Volkswagen & Ford Join Forces, Infosys Pulls Ahead of TCS, Facebook Fined Record $5bn for Role in Cambridge Analytica

Budget’s surcharge on FPIs likely to hit global passive funds that invest in India. Finance Ministry planning on taxing share buybacks by listed companies. Revenue uptick enables Infosys to pull ahead of TCS. Internal report on RPTs between IGE Group and IndiGo had been submitted in April. Facebook fined record $5bn for its role in Cambridge Analytica scandal. Government wants to roll out facial recognition technology to nab criminals – but there’s a catch. Driverless cars and EVs have made Volkswagen and Ford stop locking horns and start shaking hands. Johnson & Johnson will start testing an HIV vaccine this year. Honeywell CEO says he’s hopeful about Boeing’s 737 Max aircraft. A library tucked away in Old Delhi that anyone with a passion for lost books and lively debates should visit.

 

Moving on to the top Business news today:

 

 BUDGET IMPACTS 


Budget’s surcharge on FPIs likely to hit global passive funds that invest in India. Finance Ministry planning on taxing share buybacks by listed companies.



Surcharge #1: The Budget’s surcharge on foreign portfolio investments may hurt the returns on passive funds and their ability to match benchmark returns.



Passive funds make up 20-25% of the FPI money coming to India. Exchange-trade funds, which make up $40m of this passive money, will probably be hit the hardest.



The Budget’s surcharges on FPIs have dampened the market’s mood, with Sensex having plunged to its biggest single-day decline in nine months on 8 July. Now, if the government wants to amend its stance and exempt FPIs from the surcharge, it will have to use the Finance Bill to insert a carve-out.  



Surcharge #2: The Finance Ministry is looking to impose a 20% tax on share buybacks by listed companies as a way to encourage investments. This additional tax had been proposed by the Finance Minister in her maiden Budget Speech.



With regard to whether share buybacks that are already underway will be exempt from this levy or not, Finance Secretary Subhash Chandra Garg said the matter would be discussed “with the Revenue Department”.

 

 COMPANIES 


Revenue uptick enables Infosys to pull ahead of TCS. Internal report on RPTs between IGE Group and IndiGo had been submitted in April.



Infosys Soars High: A strong 12.4% year-on-year revenue surge helped Infosys pull ahead of TCS.



The robust report enabled Infosys to raise its revenue forecast while its share price soared 6-7% in early trade on the NYSE.



At $2.7bn, large deal signings were at the highest ever, the company said. This, alongwith a 41% digital revenue growth, helped Infosys improve on its previous quarter’s 11.7%.



TCS, meanwhile, experienced a slowdown, with growth stalling from 12.7% to 10.6% this quarter.



IndiGo Again: An internal committee to review related-party transactions (RPTs) done between IndiGo and IGE Group companies had been set up in March, the Group said on Friday.



The committee’s report had been submitted on April 4 but couldn’t be deliberated on by the IndiGo board because of differences between IGE’s Ankit Bhatia and IndgiGo co-founder Rakesh Gangwal.



Gangwal had demanded changes in the RPT procedure and also in the shareholders agreement. These demands were decried by Bhatia, who said they impinged upon “the rights of the board of directors”.

 

 RULES 

 

Facebook fined record $5bn for its role in Cambridge Analytica scandal. Government wants to roll out facial recognition technology to nab criminals – but there’s a catch.



Facebook Faces The Consequences: An investigation by the Federal Trade Commission into Facebook’s role in the Cambridge Analytica scandal ended today in a 3-2 vote in favour of fining the social media company a record $5bn.  



The scandal involved a British political consulting firm harvestimg user data for targeting them with political ads. As many as 87 million peoples’ data was compromised.



The fine was the highest ever that was imposed by the FTC on a tech company, although it still needs the approval of the Justice Department’s civil division.



Facebook, meanwhile, had been expecting this number, which falls within its own estimates. Interestingly, its shares responded positively to the news, trading up 1.8%.



The What: The National Crime Records Bureau wants to roll out facial recognition technology to be used by all law agencies as early as next year.



The software has been tested - in April, it was used by the Delhi Police to identify nearly 3,000 missing children in just four days.



The Catch: India has no law addressing or regulating facial recognition technology; not even the IT Act dwells on this topic. Without proper legislation, the tech can be misused to aid in surveillance and violate citizens’ fundamental right to privacy. It will also be difficult to tackle cases of misidentification and overreach.

 

 FUTURE 


Driverless cars and EVs have made Volkswagen and Ford stop locking horns and start shaking hands. Johnson & Johnson will start testing an HIV vaccine this year.



Together We Thrive: Former rivals Volkswagen and Ford are joining hands to boost driverless and electric vehicle production.



While Volkswagen will invest $2.6bn in a Ford-owned autonomous vehicle company, the latter will use VW’s EV platform to build zero-emission cars.



The two auto giants will also become equal owners of Argo AI, in tandem with their plan to put autonomous vehicles on American and European roads by 2021.



Vaccination Is As Important As Cure: Johnson & Johnson announced on Friday that it will test an anti-HIV experimental vaccine in the US and Europe this year. The test will involve thousands of men who have sex with men and if successful could become the first approved immunusation against HIV.



While an all-out cure for the virus remains elusive, we are closer to reaching it than ever before. At the same time, genetic engineering, medical advances and increasing awareness have enabled humanity to make remarkable strides against AIDS since 1987, when the first-ever anti-HIV drug was approved.

 

 VIDEOS 



Honeywell CEO says he’s hopeful about Boeing’s 737 Max aircraft. A library tucked away in Old Delhi that anyone with a passion for lost books and lively debates should visit.



“All’s Well Here”: The CEO of Honeywell, which is a big supplier to Boeing, is “hopeful” about the future prospects of the 737 Max, the aircraft series involved in two deadly crashes in March.



“We do think it’s a good aircraft that has some challenges that need to be addressed,” he said. “But long-term, we believe this is a sound aircraft that will be flying again ... To me, I continue to be bullish on the aircraft.”



The Lure Of Old Delhi: Tucked away in the labyrinth of narrow alleyways of Old Delhi, the Shah Waliullah Library is a delight for everyone who loves books, history and culture. Besides housing rare books and “lost” translations, it also hosts poetry readings and lively discussions on everything from art to politics. 

 

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