| economic news of india - world economic news - economics news for students - indian economy news Posted: 21 Dec 2019 08:05 PM PST
| Why the first phase of US-China trade deal is significant Posted: By Ram Upendra Das Few developments in recent years have seen quite the kind of worldwide ripples that the trade war between US and China have generated. Therefore, the path towards a conciliation is bound to be watched very closely.On December 13, the world was told about a phase one trade deal between the US and China. In its press release that day, the office of the United States Trade Representative announced: "The United States and China have reached a historic and enforceable agreement on a Phase One trade deal that requires structural reforms and other changes to China's economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange." It quoted United States Trade Representative Robert Lighthizer: "President Trump has focused on concluding a Phase One agreement that achieves meaningful, fully-enforceable structural changes and begins rebalancing the US-China trade relationship."In terms of the specifics, the USTR fact sheet highlights several dimensions of the trade agreement.The US will be maintaining 25% tariffs on approximately $250 billion of Chinese imports, but on some $120 billion of imports, the tariff will be cut by half — from 15% to 7.5%, according to Reuters. Part of the deal are commitments from China to import from the US over the next two years in a total amount that exceeds China's annual level of imports for those goods and services in 2017 by no less than $200 billion. It focuses on US-manufactured goods, food, agricultural and seafood products, energy products and services.While the Intellectual Property (IP) chapter covers trade secrets, pharmaceutical-related intellectual property, geographical indications, trademarks and enforcement against pirated and counterfeit goods, it is the Technology Transfer chapter that discusses a crucial commitment from China that the US has been able to extract: "For the first time in any trade agreement, China has agreed to end its long-standing practice of forcing or pressuring foreign companies to transfer their technology to Chinese companies as a condition for obtaining market access, administrative approvals, or receiving advantages from the government."In agriculture, exports-employment linkages are sought to be ensured by expansion of US food, agriculture and seafood product exports, by also tackling non-tariff barriers.Barriers including foreign equity limitations and discriminatory regulatory requirements acting against US providers are addressed in Financial Services chapter in the realms of banking, insurance, securities, and credit rating services, among others.The Dispute Resolution chapter sets forth an arrangement to ensure the effective implementation of the agreement and to allow the parties to resolve disputes in a fair and expeditious manner.While more details are awaited, the broad insights that emerge from the US-China Phase One Trade Agreement are important for the overall global discourse on Trade and economic integration.First, not only in today's world but also in future the merits of global interdependence of economies for the welfare of domestic constituencies including workers and corporations need to be understood and acted upon. Exports contribute to domestic economic activity and help domestic job-creation and income growth, provided effective market access by addressing tariff and non-tariff barriers is ensured. Secondly, domestic economic concerns emanating due to external trade and economic variables need to be addressed by engaging on those external variables as well. Thirdly, to address such domestic economic concerns, continued engagements highlight the significance of perseverance in negotiations. Any negotiating outcome is a win-win only when both sides yield for both sides' gains, without sacrificing their larger domestic economic imperatives Fourthly, to define the contours of terms and conditions and to make the negotiations really structured, and to implement the outcomes, a Trade Agreement becomes necessary. Fifthly, the importance of trade agreement becomes even more pronounced if it includes as an integral part a dispute settlement mechanism to address any domestic concerns that may arise. Sixthly, a trade agreement can be built over time, in a staggered manner, with periodic reviews.No trade agreement can be frozen in time. No trade agreement at a given point of time can predict the future and incorporate provisions to tackle the unknowns. It needs to evolve through reviews in a dynamic setting as new issues unfold; novel concepts emerge and; neoteric challenges surface.The world will watch closely for how further progress unfolds on this particular deal.(The author heads Centre for Regional Trade) | | SBI boss nudges industry to boost investment Posted: NEW DELHI: SBI Chairman Rajnish Kumar on Saturday nudged the industry to enrich their borrowing capacity so as to boost investment in the economy, asserting there is no dearth of funds and most of the banks will be in a better position by March-end as far as stressed assets and non-performing loans were concerned.He also said that the State Bank of India (SBI) is underutilising its loan sanction limits as there is not enough credit demand from the industry."If India has to achieve its goal of $5 trillion economy then it cannot happen unless there is investment in the economy. Today the outstanding banking credit is Rs 96 lakh crore. So for a $5 trillion economy, we would at least need to double it," Kumar said at the 92nd Annual Convention of industry body FICCI here.He further said that it is a very good business opportunity for the banks.The gross capital formation rate which is at about 30 per cent at present also needs to go up to at least 37-38 per cent, Kumar added.Stressing that there is an adequate availability of funds with the banking system, Kumar said: "I don't find enough projects where investment is being sought. Our first indication is that we are the largest financier of projects, we have a very big team for project finance and currently it is under-utilised."He said even if there are projects, those are mainly in solar, city gas projects and to some extent in roads sector."Last year, we did only two financial closures which can be said to be large tickets. One was HPCL refinery in Rajasthan where the project size is almost Rs 50,000 crore and the other was Mumbai Nagpur Super Communication Expressway where the project size is again Rs 50,000 crore and half of the money has come from the bankers."Other than that, I don't have a project where funding demand is more than Rs 2,000 to Rs 2,500 crore today. So I want to ask you (industry), where are the projects? And if there are no projects then how do I lend and to whom I lend?," Kumar asked the industrialists present at the convention.The State Bank today has loan sanction limits of up to Rs 8 lakh crore, but the utilisation (demand) is of only Rs 5.5-6 lakh crore, the SBI chairman said.He further said the industry keeps on complaining that banks are not lending and lenders are saying that "we are ready with funds, you are not borrowing".On the Centre's infra development push, Kumar said, "When we talk about USD 1.5 trillion to be invested in infrastructure sector, there is an opportunity for everyone. I don't think government can meet more than 25 per cent of this requirement. So 75 per cent will still be an opportunity for investors as well as the banks and the foreign capital."On NPAs and liquidity situation, he said banks now have become extra cautious in lending than they used to be earlier and the risks have increased due to defaults.Talking about reforms such as IBC (Insolvency and Bankruptcy Code), Kumar said in the current scenario there is ample liquidity available