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Current Affairs - 04 July 2018

General Affairs 

"I Am Not A Shahenshah": PM Modi On Personal Security
  • Current Affairs - 04 July 2018
    Prime Minister Narendra Modi has said he is "not a shahenshah or an imperious ruler" unaffected by the warmth of the people and gains strength from his interactions with the public.
    The prime minister said he cannot remain seated in his car when he sees a lot of people out on the streets to greet and welcome him.

    "I am not a Shahenshah or an imperious ruler who is unaffected by their warmth. Being among people gives me lot of strength," PM Modi said in an interview to Swarajya, an online magazine, amid reports of an "all time high" security threat to him.

    The prime minister was answering a question on apprehension in the minds of his well wishers about his personal security during road shows.

    "Whenever I am travelling, I see that a lot of people, from all age groups and sections of society, are out on the streets to greet me and welcome me. I can't just remain seated in my car, aloof from their display of affection and care. That is why I invariably get down and greet, interact with people as much as I can," he said.

    The home ministry recently drafted a new set of guidelines on the prime minister's security. Officials said there was "an all time high" threat to the prime minister and described him as the "most valuable target" in the run-up to the 2019 general elections.

Election Commission's New App To Enable Citizens Report Poll Violations
  • Current Affairs - 04 July 2018
    The Election Commission has today launched an Android-based app, using which a person can secretly send geo-tagged videos and photos of illegal money being distributed or a hate speeches being made during polls.
    The unique Internet-based beta version of the application is called 'cVIGIL', which stands for "citizens' vigil". It will be put into operation for the first time when assembly polls in states such as Madhya Pradesh, Rajasthan and Chhattisgarh are held later this year. It will be made available on Google Play Store.

    The app will work only during the time the model code of conduct (MCC) is in place in a poll-bound state.

    The EC said it will "hide the complainant's phone number and identity so as to encourage information against high and mighty without any risk of subsequent possible backlash."

    Those who do not hide their identity will also get a response from the EC on the action taken after their complaint.

    Chief Election Commissioner OP Rawat said the poll panel was bringing out this tool as there have been instances when vested interests have misled surveillance teams and directed them to a place away from the scene of poll code violation.

    "The photos and videos will be automatically tagged by the geographical information system, and hence the surveillance teams will be directed to the correct place of incident where the poll code is being violated," Mr Rawat said.

    Deputy Election Commissioner Sandeep Saxena said the app will be useful, especially in the backdrop of an instance when time lag was seen in reporting model code violations during the Karnataka assembly polls in May.

    "This app will ensure prompt reporting of MCC violation with proper evidence and in a time-bound manner. This is an initiative where the EC can be seen walking the talk," he said.

    He said a person using the app will not be able to save the photos or videos he wants to report on his phone and will have to send them within 5 minutes to the local EC-appointed field unit, which will then spring into action to check the violation.

    "If the complaint is correct, the person who sent the photo or the video clip will be intimated within 100 minutes," he added.

    A senior official said violations such as distribution of illegal inducements, black money and hate speech can be recorded via the app and sent to the EC for action.

    "The app requires an Android smartphone equipped with a camera, good Internet connection and GPS access. The operating system should be Android jellybean and above," the EC said in an advisory.

    It said "each reported incident is tracked and scrutinized from the beginning to the end, thus bringing accountability into the system."

Over 100 Indian Kailash Mansarovar Pilgrims In Nepal Evacuated
  • Current Affairs - 04 July 2018
    Over 100 Indian pilgrims were evacuated from Simikot in Nepal today as rescue work intensified to bring back more than 1,500 people stranded in Nepal's mountainous region due to heavy rain.
    "So far 104 pilgrims have been rescued from the site. Seven commercial flights have so far been operated for the rescue works," an Indian Embassy official told PTI.

    Four people from embassy staff, two each in Simikot and Tibet, have been deployed with necessary facilities so that the stranded pilgrims could contact their families in India.

    The evacuated pilgrims were taken to Nepalganj, bordering India.

    Two Indian pilgrims have died.

