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ED Expands Probe in Chanda Kochhar-Videocon-ICICI Loan Case, US to Replace Green Card with 'Build America' Visa, Amazon Invests in British Food Delivery Startup Deliveroo et al.

Professor of Financial Economics and Part-time Value Investor, Transfin.
May 17, 2019 2:10 PM 5 min read

ED expands probe in Chanda Kochhar-Videocon-ICICI loan case. US to replace Green Card with 'Build America' visa. Non-banking companies may be granted access to the Aadhaar database for conducting e-KYC. Unequal distribution of power gives rise to dispute among IndiGo promoters. Amazon invests in British food delivery startup Deliveroo.

Moving on to the top Business news of the day.




Unequal distribution of power gives rise to dispute among IndiGo promoters.


Tipping the Scales: While Cofounders Rahul Bhatia and Rakesh Gangwal hold near-equal stakes in IndiGo, the scales are tilted in favour of the former when it comes to control of the board and management. 


Exhibit A: Bhatia’s holding company Inter-Globe Enterprises (IGE) has the right to appoint key managerial personnel, including the Chairman, MD, CEO and President. It also has the right to nominate three non-independent directors, one of whom will be non-retiring. 


Exhibit B: The Rakesh Gangwal (RG) Group has the right to nominate just one non-independent director, who will be a non-retiring director, according to filings with the Registrar of Companies. 


An unequal distribution of power has given rise to dispute among IndiGo promoters.


Here’s a rundown of the other bigger issues which have caught the promoters in a scuffle. 


Zero Vision: Even a month after distressed private carrier Jet Airways halted operations on 17 April, there is no clear revival plan in sight yet.


This has dire consequences for the company as well as the aviation industry. Here are the five ways Jet Airways’ crash landing hit the industry.



Non-banking companies may be granted access to the Aadhaar database for conducting e-KYC. ED expands probe in Chanda Kochhar-Videocon-ICICI loan case. 

Three Step Process: Payment and lending companies must first seek permission from RBI, while broking entities will need sanction from SEBI, before they can query the database. Following this, entities have to apply to the Unique Identification Authority of India (UIDAI), for a privacy and security examination. The request for information will then be sent to the Ministry of Finance for clearance.
Access Allowed: It will be a significant gain for mobile wallets, digital lending startups and others struggling to comply with customer verification banking guidelines.
Expansion: ED has expanded its probe into a total of 24 loans, against Chanda Kochhar, aggregating to INR7,862cr, which are believed to be “illegally and criminally” loaned by the bank to the conglomerate when she was in charge between 2009 and 2018.
Deep Investigation: As per the ED, fresh loans or renewal of loans, guarantees — worth INR7,862.20 crore were sanctioned by the private bank to Videocon Group companies between May 2009 and June 2017.
Some of these loans were as high as INR2,870cr.
Amazon invests in British food delivery startup Deliveroo.
Leading the Pack: Online retail giant, Amazon is leading a $575m investment in fast-growing food delivery service Deliveroo, taking the total amount that Deliveroo has raised thus far to $1.53bn.
Other participants include existing Deliveroo investors T Rowe Price, Fidelity Management and Research Company, and Greenoaks.
What’s the Plan?: This new investment will help Deliveroo to grow and to offer customers even more choice, tailored to their personal tastes, offer restaurants greater opportunities to grow and expand their businesses, and to create more flexible, well-paid work for riders.
Previously: Since its London launch in 2013, Deliveroo has expanded into 500 towns and cities across Europe, Asia, Australia and the Middle East.

Of Doves, Bulls and Owls: The Wall Street is seemingly welcoming the emerging picture of Walmart’s international efforts, despite the geopolitical trade risks spooking markets at present.


Shares of the retail giant bounced nearly 2% in Thursday afternoon trading, benefiting from a strong beat on earnings per share and a confident earnings call pre-market.


Aside from e-commerce growth headlined by the company's ambitions to compete with, for convenient, next-day delivery services, the international aspect of the all-American company is enticing for analysts.


More on this here.

US to replace Green Card with 'Build America' visa.
US President Donald Trump recently announced plans to overhaul the country's immigration policy that would give preference to foreigners based on merit rather than the existing system that gives preference to family ties.
Crystal Clear: As part of the plan to transform the nation’s green card system to ‘pro-American, pro-immigrant and pro-worker’, Trump has said that he will replace the existing green cards with 'Build America' visa.
Every year, the US issues nearly 1.1 million green cards, which gives foreign nationals life-time permission to live and work in the US and a path to citizenship in five years.
A Surefire Failure: However, many vehemently voiced their dissatisfaction with the proposal commenting that the White House has repackaged the worst of its past failed immigration plans. 
“This is not designed to be a serious policy proposal – it’s a message document that’s a misguided attempt at political posturing. To say it’s dead on arrival would be generous”, warned Pili Tobar, the Deputy Director of America’s Voice, a group that advocates for immigrants’ rights.

Huawei has hedged itself against any US-China trade war-related issues.
After Effect: Shares of Huawei’s key US-listed suppliers including Qualcomm and Qorvo stumbled in Thursday trade after Huawei was added to the US government’s “Entity List”, implying that any American firm that wishes to sell to the Chinese tech giant must obtain a license.
Qualcomm was down 4%, Micron was nearly 3% lower, and semiconductor firms Qorvo and Skyworks were down 7% and 6%, respectively.
The telecom giant reportedly told some suppliers six months ago that it wanted to build up a year’s worth of crucial components to prepare for any US-China trade war-related issues.
Huawei has also been trying to reduce its reliance on US companies by investing in its own chip technology for consumer products, particularly smartphone processors and 5G chips.
However: While Huawei has been investing in some components, there are other parts that make up a smartphone for which it doesn’t have its own technology and for which it heavily relies on American parts.
Brownie Points: Median pay reached $12.4m for CEOs of the biggest US companies in 2018. Most S&P 500 CEOs got raises of 5% or better during the year, while total shareholder return was -5.8%. 
More such interesting data on the highest-paid CEOs, and the lowest, with comparisons of shareholder returns and other factors here
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