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B U S I N E S S

IPO Scam
Illegal beneficiaries to be dislodged, says FM

New Delhi, December 8
In a stern message to those involved in stock market manipulation, the government said today it would withdraw the shares from illegal beneficiaries detected in the IPO scam and make fresh allotments.

RBI hikes CRR by 0.50 pc
Home, personal loans may be dearer

Mumbai, December 8
Interest rates are likely to move upward, with the Reserve Bank today increasing the cash reserve ratio (CRR) of banks by 50 basis points as part of steps to absorb excess liquidity from the economy and contain inflation around 5 per cent.

Honeywell in talks with HAL for engines
Bangalore, December 8
US aerospace major Honeywell is in talks with Hindustan Aeronautics Limited to manufacture engines for civil transport aircraft in India, a senior HAL official said. "They are talking of transferring a production line of one of their global engines....civil aircraft engine...for their smaller transport aircraft", Bangalore-based defence major's Managing Director (Bangalore complex) A.K.Saxena told PTI.

PHDCCI proposes rural business hubs in HP
Shimla, December 8
The PHD Chambers of Commerce and Industry (PHDCCI) has urged the Himachal Government to develop rural business hubs (RBHs) in public-private panchayat partnership to generate employment in villages and improve the economy of backward areas.

Price rise: MPs want ban on future trading in wheat
New Delhi, December 8
Concerned over the spiralling prices of wheat and other essential commodities, a parliamentary committee has suggested banning future trading in items of mass consumption, including wheat.


Mr Uday Kotak, Managing Director, Kotak Mahindra Bank, after receiving the 'India Innovator of the year' award presented by CNBC-TV 18 in Mumbai late on Thursday
Mr Uday Kotak, Managing Director, Kotak Mahindra Bank, after receiving the 'India Innovator of the year' award presented by CNBC-TV 18 in Mumbai late on Thursday. — PTI

EARLIER STORIES
 
Mr Alain Dutheil, Chief Operating Officer and Vice- Chairman of the Corporate Executive Committee, ST Microelectronics, gifts a souvenir to Union Minister of Communications and Information Technology Dayanidhi Maran in New Delhi on Friday. STMicroelectronics plans to invest up to $25 million in India next year
Mr Alain Dutheil (left), Chief Operating Officer and Vice- Chairman of the Corporate Executive Committee, ST Microelectronics, gifts a souvenir to Union Minister of Communications and Information Technology Dayanidhi Maran in New Delhi on Friday. STMicroelectronics plans to invest up to $25 million in India next year. The company also gave details about its latest set-top box decoder chip, the first device of such complexity to be entirely designed in India. — AFP

Mr Ghulam Nabi Azad, Chief Minister, Jammu and Kashmir, sees a shawl at a Kashmiri pashmina shawl exhibition in New Delhi on Friday
Mr Ghulam Nabi Azad, Chief Minister, Jammu and Kashmir, sees a shawl at a Kashmiri pashmina shawl exhibition in New Delhi on Friday. — A Tribune photograph
A model presents a creation at the Fort Railway Station in Colombo late on Thursday as part of the "Paris-Colombo Fashion Week
A model presents a creation at the Fort Railway Station in Colombo late on Thursday as part of the "Paris-Colombo Fashion Week". Local designers together with their French counterparts showcased their creations. The Alliance Française de Colombo, with the support of the Embassy of France in Sri Lanka and Maldives and the French company Schneider Electric, is organising the first-ever Paris-Colombo Fashion Week in Sri Lanka from December 6 to 10. — AFP

Overseas liabilities of banks touch Rs 2,45,533 cr 
New Delhi, December 8
Due to increase in foreign currency borrowings, issue of ADRs/GDRs and equities of banks held by non-residents, the international liabilities of banks are increasing. The outstanding total international liabilities of Indian commercial banks were Rs 1,76,694 crore, Rs 2,06,852 crore and Rs 2,45,533 crore as at end of March 2004, 2005 and 2006, respectively.

ONGC to invest Rs 13,000 cr
Mumbai, December 8
The ONGC is planning to invest Rs 13,000 crore in 12 projects in three years in the western offshore fields. Through the redevelopment of these projects by 2030, an additional 10.6 million tonnes of crude oil and 2.265 billion cubic metres of natural gas will be available, company sources said. The western offshore fields consist of Mumbai High, Neelam and Heera Vasai and Satelite fields.

Punjab may get 2 textile parks
New Delhi, December 8
The government is likely to clear two private sector textile parks in Punjab out of the four sanctioned all over the country by the Planning Commission. The Textile Ministry received a nod for four parks from the Planning Commission early last month under the Scheme for Integrated Textile Parks (SITP), sources said.