and the recent judgement by the Supreme Court on Essar Steel will matter a lot."Many large ticket stressed assets are getting resolved and by March 31, we are going to be in a very good position as far as most of the banks are concerned where at least the NPA (non-performing asset) ratio and stressed assets hopefully will come down," he said."And in such scenario, the opportunities which we (SBI) are seeing definitely is infrastructure, consumer lending... There is apparently a demand slowdown, but still our housing loan portfolio, which is a large portfolio, (in that) we are still growing at 16 per cent," the SBI chief claimed.Among others, unsecured loans (such as credit against salaries) are growing at 25 per cent and there is good demand from housing sector also, he said."For housing sector, geographies may differ, you may have problem in NCR but it is not all India problem. We may have some problem in some residential markets but office market is doing quite well in certain cites like Hyderabad, Bengaluru, Chennai, Pune, Mumbai, Navi Mumbai -- all these markets are doing well and we have seen huge investment interest from all the private equity investors," he added.Replying to a question on lending to the telecom sector in the next round of spectrum auctions, he said, "For us lending for spectrum is completely unsecured. On paper, it is secured as the auction is to be done by government but practically it is totally unsecured.""So in such circumstances, banks will have to evaluate carefully before lending to the sector as the probability of default is very high," Kumar said.Nevertheless, at a time when India is witnessing a demand slowdown from consumers and slowdown in economic growth, he said the scenario is not "all that gloomy" as it looks like to be as the country is undergoing a transition phase due to ongoing reforms process.Also "the mindset with which people do business, the way we live our lives, everything is undergoing a transition phase. I think we are undergoing through a pain due to this transition...the country is full of opportunities. That have not disappeared. So I think we should not be disheartened by the current scenario," Kumar said. | | Jaypee loses control of India's only F1 Circuit Posted: NOIDA: The Yamuna Expressway Authority on Saturday cancelled the allotment of 1,000 hectares of land to Jaypee group on which India's only Formula One motor racing circuit is built in Greater Noida over non-payment of dues, officials said.The decision was taken by the Yamuna Expressway Industrial Development Authority (YEIDA) during its 66th Board meeting."A thousand hectare land was allotted to Jaypee Sports Limited, an affiliate of Jaypee group, in YEIDA's special economic zone. Jaypee Sports Limited has been defaulting on payments to YEIDA and not completing projects promised to buyers," YEIDA CEO Arunvir Singh said.The embattled business group defaulted on payments of over Rs 500 cr, he added.The Jaypee group had sub-leased plots to 11 builders on the allocated land and separately had taken around Rs 2,000 crore from homebuyers in 10 projects but not delivered it, he said."So, in light of the violation of lease deeds, it was decided during the board meeting that the land allotment be cancelled," Singh said.However, the authority said modalities are being worked out to safeguard the interests of third parties and homebuyers who had invested in projects on this land parcel. | | How future of Fortis rests on the outcome of a battle Posted: On his penultimate working day, the then chief justice of India, Tarun Gogoi, signed off on a contempt petition, arising out of transfer of shares of Fortis Healthcare Ltd, India's second biggest hospital chain. The Gogoi-led bench, on November 15, not only held siblings and erstwhile Fortis promoters Malvinder Singh and Shivinder Singh as well as lender Indiabulls Housing Finance Ltd (IHFL) guilty of contempt, it also initiated a fresh suo motu contempt complaint against Fortis Healthcare itself. The bench noted that shares of Fortis had been pledged and transferred to IHFL in violation of its August 2017 orders mandating a freeze in shareholding. While IHFL paid up and settled its case in December, the SC bench also raised the question whether Malaysian hospitals major IHH Healthcare's investment in Fortis in 2018, taking a 31% stake through preferential allotment of shares and acquisition of assets of Religare Health Trust (RHT), also violates its orders. The new contempt case will come up for hearing in February.The outcome of this high-stakes case will be keenly watched in four countries — India, Malaysia, Singapore and Japan. On it depends the future of India's second largest hospital chain, which is emerging stronger, following a prolonged and bruising custody battle. It will send strong signals about contract enforcement and commercial dispute resolution in India. And it will determine which of the two Japanese corporations — the $12 billion pharma giant Daiichi Sankyo, which has pursued the Singh brothers in courts for the better part of a decade, or Mitsui, the mammoth trading group that has become the controlling shareholder of Malaysia's IHH — will emerge victorious. 72918926 The roots of the story go back to 2008 when the Singh brothers sold a majority stake in Indian generic pharmaceuticals major Ranbaxy Ltd to Japanese major Daiichi Sankyo. Within a year, Ranbaxy had run afoul of drug regulators in the US, and by 2013, Daiichi had to admit and settle with the US Department of Justice (DoJ), paying a $500 million penalty.Daiichi sold Ranbaxy to Sun Pharma, and exited India but decided to go after the Singh brothers for selling it a lemon, and pursued arbitration in Singapore to recover the penalty amount. In May 2016, Daiichi won an arbitration award of $400 million and approached the Delhi High Court for enforcing the arbitration award, and insisted that various assets of the Singh brothers be frozen for recovery of the money. Their shareholding in Fortis was one such asset. On August 11, 2017, the Supreme Court had issued an order to keep the shareholding structure of Fortis unchanged. Separately, on December 14, 2018, it ordered a status quo on the sale of a Fortis stake to IHH, which had been reported in media at that time.With IHH in the saddle, Fortis' performance has recovered. Profits have been posted for the last three quarters, after six consecutive quarters of losses. The Fortis board today has three senior members of the IHH top brass, including IHH CEO-designate Kelvin Loh Chi-Keon, indicating its seriousness about Fortis and the Indian market. IHH was also slated to make an open offer to the minority shareholders of Fortis. It would have taken IHH's shareholding past the 50% mark. The Supreme Court's decision and the delay have been a setback for IHH, which operates Asia's largest hospital chain.Not a Clean BreakIn early 2016, the Singh brothers, as promoters, held 70% plus in Fortis. Their holdings, including those of entities controlled by them, fell progressively from 71.28% on March 31, 2016, to virtually nil on March 31, 2018. Much of this was due to lenders selling pledged Fortis shares of the promoters — much to the angst of Daiichi Sankyo, which wanted the Singhs' stake in Fortis to be preserved for the $400 million arbitration award. When the Fortis board allowed IHH to invest Rs 4,600 crore Fortis for a 31.1% stake through preferential allotment of fresh equity shares, the Singh brothers had virtually exited the company. It could have been a clean break for Fortis, save for one transaction in January 2019, which caught the SC bench's eye. 72918933 While the IHH investment happened November 2018, the apex court ordered status quo in December 2018, which it couldn't do the planned open offer. Then in January, Fortis went out and bought a bunch of hospitals owned by a Malaysia- and Singapore-based