Bank NPA crisis: Here’s what is crucially missing

RBI Governor Raghuram Rajan will be remembered for his relentless pursuit of India’s monetary policy reforms, controlling inflation and advocating a stable policy framework. His precise diagnosis and direction for “deep surgery” for the chronic NPA problems of the banking sector, especially in public sector banks, is also noteworthy. He minced no words when he said that routine “band-aid” would not clean up the balance-sheet mess and put them back on a healthy trajectory.

RBI has been issuing master circulars from time to time, encompassing entire aspects of ensuring true and fair financial statements of banks. RBI has insisted that the new restructured loans, where the borrower has renegotiated the terms of repayment, must be classified as non-performing assets (NPA) from April 1, 2015, with provisioning of 15% of the outstanding instead of 5% for restructured loans, so that banks can take early recovery action or sell NPAs to asset restructuring companies (a loan turns into an NPA when interest repayments remain due on the 91st day).

Financial audit of banks are done by statutory central auditors (SCAs) and statutory branch auditors (SBAs). On the basis of prescribed eligibility criteria determined by RBI, the CAG prepares graded panel for empanelment and selection of eligible SCAs and the The Institute of Chartered Accountants of India (ICAI) prepares a panel for eligible SBAs in PSBs and send the panels for RBI’s scrutiny before finalisation of the lists. RBI has prescribed the number of SCAs and SCBs to be appointed to audit large, medium and small PSBs, and for audit of their branches.

Also Read: Banking crisis: Why promoters must be removed quickly

The government had delegated selection and appointment of SCAs and SCBs to individual PSBs from 2014-15 from the eligible list of firms, giving enough freedom to choose the auditors of their liking. Banks are free to select statutory auditors from the list with the approval of the Audit Committee of Board (ACB). The selection of audit firms as SCAs and SBAs is subject to RBI approval. The independence of auditors/audit firms is ensured by appointments of SCAs for a continuous period of three years, subject to satisfying the eligibility norms by the firms each year; PSBs cannot remove audit firms during the above period without the prior approval of RBI.

The option to consider whether concurrent audit should be done by bank’s own staff or external auditors is left to the discretion of individual banks. A critical issue is that auditors should be experienced, well-trained and, most importantly, adhere to applicable accounting and auditing standards, mandatory guidelines and the ethical code of conduct. Auditors must be able to function independently with professional autonomy and judgement. Adequate facilities and the requisite records must be made available to auditors with initial and periodical familiarisation of the process. Relevant internal guidelines or circulars or important references including the circulars issued by RBI and/or Sebi and other regulating bodies must be made available to the concurrent auditors.

Remuneration of auditors may be fixed by banks following the broad guidelines framed by the ACB, taking into account coverage of areas, quality of work expected, number of people required for the job, number of hours to be spent on the job, etc. Banks may devise a proper reporting system and periodicity of various check-list items as per risk assessment. Serious irregularities pointed out by the audit should be straight away reported to the controlling offices or head offices for immediate action. The findings of the concurrent audit must be placed before the ACB. An annual appraisal or report of the audit system should also be placed before the ACB.

Whenever fraudulent transactions are detected, they should immediately be reported to the inspection and audit department, and the chief vigilance officer and controlling officers. Follow-up action on the concurrent audit reports must be done promptly by the controlling office and inspection and audit department. When RBI has been insisting on true and fair financial statements by banks through various notifications, master circulars, guidelines and directions time and again, why has the banking sector, especially PSBs, been pursuing window dressing so consistently for years till the position reached the current imbroglio? Statutory auditors finally certify the accounts true and fair. Whenever any falsification of accounts on the part of the borrowers is observed by the banks or financial institutions, the auditors are responsible to bring it to the notice of the management. Auditors must have to follow auditing standards, applicable accounting standards, rules and the professional code of ethics. Being the regulator of chartered accountants, ICAI is duty bound to fix accountability of auditors if they are found lacking in professionalism and ethics.

There should be disciplinary action by ICAI. In fact, ICAI, RBI, the Department of Banking Supervision and Indian Banks’ Association are mandated to circulate the names of guilty chartered accountant firms. RBI is required to share such information with other financial sector regulators, ministry of corporate affairs and CAG. The lenders can obtain a specific certification from the borrowers’ auditors regarding diversion/siphoning of funds by the borrower. The rules also specify that banks and financial institutions may ensure incorporation of appropriate covenants in the loan agreements to facilitate such certification by auditors. RBI stipulates that lenders may engage their own auditors for such specific certification purpose without relying on certification given by borrowers’ auditors for ensuring proper end-use of funds and preventing diversion/siphoning of funds by the borrowers. Bank must invariably exercise basic minimum own diligence in the matter.

