Business Tit-bits

If the government wants to tackle the massive NPA crisis that the banking system is currently going through from the root, forensic audits, particularly where defaults are wilful, are a must. Forensic Audits focus on related party transactions, bogus transactions, money laundering, tax evasion and vanishing of securities. However, to get to the root of the problem, the forensic audit/investigat...

As many industry and tax associations approach the Revenue Secretary for help to prevent income tax authorities from unfairly harrasing and prosecuting them for minor discrepencies, we ask Mr. Arun Jaitley why is this being done. This culture of "prosecution raj" is hurting small and big businesses alike and is sending the wrong message to India Inc. Giving arbitary powers and setting not only ...

"With elections on the cards, it is hardsell time for Mr.Jaitley, as he keeps writing about the achievements, of the five year rule of the Modi government. In one of his recent blog posts, he says that government has given a Rs.2 lacs crore annual benefit to the middle class, without a single tax being raised. He says that includes the reduction of GST on many commodities, which will make them...

India could have grown much faster in the past two years, but for the demonetisation blunder and the flamed GST introduction. The present challenges to growth are the SME sector which is in a mess, the need to revive the agricultural sector, the unresolved banking crisis, an improved ease of doing business at the ground level and a durable and sustainable increase in new investment. The questio...

India has been passing through an era, when those in power blatantly conceal the truth and project that what is false. The bigger the neta, babu, banker, auditor or industrialist, the bigger is the lie they say, confident that they will get away with it. So why is it that the year 2018 in particular is a year of truths? Mr. Akhilesh Bhargava, Business Editor of HW Business and Finance shares hi...

A defining feature of 2018, has been the downfall of powerful CEOs and promoters, due to their gross and criminal misdeeds being exposed and their carefully crafted reputation in tatters. They were exposed, not because of vigilance in the organisations they headed, or due to any action by the government, but were so either because their giant misdeeds could no longer be concealed, or because of...

Liquidity, which is the availability of funds, remains scarce in the Indian economy and youdo not need any economist or banker to tell that to you. Ask any small time trader orbusinessman and he will confirm it to you. Even the Reserve Bank now admits that there has been chronic shortage of liquidity in the Indian economy, notwithstanding the fact that cash in circulation in the system is over ...

The Life Insurance Corporation (LIC), which manages a huge corpus of Rs. 28 lac crores of its policy holders is a thoroughly mismanaged entity. Its pathetic and untenable state of affairs has been widely exposed by the fraudulent ILFS saga. The question is that why life needs to be put in LIC? Mr. Akhilesh Bhargava, Business Editor of HW Business and Finance shares his insights on the matter.

Among other agencies, the SFIO has been investigating the affairs and books of account of ILFS and its hundreds of subsidiary companies. In its preliminary findings, the SFIO is reported to have found shocking details of corruption, personal enrichment of employees, non-transparent deals, gross mismanagement including misreporting of income, dubious transactions, conflict of interest and evergr...

It maybe noted that the GST law has been a complex one right since its inception. The government introduced it hurriedly and without complete thought. For example, the 28% GST was meant to be only for luxury and sin items, but today, even items like cement, tyre and auto components are taxed at 28%. The GST forms are difficult to understand and a nightmare to fill. Not only is the law inherentl...

The Finance Minister, Mr.Arun Jaitley declared at an event that the government had not sought the resignation of the Reserve Bank governor Dr. Urijit Patel, over various differences between the RBI and the government. What's the complete story behind the forced exit of Mr. Urjit Patel? Mr. Akhilesh Bhargava, Business Editor of HW Business and Finance shares his insights on the matter.

Who all are they that are to be blamed for the rising NPAs in banks aside of the top management that have a direct involvment? Mr. Akhilesh Bhargava, Business Editor of HW Business and Finance shares his insights on the matter.

All is not well at Jet Airways, said to be India’s second largest airline by market share, as it heads into rough weather. It is not just that it is starved of cash and is defaulting on payments right, left and centre and that it has been incurring cash losses of over Rs.1000 crore per quarter, including a loss of Rs.1297 crore in QE September 2018, but that there are serious issues of mismana...

