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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

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Petro panel wants duty structure amended
New Delhi, May 29
With fuel prices bound to go north, the Standing Committee on Petroleum and Natural Gas has recommended changing the customs and excise duty structure on petro products to offset the impact of the hike on the common man.

Cabinet’s job to decide

India asks ADB to reduce charges 
New Delhi, May 29
India has made a strong case to the Asian Development Bank (ADB) to reduce costs of borrowing, including processing fee and commitment charges.

RBI panel to monitor bank charges
New Delhi, May 29
Taking into account the innumerable complaints pouring in from customers regarding banks levying higher charges, the Reserve Bank of India (RBI) has constituted a Working Group to ensure reasonableness of the bank charges and to incorporate this in the Fair Practices Code.

Rupee ends weak against dollar, breaches 46 mark
Mumbai, May 29
The Indian currency breached Rs 46 per US dollar mark today closing at 46.09/10/USD due to huge foreign fund outflow in the equity markets, a dealer in the forex market said.

French firm outbids Mallya for champagne major Taittinger 
Mumbai, May 29
Liquor baron Vijay Mallya’s Rs 3,000- crore bid to acquire French champagne major Taittinger has been virtually beaten by a rival firm, which has quoted a 15 per cent higher price for the brewery. “A French company is going to buy Taittinger at a crazy price. The UB group has evaluated the company and is unlikely to increase its valuation,” an informed source said.



Film actress and former Miss Universe Lara Dutta
Film actress and former Miss Universe Lara Dutta displays jewellery items at Geetanjal Gold Expressions, 2006, in Chennai on Sunday.— PTI

 

Mahindra & Mahindra Ltd Vice-Chairman Anand Mahindra M&M Q4 net up two fold at Rs 321.17 crore 
Mumbai, May 29
Mahindra & Mahindra Ltd today recorded a two- fold jump in net profit after tax at Rs 321.17 crore for the quarter ended March 31 as compared to Rs 152.66 crore for the same quarter in 2004-05. Total income (net of excise) increased to Rs 2302.60 crore for the fourth quarter in 2005-06 from Rs 1951.30 crore in the year-ago period, up by 18 per cent, the company said.

Mahindra & Mahindra Ltd Vice-Chairman Anand Mahindra speaks at a news conference in Mumbai on Monday. — Reuters photo

Russian steel tycoon keen to raise stake in Arcelor to 45 pc 
Moscow, May 29
The Russian steel tycoon who is joining with Arcelor SA to forge the world’s biggest steel producer is seeking to eventually hold 45 per cent in the new company, a company official said today.

It’s baggage boom in Baghdad

An Iraqi buys a suitcase from a shop in central Baghdad
An Iraqi buys a suitcase from a shop in central Baghdad on Monday. A thriving luggage business has sprung up in Iraq as most of the people have started fleeing the country, mostly for security reasons. — AFP

TDSAT slams VSNL
New Delhi, May 29
In a setback to Tatas-owned VSNL, telecom tribunal TDSAT has rejected its petition against the Telecom Regulatory Authority of India (TRAI) and the Department of Telecommunications and held that long- distance calling cards sold by the company were illegal.

JK Tyres mulls price hike
New Delhi, May 29
Hit by rising costs of inputs, JK Tyres said today it would hike prices by 12-15 per cent across product segments by September.

New plan for stock borrowing, lending soon
Mysore, May 29
SEBI Chairman M. Damodaran said today that a new scheme for stock borrowing and lending, based on the model being practised internationally, would be announced in the next three or four days.


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Petro panel wants duty structure amended

New Delhi, May 29
With fuel prices bound to go north, the Standing Committee on Petroleum and Natural Gas has recommended changing the customs and excise duty structure on petro products to offset the impact of the hike on the common man.

“The excise duty on petroleum products should be so structured as to ensure that the interests of the consumer were not compromised. The Committee also recommends that the ad valorem component in the existing mix should be replaced by a single specific component,” the Committee said in its report.