trust, called Religare Health Trust (RHT), for Rs 4,000 crore. RHT was previously controlled by the Singhs, and the Gogoi-led bench said this money could have been used to pay Daiichi. The SC bench now wants to pass it through the "contempt test". Apparently, the most profitable Fortis-managed hospitals were actually owned by RHT and Fortis paid a fee of Rs 250 crore to RHT every year.Having IHH as the promoter has been good for Fortis. CEO Ashutosh Raghuvanshi told ET Magazine that the new promoter has helped the company in many ways, especially with getting fresh credit lines from banks and favourable interest rates. He says: "The company was in such a state that there wasn't sufficient investment in capex, the debt rates were high — basically the hospital was in an unsustainable situation. Once IHH came on board, they helped us ease out the situation." He added that the assets acquired from RHT helped lower the fee outgo that Fortis had to pay.Moreover, despite the complications involved in the Fortis buyout, it is the only performing portfolio in India for IHH. Since it took charge, figures show that Fortis has improved operationally and is even expanding into new geographies. But all that might change come February, as Daiichi will make every effort to recover its dues, according to executives closely associated with the developments. "They will go all out and seek a complete reversal of the acquisition by IHH if they don't get paid," said a person aware of the developments who did not wish to be quoted due to the legal issues involved. Sources have also told ET Magazine that Mitsui executives have been negotiating with Daiichi to resolve the issue with Fortis and IHH in an amicable manner. In an emailed response, Mitsui declined to comment. 72918945 Daiichi lawyers did not respond to emails. Neither did IHH nor legal representatives of the Singh brothers. "The board of Fortis and IHH went ahead in the teeth of the Supreme Court status quo order and did the transaction. Supreme Court order upholds that the and other transactions were done to defeat the rights of Daiichi," said Amit Mishra of P&A Law Offices, which represent Daiichi.Shriram Subramanian, MD of InGovern, a shareholder advisory firm, feels that while the entry of IHH has helped Fortis, the Supreme Court action has left the minority shareholders in the lurch, and a reversal of the deal will be a sad thing. "The coming in of IHH has helped stabilise the ship. From the IHH point of view, they could have been much more cautious, but since they had the opportunity, they moved ahead with the deal. If they hadn't stepped in, the company would have sunk," Subramanian says. "SEBI and the courts must look at this aspect, because IHH and the minority shareholders are being hauled up for no fault of theirs," Subramanian adds.Global StakesWhile Fortis seems to be turning around, with the help of Mitsui-backed IHH, it will be important to ensure that Daiichi Sankyo does not end its India experience with all-round bitterness. Whichever way the SC rules, there would be large international players unhappy with the outcome, possibly blaming Indian judicial systems. 72918953 72918957 For Daiichi Sankyo, the only hope of recovering some part of the fine they had to pay in the US, rests on Fortis. As of mid-October, the Singh brothers have been arrested by the economic offences wing of the Delhi Police, and remain in custody, for allegedly siphoning money out of Religare Securities, the financial services company they promoted. Then there is Mitsui, the largest shareholder in IHH. As IHH battled several bidders for the Fortis stake, including private equity players like TPG, the Munjals and KKR, its own parentage changed. In May 2018, Malaysia saw a political change, with 93-year-old Mahathir Mohamad making a comeback, and focusing government's energies on bringing down the national debt. It meant selling assets, and the Khazanah investment fund of the Malaysian government decided to sell off some non-core assets, including the stake in IHH Healthcare. Mitsui picked up an additional 16% in IHH for $2 billion, to take its stake up to 33%. With the Japanese company in charge, sources indicate it will also mean a recalibration of its India strategy.Some say it is already underway. For instance, IHH has been actively looking to sell its assets in two other loss-making Indian investments in healthcare — Continental Hospitals and Global Hospitals, both acquired in 2015 for a combined value of Rs 1,700 crore. Mitsui independently owns majority shares in another Bengaluru-based hospital — Columbia Asia Healthcare India — and is also looking to sell. A senior investment banker with one of the big four audit and consultancy firms, specialising in healthcare and pharma, told ET Magazine that the Ranbaxy episode still rankles the Japanese firms when it comes to India and healthcare. "It includes their experience with Indian bureaucracy and the way Indian promoters manage their business," he adds.A bunch of Indian firms have tried their hands in Japan in pharmaceuticals, including Lupin, Dr Reddy's and Sun Pharma. Satish Khanna, a former group president of Lupin, who later went to study in Japan, says that somehow in pharma or healthcare, things have not worked out between India and Japan as the two markets are very different. He adds that there are cultural differences, too. "The Japanese are very fair and straightforward people who like to go by the book and expect fairness in return. They are slow adapters who do not respond to frequent changes very well," says Khanna says, explaining why Daiichi went after the Singhs.He points out that while India and Japan have excellent relations at the government level, Japanese companies and brands have not made much headway in India beyond automobiles and electronics to an extent. Veteran fund manager and equity researcher Andrew Holland, however, feels Japanese companies have had a mixed bag in India. "Some Japanese firms have done really well and some have not. There is nothing to worry, here. This is how it is in almost every country."IHH is also struggling to convince its investors that its bet in India, especially in Fortis, is working out. In the last three months, shares of IHH have fallen 8% in the Malaysian Stock Exchange, and analysts are putting tough questions to the board over Fortis. "We are concerned over issues at Fortis, including an auditor's qualified audit report in FY18, potential risk of provisions, lapses in internal controls, leading to regulatory probing, which could well mean execution risk," wrote an analyst from Kenanga Research, an investment bank based out of Malaysia, on December 2.On the same day, Maybank Investment Bank, which has a hold rating on IHH shares, also noted that a key downside risks for the group may come from an unfavourable outcome of India's court hearing in February, which may see IHH reversing its acquisition of 31% stake in Fortis. In contrast, Indian analysts seem to be gung-ho about Fortis. An ICICI Securities report dated December 13 said they expect the earnings before interest tax, depreciation and amortisation (EBITDA) to register a compounded annual growth of 66.6% in FY19-FY22, driven by revenue growth of 10.8% (CAGR) and EBITDA margin expansion to 17.1% in FY22 from 5.0% in FY19. "This would be driven by operating leverage and cost rationalisation," the report said. Meanwhile RHT in Malaysia, scheduled for winding up, has postponed its general meeting of unit holders, in anticipation of the Indian court verdict. India-watchers from Singapore also wait to see what happens to the enforcement of the arbitration order from its arbitration court in favour of Daiichi Sankyo that has withstood appeals both in India and Singapore. A decade-old saga is still awaiting closure.The Mysterious Trust How Fortis "sponsored" RHT and then purchased its assetsRHT or Religare