Oracle offers Rs 2,100 for i-flex share
Mumbai, December 8
Riding high on global software giant Oracle's announcement of revising its offer to buy a 34.14 per cent stake in i-flex by nearly Rs 600 per share, the domestic software company's shares surged nearly 17 per cent today. The shares of the company settled at Rs 2,048, gaining Rs 267 or 17 per cent on the Bombay Stock Exchange.

Bihar sugar industry attracts Rs 4,600 crore
Patna, December 8
The economy of Bihar is now expected to grow rapidly because of private investments to the tune of Rs 4,600 crore attracted by the sugar industry. Bihar Sugarcane Minister Nitish Mishra said the government had already sanctioned proposals for 10 sugar complexes in the private sector and received detailed project reports for 15 other sugar mills.

Malaysia's IOI to buy Aditya Birla’s palm oil biz
Kuala Lumpur, December 8
Malaysia's biggest plantation group IOI Corp is acquiring Aditya Birla's Pan Century group, which runs refinery and oleochemical businesses in the country, under a deal worth over $119 million.

GAIL buys 30 pc in Myanmar block
Mumbai, December 8
GAIL has acquired a 30 per cent stake in Block A-7 in Myanmar as a consortium partner with Silver Wave Energy. GAIL signed the production sharing contract with Myanmar Oil and Gas Enterprise on Wednesday for Block A-7 located in the Rakhine offshore Area, Myanmar, the company said today. Accordingly, the company shall hold a 30 per cent participating interest whereas the remaining 70 per cent shall be with Silver Wave Energy.

IFCI can sell Haryana Steel’s NPAs: HC
New Delhi, December 8
In what could prove to be a setback to ailing Haryana Steel and Alloys Ltd (HSAL), the Delhi High Court has ruled that the IFCI could sell bad assets of the sick company to recover its dues.

PNB to raise Rs 400 cr
Kolkata, December 8
Punjab National Bank (PNB) has decided to raise Rs 400 crore as Tier-II capital next month and make provisions to open a number of foreign offices by March 2007, PNB CMD S.C. Gupta said here today.

 

 

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IPO Scam
Illegal beneficiaries to be dislodged, says FM
Tribune News Service & PTI

New Delhi, December 8
In a stern message to those involved in stock market manipulation, the government said today it would withdraw the shares from illegal beneficiaries detected in the IPO scam and make fresh allotments.

"Irregularities have taken place and we have detected the beneficiaries of this... we have caught them and punished them," Finance Minister P. Chidambaram said in the Lok Sabha during question hour.

"...But a system has been put in place to detect such irregularities in future so that no one could make multiple applications during any IPO. Now quoting the permanent account number (PAN) has been made mandatory for making any application," the minister said.

He, however, said no bank had lost any money in the IPO scam and assured the House that all those participants who became illegally rich would be dislodged and fresh allotment of shares would be made in favour of those deserving.

The RBI has imposed monetary penalties on 10 commercial banks, namely Bharat Overseas Bank, Indian Overseas Bank, Vijaya Bank, ICICI Bank, HDFC Bank, Standard Chartered Bank, Citibank, IDBI Ltd, ING Vysya Bank and Centurian Bank of Punjab, Mr Chidambaram said.

Elaborating on steps taken by the government, he said all the Depository Account (DP) holders will have to submit their PAN by December 31 this year, failing which their DP accounts would be frozen.

The modus operandi of those involved in the irregularities was that they opened multi-fictitious accounts to corner a major portion of shares reserved for retail investors. There were 105 IPOs that hit the market over the period.

Last month, it asked depositories NDSL and CDSL and their eight participants to cough up about Rs 116 crore for not being alert to prevent these irregularities.

Stake in banks not to fall below 51 pc

The stake of the government in public sector banks in the country would not be diluted below 51 per cent and its proposed acquisition of the RBI’s holding in SBI would not adversely affect the capital raising ability of the country’s largest bank.

The government's stake in public sector banks would always be at least 51 per cent, Finance Minister P Chidambaram said.

To a question on government's efforts to acquire RBI's stake in SBI, he said the country's largest bank has a comfortable capital adequacy ratio of 12.63 per cent as on September 30 this year, which is well above the minimum regulatory requirement of 9 per cent.

"Hence, transfer of RBI shareholding in SBI to the Government of India would not in any way adversely impact the capital raising ability of the bank," Mr Chidambaram said.

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RBI hikes CRR by 0.50 pc
Home, personal loans may be dearer

Mumbai, December 8
Interest rates are likely to move upward, with the Reserve Bank today increasing the cash reserve ratio (CRR) of banks by 50 basis points as part of steps to absorb excess liquidity from the economy and contain inflation around 5 per cent.