The new governor of the Reserve Bank of India, who was hastily appointed by the government, is a highly experienced bureaucrat, with a questionable past, if Subramanian Swamy is to be believed. An IAS officer of the Tamil Nadu cadre, he retired last year and is apparently a most trusted aide of PM Narendra Modi, having launched and very staunchly defended demonetisation, at which time he was t...

With a huge base of highly educated youth, willing to take an entrepreneurial risk, or rather at times compelled to take suchrisk for want of suitable jobs, together with a giant domestic market opportunity waiting to be exploited, India should ideally be brimming with prosperous start up enterprises. With a support base of a formidable legal/banking/financial framework at least on paper, toget...

The prices of crude oil in international markets have fallen by almost 35%, to below $60 a barrel, after having touched a recent peak of $85 to a barrel, in October 2018. These prices are now at a 13 month low and are predicted to fall further. Crude oil prices are volatile and unpredictable and curiously when they go up, the market predicts that they will only keep going up, but when they star...

It is a common experience that uncontrolled powerful CEOs, with no checks on their power go astray and indulge in serious malpractices. They ensure that there is no one in the organisation to restrain their unbridled power. As they ascend the ladder of power, they gather a bunch of eminent sounding yesmen around then, who willingly collude in their blatant abuse of power. These ambitious/greedy...

"It is reported that numerous high profile cases of taxevasion, have been under discussion between India and the BVI, with the former seeking data/documents. Interestingly, the BVI authorities have informed India that it is now unableto share information on tax evasion, since the data has got destroyed in floods in August 2017 and files have been lost. The direct beneficiaries of this ‘natura...

The FY 2017-18 was a good one for the Income Tax Department (ITD). As against an average increase of 7% to 8% per year, the number of income tax returns filed in India, increased by about 20% and the gross income tax collections of India crossed Rs.10 lac crores, for the first time ever. This was despite the fact that India’s GDP growth in FY 2017- 18 was patchy and inconsistent, which is inc...

The giant sized loans of tens of thousands of crores, given by banks to the most unworthy/undeserving borrowers and the soft kid glove treatment given to them, when they deliberately defaulted, has always been shrouded in inexplicable secrecy. Bankers have been unwilling to reveal their names. Even when these powerful borrowers were found to be wilful defaulters, the bankers were unwilling ...

The Economic Times reports that the jailed directors of Unitech Ltd., who are guilty of cheating thousands of home buyers, have been having a great time at the Tihar Jail. These Unitech directors, though in jail, have been leading a luxurious life. An inspection of the jail conducted by an Additional Sessions Judge, on the directions of the High Court, upon a complaint filed by 25 jail inmates ...

Why is India’s fiscal deficit rising ?

The hawala operators had a business turnover consisted of giving bogus bills of purchase and sale, for almost any item and of almost any company too. These fake bills helped companies not just to show a rosy picture of performance, but to also evade taxes, by booking bogus expenses. In this episode of Business Tit-Bits, our Business Editor Akhilesh Bhargava discusses how implementation of GST l...

The fugitive Sandesaras, the dubious promoters of the Sterling Biotech Group, which has duped banks of over Rs.8100 crores (it could be much more), and who have run away to Nigeria, which has no extradition treaty with India, where they have established a huge asset base, built by looting banks in India, has had companies and offices at British Virgin Islands, Liechenstein, Seychelles, Dubai an...

The fugitive Sandesaras, the dubious promoters of the Sterling Biotech Group, which has duped banks of over Rs.8100 crores (it could be much more), and who have run away to Nigeria, which has no extradition treaty with India, where they have established a huge asset base, built by looting banks in India, has had companies and offices at British Virgin Islands, Liechenstein, Seychelles, Dubai an...

With a huge election season on the cards, amidst rampant reports of a resurgent Opposition, the government has finally come out with a package of reliefs for the MSME. In order to alleviate the liquidity crisis of the SMEs and to strengthen their cashflows, they will be granted loans upto Rs. 1 crore, through a dedicated portal, within 59 minutes. The PM in fact said that when you will file you...

