India to not join RCEP free trade agreement, as per sources. Infosys says no prima facie evidence found on whistleblower complaints. Price cap on medicines costing less than Rs 5 per dose may be done away with. WhatsApp's hack might delay its roll out plans for WhatsApp Pay.
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Truth or Hype?: Indian IT giant Infosys has said that no prima facie evidence was found to prove the allegations made by a group of whistle-blowers against the Chief Executive Officer (CEO) Salil Parekh and Chief Financial Officer (CFO) Nilanjan Roy regarding their involvement in unethical practices in an attempt to boost revenues and profit in recent quarters.
In a letter to the National Stock Exchange, Infosys said that the anonymous complaints were still under investigation and it was not in a position to determine “concreteness, credibility and materiality of complaints.”
Infosys share price rose c. 6% on the back of the news before closing at INR710.10 (+3.23). Reuters
In Other News: Yes Bank posted a net loss of INR600cr for the September quarter - the biggest loss for the bank since its listing after the INR1506cr loss in the quarter ending March this year, primarily on account of a one-off DTA adjustment of INR709cr due to the change in the corporate tax regime.
Gross non-performing assets (NPAs) saw a huge surge, jumping over four-fold to INR17,134cr vs INR3,866cr in the corresponding period of the previous year. NPAs soared from 0.84% in Q2 FY19 to 4.35% in Q2FY20.
YES Bank’s MD & CEO Ravneet Gill noted that the rise slippages was driven by unfortunate and unforeseen and external circumstances including crisis at Cox & Kings, CG Power, and CCD. He also noted that these troubled firms were not victims of the ongoing economic slowdown but financial trouble pewing internally. Financial Express
The What: As per sources, India's National List of Essential Medicines (NLEM) is being updated and this could result in medicines costing less than Rs 5 per dose being taken out of price control.
What Would This Mean?: If the move goes through, drugmakers will be able to raise the prices of these drugs by up to 10% every year.
Good to Know: While around 19% of the INR1.36tr domestic drug market is under price control, 4-5% of it comprises drugs priced under INR5 per dose. Moneycontrol
Interestingly, the list of drugs under price control has steadily expanded from 74 in 1995 to nearly 860 by 2019. While price control can ensure better access to quality healthcare, as per this report, the impact on the overall healthcare system and on innovation can be debilitating. As more Indians gain better access to healthcare, the quality of drugs—from stents to cancer medicines— will depend heavily on the price regime and whether there is room to reward new innovations. Livemint
Difficult Times Ahead: The telecom sector in India is eyeing the loss of c. 1L jobs following continued non-clearance of outstanding worth INR20,000cr by the state-controlled Bharat Sanchar Nigam Limited (BSNL), noted Sandeep Aggarwal, Chairman, Telecom Committee at PHD Chamber of Commerce.
The development comes in the wake of companies’ inability to disburse wages and mounting pressure from creditors. ET Telecom
In a bid to offer stressed telecom companies with some relief, the govt is considering granting them 20-yr window to repay their adjusted gross revenue (AGR) dues.
The development comes soon after the Cellular Operators Association of India (COAI) had written to the government detailing troubles faced by the telecom sector and asked the Centre to provide a complete waiver of statutory dues that its other members such as Bharti Airtel and Vodafone Idea owe to the government following the Supreme Court ruling that asked the companies to deposit the outstanding amount within three months. CNBC TV18
WhatsApp Delay: The recently-reported WhatsApp hack by Israeli surveillance firm NSO Group has reportedly raised alarm bells amongst Indian government officials, putting in jeopardy the social media company's plans to roll out a payments app.
WhatsApp recently filed a lawsuit against NSO and its software Pegasus, which apparently send malware messages to different numbers around the world, including Indian targets, to hack into their phones. (NSO denies the allegations.)
While WhatsApp maintains that its platform is secure thanks to end-to-end encryption, the government is unconvinced. It has reached out to the RBI and National Payments Corporation of India regarding WhatsApp's upcoming payments platform - WhatsApp Pay - to discuss security measures that have to be implemented to ensure that financial data is not peached. This could further delay the complete roll out of WhatsApp Pay, which has gone beta testing in India and is yet to pass compliance tests with the country's financial authorities. ET Tech
By the Way: This isn't the first time the NSO Group - or even Pegasus, the syware that allegedly hacked WhatsApp - has been in the headlines.
In 2016, NSO apparently used Pegasus to remotely peak into human rights activist Ahmed Mansoor's iPhone 6. After this hack, the company sold $15mn worth of hardware and software to the Mexican government, which wanted to use the tool against drug cartels. Jeff Bezos might have also been a victim of this malware when intimate messages between him and his mistress were leaked on the internet. And Pegasus could have also been used to spy on Jamal Kashoggi - the Saudi journalist - before he was putally murdered. Business Insider
Background: The Regional Comprehensive Economic Partnership (RCEP) is a free-trade agreement negotiations around which began in 2012. The bloc includes all 10 ASEAN countries and six partners - India, China, Japan, South Korea, Australia and New Zealand. If enacted, RCEP would include half the world's population and 30% of global GDP.
India's Reservations: New Delhi's apprehensions about the deal are not new. It has voiced these concerns ever since negotiations began - concerns of cheap mass-produced Chinese goods flooding Indian markets to the detriment of local small businesses and traders. Also a concern is the requirement to gradually reduce agricultural tariffs, many of which India is reluctant to do away with in order to protect small farmers.
China's Eagerness: China, as the region's largest economy by trillions, stands to gain much from increased market access. Especially at a time when its relations with the US are at an all-time low and the trade war and domestic slowdown are hurting its economic growth.
Update: At press time, reports were coming in that India had decided to not join the RCEP. PM Modi reportedly stood firm on demands and voiced India's concerns over the pact. “RCEP agreement does not reflect its original intent. The outcome was not fair or balanced,” the sources said. News18
2020 Vision: While a deal could not be signed this year - many analysts and politicians were predicting that it would be - the sanguine predictions are now eyeing next year as the time for a final RCEP peakthrough. Thailand, which currently holds the ASEAN chairmanship, said Sunday in a statement that the group “welcomed the conclusion of the ... Negotiations and the commitment to sign the RCEP Agreement in 2020.” CNBC
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