As regards the customs duty, the Committee had viewed that the levy was only a mechanism to ensure fruitful gains to refining companies.

The customs duty levied on products did not actually add to the revenues of the government, as product imports were almost nil owing to surplus refining capacity in the country, it said.

While the customs duty on crude is 5 per cent, petrol and diesel attract a customs duty of 10 per cent each.

The government, at present, is in the process of finalising a hike in petroleum product prices and a final announcement is expected sometime this week.

According to sources, the decision on petroleum pricing would be a mix of price increase and duty cuts on oil products.

The Left, the Congress’s major ally in the UPA government, has been against any hike in petroleum product prices. Instead, the Left had demanded that the duty structure on petroleum products be changed in order to cushion consumers from further burden.

The excise duty on petrol had a specific ad valorem mix of 8 per cent plus Rs 13 per litre. This included a basic excise duty content, additional excise duty to fund road construction, a special excise duty component and an additional excise duty as surcharge for the national highway project.

In case of diesel, apart from the basic excise duty, there existed an additional excise duty.

Consequently, the committee had found that 36 per cent on the retail-selling price on petrol and 17 per cent of that of diesel comprised the excise duty component.

“This meant that Rs 14.74 out of Rs 40.49 in the retail price of petrol and Rs 4.93 out of Rs 28.45 of diesel in Delhi owed to the excise duty component alone. This is a highly disturbing trend,” the Committee said.

More disturbing was the ad valorem component in the excise duty, which had made the burden on the consumer more prominent.

On customs duty, the Committee said, the government had been going into calculations for fixing the import parity prices of these products at refinery level, which in turn increased the consumer price.

It has recommended that the customs duty on petrol and diesel be brought down to 5 per cent from 10 per cent to make it at par with the customs duty on crude, leaving no room for any differential at this level.

The Petroleum Ministry, in its reply, said it is forwarding the proposal of replacing the ad valorem component in the excise duty structure by specific component to the Ministry of Finance. — PTI

Cabinet’s job to decide

Karaikudi: It is for the Union Cabinet to decide whether to go in for excise duty reduction if the Centre proposed to hike prices of petroleum products, Finance Minister P Chidambaram said today.

The Union Cabinet would decide on hiking fuel prices once the Petroleum Ministry came up with the proposal, he told reporters here.

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India asks ADB to reduce charges 

New Delhi, May 29
India has made a strong case to the Asian Development Bank (ADB) to reduce costs of borrowing, including processing fee and commitment charges.

In this connection, it asked the Manila-based bank to make its pilot multi-tranche financing facility a regular programme so that commitment fee is reduced in proportion to phased system of loans, a Finance Ministry official said.

Commitment charge is the fee for holding on to the undisbursed balance of a loan commitment. It is a fixed rate charge calculated on the basis of undisbursed balance.

A multi-tranche financing facility now allows ADB to finance long-term investment programme or lines of credit on a framework basis. Depending on the demand or readiness of the borrower, various tranches may be requested over the facility period.

As such, the borrower will benefit in the sense that commitment fee will not be charged on the facility amount but on the smaller individual tranche.

India also asked ADB to review upfront or processing fee.

“Our contention is that why are you (ADB) charging upfront money for, what is it for?” Moreover, upfront fee should be linked with a delay in processing loans, he said.

Pointing out that the delay is not caused by India alone, the official said upfront money should be paid by the one who is responsible for the delay. “If blame is on us, we should pay the upfront fee and if the ADB which takes time to process a loan, the fee should be paid by it,” he said.

Making a case for reducing interest rates on loans by the ADB as well, the official said it should not be a problem since the Manila-based bank had lowered interest rates in past.

At its annual general meeting in Hyderabad earlier this month, ADB had virtually rejected Finance Minister P Chidambaram’s demand to reduce the lending rates to pre-2000 level, saying the interest rates on its loans are already extremely low.