    The Indian Embassy had earlier said in a statement that there were about 525 Indian pilgrims stranded in Simikot in Humla district.

    The embassy is continuously monitoring the situation along Nepalganj-Simikot-Hilsa route of Kailash Mansarovar Yatra (through Nepal), the statement said. The weather continues to be inclement.

    The embassy said it has placed its representatives in Nepalganj and Simikot, who are personally in touch with every stranded pilgrim. They are ensuring proper food and lodging facilities for them.

    They have been told to accord first priority to clearing up the situation in Hilsa, which is lean in infrastructure compared to other areas.

    The embassy has also asked all tour operators to try and hold pilgrims back on the Tibet side as far as possible since the medical and civic facilities on Nepal side are inadequate.

    In Simikot, a health check-up has been carried out on all the elderly pilgrims and they are being provided required medical help.

    The mission is also looking at various alternatives to evacuate the stranded people from Simikot, including through alternative routes through Simikot-Surkhet/Simikot-Jumla/Simikot-Mugu.

    India has also requested the Nepal government for army helicopters to evacuate the stranded Indian nationals.

    The embassy has already set up a hotline for pilgrims and their family members, which also comprises other language speaking staff for Tamil, Telugu, Kannada and Malayalam speakers.

Sushma Swaraj, Attacked By Trolls, Gets Nitin Gadkari's Support
  • Current Affairs - 04 July 2018
    Nitin Gadkari today became the second union minister to come out in support of Foreign Minister Sushma Swaraj, who has been trolled on Twitter for days over her ministry's help to an interfaith couple.
    Sushma Swaraj has been targeted with offensive tweets for the help given to Tanvi Seth and Mohammad Anas Siddiqui, who complained to her about humiliation when they went for passport renewal. An officer allegedly harassed Tanvi Seth for not changing her name and also taunted her husband saying he should change his religion.

    The couple has got the passport and the officer has been transferred. Sushma Swaraj, who was abroad when her ministry assisted the couple, continues to face attacks on social media.

    Nitin Gadkari said people needed to be more "responsible".

    "It is very unfortunate the way Sushma Swarajji was trolled and the kind of propaganda being spread against her," said the Transport Minister.

    "She had no connection with it. She was not there at the time. People did not like the words used against her. I think everyone should act more responsibly on the social media. It is very unfortunate," he stressed.

    Ms Swaraj, one of the most popular ministers on twitter because of her alacrity in responding to SOS, has handled the attacks with dignity and humour.

    Last week, she posted a Twitter poll and asked her followers if they supported the trolling. Shockingly, 43 per cent said they supported it.

    Mr Gadkari said: "The way the people are objecting to her is sad. She is also a senior politician. We must respect each other and must never indulge in any form of verbal abuse. People should also take responsibility over their comments on social media."

    Yesterday, Home Minister Rajnath Singh had called the trolling "absolutely wrong", in the first such reaction from the party's senior ranks.

Defence Ministry Sends Experts To 5 Countries For New Assault Rifles
  • Current Affairs - 04 July 2018
    The Defence Ministry has sent a team of military experts to Australia, the US, South Korea, Israel and United Arab Emirates to look for new assault rifles and battle carbines.
    Sources said the nine-member delegation of experts will interact with leading manufacturers of assault rifles and close quarter battle carbines which are being procured for the Indian Army.

    "The empowered committee for procurement of the weapons will hold meetings with leading manufacturers of these weapons and evaluate qualities of their rifles and carbines," said a source.

    In February, the defence ministry had approved purchase of 7.40 lakh assault rifles to bolster the strength of the armed forces.

    In June last year, the Army had kick-started the initial process to procure around 44,600 carbines, nearly eight months after a tender for it was retracted.

    Around half a dozen firms including a few global arms manufacturers had responded to the RFI.

    In the last few months, the Defence Ministry has fast tracked procurement of rifles, carbines and LMGs to equip the soldiers on the border with modern and more effective equipment.

    The Indian Army has been pressing for fast-tracking the procurement of various weapons systems considering the evolving security threats including along India's borders with Pakistan and China.