Health Trust calls itself the "first business trust" to be listed on the Singapore Stock Exchange. A business trust is a tax and investment structure where one trust holds assets on behalf of another company. In this case, RHT's main sponsor was Fortis Healthcare, and 12 Fortis hospitals were owned by this entity, with two under operational management. Fortis Healthcare, despite being the "sponsor", was paying a clinical establishment fee of Rs 250 crore every year to RHT.In January this year, IHH, as part of its deal to acquire Fortis Hospitals, purchased RHT's assets for Rs 4,000 crore. This deal has come under the scanner because RHT was also owned or controlled by Malvinder Singh and Shivinder Singh in the past. While it was said that the brothers did not own or control RHT when the hospitals were acquired by Fortis, the deal immediately aroused suspicion.After buying RHT in January, Fortis/IHH put it on sale again in April 2019 but since they did not find any buyers, the companies dropped the idea. A Supreme Court bench said on November 15 that if Fortis had not acquired the RHT assets, it could have used the money that IHH invested in Fortis to pay Daiichi Sankyo $400 million — the arbitration award the Japanese company had won against the Singhs.The largest unit holders of RHT until June 2017 were the Singh brothers and their immediate family members. Even though the names of Singh brothers do not appear publicly on RHT documents today, the court has said it should be investigated when and how the holdings in RHT were transferred to various people. The current management of Fortis says that at the time it purchased assets from RHT, "to the best of the company's knowledge, the erstwhile promoters (Singh brothers) or any of their controlled entities were not unit holders in the Religare Healthcare Trust"."IHH has added immense value to Fortis"Ashutosh Raghuvanshi, CEO of Fortis Healthcare, says the issues that had put the group under a cloud have been addressed after IHH came on board. Raghuvanshi, a trained cardiothoracic surgeon who was earlier the CEO of Narayana Hrudayalaya, tells ET the focus is on improving operations now. Edited excerpts: 72919345 It has been a year since IHH stepped in as promoter of Fortis Healthcare. How does the situation look now?We had to take quite a number of steps to revive the company. Fortis was in such a state that there wasn't sufficient investment in capex and the debt rates were high — the hospital was in an unsustainable situation. Once IHH came on board, they helped us ease out of the situation. After Religare Health Trust's assets came in, the clinical establishment fees which we had to pay started remaining within the system. This gave us liquidity. On the treasury front, we managed to get fresh credit lines from banks. We were able to remove the punitive interest rates and bought interest rates down from 15% to 10%. That was a big achievement. Our credit rating has gone up by four times over a period of time. These things helped us keep our balance sheet healthy. We also looked at things as simple as food and beverage costs while bringing costs down.What changed on the hospital management front?We have improved our occupancy levels. This has risen in the last two quarters. So our hospital-side revenue has grown 10% on a year-on-year basis. We have started re-investing in our assets. We have invested Rs 200 crore in new equipment. We have commissioned a new hospital in Chennai that will be ready in the fourth quarter of this financial year. So we want to forget about other distractions and focus on operations. Also, IHH, being a very well-run and governed company in different regions and having a quality system of its own, has helped Fortis a lot. We have started talking to them about quality, supply chain and other operational matters regularly. So being associated with IHH has added immense value to Fortis — that is one thing we need to recognise.How does the situation look going forward?The momentum remains. We can't make forward-looking statements. Because the fundamentals are strong, we are positive that we will continue to perform the way we did in previous quarters.Some analysts were worried about IHH because of Fortis.I can understand people being cautious about assets being under a cloud. But from where we sit today, most of these issues have been highlighted adequately. When independent auditors came in, they made sure all the outstanding issues must be disclosed in order to have a clear picture. So a lot of work has been done and we can be more confident about how our performance is going to be. It is absolutely transparent and we follow government standards. There should not be an overhang of these issues.Tell us about the Fortis litigation against the Singh brothers.It was adequately found by our investigation that monies were taken out by the Singh brothers and Fortis has filed for recovery from them at the Delhi High Court. So that case continues. We are looking at a recovery of Rs 524 crore.Will IHH become a party to the ongoing litigation in Fortis?We don't know if IHH will become a party. We have complete confidence in the courts. We are pretty sure that when the facts are brought out, the court will see this company — which is an asset to the country — has managed to come out of a shadow and put a governance system in place.What about the forensic investigations? Any updates on that front?We do expect final reports from authorities, including SEBI, about this.What about the SRL acquisitions? We have heard that after Mitsui came in as an equity holder of IHH, they are going slow with investments in India, including Fortis?We will have to take it into consideration whether there are any sensitivities regarding the legal procedures. So they will be addressed. But the process is on track. | | How the future of Fortis Healthcare rests on the outcome of a high-stakes battle Posted: On his penultimate working day, the then chief justice of India, Tarun Gogoi, signed off on a contempt petition, arising out of transfer of shares of Fortis Healthcare Ltd, India's second biggest hospital chain. The Gogoi-led bench, on November 15, not only held siblings and erstwhile Fortis promoters Malvinder Singh and Shivinder Singh as well as lender Indiabulls Housing Finance Ltd (IHFL) guilty of contempt, it also initiated a fresh suo motu contempt complaint against Fortis Healthcare itself. The bench noted that shares of Fortis had been pledged and transferred to IHFL in violation of its August 2017 orders mandating a freeze in shareholding. While IHFL paid up and settled its case in December, the SC bench also raised the question whether Malaysian hospitals major IHH Healthcare's investment in Fortis in 2018, taking a 31% stake through preferential allotment of shares and acquisition of assets of Religare Health Trust (RHT), also violates its orders. The new contempt case will come up for hearing in February.The outcome of this high-stakes case will be keenly watched in four countries — India, Malaysia, Singapore and Japan. On it depends the future of India's second largest hospital chain, which is emerging stronger, following a prolonged and bruising custody battle. It will send strong signals about contract enforcement and commercial dispute resolution in India. And it will determine which of the two Japanese corporations — the $12 billion pharma giant Daiichi Sankyo, which has pursued the Singh brothers in courts for the better part of a decade, or Mitsui, the mammoth trading group that has become the controlling shareholder of Malaysia's IHH — will emerge victorious. 