introduced soon.
“ASCI has been in advanced talks with several stakeholders including the
government in framing its crypto advertising guidelines that will work to
protect the consumer’s interests. These are expected to be finalised shortly,”
said Manisha Kapoor, general secretary, ASCI.
ET reported earlier this month that crypto exchanges had prepared an initial
do’s and don'ts list for advertisements that deal with cryptocurrencies.
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AXIS FINANCE SENDS LEGAL NOTICE TO ZEE, SEEKS ₹146-CRORE IN DUES
Denying all the contentions of Axis Finance, ZEE has said in its response that
neither the company nor its MD and CEO Punit Goenka are party to any of the loan
documents.
* Gaurav Laghate
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* Maulik Vyas
* ET Bureau
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Axis Finance, a subsidiary of private sector lender Axis Bank, has sent a legal
notice to Zee Entertainment Enterprises (ZEE) and its promoters, Subhash Chandra
and his son Punit Goenka, seeking to recover over ₹146 crore in dues before
finalising the proposed merger of the company with Sony Pictures Network India
(SPNI).
Denying all the contentions of Axis Finance, ZEE has said in its response that
neither the company nor its MD and CEO Punit Goenka are party to any of the loan
documents. The company has also pointed out that Goenka or the company did not
provide any assurance to AFL for repayment.
In its notice, Axis Finance has demanded the clearing of the dues of two
entities of the Essel Group, namely Cyquator Media Services and Primat
Infrapower & Multiventures.
"If the payments are not made by you... either by yourself or by your group
companies, to our clients within a period of seven days from the receipt hereof,
our client will be left with no other alternative but to initiate appropriate
legal proceedings against you, including to oppose the merger between ZEE and
Sony," said the legal notice sent by law firm MDP & Partners on December 30 on
behalf of Axis Finance.
As per the notice, a copy of which was reviewed by ET, both Cyquator Media and
Primat Infra had raised ₹100 crore each from Axis Finance.
The legal notice claimed that the lender had granted a credit facility to both
the Essel Group companies and the pledges were created in various group
companies, including Direct Media Distribution Ventures, Essel Corporate LLP and
Primat Infrapower & Multiventures.
Since the borrower failed to repay the dues, Axis Finance invoked pledges and
recovered a partial amount by selling shares of Direct Media and Essel
Corporate.
Meanwhile, the lender has approached the Bombay High Court to recover over ₹60
crore from Cyquator. Simultaneously, Axis Finance is seeking to recover over ₹86
crore from Primat Infra.
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