Business Affairs

Supreme Court refuses to stay RBI ban on banks from dealing with cryptocurrency traders
  • Current Affairs - 04 July 2018
    In a big blow to the digital exchanges operating in the country, the Supreme Court on Tuesday refused to stay the RBI circular asking banks and other financial institutions to stop doing business or providing financial services to those dealing in cryptocurrencies such as Bitcoin, Ethereum, etc.

    Besides this petition, four other petitions have also been filed in the Delhi High Court as well as the Supreme Court against the blanket ban on providing the financial services to the cryptocurrency exchanges. The Supreme Court is scheduled to hear the petition against the RBI circular on July 20 but had agreed for an early hearing on a separate petition filed by Internet and Mobile Association of India (IAMAI), which considers the cryptocurrency exchanges as its members.

    In its earlier hearing on May 17, the SC had told the online marketplaces to submit a detailed report explaining their functioning and compliance with financial rules, which they submitted in early June. The central bank, which has not responded to those representations so far, was also asked by the SC on Tuesday to revert in the next seven days.

    In a statement on April 5, the RBI had said virtual currencies (VCs), also referred to as cryptocurrencies and crypto assets, raise concerns of consumer protection, market integrity and money laundering, among others. "In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs," said the apex bank in a statement, giving these banks deadline till July 5 to stop business activities with the digital exchanges.

    The move came after it was observed that the several companies had started dealing in over thousands of digital currencies which, the government and the RBI claim, had no intrinsic value - therefore leaving the investors at risk. The RBI's move was an attempt to ring-fence regulated entities from the risks associated with cryptocurrencies.  Since December 2013, the RBI had issued four warnings against bitcoin and other crypto-currencies.

    So far, the cryptocurrency investors were buying and selling the digital currencies through exchanges in Rupee. Once the July-5 deadline ends, all banks and other regulated entities will stop their services to the cryptocurrency exchanges, leaving its users with limited choices to trade digital currencies.

    After the April-5 circular, though some cryptocurrency exchanges like WazirX and Koinex Loop have started working on a peer-to-peer model to facilitate virtual currency trade without using banking channels, many prominent digital marketplaces, after showing displeasure over the RBI circular, have asked customers to withdraw money from their online cryptocurrency wallets.

    One of the biggest digital currency exchanges in India, Zebpay, last week asked its users to withdraw their money before the deadline ends on July 5. "While our industry is challenging this legally, the outcome is beyond our control. Hence, if you are holding any rupees, or depositing any rupees in Zebpay, there could soon come a time when we may not be able to honour withdrawal requests. Please continue only if you understand this risk," said the company.

    Besides, the Central government is already in process of formulating a law to regulate digital currency business in India. In an interview to ET Now last month, Economic Affairs Secretary Subhash Chandra Garg had said that the draft policy on the virtual currencies had been prepared, which could be discussed and cleared in the month of July itself. The next hearing in the case is scheduled for July 20.

The new five-point NPA resolution scheme will dilute the bankruptcy code
  • Current Affairs - 04 July 2018
    Indian banks facing the huge pile of bad loans are once again being encouraged by the government to kick the can down the road. Months after the defiant Reserve Bank of India (RBI) scrapped all the restructuring schemes from erstwhile corporate debt restructuring (CDR) to newest ones like strategic debt restructuring (SDR), S4A and 5/25; the BJP-led NDA Government has pulled a rabbit out of their hat by announcing a slew of initiatives aimed at avoiding the bankruptcy proceedings for banks as well as defaulting promoters.

    The idea behind the scheme may be noble, but it doesn't inspire confidence. A week old panel that was set up hurriedly under the Punjab National Bank (PNB) chairman Sunil Mehta on recommendation from acting finance minister Piyush Goyal and banks, have recommended setting up of a asset management company (AMC) for dealing with NPAs of over Rs 500 crore and more. A bank led approach has been suggested for loans between Rs 50- Rs 500 crore, where a lead bank would work on a resolution six months. For less than Rs 50 crore loans, the banks will work out a resolution within three months. The government has also put its stamp over these proposals.

