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Business Today

Business Today 5-Apr-20

A leading business magazine read by the business leaders for staying ahead and managing challenges that comes right away in the ever changing world of business.

Living Media India Limited
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26 Numéros

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2 min.
corona blues

An ambitious, greedy banker ran his company aground by disbursing massive loans from the publicly listed bank in lieu of back-deals to enrich himself. That’s how the Enforcement Directorate has presented its case against former Yes Bank promoter and CEO Rana Kapoor. It’s the newest addition to the long list of corporate investigations the ED is pursuing in the ongoing assault on erring and defaulting promoters. It is now faced with the arduous task of conducting forensics and connecting the dots – deciphering the trail of money and linking it to the motive of kickbacks or bribery. The latter, the hardest to prove. Having established a money trail of ₹4,300 crore loans and ₹600 crore of alleged kickbacks, ED says it’s now zeroed in on ₹20,000 crore worth of loans and…

1 min.
generously (not) yours

THE MISSING BOUNTY The dividend payout ratio of CPSEs touched a sixyear low in FY19, though their net profit grew 15.2% 62.3% Dividend payout ratio in FY17, a 10-year high Holding Back Government guidelines on capital restructuring of CPSEs in 2016 supported double-digit growth in payouts in FY16 and FY17 Source: Public Enterprises Survey 2018-19 5.4% Fall in dividends declared by 121 operating CPSEs in FY19, following a 2.7% fall the previous year 20% Share of BSE CPSE Index companies that have seen a consistent decline in cash reserves over the past four years Blame it on Dipping Cash Reserves Combined cash and bank balance levels of BSE CPSE Index constituents (ex-BFSI) have been declining steadily since FY15 #Aggregate of BSE CPSE Index constituents (Ex-BFSI); Source: Ace Equity MEETING TARGETS Actual dividends have always exceeded the government’s budgeted estimates over the past…

1 min.
core of india’s slowdown

• India’s investment rate is expected to fall from 29% to 28.1% of GDP in FY20, the lowest in 16 years • Recent sharp decline in investment rate can be largely attributed to lower construction activity. In the past five years, CAGR has been only 7.5%, the lowest in any five-year period in three decades • Share of construction sector in fixed investments has fallen from its peak of more than 60% in early 2000s to 52-53% in recent years, the lowest in two decades • Residential investments were 7.8% as % of GDP; this was about 13% in FY12 • At over 15% of GDP, investments in construction sector in India are more than double of that in the US and Thailand Source: MOFSL, CMIE…

10 min.
what next for yes bank

At the height of the 2008 financial crisis, New York-based JP Morgan Chase agreed to bail out a troubled investment bank, Bear Stearns, after much prodding by the US government. The deal to buy the marquee bank at a measly price of $10 per share as against the market price of $30 per share (pre-crisis high of $133 per share) after the crisis looked attractive. JP Morgan’s CEO Jamie Dimon initially put up a brave front by boasting about the strengths of the bank’s $2.7 trillion-balance sheet and the marginal impact the acquisition would have on its capital. But as years passed, Dimon realised the big mistake the bank had made in rescuing Bear Stearns. Seven years after the global crisis hit the financial system, Dimon publicly expressed his regret.…

2 min.
how rana kapoor ended in custody

High flying foreign banker Rana Kapoor, who stitched the Tata-Tetley deal in early-2000, got in the driver’s seat when two other co-founders abruptly exited from Yes Bank. The 62-year-old pounced on the corporate lending opportunity in the post-2008 years. The economy was slowing and the corporate sector was highly over-leveraged. The bank’s loan book grew 10 times to ₹2.24 lakh crore in the last decade. But Kapoor’s ambitions went beyond the highly regulated banking space. He became the President of industry body ASSO-CHAM, and when the opportunity presented itself, he bought Rajiv Gandhi’s painting for ₹2 crore from Priyanka Gandhi. Kapoor also started building a family empire with his three daughters and wife managing the show. He also bought properties in posh locations of Mumbai and Delhi. But things changed dramatically when…

7 min.
the usual suspect

Bliss Abode Private Ltd, a company incorporated on March 6, 2017, has its registered office at 40, Amrita Shergill Marg, New Delhi-110003. According to filings with the Registrar of Companies (RoC), one of the two directors of the company, Bindu Kapoor, is wife of Rana Kapoor, the founder and former MD and CEO of Yes Bank. The address curiously is that of the property previously owned by Gautam Thapar, the former promoter of CG Power and Industrial Solutions who was removed as company chairman over alleged financial irregularities. The property, now owned by Bliss Abode, is under the scrutiny of the Enforcement Directorate (ED), the agency that investigates In a money laundering cases, as also the Central Bureau of Investigation (CBI). The ED believes it has enough evidence to link…