Mr Chidambaram had asked the Manila-based ADB to reduce the loan charges to the levels prevailing before 2000, saying financial parameters of the bank had been robust and cost of funds were critical to its business. — PTI 

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RBI panel to monitor bank charges

New Delhi, May 29
Taking into account the innumerable complaints pouring in from customers regarding banks levying higher charges, the Reserve Bank of India (RBI) has constituted a Working Group to ensure reasonableness of the bank charges and to incorporate this in the Fair Practices Code.

This was stated by RBI Deputy Governor Usha Thorat at the Financial Planning Congress, 2006, organised by Financial Planning Standards Board (FPSB), India.

The Banking Codes and Standard Board of India (BCSBI) will closely monitor the group, comprising nominees from the Indian Banks Association (IBA) and the representatives of customers.

“Keeping in view the large number of complaints being received, the Banking Ombudsman Scheme has been revamped this year, and since the revised scheme came the number of complaints received at various offices has more than doubled to 13,483 during the last quarter,” she said.

“The Working Group monitored by the newly formed BCSBI, will ensure reasonableness of bank charges,” she added. — UNI

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Rupee ends weak against dollar, breaches 46 mark

Mumbai, May 29
The Indian currency breached Rs 46 per US dollar mark today closing at 46.09/10/USD due to huge foreign fund outflow in the equity markets, a dealer in the forex market said.

The crude oil prices above $71 per barrel in the global markets also maintained pressure on the rupee.

Rupee finally closed 21 paise weaker compared to the previous close of 45.88/89 per $ on Friday.

Earlier in the morning, the Indian currency today opened weaker by 7 paise at 45.95/$ as compared to the last close of 45.88/89.

Rupee breached Rs 46 per dollar mark in the mid-morning session and later dipped to an intra-day low of 46.12.

The Reserve Bank of India fixed the reference rate at 45.95 per US dollar, which was 10 paise down.

The six-month forward premia ended lower at 0.63 per cent from the previous close of 0.70 per cent.

The one-year forward premia too, ended lower at 0.82 per cent from the previous close of 0.89 per cent.

The cross-currency closing rate for rupee against euro was 58.80 (58.80), unchanged from the last close; for pound sterling it was 85.80(85.85) which is 5 paise down, for Japanese yen it was 41.03 (40.98), which was 5 paise down from the previous close. — UNI 

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French firm outbids Mallya for champagne major Taittinger 

Mumbai, May 29
Liquor baron Vijay Mallya’s Rs 3,000- crore bid to acquire French champagne major Taittinger has been virtually beaten by a rival firm, which has quoted a 15 per cent higher price for the brewery.

“A French company is going to buy Taittinger at a crazy price. The UB group has evaluated the company and is unlikely to increase its valuation,” an informed source said.

The UB group had valued Taittinger at Rs 3,000 crore.

Market sources speculated that the Taittinger family, backed by French bank Credit Agricole, is close to finishing the deal.

There were two French bidders and the workers council of Champagne Taittinger are believed to be opposing Mallya’s bid for the company, as they want the seller, US-based Starwood Capital, to prefer a French bidder.

About six bidders had been shortlisted for the Taittinger buyout and Mallya’s bid was amongst the highest.

US-based Starwood Capital, which had acquired Taittinger last year, plans to sell the company, globally selling around 4.5 billion bottles of champagne and wine a year.

Last week, Mallya told PTI that he had made a bid to acquire Taittinger for nearly Rs 3,000 crore — a move that would give the UB group access to network and distribution channels across Europe.

“Taittinger has got a huge distribution channel in France all over Europe... I can sell United Spirit products using that distribution channel,” Mallya had said.

Meanwhile, the UB Group is in talks with Hindustan Aeronautics and European manufacturer Eurocopter to buy helicopters for launching a city-to-airport charter service across India.

“We are evaluating HAL’s ‘Dhruv’ and Eurocopter” group Chairman Vijay Mallya said.