Master directions issued by RBI in January 2016 consolidate all regulatory matters under various Acts and are put on the RBI website. Proper medicine is prescribed for chronic NPA infection, but what is missing is strict implementation. Creating more rules, regulators and watchdogs may lead to overlaps, confusion and would prove to be counterproductive. If prompt administration of extant rules is taken care of and due diligence is exercised by regulators, bank management, auditors, audit committee and the board of directors, the NPA crisis can be resolved.

Edelweiss PE eyes growing tech start-up space

Edelweiss Private Equity, the venture capital and private equity arm of diversified financial services firm Edelweiss Financial Services Ltd, is looking to close at least 8-12 deals in the Indian start-up ecosystem this year itself.

The venture arm, which was set up mid last year on back of the growth in the start-up space, will invest in both early- and growth-stage companies.

While the fund is sector agnostic, the inclination is more towards fintech, artificial intelligence, and other tech-enabled start-ups.

A major focus is also towards the rising consumer space and categories that can drive demand for the next 10-15 years.

Pranav Parikh, head of Edelweiss PE, told BusinessLine that the fund is looking at doubling the investments in growth stage this year. While, he did not disclose the size of the fund, Parikh said a typical early-stage deal would be $1-3 million, while growth-stage investments will be $10-15 million.

The Edelweiss private equity and venture capital fund has already invested in five companies, including fitness wearable start-up GOQii, data analytics company BRIDGEi2i and consumer firm Freshee.

Indian landscape

“We are quite optimistic about the investing landscape in India and are looking at companies that can solve actual problems in healthcare, finance, transport spaces, to name a few. We play across the spectrum and will invest in tech-enabled emerging businesses, such as data analytics, Internet of Things, smart devices, tech products, as well as consumer companies with strong online and offline brands. We look forward to working with entrepreneurs and strive towards making a few of them leading brands or category leaders in their respective fields,” Parikh said.

Parikh, who has over one-and-a-half decades of investment experience in the US and Indian markets, joined Edelweiss last year to drive PE and VC investments. Parikh used to work with multi-asset private investment firm Q Investments, and was leading its Indian arm till 2013. Edelweiss PE fund is an internal fund at present, but may raise more funds from institutional investors in the next 1-2 years.

The company plans to stay invested in all its portfolio companies for at least 5-10 years, Parikh said, adding that the current market is very volatile and that a lot of investors are expected to exit their portfolios.

“The last PE rush was around 2007-08. Investments made during that time are expected to mature by now.”

He said the start-up space will see the next round of funding boom around next March.

Investments

Edelweiss is among a few other financial service firms and diversified conglomerates to have set their eyes on the growing start-up space in India. IIFL has created a corpus of ₹1,000 crore; JSW has set aside about 100 crore to invest in tech-enabled start-ups over the next three years.

Meanwhile, several private-sector and public-sector banks have also turned investors with Kochi-based Federal Bank looking to invest around 90 crore in early-stage start-ups. State Bank of India also recently announced that it has created a corpus of 300 crore for the same.

