Indian government looks to ban cryptocurrencies; starts consultations on bill
The Indian government is looking to ban cryptocurrencies in its entirety and a committee under it has already begun the consultations on a bill called "Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019". Indian lawmakers have taken a hostile approach towards cryptocurrencies and have suggested: "an urgent need of a ban" on the digital currency.
Earlier in the year, the Supreme Court had given a deadline of four weeks to the government to come up with regulations for cryptocurrencies. At the moment, the draft bill is being circulated to the appropriate government officials.
The bill was drafted by a committee under the government and consisted of various ministries under the Finance Secretary, Subhash Chandra Garg. The committee included the Department of Economic Affairs (DEA), the Central Board of Direct Taxes (CBDT), the Central Board of Indirect Taxes and Customs (CBIC) and the Investor Education and Protection Fund Authority (IEPFA), among others.
The government could ban cryptocurrencies under the Prevention of Money Laundering Act (PMLA). Earlier there were reports that the government is looking to bring in regulation policies regarding digital currencies and were in the process of setting up a committee.
"The ministry of corporate affairs has in its feedback to the department of economic affairs pointed out the sale purchase and issuance of cryptocurrencies such as Bitcoin, Etherium & Cashcoin, etc. are being done by individuals and companies on false inducements of massive returns. Such schemes are neither transparent nor do they fall within any regulated legal framework. Many of them are run as Ponzi schemes, it said adding that these schemes were being used to defraud gullible investors".
Earlier, RBI had said that entities regulated by it cannot provide services to any individual or businesses dealing with or settling virtual currencies.
"We have decided to ring-fence the RBI regulated entities from the risk of dealing with entities associated with virtual currencies. They are required to stop having a business relationship with the entities dealing with virtual currencies forthwith and unwind the existing relationship within a period of three months," BP Kanungo, Deputy Governor, RBI had said.
Jet Airways shutdown: Grounding of carrier affects exports of fresh fruits, vegetables
The grounding of Jet Airways has affected the export of fresh fruits and vegetables. The troubled carrier had the highest capacity for cargo and accounted for 50% of exports from Mumbai to London, Amsterdam, Paris, and Singapore. Emirates Airlines has the second highest capacity and has hiked the prices by 30-40%.
Jet Airways' last flight was on Tuesday night after it failed to get funds. According to a report, the Jet shutdown has particularly affected fresh produce exports to Europe, especially the UK. On average, nearly 50 tonnes of vegetables were being shipped out from Mumbai to London. Jet Airways had a majority share while carrying these 50 tonnes of produce and used to operate 3 flights daily. The report added that Emirates, via Dubai, had the second largest share.
"From an average of Rs 75-80 per kg, the latest freight rates are in excess of Rs 100/kg. As a result, exporters are unable to fulfill their volume and price commitments with their customers," the daily quoted Kaushal Khakhar, CEO of Kay Bee Exports, as saying.
Apart from fruits, major vegetables that were being shipped like okra and chilies will take a hit too. "This dramatic reduction in capacity has been nothing short of a force majeure event like Brexit. We have appealed to our customers to take cognizance of the situation. With our in-house freight forwarding division, we are able to fulfill the volumes and maintain the service levels but at a significant jump in freight rates," Kakkar said.
The reduction in cargo capacity has resulted in exporters looking for alternative airlines that will book their cargo. "It is not just about an increase in freight. The capacity available for export of fruits and vegetables has declined drastically", the daily quoted Ekram Husain, vice-president, Fresh Vegetables and Fruit Exporters Association, as saying.
SpiceJet and IndiGo rally as Jet Airways suspends operations
Shares of SpiceJet and InterGlobe Aviation continued gaining streak on Wednesday and stocks touched their 52-week high after rival Jet Airways announced that they would temporarily suspend all its international and domestic flights operations.
Spicejet opened with a gain of 8.52 percent and gained 15 percent intraday to touch a new 52- week high of Rs 152.60. The stock has been gaining for the last 5 days and has risen 51.61 percent in the period. The stock is the top gainer on the BSE platform today.
SpiceJet today also announced that it will induct six more Boeing 737-800 NG aircraft on dry lease. The total number of planes to be inducted in the immediate future now stands at 27.
Meanwhile, Interglobe Aviation and rose 4.3 percent intraday to a record high of Rs 1650 apiece, also its new 52-week high value. The stock has gained at 16 percent for the last 6 day.
On the other hand, Jet Airways'stock fell more than 30 percent in morning trade on Thursday. The gains in the domestic aviation stocks come after rival Jet Airways temporarily suspended its operations on Wednesday. As per media reports, 90 percent of Jet Airways vacant slots are being re-allotted temporarily.
In a separate development, Civil Aviation Secretary Pradeep Singh Kharola said the DGCA reviewed airfare movement in 40 high-density sectors on Tuesday. It was found that airfares rose 10-30 percent on 10 routes and on those routes, airlines have been asked to reduce the ticket prices to "reasonable levels".
Mallya fails to convince UK court to dismiss Indian banks' attempt to recover dues
Vijay Mallya failed to convince a UK High Court to dismiss an order related to money in one of his London bank accounts, dealing a blow to the embattled liquor tycoon's efforts to prevent a consortium of Indian banks getting access to nearly 2,60,000 pounds.
