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Elon Musk’s attempt to walk away from his $44 billion Twitter Inc. buyout will turn on a three-word phrase that’s sometimes asserted in busted mergers -- but rarely passes muster with judges.

“Material Adverse Effect” was cited by Musk’s lawyers in a regulatory filing Friday which argued that undisclosed information about bots on the social media platform is “fundamental to Twitter’s business and financial performance.”

To escape the deal, Musk must prove the alleged omission amounts to an “unexpected, fundamental, permanent” negative development -- akin to blowing a hole in the transaction that can’t be fixed, said Larry Hamermesh, a University of Pennsylvania law professor.

In a 2020 case involving Boston Scientific Corp., a Delaware judge defined the term as an “adverse change in the target’s business that is consequential to the company’s long-term earnings power over a reasonable period, which one would expect to be measured in years rather than months.”

So far, Delaware courts have found only one case in which a clear MAE emerged -- Fresenius SE’s $4.3 billion buyout bid in 2018 for rival drugmaker Akorn Inc.

A judge blessed Fresenius’ decision to walk away from the deal after finding Akorn executives hid an array of problems that cast doubt on the validity of data backing up approval for some drugs and profitability of its operations.

The GST Council has set up a Group of Ministers, chaired by Haryana Deputy Chief Minister Dushyant Chautala, to suggest required changes in the law for setting up the GST Appellate Tribunal (GSTAT).

The GST Council, chaired by Finance Minister Nirmala Sitharaman and comprising state ministers, had last week decided to constitute a Group of Ministers (GoM) to address various concerns raised by states in relation to constitution of the GSTAT.

As per the Terms of Reference (ToR) of the GoM, the panel would recommend required amendments in the GST law to ensure that the legal provisions maintain the right federal balance and are in line with the overall objective of uniform taxation within the country. The 6-member GoM would also ensure that the amendments are in line with various court judgements relating to setting up the tribunal.

The GoM will consult legal experts for formulating its recommendations and will submit report to the Council by July 31. Besides Chautala, other members of the GoM are Andhra Pradesh Finance Minister Buggana Rajendranath, Goa Industries Minister Mauvin Godinho, Rajasthan Law and Legal Affairs Minister Shanti Kumar Dhariwal, Uttar Pradesh FM Suresh Khanna and Odisha FM Niranjan Pujari.

The GoM is likely to address the concerns of states in light of the Madras High Court order which said that the number of technical members should not exceed the number of judicial members in the GSTAT. The CGST Act had originally envisaged that the GSTAT would have one judicial member and two technical members (one each from the Centre and states).

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Hetal Gandhi and Surbhi Kaushal

Inherent contradictions have long tangled the wires of India’s power sector, adding vulnerability to the Indian economy, and its commitment to clean energy.

To be sure, the government has drawn up an aggressive roadmap for the transition to clean energy. However, lack of infrastructure investments by bleeding distribution companies (discoms) are stymieing these plans.

As a result, states are not only underperforming on their central renewable purchase obligation (RPO) goals, but are also largely unable to meet the often-lower targets set for themselves

So, how can India meet its power needs, and energy transition goals?

Three things need to happen:

1. A sharp increase in renewable energy (RE) installations
2. Higher spending on grid infrastructure, and value chain to cope with the rising share of intermittent RE power
3. Effective, and consistent policies to win the confidence of investors, and attract professional capabilities

Let’s examine these intertwined necessities.

CRISIL Research’s transition modelling and analysis indicates that in the first decade of energy transition, 80 percent of capacity additions would be for non-fossil fuels, versus the opposite in the decade till 2020. Thus, reaching 50 percent RE generation by 2030, as targeted under COP26, is ambitious. However, tripling the RE share (excluding hydro) from 11 percent now to around 36 percent is possible — and will be a feat in itself.

For this to happen, investments in grid infrastructure, smart meters, energy storage, and new business models to handle intermittent power are inevitable.

