PACL revises its offer to Rs23,000 crore; Lodha Committee invites final proposals from others
Market regulator Securities and Exchange Board of India (SEBI) said, PACL Ltd (erstwhile Pearls) has increased its offer to Rs23,000 from Rs20,000 to buy own properties. Due to this, the Justice RM Lodha Committee appointed by the Supreme Court has decided to invite final counter or revised proposals from interested parties. 
 
In a release, SEBI says, "...the Committee has received nine counter proposals, out of which two have made offers higher than the value of offer made by PACL by way of its 14 April 2018 proposal. Subsequent to the same, the Committee has received a revised proposal dated 3 July 2018 from PACL revising the total offer value for the sale of the properties from Rs20,000 crore to Rs23,000 crore."
 
The entities interested, including PACL, have been given time till 17 July 2018 for submitting final counter proposal or revised bids to buy PACL properties. 
 
Last month, apart from PACL itself, SEBI had received counter proposals to buy properties of PACL from three each from Maharashtra and Tamil Nadu and two from Delhi. From Maharashtra, Grovalue Marketing Pvt Ltd, Trig Guardforce Ltd and City Wines while from Tamil Nadu, Vijaylakshmi Marketing, Lakshmi Murugan Developers Pvt Ltd, and Bava Fules have submitted their proposals. From Delhi, Rohatas Dalal and PK Overseas (P) Ltd have submitted counter proposals.
 
PACL in its offer submitted in April had proposed to bring in buyers to purchase its assets for not less than Rs15,000 crore, in two tranches spread over two years. In addition, if allowed, PACL had proposed to bring in additional Rs5,000 crore in third year, making its total offer for Rs20,000 crore. 
 
The Lodha Committee is supervising the Supreme Court ordered process of selling PACL's assets across the country and refunding Rs49,100 crore collected from over 56 crore investors. The money to be refunded to the investors was allegedly collected by PACL and Pearls Golden Forest Limited - two companies belonging to Nirmal Singh Bhangoo-managed group - in the name of sale and development of agricultural land.
 
For more details, investors of PACL are requested to visit SEBI website or click on this link https://www.sebi.gov.in/PACL.html
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    Monopolies in digital space are bad for media and entertainment industry
    It was not very long ago that the daily dose of entertainment for the average Indian household came from the soaps that ran like clockwork at dinner time. Now, it is not uncommon to find those rituals replaced with discussions of the latest show on Netflix.
     
    The digital media company has taken the global entertainment industry by storm. It is currently making TV shows in 21 countries by spending more on content creation than any studio spends on films. In fact, this year, Netflix will make three times more feature films than Warner Brothers, Hollywood's biggest studio.
     
    Tech firms like Netflix have historically shown immense potential to dominate existing industries or create new spaces where they quickly become irreplaceable. Facebook, Amazon, Apple and Alphabet (Google's parent company) have become reflections of a general phenomenon of market concentration in the digital space. These firms are not just limited to America. The Chinese market has also created towering giants like Baidu, Alibaba and Tencent. These few tech behemoths form some of the biggest firms on the planet.
     
    Such a growing market concentration among a few firms in both America and China is not only a pertinent issue for their home markets but for the emerging world as well. Interestingly, these firms have avoided competition in their home markets as Chinese markets have always been restrictive while America is gradually following along similar lines. The battle between these titans is, instead, being fought out in emerging markets. Among others, India is a hotly contested territory. Even indigenous players like Flipkart, PayTM, Ola and Zomato have been recipients of heavy Chinese funding from the same tech giants.
     
    The growing monopolistic tendencies displayed by these firms is cause for concern because it is inimical to long-term economic growth for a variety of reasons. The most damaging effect of holding a dominant position is that firms are left with little incentive to invest in expanding their productive capacities because they already enjoy monopoly rents. A recent blog post by the Bank of France on the dangers of monopolies to the United States highlighted how investment has slowed since the 1980s in the nation despite rising returns on capital due to the increasing concentration of production among fewer firms.
     
    In case firms do not cut back on investment despite their rising market power, they spend it on creating barriers to entry in the industry so that new competition is not created. Whatever competition is created is usually eliminated by buying emerging start-ups. Google, Amazon and Facebook have shown a high proclivity to do so to maintain their dominance.
     