As the National Company Law Tribunal (NCLT) labours to resolve the NPA cases that are queued up before it, the humongous losses, called haircut in the banking jargon are emerging on the horizon with certainty. In the first twelve cases referred to the NCLT for NPA resolution, the losses to the banks are to the tune of a shocking Rs.2.65 lac crores. And this is despite the best of efforts being ...

It is the political and bureaucratic interference in the functioning of all institutions, that has been primarily responsible for their decimation and downfall in India. If Air India has been a victim of such corrupt interference, so have been the public sector banks, which have lost their capital, by giving loans to the most unworthy and undeserving borrowers, at the behest of politicians. Suc...

There has been a sharp fall in the recently reported quarterly profits of Yes Bank and ICICI Bank. Their quarterly profits fell by over 50% and did not even meet the tapered down expectation of the street analysts. This collapse of quarterly profits coincides with the change of guard at the two banks. Both, Ms. Chanda Kochhar the former MD/CEO of ICICI Bank, as well as Rana Kapoor, the truncate...

It is now the turn of the CAG to accuse the Reserve Bank of irresponsibility. The present CAG, while speaking at the launch of the Indian School of Public Policy, has questioned the role of the RBI, in the present banking crisis and has demanded to know, as to what was the banking regulator doing, when the banks went berserk, mindlessly lending huge amounts of money, which has resulted in the ...

It was just last year that in the World Bank rankings India had jumped up 30 notches as far as ease of doing business in India is concerned. The Modi government felt the occasion called for a celebration and termed things to be on the improving side. The question here arises if this is the real picture? Mr. Akhilesh Bhargava, Business Editor of HW Business and Finance shares his insights on the...

#BusinessTitBits: The Finance Minister Shri #ArunJaitley calls India a low compliance nation, to mean that we evade tax laws and do not pay taxes and file our tax returns. And for that he points to the small number of tax returns that are filed in India, as compared to its huge population. While his comment ignores the fact that millions of Indians still live below the poverty line, with no inc...

Dubai has been a favourite destination for parking of illegal funds of Indians, who may have evaded various laws, including FEMA and the Income Tax Act. With a zero tax regime and a very liberal banking system, with few questions asked regarding funds inflow and outflow, it has been a tax haven of sorts, which has been patronised not just by South East nations like India, but by the nearby Afri...

In yet another setback for Rana Kapoor, who is now trying to mend fences with Madhu Kapoor, the other large founder shareholder of Yes Bank, the Yes Bank board has recommended that the huge bonuses paid to him for the two years ended 31.03.2016 be taken back and that no bonuses be paid to him thereafter, till his tenure ends on 31.01.19. While the reasons for this harsh decision of the Yes Bank...

At a time when India needs to strengthen its foreign exchange inflows the most, the reverse has been happening on many fronts. India’s forex reserves have receded by USD 25bn to USD 400 billion, primarily because of the outflow of about Rs.66000 crores from the Indian stock markets, by the foreign investors and the huge increase of USD 26 bn in India’s annual oil import bill, due to the rising ...

Money is extremely scarce at present in the Indian economy. Experts say that India is passing through its worst liquidity crisis, of the past five years. It is not that Indians are not earning/saving enough, or that there is a shortage of currency in circulation in the system, (it is in fact at a record high), but for those businesses that desperately need it, the money is missing. The question...

It was last Thursday that founder of The Quint Mr. Raghav Bahl was subjected to what he calls a 'gruelling' Income Tax Raid. His offices were searched, along with his residence for straight 23 hours. His wife and mother as he says were confined and were not allowed any access to mobile phones or any kind of communication or the need to take advice from consultants. The Income Tax department on ...

With a huge election season on the cards leading to the general elections in 2019, political parties and their advisors are desperate to judge the mood to the electorate. All kinds of voter surveys are conducted by these parties. The voter mood is best reflected in the consumer confidence surveys because there is a direct correlation between the happiness and confidence of the consumer and the ...