Such expenditure will have to be driven by India’s 45-odd state discoms. But financial inefficiencies stemming from bad karma and operational logjams have left them with little ability to do so. Add policy U-turns, poor implementation of annual tariff revisions, and inadequate disclosure of financials, and what you have is high vulnerability.

All that has meant debtor days (receivables from customers of the top 15 states, accounting for 85 percent of India’s power consumption) rising to 130-140 days as compared to an ideal benchmark of 30-60 days, and payments outstanding of Rs 2.2 lakh-crore (see table below).

The discoms’ dues to power generators stand at ~Rs 110,551 crore as on June 2022. Further, debt requirements are increasing with interest payments surging, even as operations bleed.

Non-receipt of such monies is why generators haven’t been able to shore up coal stocks despite a sharp 7.9 percent uptick in power demand in fiscal 2022.

Attempts have been made to course correct. With UDAY, nearly Rs. 2.2 lakh-crore of discom debt was transferred in 2016 to corresponding state governments, paving the way for investments, and borrowings to trim system losses (see table below).

However, political interventions to keep subsidising power, alongside systemic inefficiencies have erased potential benefits. Further, low demand during the pandemic, especially from high-paying industrial customers, amplified the payment crisis.

It was the short-term liquidity infusion of Rs. 1.35 lakh-crore through the Aatmanirbhar package that prevented a ballooning of this crisis.

Fast-forward to 2022. The government has approved the Revamped Distribution Sector Scheme (RDSS) to give discoms another chance to take corrective actions, and gain funding access.

Some corrective steps have failed, some partially succeeded and the results of the rest are awaited.

However, the RDSS, along with amendments in the Central Electricity Authority (CEA), and the recent announcement of the Late Payment Surcharge (LPSC) waiver, can help the distribution sector build investor confidence.

Further, the recent open access rules will drive green power usage among commercial and industrial consumers. The LPSC waiver can enable discoms to regularise the significant dues to generators. It’s a win-win scheme — it prevents deterioration in discoms’ financials, and averts penalties, while assuring payments to generators over 48 months.

But there are several monitorables. How generators cope with the higher interest cost arising from receivables being staggered over 48 months, and how the government handles this funding bears watching.

For long, discoms have grappled with cash flows and dues. The ability to generate cash is crucial since subsidised electricity sales, systemic inefficiencies, and interest on legacy debt will not vanish overnight.

While the modalities of the LPSC scheme are awaited, funding for it would be a handy crutch for discoms. It will be the first step to transforming this segment of the power value chain.

Hopefully, it will lead to generation of ‘swachh’ power, paid for by ‘swachh’ discoms.

India has tweaked its export policy for wheat flour, and an inter-ministerial committee will take a call on outbound shipments from July 12.

In a notification dated July 6, the government said no restrictions were being imposed on the export of wheat flour, maida, semolina and wholemeal atta.

The government said that supply disruptions in wheat and wheat flour have created many new players, leading to prices fluctuations and potential quality issues.

"Therefore, it is imperative to maintain the quality of wheat flour exports from India," it said.

Meanwhile, wheat flour exports between July 6 until July 12 will be allowed in case loading of the shipments has commenced before the issue of the notification and if the consignment has been handed over to the customs authority and registered by them.

The Russia-Ukraine war has disrupted global food and commodities supplies, including that of wheat.

Zimbabwe's central bank said it would start selling gold coins this month as a store of value to tame runaway inflation, which has considerably weakened the local currency.

The central bank governor John Mangudya said in a statement on Monday that the coins will be available for sale from July 25 in local currency, U.S. dollars and other foreign currencies at a price based on the prevailing international price of gold and the cost of production.

The "Mosi-oa-tunya" coin, named after Victoria falls, can be converted into cash and be traded locally and internationally, the central bank said.

The gold coin will contain one troy ounce of gold and will be sold by Fidelity Gold Refinery, Aurex and local banks, it added.

Gold coins are used by investors internationally to hedge against inflation and wars.

Last week, Zimbabwe more than doubled its policy rate to 200% from 80% and outlined plans to make the U.S. dollar legal tender for the next five years to boost confidence.

