JOIN USCorporate world saw both ups and downs
From bans to recalls to mergers and acquisitions, it was a year filled with events, negative as well as positive for corporates. It all started with the famous two minute snack — Maggi noodles.
The Food Safety and Standards Authority of India (FSSAI), on June 5, 2015, ordered Nestle India to withdraw and recall the nine approved variants of its Maggi instant noodles from the market for having been found unsafe and hazardous for human consumption.
Nestle was instructed to stop further production, processing, import, distribution and sale of the product with immediate effect. FSSAI had also asked Nestle to withdraw and recall its Maggi Oats Masala Noodles with Tastemaker, for which risk/safety assessment has not been undertaken and product approval has not been granted.
Legal battle
While Nestle India sought legal recourse, retailers including Kishore Biyani-owned Big Bazaar and Reliance Retail decided to take the product off their shelfs in the interest of the consumers.
HUL also decided to withdraw Knorr, its Chinese range of instant noodles, from the market following the problems surrounding Maggi.
However, after fresh testing of the newly manufactured samples, the product was brought back on the shelf early last month, nearly five months after the product was banned by the FSSAI. Another really big event from the corporate perspective was the recall made by Volkswagen Group India.
Right when the emission scandal hit the German auto major globally, it was known that the impact will be felt in India as well.
No wonder then that earlier this month, Volkswagen Group India decided to voluntarily recall nearly 3.23 lakh vehicles equipped with the infamous EA 189 diesel engines, which was found to have software that could fool emission tests in some geographies.
Volkswagen Group India was not the only one to recall their products. Honda Cars India, in statement issued on December 10, said that the company is recalling 90,2010 units of the City and Mobilio models manufactured between December 2013 and July 2015 to replace fuel return pipes.
General Motors India announced on December 15 that it will inspect and if necessary, replace the clutch pedal lever in over one lakh Chevrolet Beat Diesel cars made between December 2010 and July 2014.
Mergers and acquisitions
On the mergers and acquisitions front, it was a busy year. Oil explorer Cairn India decided to merge with Vedanta in a deal valued at over $2 billion. Anil Ambani-controlled Reliance Infrastructure decided to acquire an 18 per cent stake in Pipavav Defence for Rs 819 crore, besides an open offer for an additional 26 per cent stake.
Reliance Communications decided to demerge Sistema’s Indian wireless business, carried on by Sistema Shyam Teleservices (SSTL) into RCOM. Besides this, the company also announced last week that it has entered into a 90-day exclusivity period with Maxis Communications Berhad (MCB) and Sindya Securities and Investments, the shareholders of Aircel, to consider the potential combination of the Indian wireless business of RCOM and Aircel.
Following the government’s decision to hike foreign direct investment limit in the insurance sector, a lot of the foreign partners of insurance companies based in India decided to hike their stake.
Nippon Life Insurance (NLI) decided to increase its stake in Reliance Life Insurance (RLIC) to 49 per cent from 26 per cent for Rs 2,265 crore, ERGO decided to hike stake in HDFC ERGO General Insurance Company to 48.742 per cent from 25.84 per cent with an investment of Rs 1,122 crore.