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Govt Simplifies Process to Avail Angel Tax Exemption, Facebook Makes India a Separate Region, WeWork CEO in Trouble et al.

Professor of Financial Economics and Part-time Value Investor, Transfin.
Jan 17, 2019 2:56 PM 3 min read
Editorial

Facebook makes India a separate region; sets up 6-member board.  Govt simplifies process to avail angel tax exemption. WeWork CEO Adam Neumann sparks conflict of interest concerns; leashes out own property to his co-working startup. Amazon ventures into publishing.
 

Now to Today's Top Business News Stories in Our End Of Day Wrap Up:

Govt Simplifies Process to Avail Angel Tax Exemption, Facebook Makes India a Separate Region, WeWork CEO in Trouble et al.

AVIATION

Chairman Naresh Goyal agrees to invest INR700cr in Jet Airways, but conditions apply.

An Offer You Cannot Refuse: As per a Livemint report, Chairman Naresh Goyal is willing to inject INR700cr in beleaguered Jet Airways and pledge all his shares.

Please Read Terms and Conditions Carefully: The infusion however, is subject to the condition that his shareholding post the financing remains at least 25%.

Bigger Picture: The development comes a day after Jet's 24% stakeholder, Etihad Airways offered to invest in the airline at a c. 50% discounted rate.

View a neat summary of events to-date in this case here.

 

FACEBOOK

Facebook makes India a separate region; sets up 6-member board.  

Facebook Gears Up: Ahead of general elections 2019, Facebook has created a six member board for India which would be led by Ajit Mohan, VP and MD, Facebook India. This is likely to enable more local accountability, faster and efficient decision-making, and closer connection with the headquarters.

On Par: The India board of Facebook will be treated as a separate region, to be treated on a par with its headquarters at Menlo Park, US. The local office will no longer be a part of Facebook’s Asia Pacific operations, and will report directly to Menlo Park.

Background: Facebook has recently faced severe backlash across the globe, specifically in India and US over the misuse of the social media platform in influencing masses, propagating fake news and rumors, and not being able to keep the data of its users confidential. India is the largest market for Facebook outside US and with General Elections due in May, there is heightened sensitivity around "fake news", which perhaps warrants deeper commitment from the media giant. 

 

STARTUP

Govt simplifies process to avail angel tax exemption.

The What?: Government has simplified the process to avail angel tax exemption for start-ups.

What’s the Process?: A startup recognised by the Department of Industrial Policy and Promotion is eligible to seek exemption if:  



i) The aggregate amount of paid up share capital and share premium after the proposed issue of shares does not exceed INR10cr
ii) The investor should have filed income tax returns of at least INR50L for the year preceding the investment year
iii) Additionally, the investor's net worth should exceed INR2cr or the amount invested (whichever is higher)

The notification covers all past and future investments, and applies to startups incorporated before April 2016 as well.

Straight From the Horse’s Mouth: See DIPP’s twitter thread on the issue here.

Govt Simplifies Process to Avail Angel Tax Exemption, Facebook Makes India a Separate Region, WeWork CEO in Trouble et al.

EDTECH

Byju’s acquires US-based educational gaming system Osmo for $120m.

The What: This is the first US-based acquisition made by the Bangalore-based education technology firm.

Osmo: Osmo produces reality games for iPads and Kindle Fire tablets targeted at children in the 3-8 age group.

Aim: This acquisition will help Byju’s expand into a new demography, and cater to a larger user base.

 

US

WeWork CEO Adam Neumann sparks conflict of interest concerns; leases out own property to his co-working startup. Amazon ventures into publishing.
 

Scandal: WeWork CEO Adam Neumann has reportedly made millions of dollars by leasing office space to his own company.
 

Disclosure: WeWork last year disclosed that it had paid $12m in rent in 2016-2017 to buildings "partially owned by officers" of WeWork.
 

Perspective: The company’s business model involves leasing large amounts of office space, and then subleasing smaller chunks of that space out to individuals, startups, and smaller groups.
 

Also, this: The news comes shortly after Softbank slashed its proposed investment in the company from $16bn to $2bn.
 

Read original report here.
 

Amazon marches into publishing: Read this insightful piece by WSJ which discusses how the retail giant, after sabotaging brick-and-mortar bookstores is now foraying into publishing.

 

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