Soaring inflation in the southern African country has been piling pressure on a population already struggling with shortages and stirring memories of economic chaos years ago under veteran leader Robert Mugabe’s near four-decade rule.

Last week, Zimbabwe more than doubled its policy rate to 200% from 80% and outlined plans to make the U.S. dollar legal tender for the next five years to boost confidence.

Soaring inflation in the southern African country has been piling pressure on a population already struggling with shortages and stirring memories of economic chaos years ago under veteran leader Robert Mugabe’s near four-decade rule.

The company that built India’s digital payments backbone plans to make it cheaper and easier for the nation’s 32 million expatriates to bring their money home.

Indians overseas remitted $87 billion last year, the biggest inflow for any country tracked by the World Bank. The remittances market, where it costs $13 on average to send $200 across borders, is ripe for disruption, according to Ritesh Shukla, chief executive officer of NPCI International Payments Ltd.

“We have displaced cash in India to a large extent and are now looking to repeat the success in cross-border corridors,” said Shukla. “Overseas Indians can use our rails to remit money inwards straightway into their bank accounts, and for the markets where Indians travel frequently, we will build acceptance for our instruments.”

Successful overseas forays by NPCI would give India a home-grown alternative to SWIFT, the Belgium-based cross-border payment system operator, though Shukla stressed that the objective was not to displace existing platforms. About 330 banks and 25 apps -- including

Alphabet Inc.’s Google Pay and Meta Platform Inc.’s WhatsApp -- share NPCI’s unified payment interface, which has helped make instantaneous digital transactions a $3 trillion market in India.

NPCI is in the process of connecting the UPI platform to systems in other countries to replicate its domestic success. It is negotiating collaborations with governments, fintech companies and service providers around the world, aiming to reduce transaction costs and enable more small-ticket transactions, Shukla said.

Cutting Costs

“This is going to take the payments world by storm,” said Mayank Goyal, CEO of moneyHop, a cross-border banking app that lets users make international remittances through the SWIFT network. The company will seek to integrate UPI rails into the app as it makes cross-border payments easier, Goyal said.

UPI’s linkage with overseas nations will further anchor trade, travel and remittance flows between the countries and lower the cost of cross-border remittances, the Reserve Bank of India said in a report.

The Reserve Bank of India set up NPCI along with the country’s lenders to make retail payments faster, more accessible, and cost-efficient. A user just needs a virtual payment address to instantly transact with vendors and exchange cash between friends or family members.

Petrol and diesel prices will remain steady on July 6, the latest price notification issued by fuel retailers shows, with prices staying unchanged for more than a month after the government on May 21 cut the excise duty on petrol by Rs 8 a litre and on diesel Rs 6 a litre.

The duty cut brought down the petrol price in Delhi by Rs 9.5 and Rs 7 for diesel. Petrol in Delhi costs Rs 96.72 and diesel Rs 89.62 a litre.

In Mumbai, petrol is selling at Rs 111.35 and diesel at Rs 97.28. Petrol and diesel are priced at Rs 102.63 and Rs 94.24 in Chennai, while in Kolkata, petrol is at Rs 106.03 and diesel at Rs 92.76.

Oil marketing companies are incurring a loss of Rs 13.08 a litre on petrol and Rs 24.09 on diesel even as they pass on the excise duty cut to consumers in the country. India meets 80 percent of its fuel needs through imports.

The Centre has proposed to allow primary agriculture credit societies (PACS) to undertake activities like dealership of petroleum products, running PDS shops, and developing hospital and educational institutions, in addition to their regular functions. In this regard, the Ministry of Cooperation has floated a draft 'Model By-laws of PACS' on which it has invited suggestions from the state governments and other stakeholders by July 19.

The existing framework does not allow PACS to diversify in other areas apart from their core business. The draft model by-laws propose that PACS should be allowed to work as Bank Mitras and common service centres (CSCs), provide cold storage and godown facilities, set up PDS shops besides enabling them to work in dairy, fishery, irrigation and green energy sectors.