As the investigation by multiple agencies continues into the affairs and accounts of the scammy ILFS, shocking details of misreporting and manipulation of the audited financial statements are being revealed with each passing day. But the question is, what is the unknown reality of ILFS? Mr. Akhilesh Bhargava, Business Editor of HW Business and Finance shares his insights on the matter.

Like the Indian rupee, which has been the worst performing Asian currency in 2018, so has been the case with the Indian stock markets. The share prices have been falling in trading session after session and dozens of prime scrips trade at a discount of over 50% to their 52 week high. The question is what has Donald Trump got to do with the market crash? Mr. Akhilesh Bhargava, Business Editor of...

Chanda Kochhar the embattled MD/CEO of ICICI Bank, who is under investigation for serious questionable practices and misconduct, finally put in her papers and resigned as the CEO of the bank yesterday. She also resigned from her directorship in all other subsidiaries of ICICI Bank. There is no element of surprise in this news. With the litany of charges against her that have kept surfacing and ...

It was on 7th August 2018, that Elon Musk, the maverick founder of Tesla Motors tweeted, that he was considering taking Tesla private, by buying back its shares from the public at USD 420 per share, and that he had secured the funding for it. It was an impulsive tweet, with no basis whatsoever. It created a chaos in the American stock markets. Trading in the shares of Tesla was suspended and it...

A news item says that the board of directors of IDBI Bank will meet on October 4, 2018, to consider the preferential allotment of equity shares to the LIC, such that its shareholding in the bank, after such allotment of shares will increase to 51%. LIC has already conveyed its approval to such allotment of shares to the board of IDBI Bank. By virtue of such allotment of shares, for which LIC wi...

While the mystery over why did Dassault partner with a wholly inexperienced, debt-ridden Ambani company in an Rs. 30000 crore order remains unresolved, yet another instance of a bankrupt Anil Ambani Group company called RNaval being given a favoured treatment, though ineligible for it, is waiting to burst into a national controversy. Why Ambani was favoured, in spite of being bankrupt. Mr. Akhi...

As the ILFS Group threatens to collapse like a pack of cards, more and more instances of its mismanagement and reckless financial policies are coming out in the open. The spate of resignations of its top honchos, starting from its CEO of 30 years, Shri Ravi Parthasarthy is only confirming the chronic malpractices and financial mismanagement of ILFS, which engineered its collapse. It now turns o...

The Appointments Division of the RBI had approved the Yes Bank’s founder CEO Rana Kapoor's extension of appointment for another three years until August 2021, but it was rejected by the RBI top brass. Interestingly, even though the officers of the said Appointment Division had a number of adverse observations against Yes Bank and its management under Rana Kapoor, they yet for strange reasons ch...

The bankrupt Dena Bank is being merged into Vijaya Bank and Bank of Baroda. So huge are the losses in the Bank that it needed two healthy banks to be able to absorb and withstand its losses. Its carcass of mismanagement is so heavy that it needed more than one bank to be able to carry it. But these are the privileges of being a government-owned entity, where accountability and answerability are...

The saga of shell companies and bogus capital as the government alleges is one such instance, where due to a miniscule number of shell companies, the entire corporate world has suffered. Almost 3 lakh entities have been closed down in this manner. To detect and close down alleged shell companies and to tax share capital, on sheer suspicion, the most irrational and illogical measures have been i...

The suspense over the continuity of the flamboyant Rana Kapoor, as the managing director/CEO of Yes Bank, is finally over. In a decisive move, which was seen to be coming, the Reserve Bank has informed Yes Bank that Rana Kapoor can continue as its CEO, only until 31st January, 2019. This entire saga of wait and watch over his continuity as MD of Yes Bank, started when in June 2018, the sharehol...

The rapid build-up of the giant and unmanageable NPA crisis that India faces today, has been gradually coming out in the open. Between 2006 to 2009 the aggregate loans by banks doubled from Rs.18 lac crores to about Rs.36 lac crores and then increased by yet another 50% to about Rs.54 lac crores by end 2013. By this time, bankers had exhausted their capital, their money was blocked in bad loans...