In one of the many legal cases being faced by the 63-year-old liquor tycoon in the UK, Master David Cook ruled that an interim debt order in favor of SBI and other banks seeking access to funds in the ICICI UK bank account "should remain in force" but that the application to make it final should be adjourned until after the hearing of Mallya's pending bankruptcy petition.
The funds in the account will meanwhile remain frozen as part of the worldwide freezing order in favor of the Indian banks last year.
Mallya's lawyers had argued for the dismissal of the interim order on a number of grounds, including a claim that it was a "deliberate ploy" to prevent Mallya "reasonable" living expenses.
"I reject the proposition that the application for a TPDO (third party debt order) was a deliberate ploy to thwart Mallya's ability to meet his ordinary living expenses and reasonable legal expenses which are permitted under the terms of the WWFO (worldwide freezing order)," Master Cook notes in his judgment.
"The relevant context here is that Mallya is in a post-judgment scenario where the Claimants (Indian banks) are attempting to enforce their judgment and discover the true extent of his assets. I note that Mallya has made no voluntary payment to date while continuing to incur substantial legal costs in opposing the Claimants’ efforts to enforce their judgment," he said.
The case revolves around 258,559.79 pounds held in a bank account with the ICICI UK, which is named as a third party in the High Court case.
It is among one of many orders pursued by TLT LLP, the law firm acting for the Indian banks, as part of efforts to recoup some of the 1.142 billion pounds owed to them arising from proceedings in the Bangalore Debt Recovery Tribunal (DRT) against Kingfisher Airlines and others.
The DRT case was registered in the UK under the Foreign Judgments (Reciprocal Enforcement) Act 1933 and went in favor of the Indian banks in an appeal in May 2018.
The banks have since also filed a bankruptcy petition against Mallya in the UK courts, which is being challenged by the former Kingfisher Airlines boss and is expected to come up for hearing around December this year.
Meanwhile, in yet another legal intervention, Mallya is seeking a stay of all enforcement proceedings which have been commenced since the presentation of the bankruptcy petition by the Indian banks in September last year, a hearing of which is expected next month.
The outcome of that hearing will determine the future course of the funds being sought by the SBI, Bank of Baroda, Corporation Bank, Federal Bank Ltd, IDBI Bank, Indian Overseas Bank, Jammu & Kashmir Bank, Punjab & Sind Bank, Punjab National Bank, State Bank of Mysore, UCO Bank, United Bank of India and JM Financial Asset Reconstruction Co. Pvt Ltd.
Vijay Mallya accuses govt of discrimination against private airlines in India
Liquor baron and former Kingfisher Airlines chairman Vijay Mallya have accused the government of discrimination when it comes to bailing out private companies in the country. Mallya, who is facing an extradition case to India in a London court, in a series of Tweets, said his heart went out for the beleaguered airline, which was on the verge of complete shutdown as its lenders had not released the minimum required funding of around Rs 1,500 crore.
Mallya said it was sad many airlines like Jet Airways had to bite the dust in India. "Even though we were fierce competitors, my sympathies go out to Naresh and Neeta Goyal who built Jet Airways that India should be extremely proud of. Fine Airline providing vital connectivity and class service. Sad that so many Airlines have bitten the dust in India. Why?" Mallya asked.
Drawing a comparison with state-owned Air India, which has a debt of over Rs 50,000 crore, Mallya said the government used Rs 35,000 crore of public funds to bail out Air India while one of finest airlines like Jet Airways was being allowed to collapse. "Even though Jet was a major competitor to Kingfisher at the time I feel sorry to see such a large private airline on the brink of failure when Government used 35K crores of public funds to bail out Air India. Just being a PSU is no excuse for discrimination."
Calling it the "Airline Karma", Mallya said his now defunct Kingfisher Airline borrowed from public sector banks as well but now that he was offering to pay back "100 percent" he was being "criminally charged". "I invested hugely into Kingfisher which rapidly grew to become India's largest and most awarded airline. True, Kingfisher borrowed from PSU Banks as well. I have offered to pay back 100 percent but am being criminally charged instead. Airline Karma?" Asked the fugitive businessman. He also accused the media of bias reporting whenever he expressed his willingness to pay "100 percent back to the PSU banks". "I am willing to pay either way whether I am in London or in an Indian Jail. Why don't Banks take the money I offered first?" he tweeted.
The embattled businessman had recently filed an application in the UK High Court to avoid extradition to India. Mallya filed for an oral consideration after his first attempt at an application seeking "leave to appeal" in the court failed. The Westminster Magistrates' Court has already judged in favor of extraditing Mallya to India, which was then approved by the UK Home Secretary Sajid Javid back in February.
Meanwhile, the Jet Airways' board is meeting today to decide on the crumbling airline's next course of action. The airline's operating fleet has now reduced to just five planes. Civil Aviation Secretary Pradeep Singh Kharola said yesterday that the airline, which has a debt of over Rs 8,000 crore, has sought emergency funds worth around Rs 400 crore from banks and that the matter was between the carrier and the reluctant lenders. Many of Jet Airways' 16,000-plus employees have not received salary since January.