Reliance, Huawei - Current Affairs Questions and Answers

1)   Reliance Capital saw the end of which leading executive's term in March 2017?

a. CMD
b. Managing Director
c. CEO
d. None of the above
Answer  Explanation 

ANSWER: CEO

Explanation:
Reliance Capital's long time CEO Sam Ghosh will leave the company w.e.f. March 31, 2017.

He spent 9 years at the financial services arm of the ADAG business conglomerate.

Ghosh had joined the company in April of 2008 as Group CEO of Reliance Capital.

He was elevated to the board in May 2015.

Ghosh will complete his term of office on March 31, 2017.

Reliance Cap is on track to become a CIC or Core Investment Company by March 31, as per RBI guidelines.

Ghosh was a CA from the UK. He played a key role in expanding core businesses during divestment of non-core assets to step up resources.

What is a CIC?

  • A CIC-ND-SI is a Non-Banking Financial Company with asset size of INR 100 crore and above
  • It is carrying on the business of acquisition of shares and securities
  • It holds not less than 90 percent of its net assets in the form of investment in equity shares, preference shares, bonds, debentures, debt or loans in group companies;
  • Its investments in the equity shares (including instruments compulsorily convertible into equity shares within a period not exceeding 10 years from the date of issue) in group companies constitutes not less than 60% of its net assets
  • It does not trade in its investments in shares, bonds, debentures, debt or loans in group companies except through block sale for the purpose of dilution or disinvestment;
  • It does not carry on any other financial activity referred to in Section 45I(c) and 45I(f) of the RBI Act 1934 except investment in bank deposits, money market instruments, government securities, loans to and investments in debt issuances of group companies or guarantees issued on behalf of group companies.
  • It accepts public funds
2)   Reliance Communication signed binding agreements to sell its tower business with which company?

a. Brookfield Communications
b. British Telecom
c. Vodafone
d. None of the above
Answer  Explanation 

ANSWER: Brookfield Communications

Explanation:
RCom signed binding agreements with Canada-based Brookfield Infrastructure and institutional partners to sell its tower business for an upfront cash payment of INR 11,000 crore.

RCom will also receive B Class non-voting shares in the tower company, providing 49% future economic upside from the business based on certain conditions, according to the company.

RCom will utilize the cash proceeds solely to reduce debt.

The tower business will be demerged into a separate company, to be 100% owned and independently managed by Brookfield Infrastructure.

The deal represents the largest-ever investment by an overseas financial investor in the infrastructure sector in India.

The ADAG-promoted RCom, and Mukesh Ambani's 4G telecom venture Reliance Jio will continue as major long-term tenants (of the tower company).

RCom said the combination of its wireless business with Aircel and monetization of tower operations will together reduce the company debt by Rs 31,000 crore ($4.6 billion), or nearly 70%.

RCom will continue to hold 50% stake in Aircel JV and 49% upside in tower business to be monetised at an appropriate time to further reduce debt significantly.

About Reliance Communications

  • Headquarters: Navi Mumbai
  • CEO: Vinod Sawhny (Feb 10, 2014)
  • Subsidiaries: Reliance Digital TV, Global Cloud Xchange, Reliance Globalcom Limited, Reliance - Big TV Limited
  • Parent organisation: Reliance Anil Dhirubhai Ambani Group

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