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Millions of investors of the five energy companies, which have been dragged into the corporate espionage scandal, are unlikely to be impacted by it. 
	 Last week, the Delhi Police arrested five officials of energy companies that include <keyword id="6484187" type="CITY" weightage="20" keywordseo="RIL">RIL</keyword>, Reliance <keyword id="3821" type="CITY" weightage="20" keywordseo="ADAG">ADAG</keyword>, <keyword id="6368035" type="CITY" weightage="20" keywordseo="essar">Essar</keyword>, <keyword id="59287" type="COMPANY" weightage="20" keywordseo="Cairn-India">Cairn India</keyword> and <keyword id="2743320" type="UNKNOWN" weightage="20" keywordseo="Jubliant-Energy">Jubliant Energy</keyword> for theft of confidential documents related to both Coal and Oil Ministries. 
	 
	While these companies have not been named in the First Information Report (FIR) filed by the Delhi Police, if investigated, could have serious repercussions on both the company as well as the Board. 
	 
	“For the authorities to investigate the companies, they have to first establish that the officials involved were acting on behalf of the Board and not for personal benefits,” said corporate lawyer Sameer Chaudhary, partner, Sastra Legal. 
	However, he pointed out that it would be difficult for the agencies to prove any collusion between the officials and the companies as concrete evidence would be required. 
	 
	“The companies could be booked under the Official Secrets Act (OSA), if it is proven. Nevertheless, I am sure that the angle of investigation would be to check, who is the beneficiary and that's how the needle of suspicion would point towards the board as well,” added another corporate lawyer, Ajay Brahme, founder of Ajay Brahme &amp; Co. 
	 
	Apart from these sections, the Corporate Affairs Ministry too could begin a suo-moto probe by invoking Section 210 under the Companies Act, 2013, “However, it is very distant right now. We have to remember that the investigating agencies will have to first prove that the information leaked was benefitting the companies,” noted Chaudhary. 
	 
	While Chaudhary noted that the companies can be barred by market watchdog SEBI if the investigation becomes more conclusive, market analysts believe that the firms cannot be barred from trading in the capital market. 
	 
	“SEBI can take any action, like it did with realty giant DLF, only if there are violations of the securities law. However, I do not believe that in a case such as this, the regulator can do much,” stated P Phani Sekhar, senior fund manager of Karvy Stock Broking. 
	 
	Interestingly, the entire controversy has not impacted the performance of these companies in the market. “We do not see any particular trend in the market as far as these firms are concerned. The companies are performing in line with the expectations,” added Sekhar. 
	 
	While it may be speculative at the moment, what remains to be seen is whether the NaMo government, which is considered to be close to India Inc, intends to take it forward seriously.

Corporate
espionage won’t impact RIL, ADAG, Essar, Cairn India & Jubliant Energy
investors

The growth slowdown of the past few years doesn't seem to have taken the edge off India Inc’s appetite for profit. As many as 18 companies are poised to join the club of those reporting $1 billion in net income in FY14, the highest in the past six years, keeping the rupee-dollar rate constant at current levels. While this is just one more than last year, the number is significant in the context of India’s prolonged slump. ONGC and <keyword id="6355199" type="CITY" weightage="40" keywordseo="Reliance-Industries">Reliance Industries</keyword> occupy the top two berths in that order while <keyword id="6357585" type="CITY" weightage="40" keywordseo="Tata-Consultancy-Services">Tata Consultancy Services</keyword> replaces Coal India at the third place that it occupied last year. According to an ETIG analysis, 18 companies are expected to cross Rs6,100 crore or $1 billion in profit in FY14 against only four in FY08. 
 The tally is also higher than the 13 companies that made it to the $1 billion club in FY08 even after considering the rupeedollar rate of 40 prevailing at the end of that fiscal year. “Inflation, rupee depreciation and commodity price increases, while hurting the <keyword id="34412" type="ORGANIZATION" weightage="40" keywordseo="economy">economy</keyword>, have also benefited certain sectors," said P Phani Sekhar, fund manager, portfolio management services, Angel Broking. Sekhar added that consumer-facing businesses have benefited from price increases. “One of the primary characteristics of the inflationary conditions that prevailed from 2009-14 has been the propensity to consume at the altar of savings.” 
 