India Weekly Market of Economy, Corporates, Global Events & Politics

      India Market Weekly

Economy	·         Brexit drags rupee lower, RBI tries to arrest steep fall. The rupee took a sharp plunge of 96 paise against the US dollar to crash below the 68-level today as Britain's vote for leaving the EU played havoc in global markets. http://goo.gl/KRiOVl ·         India ranks 10th in FDI inflows: UNCTAD report: India’s FDI inflows have increased to $44 billion in 2015 as compared to $35 billion in 2014, and the growth has been across the board, the report said. http://goo.gl/9S9ZbJ ·         LIC Chairman S K Roy, appointed by previous UPA government, has resigned nearly two years ahead of completion of his five-year term. http://goo.gl/FcifyX ·           ·         NITI Aayog member Bibek Debroy said on June 22 reiterating the suggestion made by a panel headed by him last year for scrapping separate railway budget http://goo.gl/rvoBDq ·         Govt said it is revising its drugs law to make it easier for companies to do business while ensuring the safety and efficacy of medicines. Ministers decided the current law cannot effectively regulate areas such as biological drugs, stem cells and regenerative medicines, medical devices, and clinical trials http://goo.gl/tMBo3W ·         Cabinet has given approval for a special package for employment generation and promotion of exports in Textile and Apparel sector. It will have 3years sunset clause.   http://goo.gl/oevtUi ·         The pharma sector is expected to grow by 20% on account of relaxed FDI norms and a separate ministry to focus on the sunrise sector is on the anvil, Chemical and Fertiliser Minister said. ·         The Union Cabinet has approved the establishment of "Fund of Funds for Startups" (FFS) at SIDBI for contribution to various Alternative Investment Funds (AIF), registered with SEBI which would extend funding support to Startups. (PIB) ·         Cabinet gave a go-ahead to auctions across seven bands. The sale will see the government put around 2,300 MHz of spectrum on sale — the highest-ever in a single auction — which is likely to fetch the exchequer at least Rs 5.5 lakh crore if all the mobile airwaves are sold at the reserve price. http://goo.gl/mwHqkC ·         Execution of works in 20 smart cities will kick-start from June 25 with PM launching 14 projects in Pune, while 69 others will commence in other parts of the country (PIB) ·         The railways was also asked to increase its share in freight transport from the current 33% to 37% in the next three years in a NITI Aayog report to the PM. Among other targets are doubling the average speed of freight trains from 24 kmph to 48 kmph in three years, and raising that of mail and express trains to 80 kmph in three years, and 110 kmph in 15 years. The targets take into consideration the fact that the railway’s dedicated freight tracks in the western and eastern corridors are expected to be completed by 2019 and 2021, which will divert many freight trains to these corridors. (PTI)
Corporates	·         As Britain voted to exit the EU, Tata Motors-owned Jaguar Land Rover today said it is "business as usual" and will manage the long-term impact and implications of the decision, insisting "nothing will change" overnight for it and the automotive industry. ·         CARE, CRISIL may face SEBI action in Amtek Auto case: The crisis drew attention to the conduct of the rating agencies in assigning a credit rating to the Amtek Auto bonds and the JP Morgan schemes. CARE Ratings chose to suspend its rating on Amtek Auto on 7 August 2015. The agency had given Amtek Auto an AA- rating. Crisil Ltd had assigned a rating of AAAmfs (signifying the highest portfolio credit quality) to the JP Morgan India Treasury Scheme in May 2015. http://goo.gl/05k2IQ ·         Indiabulls Alternative Investments Ltd (AIF) to raise Rs1,000 cr from NRIs for realty fund having a tenure of four years, extendable by a year. Indiabulls Asset Management Co. Ltd, a unit of Indiabulls Housing Finance Ltd, is currently raising its second fund— Indiabulls High Yield Fund— that aims to raise up to Rs1,000 cr from domestic investors to invest in residential projects in key property markets. http://goo.gl/Y2L3tn ·         The Motherson Sumi Group is mulling a mega restructuring plan that will allow to it raise more funds and expand its business http://goo.gl/Bqy70F​
Global events	·         Prime Minister David Cameron on Friday announced his resignation in the wake of defeat in the crucial referendum after Britain voted to leave EU in a deadly blow to the 28-nation bloc that triggered a panic reaction in world markets and raised questions over immigration and other issues in the UK after the divorce. ·         The pound has fallen to levels not seen since about 1985 ·         Making the first moves to calm the markets following Britain's vote to leave the European Union (EU), Bank of England Governor Mark Carney on Friday announced that it was ready to provide additional liquidity worth £250 billion and take any other steps needed to ensure market functioning. ·         Bank stocks were pummeled at the open of European trade Friday in the aftermath of a landmark vote by the U.K. to leave the European Union, which has roiled global markets. ·         Gold prices zoomed to 26-month high of Rs 30,885 per ten gram today in the biggest single-day gain of Rs 1,215 since August 2013 as Britain voted to exit the European Union leading to bloodbath in global equity and currency markets.
Politics	·         As Britain voted to leave the European Union in a landmark referendum, India on Friday said it values its ties with both the UK and EU and will strive hard to strengthen these relationships in the years ahead. ·         Meghalaya seeks exemption from coal mining law ·         US reiterates support for India's NSG bid ·         Govt may review provisions of Geospatial Bill that proposes jail term of seven years and a fine up to Rs 100 crore if anyone wrongly depicts India's map http://goo.gl/PlkfYR

                                                                                                               

Raghuram Rajan coy about second term as RBI Governor

New Delhi has not yet asked Raghuram Rajan whether he would like to pad up for a second innings at the Reserve Bank of India after his term ends on September 4. In the past one month, there has been endless speculation about the equations between the government and the RBI governor — whether Rajan would be given a cold shoulder, or offered another term, or invited to play a different role.

