Parle could lay off 10,000 workers amid slowdown in the FMCG sector. Govt extends temporary allocation of Jet Airways' slots, flying rights to others till December. SC to hear Facebook’s plea in Aadhaar-social media linking case. Banks may seek customer consent before allowing transfer of funds. CG Power reports serious accounting lapses; share price drops c. 20%. Facebook will hire journalists to curate content on its upcoming “News Tab”. EU opens antitrust investigation into Facebook’s Libra cryptocurrency. H20.ai, which wants to “demoratise” artificial intelligence, announced $72.5mn Series D led by Goldman Sachs. How “Edge Computing” could threaten computing giants.
Moving on to top Business news of the day:
Parle could lay off 10,000 workers amid slowdown in the FMCG sector. Govt extends temporary allocation of Jet Airways' slots, flying rights to others till December.
G for Goodbye: India’s largest biscuit-maker Parle may be forced to lay off up to 10,000 workers on back of the ongoing slump in domestic consumption.
Adding to the slowdown has been the GST woes. As per Mayank Shah, Category Head of Parle Products, the company has sought reduction in GST on biscuits priced at INR100 per kg or below - typically sold in packs of INR5 and below. However, if the government doesn’t provide the requisite stimulus, the biscuit-maker would have to let go of over 10,000 people.
Zooming Out: Earlier, the sub-below INR100 per kg biscuits were taxed at 12%. Subsequently, companies had expected the GST rate to be fixed at 12% for premium biscuits and 5% for the lower-priced ones. However, following the implementation of GST, all biscuits were brought under the 18% tax structure, forcing companies to increase prices, thereby adversely affecting sales.
Severe slowdown in demand has also been noted in the automobile and retail sector in the recent times.
Extending the Right to Fly: The government has extended the temporary allocation of slots and bilateral foreign flying rights of defunct airline Jet Airways to other airlines till December.
Previously: Jet Airways shut down its operations on April 17 on back of severe fund crunch. This had led to a sudden rise in domestic and international airfares.
Consequently, the Centre decided to temporarily allocate the slots as well as the international flying rights of Jet Airways to other airlines who could immediately launch new flight services and fill the supply gap till September.
SC to hear Facebook’s plea in Aadhaar-social media linking case. Banks may seek customer consent before allowing transfer of funds.
Between the Devil and the Deep Blue Sea: Emphasising the need to strike a balance between privacy and security, the Supreme Court has agreed to hear a plea by Facebook to transfer to the apex court four petitions filed in the High Courts of Madras, Bombay and Madhya Pradesh seeking the “linking of Aadhaar information to social media accounts”.'
The Bigger Picture: A petition by Antony Clement Rubin in Madras High Court last year had sought the HC’s direction to the Central government to make it mandatory for social media users to link their Aadhaar number with email IDs in order to check fake news, defamatory articles, pornographic materials, anti-national and terror contents et al.
Consent Before Transfer: As per this report, the Union government has written to the RBI seeking its views on a mechanism to enable bank customers to have control over deposits of money in their accounts.
Under the proposed mechanism, banks will notify customers when someone tries to deposit money in their accounts. Customers will then have the option of accepting or rejecting the money transfer request.
The move is a follow-up to instances of illicit deposits - after demonetisaton - in bank accounts opened under the Pradhan Mantri Jan-Dhan Yojana.
CG Power reports serious accounting lapses; share price drops c. 20%.
Unauthorised Transactions Detected: Gautam Thapar-led electric equipment maker CG Power and Industrial Solutions has reported major corporate governance issues involving unauthorised transactions and understatement of liabilities and net worth.
CG Power disclosed that the total liabilities of the company and that of Avantha Group (yet another business conglomerate led by Gautam Thapar) may have been "potentially understated" by around INR1,053cr and INR1,608cr respectively as on March 31. As of April 1, the figures stood at c. INR602cr and INR402cr respectively.
In addition to this, advances to related and unrelated parties of the company and the group may have been potentially understated by over INR1,990cr and INR2,806cr respectively as of March-end.
As per Bloomberg data, CG Power's consolidated debt has swelled over 33% Y-o-Y to INR2,664cr in end-March.
Contagion: Yes Bank, which holds a 12.79% stake in CG Power, has tanked over 9%, hitting a 5-year low.
Apart from Yes Bank, the other major stakeholders in the company are HDFC Mutual Fund, Aditya Birla Sun Life, Franklin Templeton and Life Insurance Corporation of India.
Facebook will hire journalists to curate content on its upcoming “News Tab”. EU opens antitrust investigation into Facebook’s Libra cryptocurrency.
Zuckerberg News Network: It was recently revealed that Facebook was planning on launching a “News Tab” on its platform and was willing to pay publishers millions to feature their stories. Now, Facebook is reportedly hiring a “small team” of journalists to select stories for this News Tab. While most stories featured on the tab will be arranged algorithmically, the top stories of each day will be identified by this team of veteran journalists.
Libra Under A Microscope: Facebook’s upcoming cryptocurrency venture is being probed again – this time by EU regulators. The European Commission said it is "currently investigating potential anti-competitive behavior", expressing concern that the digital currency could shut down competition. The investigation revolves around the structure and membership of the Libra Association, whose composition could generate conflicts of interest. To know more, click here.
The US Treasury has already warned against Libra’s implications, and the fintech venture has drawn suspicion and ire from politicians across the US and Europe from both sides of the political spectrum.
H20.ai, which wants to “demoratise” artificial intelligence, announced $72.5mn Series D led by Goldman Sachs. How “Edge Computing” could threaten computing giants.
Democratising AI: H2O.ai has announced a $72.5mn Series D round led by Goldman Sachs and Ping An Global Voyager Fund. With this, the total investment raised reaches $147mn. H20.ai’s previous investors include Wells Fargo, Nvidia and Nexus Venture Partners.
H20.ai says its mission is to democratise AI for all and “empower every company to be an AI company”. It does this with products and tools that companies can use to harness the power of AI without having to rely on teams of data scientists.
The Edge of Glory: With over 100 giant data centres worldwide, Amazon, Microsoft and Alphabet dominate the world of cloud computing, making billions of dollars along the way (Amazon, for example, earns more dollars through its cloud computing service than its e-commerce platform). But as people and companies increasingly demand computing power to be located closer to them rather than in remote regions, wireless carriers could jump in to fill the void with their fast 5G networks, thereby threatening the dominant cloud computing players. More on this here.
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