72918926 The roots of the story go back to 2008 when the Singh brothers sold a majority stake in Indian generic pharmaceuticals major Ranbaxy Ltd to Japanese major Daiichi Sankyo. Within a year, Ranbaxy had run afoul of drug regulators in the US, and by 2013, Daiichi had to admit and settle with the US Department of Justice (DoJ), paying a $500 million penalty.Daiichi sold Ranbaxy to Sun Pharma, and exited India but decided to go after the Singh brothers for selling it a lemon, and pursued arbitration in Singapore to recover the penalty amount. In May 2016, Daiichi won an arbitration award of $400 million and approached the Delhi High Court for enforcing the arbitration award, and insisted that various assets of the Singh brothers be frozen for recovery of the money. Their shareholding in Fortis was one such asset. On August 11, 2017, the Supreme Court had issued an order to keep the shareholding structure of Fortis unchanged. Separately, on December 14, 2018, it ordered a status quo on the sale of a Fortis stake to IHH, which had been reported in media at that time.With IHH in the saddle, Fortis' performance has recovered. Profits have been posted for the last three quarters, after six consecutive quarters of losses. The Fortis board today has three senior members of the IHH top brass, including IHH CEO-designate Kelvin Loh Chi-Keon, indicating its seriousness about Fortis and the Indian market. IHH was also slated to make an open offer to the minority shareholders of Fortis. It would have taken IHH's shareholding past the 50% mark. The Supreme Court's decision and the delay have been a setback for IHH, which operates Asia's largest hospital chain.Not a Clean BreakIn early 2016, the Singh brothers, as promoters, held 70% plus in Fortis. Their holdings, including those of entities controlled by them, fell progressively from 71.28% on March 31, 2016, to virtually nil on March 31, 2018. Much of this was due to lenders selling pledged Fortis shares of the promoters — much to the angst of Daiichi Sankyo, which wanted the Singhs' stake in Fortis to be preserved for the $400 million arbitration award. When the Fortis board allowed IHH to invest Rs 4,600 crore Fortis for a 31.1% stake through preferential allotment of fresh equity shares, the Singh brothers had virtually exited the company. It could have been a clean break for Fortis, save for one transaction in January 2019, which caught the SC bench's eye. 72918933 While the IHH investment happened November 2018, the apex court ordered status quo in December 2018, which it couldn't do the planned open offer. Then in January, Fortis went out and bought a bunch of hospitals owned by a Malaysia- and Singapore-based trust, called Religare Health Trust (RHT), for Rs 4,000 crore. RHT was previously controlled by the Singhs, and the Gogoi-led bench said this money could have been used to pay Daiichi. The SC bench now wants to pass it through the "contempt test". Apparently, the most profitable Fortis-managed hospitals were actually owned by RHT and Fortis paid a fee of Rs 250 crore to RHT every year.Having IHH as the promoter has been good for Fortis. CEO Ashutosh Raghuvanshi told ET Magazine that the new promoter has helped the company in many ways, especially with getting fresh credit lines from banks and favourable interest rates. He says: "The company was in such a state that there wasn't sufficient investment in capex, the debt rates were high — basically the hospital was in an unsustainable situation. Once IHH came on board, they helped us ease out the situation." He added that the assets acquired from RHT helped lower the fee outgo that Fortis had to pay.Moreover, despite the complications involved in the Fortis buyout, it is the only performing portfolio in India for IHH. Since it took charge, figures show that Fortis has improved operationally and is even expanding into new geographies. But all that might change come February, as Daiichi will make every effort to recover its dues, according to executives closely associated with the developments. "They will go all out and seek a complete reversal of the acquisition by IHH if they don't get paid," said a person aware of the developments who did not wish to be quoted due to the legal issues involved. Sources have also told ET Magazine that Mitsui executives have been negotiating with Daiichi to resolve the issue with Fortis and IHH in an amicable manner. In an emailed response, Mitsui declined to comment. 72918945 Daiichi lawyers did not respond to emails. Neither did IHH nor legal representatives of the Singh brothers. "The board of Fortis and IHH went ahead in the teeth of the Supreme Court status quo order and did the transaction. Supreme Court order upholds that the and other transactions were done to defeat the rights of Daiichi," said Amit Mishra of P&A Law Offices, which represent Daiichi.Shriram Subramanian, MD of InGovern, a shareholder advisory firm, feels that while the entry of IHH has helped Fortis, the Supreme Court action has left the minority shareholders in the lurch, and a reversal of the deal will be a sad thing. "The coming in of IHH has helped stabilise the ship. From the IHH point of view, they could have been much more cautious, but since they had the opportunity, they moved ahead with the deal. If they hadn't stepped in, the company would have sunk," Subramanian says. "SEBI and the courts must look at this aspect, because IHH and the minority shareholders are being hauled up for no fault of theirs," Subramanian adds.Global StakesWhile Fortis seems to be turning around, with the help of Mitsui-backed IHH, it will be important to ensure that Daiichi Sankyo does not end its India experience with all-round bitterness. Whichever way the SC rules, there would be large international players unhappy with the outcome, possibly blaming Indian judicial systems. 72918953 72918957 For Daiichi Sankyo, the only hope of recovering some part of the fine they had to pay in the US, rests on Fortis. As of mid-October, the Singh brothers have been arrested by the economic offences wing of the Delhi Police, and remain in custody, for allegedly siphoning money out of Religare Securities, the financial services company they promoted. Then there is Mitsui, the largest shareholder in IHH. As IHH battled several bidders for the Fortis stake, including private equity players like TPG, the Munjals and KKR, its own parentage changed. In May 2018, Malaysia saw a political change, with 93-year-old Mahathir Mohamad making a comeback, and focusing government's energies on bringing down the national debt. It meant selling assets, and the Khazanah investment fund of the Malaysian government decided to sell off some non-core assets, including the stake in IHH Healthcare. Mitsui picked up an additional 16% in IHH for $2 billion, to take its stake up to 33%. With the Japanese company in charge, sources indicate it will also mean a recalibration of its India strategy.Some say it is already underway. For instance, IHH has been actively looking to sell its assets in two other loss-making Indian investments in healthcare — Continental Hospitals and Global Hospitals, both acquired in 2015 for a combined value of Rs 1,700 crore. Mitsui independently owns majority shares in another Bengaluru-based hospital — Columbia Asia Healthcare India — and is also looking to sell. A senior investment banker with one of the big four audit and consultancy firms, specialising in healthcare and pharma, told ET Magazine that the Ranbaxy episode still rankles the Japanese firms when it comes to India and healthcare. "It includes their experience with Indian bureaucracy and the way Indian promoters manage their business," he adds.A bunch of Indian firms have tried their hands in Japan in pharmaceuticals, including Lupin, Dr Reddy's and Sun Pharma. Satish Khanna, a former group president of Lupin, who later went to study in Japan, says that somehow in pharma or healthcare, things have not worked out between India and Japan as the two markets are very different. He adds that there are cultural differences, too. "The Japanese are very fair and straightforward people who like to go by the book and expect fairness