SEBI's ban on PwC in Satyam scam removed. Auto sales slowdown continues through August. Jack Ma set to step down as Alibaba Chairman. China's GDP numbers may not be telling the complete story. Pepperfry planning IPO. Uber planning to branch out into fintech products.
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One Fell Swoop: Securities Appellate Tribunal (SAT) today overturned a two-year audit ban placed on PricewaterhouseCoopers (PwC) by the Securities and Exchange Board of India (SEBI) in the INR7,800cr Satyam scam.
SAT noted that only the national auditors watchdog ICAI (Institute of Chartered Accountants of India) can take any action against its members and fraud cannot be proved on the basis of negligence in auditing. It added that SEBI can only take remedial and preventative action, whereas the ban was a punitive action.
However, it allowed disgorgement of the INR13cr fee from the auditor.
In Other News: As per this ET report, the Ministry of Electronics and IT is considering issuing guidelines that will make it mandatory for companies such as Google, Facebook and Amazon to sell public or non-personal data, including traffic, buying and illness patterns that they collect to anyone in the country seeking access to it, including the government and private entities.
Slowdown Meltdown: Automobile sales continue to sink. In August, passenger car sales declined 31% YoY (the steepest fall in two decades) while commercial vehicle sales have declined 39% YoY to 51,897 units. Meanwhile, two-wheeler sales have dropped 22% and three-wheeler sales by 7% (both YoY).
Where Dem Cuts At?: With slowdown accelerating to the most serious one in two decades, the industry is increasingly relying on a GST cut to boost sales. It has been pitching for a rate cut from 28% to 18%. However, as the revenue scenario of the government itself is bleak, the industry might have to wait for some time.
Show Me the Money: Tax receipts arising from a equalisation levy on payments made to digital advertising platforms such as Google and Facebook from Indian entities soared 59% in the year ended March.
The tax department collected INR939cr during the period, up from INR590cr a year earlier.
What You Need to Know: The 6% equalisation levy, introduced by the Modi government in 2016 is imposed on payments made by Indian businesses to a non-resident service provider offering digital advertising services that does not have any permanent establishment in India. This covers social media giants such as Google and Facebook as well as mobile phone apps and digital content streaming services.
Clearing Dues: Baba Ramdev-led Patanjali Ayurved is set to infuse over INR205cr as equity and INR3,233cr as debt to settle dues of creditors of the debt-laden firm.
The amount will be infused in a special purpose vehicle 'Patanjali Consortium Adhigrahan Pvt Ltd', which will be later amalgamated with Ruchi Soya.
Another INR900cr will be infused by the Patanjali group through subscription of non-convertible debentures and preference shares in the SPV. It will also provide credit guarantee of nearly INR12cr.
The news comes a week after NCLT approved Ruchi Soya’s acquisition by Patanjali.
The Suitable Deal: Bengaluru-based vehicle sharing marketplace Drivezy has entered into a strategic partnership with hospitality platform OYO Hotels and Homes.
As part of the partnership, Drivezy will tap Oyo’s network of over 10,000 leased and franchised buildings in more than 300 cities in the country, and create on-site hubs to station its bikes and cars.
Data Is The New Oil: China’s economy isn’t tanking. But slipping demand and trade duress have hurt GDP numbers, which in Q2 was reportedly 6.2%. But these numbers have long been questioned by economists, policymakers and investors for their authenticity. Many have argued data released by the Communist Party is tampered and unreliable. This has led analysts to find other ways of securing genuine data – from analysing energy consumption to taking photos from space.
Alibaba Sans Ma: Jack Ma will be officially stepping down as Chairman of the company he founded in 1999 on Tuesday, when he turns 55. Ma will leave Alibaba in the hands of CEO Daniel Zhang and Vice-Chairman Joseph Tsai. However, he will remain on the company’s board till 2020.
Alibaba and the Forty Griefs: China’s food delivery market is a colossus. It is also an outlier in that it’s a market where Alibaba is losing to a rival. Beijing-based Meituan Dianping commands 65% of the $84bn market, and has left Alibaba (whose share is a mere 27%) in the dust. More on Meituan’s journey and winning strategy here.
Uber Money: Uber is surveying its drivers on a “new financial product” aimed at drivers “in a time of need”. The ride hailing service has already engaged in cash advance and car lease programmes, and in June had hired about 100 fintech-oriented tech workers. Industry speculation is rife – the company may be looking to diversify its portfolio, and financial products is probably the direction it is steering towards.
Pepperfry Chat: In a wide-ranging interview with Livemint, Pepperfry Co-founder and CEO Ambareesh Murty discussed the online furniture-selling market in India and surviving in the compete-or-die e-commerce space. He also called an IPO the “true measure of success” and said he hopes to take the company public in the next 12-18 months.
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