"That question, I can't answer. First I have to be asked, 'Do you want to continue?' Then, I can answer," said Rajan at the Shiv Nadar University on Saturday when ET asked him whether he would like a second term as the RBI boss. There is a widely shared perception in financial markets and banking circles that the Centre may find it difficult to refuse a second term to Rajan if he were keen on continuing. But as of now, the Chicago school economist — who in the past three years has positioned himself as an inflation warrior — is keeping options open.

"I love teaching. I will go back to academia once I am done with my work here," Rajan said in a meeting with the Shiv Nadar University's faculty. The governor was the chief guest at the second convocation of the university, which was founded in 2011. Even though corporate India and local markets have criticised Rajan's policy to keep interest rates high and liquidity tight, foreign portfolio managers, who have gained from high rates and a stable rupee, have been vocal admirers of Rajan.

Last week, Christopher Wood, equity strategist at brokerage and investment group CLSA, said the biggest risk to the Indian bond and currency market will be if the RBI governor is not given a second term. "He (Prime Minister Narendra Modi) must recognise the constructive role played by RBI under Rajan in both imposing a tighter NPL (non-performing loan) system on banks, carrying out a stress test on banks and putting pressure on them to go after defaulting creditors," Wood wrote in the widely circulated CLSA newsletter.

Before taking over as the RBI governor in September 2013, Rajan was the chief economic adviser in the ministry of finance. Prior to that, he was a professor of finance at the University of Chicago Booth School of Business and chief economist at the International Monetary Fund. "I have no problems with India's growth. It could be better. The best is yet to come," said Rajan.

Rajan also stressed the need to have research-oriented universities. "As a country, as we grow in stature, we have to contribute ideas. We are always protesting — this doesn't look good, that doesn't look good. We are always underprepared and that's why we shout." Back in the '50s, he pointed out, ideas and concepts such as Panchsheel emerged in India, but today "we are a shouting lot".



"If we contribute ideas based on facts, based on research, we could very quickly become leaders," he said. Addressing students at the convocation, Rajan said, "India is changing, in many ways for the better. You will be able to help shape our country, the world, and your place in it. Play to your strengths." Referring to the Shiv Nadar University, founded by billionaire tech czar Shiv Nadar, Rajan said, "I would like to see places like this flourish. Thoughtful philanthropy, as reflected in the founding of this school, can further help enhance society's acceptance of great wealth."

However, adding a word of caution, the RBI governor said, "We should make sure that unscrupulous schools do not prey on uninformed students, leaving them with high debt and useless degrees." Greater Noida, where Shiv Nadar University is located, is emerging as an educational hub with around 50 colleges attracting students from across the country.

Three NBFCs to bet on as CV sales recover

Piggy backing on a visible recovery in sales of commercial vehicles, Shriram Transport Finance, M&M Financial and Cholamandalam Finance emerge as favourites

With many quarters of earnings disappointment on account of weak net interest income (NII) growth or elevated non-performing assets (NPAs), stocks such as Shriram Transport, M&M Finance and Cholamandalam Finance have remained under pressure. But now with the better than average monsoon season forecast, sales of commercial vehicles (CVs) are showing steadfast signs of improvement. These stocks have gained 14-30% in the last month. Their March 2016 quarter (Q4 FY16) results too exceeded the Street’s expectations. This too fuelled their stock performance, regenerating interest in these stocks.