Mr Mallya said he planned to connect the centre of the city with the airport, thereby reducing the travel time. The service would be available only for airline passengers.

The group, which already has presence in the aviation business through Kingfisher Airlines, has not yet decided on the fleet size for the new service. — PTI 

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M&M Q4 net up two fold at Rs 321.17 crore 

Mumbai, May 29
Mahindra & Mahindra Ltd today recorded a two- fold jump in net profit after tax at Rs 321.17 crore for the quarter ended March 31 as compared to Rs 152.66 crore for the same quarter in 2004-05.

Total income (net of excise) increased to Rs 2302.60 crore for the fourth quarter in 2005-06 from Rs 1951.30 crore in the year-ago period, up by 18 per cent, the company said.

The Board has recommended a dividend of Rs 10 per share (100 per cent). This dividend includes a 75 per cent dividend on the enhanced share capital and also a special dividend of 25 per cent.

For the year ended March 31 the company registered a net profit after tax of Rs 857.10 crore as against Rs 512.67 crore for the year 2004-05). The total income (net of excise) rose to Rs 8326.53 crore for FY 05-06 from Rs 6769.05 crore in FY 04-05.

The group posted a consolidated balance of profit at Rs 1404 crore for the year 2005-06 as compared to Rs 724.07 crore for the year 2004-05.

The consolidated total income (net of excise) increased to Rs 12648.40 crore for FY 05-06 from Rs 9565.51 crore in FY 04-05. — PTI

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Russian steel tycoon keen to raise stake
in Arcelor to 45 pc 

Moscow, May 29
The Russian steel tycoon who is joining with Arcelor SA to forge the world’s biggest steel producer is seeking to eventually hold 45 per cent in the new company, a company official said today.

OAO Severstal spokeswoman Olga Antonova confirmed CEO Alexei Mordashov’s intentions to increase his stake in Arcelor from 32 per cent, but added that it could only happen after five years under the terms of the deal.

Mordashov was earlier quoted by the Interfax news agency as saying that he wanted “to increase my interest to 45 per cent, but only as long as this meets the interests of other shareholders and the regulators in Luxembourg”.

The news came as wrangling intensified for creating an international steel titan, and Mittal Steel Co. — the world’s No 1 steelmaker which has so far been spurned in its attempts to acquire Arcelor — reportedly sought to derail the Severstal-Arcelor merger.

Under the surprise deal announced last week, Mordashov will pay $1.59 billion in cash to gain a 32 per cent stake in Arcelor, and will hand over his stake in all of Severstal’s steel assets and Italian steelmaker Lucchini SpA. The merged companies would have a six per cent share of world steel output — 70 million tonnes annually — and 124,000 employees.

Meanwhile, Mordashov said Arcelor was buying back 150 million of its own shares, after which they would be cancelled, thus raising his stake to 38.5 per cent.

“There was little sense in buying additional shares — they are very expensive,” Mordashov was quoted by the Vedomosti business daily as saying.

The Wall Street Journal reported today that Mittal Steel Co. was racing to torpedo the Arcelor-Severstal deal. — AP

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TDSAT slams VSNL

New Delhi, May 29
In a setback to Tatas-owned VSNL, telecom tribunal TDSAT has rejected its petition against the Telecom Regulatory Authority of India (TRAI) and the Department of Telecommunications and held that long- distance calling cards sold by the company were illegal.

“We have come to the conclusion that the appellant (VSNL) is not authorised to provide the service of calling cards for making out-bound long -distance calls under the conditions and clauses provided by national long- distance or international long -distance licence,” said Justice N Santosh Hegde, Chairman of the TDSAT.

“This service can only be provided under the license of basic service operator or unified access service licence,” he said.

“By introducing this service, the appellant (VSNL) is directly accessing these subscribers, which is not allowed as per the licence condition,” the tribunal observed further.

Under the long- distance calling cards of VSNL, any telephone subscriber could make an ISD call using a toll- free number.