    Dilution of Bankruptcy Code

    There is a clear dilution of newly set up bankruptcy code, which comprehensively covers the resolution and restructuring of a stressed corporate by way of insolvency professionals and committee of creditors in a time bound 180 days. The very fact that the RBI scrapped all the restructuring schemes and issued a diktat that even a single day default would trigger a resolution process, culminating in referring the case to IBC, was a clear indication to defaulting promoters to pay up and come to the table. The new schemes provide a breather to both banks and promoters from the tough bankruptcy code.

    Potential Loss of Productive Assets

    Any deferment of stress will result in potential loss of productive assets, which will also erode the value of assets, if brought later to bankruptcy code. This was the big concern under the earlier restructuring system. The new schemes will only provide a short term breather. Is RBI on board on these new measures? Many say the new scheme is purely a work of bankers. It addresses the concerns of only bankers.

    Finally, banks will manage to show better numbers

    The banks have a got a huge breather as they were staring at future losses. The triggering of IBC results in a 50 per cent provisioning for bad assets (100 per cent for liquidation cases) from profits. This was eating away capital of the public sector banks. The new scheme means lower provisioning and better profitability or reduced losses. The banks number will look good, but there is a question mark on whether the new 5 point formula will help the economy as a whole in the long run.

    Operational Creditors to use IBC

    Currently, the operational creditors were using the IBC to get their money back. In fact, more than half the cases were filed by operational creditors. The bank led cases were mostly done at the behest of the RBI as the regulator was forcing banks to take the defaulters to IBC. In the first set of two cases, the RBI actually named the specific 40 plus large corporate from Essar to Jaypee, which were to be taken to the IBC. Later, they mentioned a general 'one day default' rule for triggering IBC if not resolved six months.

    AMC Modalities Still Unclear

    It is not yet known how the AMC will be structured. There are some hints of a backing by Alternative Investment Fund (AIF). But the question arises; who will put money in an AIF? Ultimately, these stressed assets have to be restructured, resolved or turnaround. Where is the management bandwidth to do an operational turnaround? The global funds are already staying away from the IBC process because of uncertainty in the code and also the challenges in the economy. Why will they invest in an AIF of PSBs?

8K Miles Software Services stock falls nearly 39% in two days, hits fresh 52-week low
  • Current Affairs - 04 July 2018
    The 8K Miles Software Services stock closed 18.97% or 74 points lower on Tuesday. The stock has lost nearly 39% in two days. On Monday, the stock closed over 20% lower on the BSE. Today, the stock opened at 349 level and ended at 317 level.  It hit its fresh 52-week low of 314.50 level on BSE.

    The fall can be attributed to a delay in the announcement of consolidated Q4 and annual earnings of the company.

    Commenting on the same, company's chairman and chief executive officer Suresh Venkatachari told CNBC-TV18 that the firm adopted the Indian Accounting Standards for the consolidated statements this year for the first time ever. The firm underestimated accounting challenges in adopting Indian Accounting Standards which led to the delay.

    Venkatachari added that there were no auditor problems or other issues the firm was facing.

    The IT firm announced yesterday that it would declare its consolidated Q4 and annual earnings on July 17, 2018.

    The firm announced its standalone Q4 and annual earnings on May 30, 2018.

    The stock is down 41.23% during the last one year and has fallen 65% since the beginning of this year.

    8K Miles Software Services is a global cloud and security solutions provider and Next Generation Cloud MSP headquartered in the San Francisco Bay area and a publicly traded company listed on BSE and NSE.

After PNB fraud, Mehul Choksi planned an escape by selling Gitanjali properties: ED chargesheet
  • Current Affairs - 04 July 2018
    During its investigation, the Enforcement Directorate (ED) summoned as many as 37 people from the companies of Mehul Choksi and Gitanjali Group. In fear of getting arrested under the stringent Money Laundering Act, most of them spilled the beans and supported the agency to make a watertight case against diamond merchant Mehul Choksi.

