Ericsson Seeks Arrest of Anil Ambani Over Dues of Rs550 crore: Report
Swedish telecom equipment major Ericsson has petitioned the Supreme Court of India to arrest Reliance Communications Ltd (RCom) chief Anil Ambani over recurring delays in payment of its dues worth Rs550 crore, says a report.
 
In the report, the Times of India, says, Ericsson has accused the embattled businessman of engaging in 'gross and wilful contempt' of the apex court. The company has said that insolvency proceedings should be initiated against RCom and its spectrum and tower sale deal with Reliance Jio should be stopped “with immediate effect”. 
 
In its second contempt plea, the Swedish company requested the apex court to bar Mr Ambani from leaving India for defaulting on payments.
 
“The respondents have abused the process of law to the hilt and caused grave damage to the interest of justice… having committed and guilty of contempt of court, be directed to be detained in civil prison unless… (they) purge themselves by making payment of Rs550 crore along with interest,” the report says quoting the petition filed by Vishal Garg, authorised representative of Ericsson India Pvt Ltd. 
 
Earlier in October 2018, Ericsson had filed its first contempt petition in the Supreme Court. At that time, RCom had stated that it sought another 60 days for the repayment of Rs550 to the Swedish company. 
 
"The extension has been sought purely due to the fact that, as approved by 38 secured lenders, and as per RCom's undertaking, Ericsson is to be paid from the sales proceeds of spectrum being traded by RCom, and such sale could not be completed as yet owing to factors beyond the control of RCom," the Anil Ambani group company had said in its regulatory filing.
 
Initially RCom owe Rs1,600 crore to Ericsson. However, after a court monitored settlement, this was brought down to Rs550 crore and was supposed to be paid by 30 September 2018.
 
The report from ToI, says, "Troubles for RCom — which has run up a cumulative debt of nearly Rs45,000 crore — have been compounding despite Anil Ambani striking a deal with elder brother Mukesh’s telecom venture Jio. While the company has received around Rs5,000 crore through the sale of fiber and media convergence node (MCN) set-up, the bigger deal — estimated at Rs15,000 crore through sale of spectrum and towers — still hangs in balance over payment of a bank guarantee."
 
"With the bigger deal looking difficult to pass, and money collected from the previous sale parked in an escrow account controlled by the banks, Anil Ambani has been unable to pay Ericsson despite giving specific assurances for the same," the report adds.
 
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Vendor Association Alleges Violation of FDI norms and FRTP by Big E-commerce Players 
The Indian government has clarified that the foreign direct investment (FDI) policy on e-commerce does not allow foreign investments into multi-brand retail. However, the All India Online Vendors Association (AIOVA), while alleging violation of government FDI norms on by large ecommerce companies, has asked the government tighten its policies and reprimand such erring players. 
 
In a statement, the department of industrial policy and promotion (DIPP) had assured that FDI in allowed only in the business-to-business (B2B) e-commerce segment and not in the business-to-consumer (B2C) segment, which in effect is the multi-brand retail or the inventory-based e-commerce model.
 
"Certain averments suggest that Press Note 3/2016 had covertly allowed multi-brand retail trading. Such a view is completely contrary to the specific provisions of Press Note 3/2016, which unambiguously provided that FDI is not permitted in inventory based model of e-commerce which amounts to multi-brand retail," the statement said.
 
It further said as FDI is allowed only in B2B e-commerce, an e-commerce entity providing marketplace will not, directly or indirectly, influence the sale price of goods or services, which also renders such business as an inventory based model.
 
However, in a series of tweets, the AIOVA pointed out how big players like BigBasket, Amazon, Grofers and Flipkart, among others violate the FDI policy on e-commerce using the food retail trading policy (FRTP) route. 
 
 
 
For example, the Association says, BigBasket is a subsidiary of Supermarket Grocery Supplies Pvt Ltd (SGS), which in turn is a wholesale company with FDI. "Even though SGS is owner of BigBasket's trademarks, the actual site or marketplace of the e-commerce business, has been licensed to Innovative Retail Concepts Pvt Ltd (IRC), which has two directors and authorised capital of only Rs2 crore," it added.
 