Responding to it, TRAI said that as per the licence conditions, only the customer of Tata Tele services Ltd and Tata Tele services Maharashtra Ltd were entitled to it. — PTI 

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JK Tyres mulls price hike

New Delhi, May 29
Hit by rising costs of inputs, JK Tyres said today it would hike prices by 12-15 per cent across product segments by September.

“We will be increasing the prices in two phases. While prices will go up between 6-8 per cent from June, a similar hike will be undertaken before September,” company Marketing Director Kalyan K Paul said here.

The Indian tyre industry has seen profit margins under severe pressure following unprecedented hikes in rubber and petro products prices, which together account for 70 per cent of input costs.

Mr Paul said operating profit margins (before interest and depreciation) for the company had seen a massive erosion, falling from 15 per cent two years ago to 6.5 per cent now.

“During this period, rubber prices have jumped from Rs 55 per kg to around Rs 105 per kg while crude prices have risen to around $70 per barrel. This is intense pressure,” he said. The net impact from this to the company was around a 13-14 per cent price lag in terms of costs. — PTI

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New plan for stock borrowing, lending soon

Mysore, May 29
SEBI Chairman M. Damodaran said today that a new scheme for stock borrowing and lending, based on the model being practised internationally, would be announced in the next three or four days.

Talking to newspersons here, he said under the new scheme, settlements would be through shares instead of cash to safeguard the capital market from its uncertainties to a considerable extent.

Mr Damodaran said that a state-of-the-art National Institute for Securities Market and Trading would be set up in another three years on the outskirts of Mumbai. Unlike other institutes offering diploma courses, it would train the candidates in the capital market to upgrade functioning, understand the market complexities and orient for training and research.

Mr Damodaran said a system of optional grading of initial public offerings (IPOs) was being planned by SEBI to get a better understanding of the risk factors associated with IPO. The system would be implemented by year-end. — UNI 

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Bharat Forge
Mumbai, May 29
Bharat Forge Ltd expanded its Board of Directors to accommodate three additional directors - Mr P. K. Maheshwari, Mr B. P. Kalyani and Mr S. E. Tandale. The company said the three new Directors have been inducted into the Board as Executive Directors with effect from May 23. The company`s Board strength has now gone up to 15 from 12. Also, the number of Executive Directors on the Board has swelled from four, including the Managing Director, to seven. It was also decided to elevate Executive Director G. K. Agarwal to the position of Deputy Managing Director while Mr B. N. Kalyani is the Chairman and Managing Director. — UNI

HCL Info
New Delhi, May 29
HCL Infosystems today entered into a strategic but non-exclusive agreement with Apple Computers to distribute the latter’s desktop computers and digital musical device iPod. HCL will sell and distribute Apple Desktop computers for education, media and entertainment space, Mr Ajai Chowdhury, Chairman of HCL Infosystems, said here. For iPods, HCL Infosystems will provide complete sales and service support. iPod, a digital musical device for music lovers, is currently available in India in the price range of Rs 4,000-Rs 23,000 through some regional outlets. — PTI

Tata, Essar plants
Dubai, May 29
Tata Steel and Essar are planning to set up two steel plants in southern Iran within four years, Iran’s Deputy Minister of Industries and Mines for Economic and International Affairs has said. Mr Mohsen Shaterzadeh said yesterday the companies had bought the land for the steel plants, whose total capacity is estimated at 10 million tonnes per annum (MTPA). The plant to be set up by the Essar Company is scheduled to become operational within three years and would produce two MTPA of steel in its first phase, Teheran Times quoted him as saying. — UNI

KEC International
Mumbai, May 29
KEC International Limited (KEC), a part of the Rs 9,500- crore RPG Enterprises has floated a joint venture company with Power Engineers Inc (PEI) of the US in a bid to tap the North American market. The 50:50 joint venture, KEC Power Inc (KPI) will be based in the state of Idaho and capture high- value projects that are expected to come up as the USA builds transmission system infrastructure, KEC said here today. — PTI 
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