    India Today has accessed the chargesheet filed against Mehul Choksi, and all statements given by Choksi's employees to ED officials. In last few years, Choksi have expanded his wings from jewellery business to real estate sector. He was using bank's money to develop residential projects in Mumbai and a mall in Hyderabad, reveals the chargesheet. When he got a hint that the Punjab National Bank (PNB) has lodged a complaint against Gitanjali Group and the central investigative agencies are on the verge of nailing him down, he began the process of selling all his properties and move outside India.

    Siddharth Shah, Vice President (account and finance) of Gitanjali Gems, who was to assist and consult Choksi for sell/purchase and the construction of real-estate project, in his statement to the ED stated that in November 2017, Choksi asked him to complete his TATVA Project in Borivali, Mumbai, in one month and to sell all flats on urgent basis. "Choksi provided me a list of all the properties of the Gitanjali Group and told me to try to sell the properties which were lien free whereas in case of the properties, which were mortgaged. Choksi instructed me to put them on rent and take a loan," Shah told the agency. However, the ED managed to attach 50 flats worth Rs 90 crore, which were owned by Choksi.

    Choksi entered Tatava Project to divert funds

    On February 1, 2018, Gitanjali Infratech Ltd (a subsidiary of Gitanjali Gems) entered into a development agreement with Laxmi Infra Developer Pvt Ltd for developing a residential project. The terms of the agreement in this regard were:

    Premium of Rs 29.9 crore was to be paid to Gitanjali Infratech Ltd.
    To finish the balance construction work till obtaining the occupation certificate (OC) and handing over possession to customers.
    The assessment of the work to be completed was done jointly by both the companies and it was estimated that Rs 45 crore including salary to project staff was required till completion (this assessment was made in the month of December 2017).
    The project was to be completed within six months.
    Total 50 flats were to be given along with 100 parking spaces to Laxmi Infra Developers Pvt Ltd.
    According to Vasant Gajera, director of Laxmi Diamonds Pvt Ltd, Shanti Residency Pvt and Laxmi Infra Developers Pvt Ltd, the agreed premium amount was paid between January 1, 2018 and January 24, 2018. "In November 2017, Choksi called me and asked to help in completion of his project in Borivali," Gajera told in his statement.

    Gitanjali Infratech Ltd, is a wholly owned subsidiary of Gitanjali Gems Ltd, which was developing one project namely, "TATAVA Project - as a residential building at Borivali. In January 2018, a board resolution of Gitanjali Infratech was prepared for giving development rights of this project in favour of Laxmi Infra Developers Ltd, which is a Surat-based infrastructure company by Gajeras. Interestingly, Gajera family members are close friends of Choksi.

    In her statement to the ED, Pankhuri Warange, company secretary of Gitanjali Gems Ltd revealed crucial details about the residential project. "In respect of the board resolution, no board meeting had taken place before preparation of the resolution. The decision had been taken by Choksi and as per his directions fake minutes of the meetings/board resolutions were prepared and later, informed the directors for their signatures," Warange stated.

    Gitanjali Infratech was to remain part of the Tatava project along with Laxmi Infra Developers, even after transfer of the development rights in favour of the Laxmi Infra. Thus, Choksi entered into an understanding with Gajera family to takeover one of their companies namely Laxmi Dia Jewel Pvt Ltd., at SEEPZ, Mumbai. "Actually, Choksi intended to get the said property transferred in the name of one of his companies namely Joyce Trading Pvt Ltd, but as per SEEPZ norms and procedures, such transfer was possible only if there were common directorship and common shareholding in both the companies", Warange explained to investigators.

    To complete the transfer formality, Ashok Gajera, Chuni Bhai Gajera, Vasant Bhai Gajera and Bakul Bhai Gajera - the directors of Laxmi Dia Jewels Pvt Ltd., were made directors in Joyce Trading Pvt Ltd. "In addition, Rakesh Gajera, one of the directors in Laxmi Infra had been allotted equity shares of Gitanjali Gems Ltd on preferential basis comprising of 5.75 per cent (6824226 number of shares) of the total paid up capital during the year 2016," Warange stated.