For instance, Shriram Transport, which is the market leader in CV lending segment, saw its NII for Q4FY16 expand to Rs 1,273 crore, up 34% year-on-year. However, higher provisioning (Rs 1,073 crore; up 33%) dented net profit to Rs 143 crore, which was down 55% year-on-year. But as this was due to consolidation of its commercial equipment business, analysts regard it as a one-off. In fact, the 23% year-on-year growth in assets under management or AUM (Rs 72,750 crore) and positive surprise from share of new CVs expanding from 8% a year-ago to 10% in Q4FY16 offset the decline in profit. Used vehicles business accounting for the rest of its business grew by 21% year-on-year. AUMs in FY17 are expected to grow by 15%, contingent to monsoon. Consequently, analysts at Jefferies have raised their earnings per share (EPS) target for FY17-18 by 100–200 basis points (bps) as Shriram Transport should benefit from strong CV credit demand and lower borrowing cost.  

Likewise, for M&M Financial Services, after a watered-down December'15 quarter, NII and net profit posted 16% and 12% year-on-year growth in Q4FY16, respectively. Elevated provisioning for bad loans which was the major pain point for many quarters showed remarkable improvement in Q4FY16 as provisioning declined by 23% year-on-year to Rs 116 crore in Q4’FY16. Also, with fairly high levels of repossession and collection efforts in place, analysts at Credit Suisse note that the provision coverage for M&M Financial remains intact at 62%. Though loans grew at 11% year-on-year (versus 18-20% for peers), with the asset quality improving, Credit Suisse has recently upgraded its EPS target for FY17 by 300 basis points to Rs 23.6.

In case of Chalamandalam Finance, too, Phillips Capital has increased its EPS estimate for FY17 by 350 basis points to Rs 48 on the back of strong NII, net profit and disbursements in the March 2016 quarter. While NII at Rs 600 crore grew by 33% year-on-year, net profit expanded by 42% to Rs 192 crore in Q4FY16. Vehicle finance (mainly CVs) account for 67% of Cholamandalam’s assets. In FY17, the company expects to maintain 20% growth in its advances, with higher focus on heavy commercial vehicles.

However, there is a word of caution for all NBFCs. While the asset quality may improve in FY17 with above-average monsoon, the crunching of provisioning norms from 120 and 150 days per dues (dps) to 90 dpd by FY17 (or FY18 in case of Shriram Transport) may put some stress on asset quality. But as this is a structural change, the Street is not too wary of it.

Sebi plans to ease funding, listing norms for start-ups

A revamp of the listing, fundraising norms on the anvil; Sebi to also expand definition of high-tech start-ups

Mumbai: The capital markets regulator is planning to expand the categories of investors eligible to fund start-ups; relax rules for listing shares; and ease promoter-holding and minimum trading-lot norms to help the country’s 3,100-odd start-ups to raise capital, two people directly familiar with the development said.

The Securities and Exchange Board of India (Sebi) also plans to further liberalize the norms related to alternative investment funds (AIFs) introduced in 2012, to increase access of capital to start-ups. The AIF route has made investments in start-ups more transparent and easier for private equity (PE) funds, venture capitalists and high networth individuals.

“Within the existing norms, certain changes in definition of eligible investors could be made to encourage more investors to put money in promising early-stage businesses,” said one of the two people cited above. “We are also examining if the minimum investment amount in the AIFs could be brought down slightly.”

Rules may also be relaxed to allow more early-stage companies to get listed.

The existing norms allow only so-called high-tech and new-age start-ups.

As many as 40 start-ups are ready to get listed either in India or overseas, according to Harish H.V., partner (India leadership team) at Grant Thornton India.

“Sebi’s thinking is in the right direction to liberalize the norms for start-ups, but the regulator should be careful while expanding the definition of a start-up eligible for listing,” said Harish.

“While amending the norms to attract more start-ups to get listed, it has to be ensured that no fly-by-night operator takes advantage.”

In June 2015, Sebi allowed the exchanges’ institutional trading platform (ITP) to be used for capital raising by start-ups which are intensive in their use of technology, information technology, intellectual property, data analytics, biotechnology or nano-technology, to provide products, services or business platforms with substantial value addition.

However, even among these companies, only those that have at least 25% of their pre-issue capital being held by qualified institutional buyers (QIBs) were allowed to access the exchange platform.

For other categories of startups to be eligible for getting listed, at least 50% of the pre-issue capital in the company has to be held by QIBs. Additionally, no person (individually or collectively with persons acting in concert) could hold 25% or more of the post-issue share capital in a listed start-up.

The norms laid down by Sebi, however, failed to attract any start-up to get listed.

The regulator is now considering expanding the definition of so called “high-tech” and “new-age” firms, which could opt for listing on ITP, said the second person. “The definition could be modified to include more categories of start-up companies to be eligible for the platform,” said the second person.