in return. They are slow adapters who do not respond to frequent changes very well," says Khanna says, explaining why Daiichi went after the Singhs.He points out that while India and Japan have excellent relations at the government level, Japanese companies and brands have not made much headway in India beyond automobiles and electronics to an extent. Veteran fund manager and equity researcher Andrew Holland, however, feels Japanese companies have had a mixed bag in India. "Some Japanese firms have done really well and some have not. There is nothing to worry, here. This is how it is in almost every country."IHH is also struggling to convince its investors that its bet in India, especially in Fortis, is working out. In the last three months, shares of IHH have fallen 8% in the Malaysian Stock Exchange, and analysts are putting tough questions to the board over Fortis. "We are concerned over issues at Fortis, including an auditor's qualified audit report in FY18, potential risk of provisions, lapses in internal controls, leading to regulatory probing, which could well mean execution risk," wrote an analyst from Kenanga Research, an investment bank based out of Malaysia, on December 2.On the same day, Maybank Investment Bank, which has a hold rating on IHH shares, also noted that a key downside risks for the group may come from an unfavourable outcome of India's court hearing in February, which may see IHH reversing its acquisition of 31% stake in Fortis. In contrast, Indian analysts seem to be gung-ho about Fortis. An ICICI Securities report dated December 13 said they expect the earnings before interest tax, depreciation and amortisation (EBITDA) to register a compounded annual growth of 66.6% in FY19-FY22, driven by revenue growth of 10.8% (CAGR) and EBITDA margin expansion to 17.1% in FY22 from 5.0% in FY19. "This would be driven by operating leverage and cost rationalisation," the report said. Meanwhile RHT in Malaysia, scheduled for winding up, has postponed its general meeting of unit holders, in anticipation of the Indian court verdict. India-watchers from Singapore also wait to see what happens to the enforcement of the arbitration order from its arbitration court in favour of Daiichi Sankyo that has withstood appeals both in India and Singapore. A decade-old saga is still awaiting closure.The Mysterious Trust How Fortis "sponsored" RHT and then purchased its assetsRHT or Religare Health Trust calls itself the "first business trust" to be listed on the Singapore Stock Exchange. A business trust is a tax and investment structure where one trust holds assets on behalf of another company. In this case, RHT's main sponsor was Fortis Healthcare, and 12 Fortis hospitals were owned by this entity, with two under operational management. Fortis Healthcare, despite being the "sponsor", was paying a clinical establishment fee of Rs 250 crore every year to RHT.In January this year, IHH, as part of its deal to acquire Fortis Hospitals, purchased RHT's assets for Rs 4,000 crore. This deal has come under the scanner because RHT was also owned or controlled by Malvinder Singh and Shivinder Singh in the past. While it was said that the brothers did not own or control RHT when the hospitals were acquired by Fortis, the deal immediately aroused suspicion.After buying RHT in January, Fortis/IHH put it on sale again in April 2019 but since they did not find any buyers, the companies dropped the idea. A Supreme Court bench said on November 15 that if Fortis had not acquired the RHT assets, it could have used the money that IHH invested in Fortis to pay Daiichi Sankyo $400 million — the arbitration award the Japanese company had won against the Singhs.The largest unit holders of RHT until June 2017 were the Singh brothers and their immediate family members. Even though the names of Singh brothers do not appear publicly on RHT documents today, the court has said it should be investigated when and how the holdings in RHT were transferred to various people. The current management of Fortis says that at the time it purchased assets from RHT, "to the best of the company's knowledge, the erstwhile promoters (Singh brothers) or any of their controlled entities were not unit holders in the Religare Healthcare Trust"."IHH has added immense value to Fortis"Ashutosh Raghuvanshi, CEO of Fortis Healthcare, says the issues that had put the group under a cloud have been addressed after IHH came on board. Raghuvanshi, a trained cardiothoracic surgeon who was earlier the CEO of Narayana Hrudayalaya, tells ET the focus is on improving operations now. Edited excerpts: 72919345 It has been a year since IHH stepped in as promoter of Fortis Healthcare. How does the situation look now?We had to take quite a number of steps to revive the company. Fortis was in such a state that there wasn't sufficient investment in capex and the debt rates were high — the hospital was in an unsustainable situation. Once IHH came on board, they helped us ease out of the situation. After Religare Health Trust's assets came in, the clinical establishment fees which we had to pay started remaining within the system. This gave us liquidity. On the treasury front, we managed to get fresh credit lines from banks. We were able to remove the punitive interest rates and bought interest rates down from 15% to 10%. That was a big achievement. Our credit rating has gone up by four times over a period of time. These things helped us keep our balance sheet healthy. We also looked at things as simple as food and beverage costs while bringing costs down.What changed on the hospital management front?We have improved our occupancy levels. This has risen in the last two quarters. So our hospital-side revenue has grown 10% on a year-on-year basis. We have started re-investing in our assets. We have invested Rs 200 crore in new equipment. We have commissioned a new hospital in Chennai that will be ready in the fourth quarter of this financial year. So we want to forget about other distractions and focus on operations. Also, IHH, being a very well-run and governed company in different regions and having a quality system of its own, has helped Fortis a lot. We have started talking to them about quality, supply chain and other operational matters regularly. So being associated with IHH has added immense value to Fortis — that is one thing we need to recognise.How does the situation look going forward?The momentum remains. We can't make forward-looking statements. Because the fundamentals are strong, we are positive that we will continue to perform the way we did in previous quarters.Some analysts were worried about IHH because of Fortis.I can understand people being cautious about assets being under a cloud. But from where we sit today, most of these issues have been highlighted adequately. When independent auditors came in, they made sure all the outstanding issues must be disclosed in order to have a clear picture. So a lot of work has been done and we can be more confident about how our performance is going to be. It is absolutely transparent and we follow government standards. There should not be an overhang of these issues.Tell us about the Fortis litigation against the Singh brothers.It was adequately found by our investigation that monies were taken out by the Singh brothers and Fortis has filed for recovery from them at the Delhi High Court. So that case continues. We are looking at a recovery of Rs 524 crore.Will IHH become a party to the ongoing litigation in Fortis?We don't know if IHH will become a party. We have complete confidence in the courts. We are pretty sure that when the facts are brought out, the court will see this company — which is an asset to the country — has managed to come out of a shadow and put a governance system in place.What about the forensic investigations? Any updates on that front?We do expect final reports from authorities, including