    In addition, Gitanjali Infratech had given a loan of Rs 40 crore to A P Gems and Jewellery Park Pvt Ltd., for construction of a Mall in Hyderabad. In fact, two of the employees of Gitanjali group namely Gajendra Kumar Kaninde and Deepen Shah were made directors by Choksi in A P Gems and Jewellery Park Pvt Ltd.

BSE to delist 222 companies tomorrow
  • Current Affairs - 04 July 2018
    Leading stock exchange BSE will delist as many as 222 companies from tomorrow as trading in their shares has remained suspended for over six months. The move comes at a time when authorities are clamping down on shell companies -listed as well as unlisted-for being allegedly used as conduits for illicit fund flows.

    In August last year, Sebi had directed exchanges to act against 331 suspected shell companies, while the government has already deregistered more than 2 lakh firms that have not been carrying out business activities for long.

    In a circular, the BSE said, "210 companies that have remained suspended for more than six months would be delisted from the platform of the exchange, with effect from July 4, 2018 pursuant to order of the delisting committee of the exchange".

    Further, it said that six firms-Asian Electronics, Birla Power Solutions, Classic Diamonds (India) Ltd, Innoventive Industries, Paramount Printpackaging and SVOGL Oil Gas and Energy-that have been compulsorily delisted by the NSE, would also be delisted from the BSE from tomorrow.

    Under the compulsory delisting regulations, the delisted company, its whole-time directors, promoters and group firm would be debarred from accessing the securities market for ten years from the date of compulsory delisting.

    Promoters of these delisted companies will be required to purchase the shares from the public shareholders as per the fair value determined by the independent valuer appointed by the BSE.

    Further, these companies will be moved to the dissemination board of the exchange for five years as advised by the markets regulator Securities and Exchange Board of India (Sebi).

    Separately, the exchange said that six companies that have remained suspended for more than six months and are "under liquidation / liquidated" will also be delisted the same day.

    These six companies are MMS Infrastructure, Oasis Textiles, Integrated Finance Company, Omnitech Infosolutions, Flawless Diamond (India) Ltd and Indo Bonito Multinational.

    These companies are under liquidation, therefore the provisions of delisting regulations would not apply to these companies, their promoters and whole time directors, "if the date of the appointment of provisional liquidator or the order of winding up is prior to the date of compulsory delisting.

    Earlier in May, the exchange had delisted over 200 companies as trading in their shares remained suspended for over six months.

    General Awareness

    National Register of Citizens
    • Context: The Supreme Court has extended by a month its June 30 deadline for the publication of the final draft of Assam’s National Register of Citizens (NRC).

      Background:

      The first draft of the NRC, which was released in January, listed only 1.9 crore people as citizens out of the 3.9 crore people who had filed the NRC application.
      The updated NRC will count only those as Assam citizens who can prove their residency on or before March 21, 1971. This means that all those not included in the list run the risk of being rendered illegal immigrants.

      What is National Register of Citizens (NRC)?

      The NRC was introduced to identify illegal immigrants from Bangladesh and recognise the Indian citizens in Assam. It was first prepared in 1951 and Assam is the only state having this arrangement.

      Why the NRC is being updated in Assam?

      NRC updation basically means the process of enlisting the names of those persons (or their descendants) whose names appear in any of the Electoral Rolls up to 1971, 1951 NRC or any of the admissible documents stipulated.

      Way ahead:

      The need of the hour therefore is for the Union Government to allay apprehensions presently in the minds of the people of Assam and take steps to contain any adverse fallout after the publication of the final draft of the NRC. At the same time, it also needs to spell out what it intends to do with the persons whose names do not figure in the final NRC.

      Facts for Prelims:

      Assam, which has faced influx of people from Bangladesh for over many years now, is the only state having an NRC.
      The NRC will be updated as per the provisions of The Citizenship Act, 1955 and The Citizenship (Registration of Citizens and Issue of National Identity Cards) Rules, 2003.

      What’s important?

      For Prelims: NRC.
      For Mains: Need for policy on migrants.

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