 
AIOVA says, "IRC has a B2C turnover of Rs1300 crore, which is less than the Rs1500 crore of SGS. It seems IRC is not working as a marketplace but as a retailer itself. Here a clear loss can be seen where IRC is making loss on its purchases for SGS. Both companies have declared a combined loss of 500 crores. It seems IRC entire capital is wiped out. Still it is doing business."
 
 
As per food retail permission, SGS can retail food products that are made in India. "They need to keep the inventory and accounting separate from other business. But wait, SGS is nowhere involved in B2C. Then what is the need of food retail license?" the Association asks.
 
"This is a case of a wholesale company being funded through FDI, which controls an Indian marketplace and using its capital to deep discount in food and other household items. Their business model can soon be adopted by other companies and evade DIPP press notes completely," AIOVA says.
 
 
Talking about Grofers, the Vendor Association, says, this e-commerce player was  owned by Locodel Solutions Pvt Ltd, which in FY2016 was transferred to Grofers India Pvt Ltd (GIPL). Grofers India received approval from the DIPP for retailing food products, which allowed the company to sell food made in India. 
 
 
Quoting a report from the Mint, the Vendor Association alleges violation of DIPP norms by Grofers on the same line of Flipkart, by creating four shell companies, one being a B2B company and three shell B2C companies to sell goods on the marketplace.
 
 
According to AIOVA, Grofers India had committed $25 million for engaging in food retail. "Within one year of receiving the license, their Singapore based holding company received funding of about $500 million. The holding company infused Rs100 crore into GIPL at a premium Rs11 lakh per share in October 2017," it added.
 
 
"This raises a question on the food retail license given to GIPL. The license clearly mandates them to keep food retail and other operations separate. And the entity cannot retail anything apart from Made in India Food. Albinder Dhindsa from Grofers claims to have 2000 sellers on marketplace," the Vendor Association says. 
 
AIOVA also points out how after failing to satisfy DIPP norms, Amazon went ahead with FRT in Cloudtail India Pvt Ltd. It says, Amazon Retail India Pvt Ltd, was the third company to receive nod from DIPP for food retail, and had committed an investment of Rs3500 crore. However, Amazon's plan got foiled when DIPP asked to maintain separate resources for website and FRTP, it added.
 
 
The Vendor Association says, "FRTP imposed proper restrictions on these companies so that they don’t abuse the license to dilute the marketplace. However, DIPP failed to check other circumventions. While these companies can still open stores and carry out FRTP, they are unwilling to fulfil backend infrastructure investment or other conditions stated in their proposal to get the FRTP license knowing very well that they can carry out FRTP by creating 'pseudo marketplaces' and shell companies."
 
 
In the statement, the DIPP also noted that despite the regulations not allowing an e-commerce player to influence pricing of products the government continued to receive complaints that certain marketplace platforms violated the policy and indirectly engaged in inventory-based model.
 
"An e-commerce platform operating an inventory based model does not only violate the FDI policy on e-commerce but also circumvents the FDI policy restrictions on multi-brand retail trading," the statement stressed.
 
The Commerce Ministry in December revised the FDI policy for e-commerce players whereby it barred online retail firms like Amazon and Flipkart from selling products of companies in which they have stakes. It also prohibited e-tailers from mandating any company to sell its products exclusively on its platform only.
 
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SEBI directs FHL, Fortis Hospitals to recover Rs 403 cr from Malvinder, Shivinder with due interest
The Securities and Exchange Board of India (SEBI) has directed Fortis Healthcare (FHL) and Fortis Hospitals (FHsL) to recover Rs 403 crore along with due interest from Malvinder Mohan Singh, Shivinder Mohan Singh and other entities within three months.
 
The development comes after FHL and FHsL approached the regualtor on its earlier "ad-interim ex-parte" order in the matter of Fortis Healthcare passed on October 17, 2018.
 
In its interim order posted on the SEBI website on Friday, the regulator said: "FHL and AFHsL shall take all necessary steps to recover the above mentioned amount of Rs 403 crore (approx.) along with due interest from Noticee nos 3 to 11, within three months from the date of the 'Interim Order'."
 
"The Noticee nos. 3 to 11 shall, jointly and severally, repay the above mentioned amount of Rs 403 crore (approx.) along with due interest to FHsL, within three months from the date of the 'Interim Order'."
 
In addition, Malvinder Mohan Singh and Shivinder Mohan Singh have been directed not to associate themselves with the affairs of FHL and FHsL in any manner whatsoever, till further directions.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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