SEBI, about this.What about the SRL acquisitions? We have heard that after Mitsui came in as an equity holder of IHH, they are going slow with investments in India, including Fortis?We will have to take it into consideration whether there are any sensitivities regarding the legal procedures. So they will be addressed. But the process is on track. | | View: A lasting resolution between Ratan Tata and Cyrus Mistry is the only way forward Posted: By Mukund Govind RajanThe recent National Company Law Appellate Tribunal (NCLAT) judgment on the Shapoorji Pallonji Group's appeal against an earlier NCLAT verdict, has created quite a stir. The legal community seems to be divided on the interpretation of the order for the reinstatement of Cyrus Mistry as executive chairman of Tata Sons, and it is unclear how any further appeal to the Supreme Court might be dealt with. Meanwhile, Tata group stakeholders are staring at a period of uncertainty until clarity emerges.As a former employee, my heart goes out to colleagues who have lived through perhaps the most turbulent period in the group's history. There have been previous crises, including the Tata Finance scandal in 2001 and the so-called 2G scandal of 2010, and each time, the Tata brand bounced back stronger; even today, the brand is rated the most powerful Indian corporate brand by international brand advisory firm Interbrand. However, this crisis is different, with intense stakeholder scrutiny of governance and profound long-term implications for the brand.The principal protagonists in the two camps are Ratan Tata and Cyrus Mistry. Both are individuals I have had the privilege of working closely with in the past. Both are thorough gentlemen, humble and grounded leaders, with a good grasp of technology and a curiosity about the changing world. Both have been new-age leaders for a new India, Tata coming into his own in a post-liberalisation India and Mistry in an increasingly digital India. Both still have much to contribute to Tatas and to India.The four weeks, which the NCLAT has allowed for an appeal before the Supreme Court, perhaps present an opportunity. At a time when corporate India desperately needs role models, many well-wishers of the group will be hoping that Tata and Mistry will direct their teams to arrive at a lasting resolution that sustains the brand for the foreseeable future, before the matter goes back to the courts, rather than letting external entities dictate possibly sub-optimal outcomes.Brand for All SeasonsThe Tata brand clocked its 150th anniversary in 2018. When stakeholders wonder what has sustained the brand for such a long time, I point to two key factors. The longevity of leadership at the top — with only seven leaders at the helm in 150 years — and the group's commitment to values-driven business conduct. These are reflected in the group's mission statement: "To improve the quality of life of the communities we serve globally through long-term stakeholder value creation, based on leadership with trust." However, these attributes have been coming under pressure recently.The group has had a history of nation-building through creation of employment in industrial sectors of national importance. More recently, though, across sectors like automotive and steel, with the advent of automation and robotics, significant workforce reductions have taken place. There has also been substantial attrition in newer but stressed sectors like telecom. Declining job-creation potential in traditional sectors has in fact been masked by growth in IT and IT-enabled services -- TCS now employs over 400,000 people, over half of the Tata group's employee base. But new job creation channels will need to be found if the group has to live up to its venerable history in a country which, more than ever before, needs job creation at scale.The group's reputation for giving back to society has been another critical element that has shaped its brand equity. The community engagement activities of companies like Tata Steel and Tata Motors have earned Tatas enormous goodwill. However, the amendments to the Indian Companies Act and the new CSR rules mean that merely spending on CSR is no longer a key differentiator. In my travels across Odisha, it became clear that where Tata Steel was once the lone vehicle of social change, now companies like JSW Group and Vedanta are doing a huge amount of work with local communities.Model for the FutureJRD Tata famously articulated the trusteeship concept: "The wealth gathered by Jamsetji Tata and his sons… is held in trust for the people and used exclusively for their benefit. The cycle is thus complete. What came from the people has gone back to the people many times over." The current situation offers Ratan Tata and Mistry an opportunity to converge, as shareholders, on what they wish the group's lasting legacy to be. Can it include an amazingly successful charitable organisation (Tata Trusts), a well-resourced business group that sustains the legacy of nation-building (Tata Sons), and a brand that is universally admired for giving back to society (Tata)?In this construct, the Tata Trusts may wish to consider refocusing their efforts on their philanthropic endeavours, gradually distancing themselves from the business of Tata Sons and the Tata companies. Progressively liquidating their holding in Tata Sons, not dissimilar to the manner in which the Wellcome Trust divested its legacy interests in pharmaceuticals in the mid-1990s to Glaxo, will create the richest charity organisation in the world, worth well over $100 billion. The yield on this could generate at least $6 billion a year, allowing the Trusts to multiply their annual funding of charitable initiatives, 50-fold in one stroke, delivering positive social outcomes on an unprecedented scale.To create liquidity in the hands of the Tata Trusts (and indeed other shareholders, including the Shapoorji Pallonji Group), an option may be to publicly list Tata Sons. Then there would be the inevitable public scrutiny listed companies find themselves under, and a requirement to have a distinctive board of directors. The combination of public scrutiny and a respected board would yield an institutional framework with sufficient checks and balances to give comfort to the remaining Tata group companies, particularly the listed ones, that their interests at the level of the promoter will be fully protected.Tata Sons could even choose to present itself as a "B Corp", a Benefit Corporation that is a for-profit entity trying to do well by doing good and delivering on its job creation promise. Ratan Tata is already one of the leaders of the global nonprofit, The B Team, founded by Sir Richard Branson. Tata Sons could nurture its existing businesses and protect jobs, while pursuing exciting new areas of business exploration, including finding answers to critical sustainability challenges like global warming; some of the resources to fund this would naturally come from monetising its holdings in companies like TCS, as it has already been doing.JRD Tata once said, "I don't want India to be an economic superpower. I want India to be a happy country." Likewise, the yardstick to measure success at Tata Sons need not be the profitability criterion alone, but a range of other attributes that comprehensively measure delivery on its stated mission – to improve the quality of life of the communities it serves. Ratan Tata as leader of the Tata Trusts, and Mistry as a significant shareholder in Tata Sons, have an opportunity to demonstrate the statesmanship both have in spades, to pull the group out of the cloud of uncertainty it currently rests in, and define a sustainable future for the Tata brand that many Indians will applaud.