Reliance Communications (RCom) said its lenders have rejected the resignation of chairman Anil Ambani and four other directors, and asked them to cooperate in the ongoing corporate insolvency resolution process. Ambani along with four directors - Ryna Karani, Chhaya Virani, Manjari Kacker and Suresh Rangachar - had resigned from the company earlier this month. The company is going through insolvency proceedings following an application filed by Swedish telecom gear maker Ericsson. The National Company Law Tribunal (NCLT) has handed over control of the company to an insolvency resolution professional. Sources estimate that RCom Group’s total secured debt is around £3.3 billion. Lenders had submitted claims of around £4.9 billion in August.
BoB denies South Africa corruption charges
Bank of Baroda has denied allegations by a British lawmaker that the bank had facilitated corruption in South Africa under the regime of former president Jacob Zuma. British lawmaker Peter Hain last week told an inquiry panel that HSBC, Standard Chartered and Bank of Baroda were “directly culpable” in looting South Africa’s treasury under Zuma. While HSBC said that it fully supported the commission’s inquiry, Standard Chartered said there was no evidence linking it to the Guptas directly. Bank of Baroda, which had not immediately responded, said in a statement that its operations in South Africa were governed and conducted in accordance with the regulations and guidelines of the South African Reserve Bank and the RBI. “We confirm that Bank of Baroda, South Africa, has not indulged in any activity violating regulatory guidelines knowingly. The transactions were carried out in a professional and transparent manner and we are totally committed to comply with rules and regulations laid out by the governing bodies and regulators,” the bank said in a statement.
Telecom companies to hike tariffs
Close on the heels of Vodafone Idea and Bharti Airtel announcing a tariff hike, Reliance Jio, the telecom arm of Reliance Industries, hinted that it will increase mobile phone call and data charges in the next few weeks in compliance with rules. “We understand that TRAI is likely to initiate a consultation process for revision of telecom tariffs. Like other operators, we will also work with the government and comply with the regulatory regime to strengthen the industry to benefit Indian consumers and take measures including appropriate increase in tariffs in next few weeks in a manner that does not adversely impact data consumption or growth in digital adoption and sustains investments,” Jio said in a statement.
SpiceJet plans JV airline in UAE’s Ras Al Khaimah
In a first, an Indian carrier is planning to start a JV airline abroad. SpiceJet is going to apply to launch an airline in Ras Al Khaimah (RAK), one of the seven emirates of the UAE. SpiceJet CMD Ajay Singh said his budget airlines is finalising paperwork to apply for getting the start-up airline licence in RAK, which does not have an airline of its own. RAK Airways used to be the national carrier of this emirate but the 2006-founded carrier ceased operation in January 2014. Asked if it makes business sense to start a subsidiary abroad when the parent airline itself is in losses, he said the view is long term. “Why should only foreign airlines comes to India and start airlines here? Indian carriers should also look for similar opportunities abroad. The investment required for the proposed RAK startup JV is not much. What is required is planes and we already have many on order,” Singh said.
RBI mulls new rules on corporate governance
The Reserve Bank India is looking to introduce new rules on corporate governance for banks in sync with global ones, and would also like lenders to disclose more, deputy governor N S Vishwanathan said. Vishwanathan also urged banks to recognise losses because of NPAs as early as possible and not to defer the same. The comments from the top central banker come at a time when the system continues to go through the issues of asset quality, even though the new additions have slowed down. Vishwanathan listed out a slew of initiatives the RBI has undertaken, with the compensation structures for key management personnel and whole-time directors being the latest additions, and hinted that it is looking at more.