The nature of companies that are members of the club has also changed significantly over the years. In FY08, of the four companies that crossed Rs6,100 crore in profit, three belonged to the public sector with RIL being the only non-state entity. In FY14, 13 out of 18 companies will likely be from the private sector. “In the last 5-6 years (since FY08), Indian domestic manufacturing industry has suffered a slowdown,” said Sachin Shah, fund manager, Emkay Investment Managers. 
 
 
 
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 “On the other hand, the domestic services sector and export-oriented businesses have done reasonably well. And this is the primary reason why companies like ONGC, RIL, <keyword id="45179" type="CITY" weightage="40" keywordseo="NTPC">NTPC</keyword> have taken a back seat and companies like TCS, Infosys, <keyword id="10862" type="CITY" weightage="40" keywordseo="Wipro">Wipro</keyword>, <keyword id="42747" type="CITY" weightage="40" keywordseo="Tata-Motors">Tata Motors</keyword> (JLR), HDFC Bank, <keyword id="6653" type="CITY" weightage="40" keywordseo="ICICI-bank">ICICI Bank</keyword> have done reasonably well.” 
 Considering the rupee’s appreciating trend and the expectation of a recovery in the domestic economy after the general elections, some analysts believe the number of billion dollar profit companies will be maintained in FY15. “I don't see any reason why the number of Indian companies reporting $1 billion or more of profits per annum should fall given that the <keyword id="6356076" type="UNKNOWN" weightage="40" keywordseo="indian-economy">Indian economy</keyword>, even in a recession, continues to grow at 13% per annum (on a nominal basis),” said Saurabh Mukherjea, CEO, institutional <keyword id="45369" type="CITY" weightage="40" keywordseo="equities">equities</keyword>, Ambit Capital. “If anything, given that the informal segment of the economy is being relentlessly squeezed by better organized, listed companies, we should see a sharp pick-up in billion dollar or more profit reporters in the years ahead.” 
 A sustained growth revival could see more companies joining the club in subsequent years. “We are expecting 16% earnings growth in <keyword id="6484188" type="CITY" weightage="40" keywordseo="Sensex">Sensex</keyword> earnings for FY15, (so) $1 billion PAT (profit after tax) companies would largely remain the same," said Rikesh Parikh, vice-president, institutional corporate broking, Motilal Oswal Securities. “However, afew more companies could make their mark in FY16 in case of economic revival.” The top three IT companies, including TCS, Infosys, and Wipro, will figure in the list for FY14 as well following sustained momentum in global IT outsourcing demand and the weaker rupee. 
 “Export-oriented sectors such as IT have benefited from 33% depreciation in the rupee against the dollar," said Sekhar of Angel Broking. Bharat Heavy Electricals (<keyword id="6354446" type="CITY" weightage="40" keywordseo="BHEL">BHEL</keyword>) is likely to miss the list this time around, considering the public sector electrical engineering giant’s poor show in the first nine months of FY14, when net profit halved to Rs 1,616 crore from Rs 3,377 crore a year earlier. It’s unlikely that the company will be able to exceed last year's profit of Rs 6,614 crore. Axis Bank is expected to debut in the club in FY14, given its double-digit net profit growth in each of the three quarters of the fiscal year so far. It has clocked a profit ofRs4,375 crore in the nine months and is likely to cross the Rs6,100 crore mark by the end of the March quarter.

In FY14, 18 Companies To Join Group Reporting $1 Billion And More In Net Income, The Most In 6 Years

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Corporate espionage won’t impact RIL, ADAG, Essar, Cairn India & Jubliant Energy investors

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In FY14, 18 Companies To Join Group Reporting $1 Billion And More In Net Income, The Most In 6 Years

Economic Times

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