(Mukund Govind Rajan is a former brand custodian of Tata Sons and the author of The Brand Custodian: My Years with the Tatas) | | Best way to protect capital in stock investing: SWOT analysis Posted: By DK AggarwalInvesting in the stock market is considered one of the best ways to accumulate wealth.But before jumping into investing in a stock, one needs to analyse it. Stock investing can be extremely rewarding if the investment decision is based on fundamentals. SWOT analysis – an acronym for studying strengths, weaknesses, opportunities and threats – for a stock is one of the most widely used tools to perform a 'qualitative' study on a business. Doing a SWOT analysis is similar to brainstorming at meetings, and there are different ways to run them. It is especially useful when performing a comparative study on companies. At the same time, it can help understand a company's market position and competitive advantages. It's a valuable way to assess both the pros and cons of a potential investment or business and can help in strategic planning and decision-making.Strength and weakness' are the internal factors of a business while opportunities and threats are external. Each area is important individually, but when used together, they make a powerful analytical tool. We can take advantage of opportunities and protect against threats, but you can't change them. A company with a lot of opportunities has a lot of scope to succeed and make profit in the future. A thorough understanding of the weaknesses can enable a company to eliminate threats that could otherwise catch them off-guard.Let us understand this with an example. In 2017, the government launched Bharat Stage (BS)- IV fuel. That meant, thereby, that the sale of BS III-compliant vehicles would be banned across the country. Those automobile companies, which were quick to realise the opportunity, started working on BS-IV vehicles months before the expected launch date. Hence, they became profitable. 72914153 On the other hand, companies that did not do the opportunity or threat analysis properly had to face a lot of troubles as they could not sale the old vehicles. They suffered a big loss on their finished products and inventories.Once the SWOT analysis is completed, results should be consolidated so that all the positive opportunities — and any negative trends that can affect an investment strategy can be watched. Moreover, a SWOT analysis should be to the point and simple, so as to avoid confusion or over-analysis. Actually, it gives investors an opportunity to look at companies logically.By utilising SWOT analysis, investors can be one step closer to reaching their investment goals. It can enable proactive thinking, rather than relying on habitual or instinctive reactions. Moreover, it can bear fruits in the form of long-term gains and protect your capital to a great extent. 72912846 Chairman and MD, SMC Investments and Advisors | | Palladium tumbles most in four months after piercing $1,900/Oz Posted: Spot palladium tumbled further from its all-time high reached this week, posting the biggest drop in four months after crashing through $1,900 an ounce.Palladium for immediate delivery plunged as much as 5.3%, and closed 4.2% lower at $1,856.57 in New York, the biggest decline since Aug. 1."$1,900 acted as trigger to push the metal lower," Fawad Razaqzada, a market analyst at Forex.com, said Friday by phone. "That level broke down and the metal dropped $60 below it in no time at all. Those kinds of moves are common in less-liquid markets."The metal reached an intraday record of $2,000.35 an ounce on Tuesday as an already squeezed supply deficit showed signs of expanding following power outages in South Africa, a key producing country. Palladium had gained as much as 59% this year."The ascent was too steep and I would be staggered if a load of stops had not been hit," Rhona O'Connell, head of market analysis for EMEA and Asia at INTL FCStone, said in an email.Futures for March delivery fell 4.8% to settle at $1,808.90 an ounce on the New York Mercantile Exchange after earlier trading as high as $1,918.60. 72912514 In other precious metals, gold futures declined the most in two weeks on the Comex in New York as the dollar and U.S. equities advanced, erasing the metal's weekly advance.As the year draws to an end, the metal continues to trade within the week's range of $11.50 an ounce as investors weigh near-record stock levels against global interest rates that remain low and reduce the impetus to buy or sell gold, George Gero, a managing director at RBC Wealth Management, said by phone Friday.Platinum futures fell, with aggregate open interest topping 100,000 contracts for the first time on record. Silver futures advanced. | | After Google, Twitter warns Indian users about data breach Posted: NEW DELHI: In an extremely stressful year for Internet users, Twitter on Saturday admitted a malicious code was inserted into its app by a bad actor that may have compromised some users' information worldwide, including in India, as people woke up to an email from Twitter, warning them to update the app for Android.The vulnerability within Twitter for Android could allow the bad actor to see non-public account information or to control your account (send Tweets or Direct Messages), said an apologetic Twitter."Prior to the fix, through a complicated process involving the insertion of malicious code into restricted storage areas of the Twitter app, it may have been possible for a bad actor to access information (Direct Messages, protected Tweets, location information) from the app," Twitter said in a statement.The company said it does not have direct evidence that malicious code was inserted into the app or that this vulnerability was exploited, but it can't be completely sure. Twitter did not divulge the number of users affected too."We have taken steps to fix this issue and are directly notifying people who could have been exposed to this vulnerability either through the Twitter app or by email with specific instructions to keep them safe".Twitter recommended updating to the latest version for Android as the issue did not impact "Twitter for iOS"."We're sorry this happened and will continue working to keep your information secure on Twitter," said the company in the email sent to the Indian users, adding that those affected can also reach out to Twitter's Office of Data Protection, requesting information regarding their account security.The new data breach in Twitter was reported two days after several Indian users saw warning pop-ups from Google on their mobile and desktop screens as they opened certain affected websites in the Google Chrome browser, alerting them about a data breach on the site or app they had visited which also exposed their passwords.The Internet giant issued warning of data breach for users in India and globally after fixing the Chrome 79 bug and re-issuing it for the public."Change your password. A data breach on a site or app exposed your password. Chrome recommends changing your password for the site," read the warning pop-up.Twitter has faced several vulnerabilities on its platform in the recent past.In May, Twitter disclosed a bug that shared some iOS users' data with an unnamed partner, even if the users did not opt to share data. The bug affected Twitter's iOS user base and they were notified about the issue.In February, a bug in Twitter exposed private tweets of some Android users for over five years when they made changes in their settings, like changing the email address linked to their accounts.The vulnerability disabled the "Protect your Tweets" setting if certain account changes were made on Android devices.In a mega data breach last year, the micro-blogging platform alerted all users to change their password after it discovered a bug that stored passwords in plain text in an internal system."Out of an abundance of caution, we ask that you consider changing your password on all services where you've used this password," said Parag Agrawal, Chief Technology Officer at Twitter. |   |