Further, the present norms allow only two categories of investors—institutional investors (with net worth of more than Rs.500 crore) and non-institutional investors (NIIs) other than retail individual investors to access the proposed ITP.

While getting listed on ITP, the minimum application size from such investors cannot be less than Rs.10 lakh and the minimum trading lot post-listing cannot be less than Rs.10 lakh.

These promoter-holding and minimum trading-lot norms are discomforting for startups, if and when they plan to get listed, according to a person associated with Indian Angel Network.

Sebi is planning to relax these norms, said the two people cited above.

“Sebi has received representations that the current cap on promoter holding on the company which is willing to list on the start-up platform, at 25% be relaxed to around 50-75%,” said the second person.

Also, the trading lot size at Rs.10 lakh is too high for any investor, and market participants have requested its reduction to Rs.5 lakh as earlier proposed. The regulator is actively considering these recommendations.

Although Sebi may not explicitly encourage retail investors to buy shares of start-ups, a lower minimum trading lot will enable more investors to invest in these early-stage companies.

“In order to make listing feasible for start-ups, it is very important to keep the minimum trading lot size less than the minimum required subscription amount,” said Harish. “The suggestion we made is to keep the minimum trading lot-size at Rs.2.5 lakh if the minimum subscription amount in the listing issue of the startup is fixed at Rs.5 lakh. Otherwise, if the value of the stock comes down even slightly after listing, it will be difficult for the investor to trade in the start -up stock.”

In January, an advisory panel headed by Infosys co-founder N.R. Narayana Murthy had suggested changes to facilitate capital raising.

Sebi’s latest plans are somewhat in line with the panel’s recommendations.

Th panel had suggested that Sebi change its eligibility norms for investors to put money in alternative investment funds.

The current norms require a person to invest at least Rs.1 crore in an AIF. The rules also say that any individual with total annual income of at least Rs.50 lakh should be allowed to put money in AIFs.

According to market experts who deal with AIFs, Sebi may consider easing some of these restrictions.

“The minimum investment required in the AIFs could be reduced to include more potential investors,” said the first person.

AIFs collect funds from high net-worth investors to invest primarily in unlisted securities and start-ups to promote entrepreneurship.

According to latest available Sebi data, AIFs got funding commitments worth Rs.30,687 crore by the end of December. Of this, at least Rs.14,031.39 crore has been already invested.

According to the Murthy panel, pension funds, insurers, domestic financial institutions and banks should contribute more to develop the AIF industry. Domestic pension funds in India, including the National Pension System (NPS) and the Employee Provident Fund Organization (EPFO) should allocate up to 3% of their assets to AIFs by 2017 and 5% by 2020, the panel had suggested.

Obama: new tax rule will fight corruption, help economy

WASHINGTON - U.S. President Barack Obama said on Friday a long-delayed rule requiring the financial industry to identify the real owners of companies will help fight corruption and tax evasion and boost the economy.

His administration on Friday issued the Customer Due Diligence rule in the works since 2012 and proposed legislation meant to stop prevent criminals from using shell companies to evade taxes, launder money, and finance terror.

"These actions are going to make a difference," Obama told reporters. He said they would help the administration to do a better job of tracking financial flows and making sure companies are "paying the taxes they owe rather than using shell corporations and offshore accounts to avoid doing the things that ordinary Americans are doing every day."

Obama also called on Congress to pass legislation that requires all companies formed in the United States to report information to the financial crimes enforcement network at the Treasury Department.

"That's going to help law enforcement better investigate and prevent financial crimes," Obama told reporters.

Obama also urged Congress to raise the federal minimum wage, pass new trade agreements, and simplify the tax code.

"Only Congress can fully close the loopholes" that wealthy individuals or corporations can take advantage of, Obama said.

He singled out Senator Rand Paul, a Republican and libertarian, who in years past has single-handedly blocked tax treaties or treaty updates between the United States and Spain, Japan, Britain, and other countries. Paul has been "a little quirky on this issue," Obama said, and urged him "to stop blocking the implementation of tax treaties."

Paul's office did not immediately comment.

(Reporting by Timothy Gardner, Jeff Mason and Susan Heavey; Writing by Doina Chiacu; Editing by Chizu Nomiyama)

Sun Capital