    A century ago Standard Oil was split into 34 firms for its ruthless exploitation of its dominance to eliminate any competition. But in the fast-paced digital world, it is widely believed that such anti-trust regulations are not as necessary because any tiny start-up holds the potential to kill an industry titan with new ideas and better tech. The case of Microsoft being pulverised by new start-up Google in the early 2000s is a case in point.
     
    Nevertheless, despite all the benefits that society has derived from these constellation of tech giants, the immense market power in the hands of these few firms can be a dangerous proposition. The recent data scandal with Cambridge Analytica highlights the perils of such concentration in these market settings. More importantly, competition takes a back seat when markets tend towards monopolies.
     
    Some commentators still like to argue that monopolies are not all bad. Recently, T.C.A. Srinivasa-Raghavan did this in his column in Business Standard. He pointed out how monopolies sometimes yield the same results of higher output and lower prices. The example he gave is of the Indian Railways, which has constantly expanded its services and charged below costs. "What more do you want," he asked. For starters, railways are a perpetually loss-making venture of the Indian government with annual losses in recent years exceeding Rs 30,000 crores. And railways are a perfect example of how innovation takes a backseat in monopolies. Indian trains today run at same speeds as they did in the 1970s.
     
    As for Google, Srinivasa-Raghavan asked if it mattered that the company sometimes throttles competition since the price of its services cannot get any lower. This completely misses the point. Monopolies are harmful because they hold immense power to kill any new threats that might emerge.
     
    Take the case of Getty Images. In 2013, Google began allowing its users to directly download Getty's high-definition images from its own website. As a result, traffic suddenly plummeted to Getty's website by 85 percent. When the company asked Google to stop the practice, the latter simply responded by offering to exclude them from its search results. This was not really an option since Google is the most used search engine. And that is the problem with monopolies.
     
    Even a company as innocuous as Netflix, which is churning out some of the best content in the entertainment industry right now, poses a threat of concentrating the kind of ideas shared with the masses in the hands of a few. As a smaller number of companies begin to control what we see on the shiny piece of real estate in our pockets, we need to be wary of the repercussions this is having on our societies. The emerging markets, especially India, are the biggest losers in the whole process as even the monopoly rents accrue to the domestic nations of these monopolies.
     
    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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    COMMENTS

    Deepak Narain

    1 year ago

    Whatever we do using Google and others is known to those companies, though we think that our information is confidential and is known to us only. That is one reason why China has created its own 'Baidu' etc. We have the potential to have our own Google and others. Government must help the emergence of such bodies and protect them from being subsumed by the international giants.

    NCLT upholds Tata Sons' 2016 move sacking Cyrus Mistry as Chairman
    The National Company Law Tribunal (NCLT) on Monday upheld the 24 October 2016 decision of the Tata Sons Board of Directors dismissing its then Chairman Cyrus Mistry, a company official said.
     
    The NCLT ruled that the Tata Sons Board of Directors was competent to remove the Executive Chairman and that Mistry was ejected as the board members had lost confidence in him.
     
    Commenting on the decision, Office of Cyrus Mistry, said, "The ruling of the Tribunal is disappointing although not surprising. The ruling is in line with the earlier position expressed by the Tribunal. An appeal on merits will be pursued. Matters like TTSL, Air Asia, recovery of dues from Siva, non-closure of a loss-making Nano, a struggling resolution of Tata Steel Europe, all present serious issues that will be pursued. Not only the facts that were under consideration but also subsequent facts and developments that continue to evidence oppression and mismanagement will be under scrutiny and will be pursued in full earnest."
     
    The much-awaited verdict of the NCLT came on a petition filed by Mistry after he was abruptly ousted as the Tata Sons Chairman that day, creating an upheaval in the Indian corporate world.
     
    Mistry later quit from the board of other six Tata Group companies but challenged the Group and his successor, former Interim Chairman Ratan Tata's decisions, before the NCLT.
     
    The Office of Cyrus Mistry said, it will continue to strive for ensuring good governance and protection of interests of minority shareholders and all stakeholders in Tata Sons from the wilful brute rule of the majority. "Ours has always been a principled fight to restore the Tata Group to its glorious days of high standards, best practices and most importantly, the best value systems. In this journey, no matter how hard it may seem, as shareholders who have always supported the Tata Group, it remains our duty to protect the Tata Group from those were destroying value and making the Group vulnerable to external forces," it added.
     
    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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