The CRR, the amount of money and assets which banks must keep with the RBI at any given time, will be increased to 5.25 per cent on December 23 and to 5.5 per cent on January 6, 2007, from the current 5 per cent, the central bank said.

The RBI decision could push housing and personal loans upward as all lenders would have to deposit a higher percentage of their assets with the apex bank. The hike would absorb about Rs 13,500 crore of resources of banks.

The increase comes just a day after Finance Minister P Chidambaram said it was premature to talk about overheating in the economy.

"The recent reduction in prices of petrol and diesel will moderate inflation, but the overall impact on inflation expectations requires to be monitored," the RBI said. It said conditions in financial markets were stable and orderly. The external sector was also strong and current account deficit is likely to be close to the trend, and will continue to be accommodated by net capital flows.

The decision to increase CRR would be applicable to all banks, including commercial banks, regional rural banks, state co-operative banks. — PTI

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Honeywell in talks with HAL for engines

Bangalore, December 8
US aerospace major Honeywell is in talks with Hindustan Aeronautics Limited to manufacture engines for civil transport aircraft in India, a senior HAL official said.
"They are talking of transferring a production line of one of their global engines....civil aircraft engine...for their smaller transport aircraft", Bangalore-based defence major's Managing Director (Bangalore complex) A.K.Saxena told PTI.

He expects the discussions to lead to a memorandum of understanding between the two firms.

Mr Saxena said global aerospace major Pratt and Whitney was in dialogue with HAL to enter into a broad-based partnership agreement covering areas, including energy, research and development and manufacturing.

HAL had already inked a pact with Pratt and Whitney Canada (P&WC) for an aircraft maintenance, repair and overhaul (MRO) centre in Bangalore.

In the industrial and marine gas turbine area, HAL intended to go in a very big way and is looking for partnership with leaders, including GE and Pratt and Whitney.

HAL is bullish on MRO opportunity. "We have never been in civil aircraft MRO business. This is going to be one of our key business areas. We intend to get into it in a bigger scale".

The number of civil aircraft flying in India was expected to go up from the current 250-plus to nearly 600 by 2011-2012. "All aircraft will need servicing. MRO is going to be a very big business", he said.

Mr Saxena also said HAL was making a "substantial investment" as it was undertaking a major upgradation of infrastructure at its units in various parts of India. "We are getting into export in a big way", he said, adding that "we will export components to P&WC".

HAL would recruit 500 management trainees this year. He ruled out introducing a voluntary retirement scheme in HAL. — PTI 

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PHDCCI proposes rural business hubs in HP
Tribune News Service

Shimla, December 8
The PHD Chambers of Commerce and Industry (PHDCCI) has urged the Himachal Government to develop rural business hubs (RBHs) in public-private panchayat partnership to generate employment in villages and improve the economy of backward areas.

Te state had immense potential for export of handicrafts and agro-based products, particularly organic agro produce which, if properly exploited, could transform the rural economy.

Rural ‘haats’ should be set up in collaboration with the private sector and promoted through the Union Ministry of Tourism, and the state Tourism Department. The Centre had already launched an initiative to develop rural tourism hubs which should be integrated with panchayati raj institutions (PRIs) for effective functioning.

The PHDCCI felt that besides promotion of cottage industries and handicrafts, a good network of engineering and foundry industries, agro-based and livestock-based industries could be created in Una, Hamirpur, Kangra, Bilaspur, Sirmaur and Solan districts. The districts of Kulu, Shimla, Chamba, Mandi, Bilaspur and Solan were suitable for horticulture and forest-based industries. The tribal areas of Kinnaur, Lahaul-Spiti and Chamba, besides Kullu and Shimla had scope for handicraft units.

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Price rise: MPs want ban on future trading in wheat

New Delhi, December 8
Concerned over the spiralling prices of wheat and other essential commodities, a parliamentary committee has suggested banning future trading in items of mass consumption, including wheat.

"Taking note of hardening of wheat prices in the market, the committee has recommended that the government should ban forward/future trading in wheat so as to contain the prices of foodgrains in the open market,", the committee report tabled in Parliament said.

The Standing Committee on Ministry of Consumer Affairs, Food and Public Distribution, headed by Mr Devendra Prasad Yadav, "urged that the essential items of mass consumption need not be included in the list of items for which forward/future trading is permitted".

"Sadly the purpose for which the future/forward market was permitted to trade in foodgrains, including wheat, has not yielded the desired results, especially to small farmers," the report said, adding that consequent upon the rise in future/forward price of wheat, the end retail prices had also risen.

"On the one hand, the farmers have not been able to reap the benefit of future trading and on the other, the consumer is made to pay a high price, on account of speculation and other market manipulations," the report said.

In its action taken report, the ministry said the Forward Markets Commission, the regulator for commodity futures trading, had been keeping a close watch on futures trading in wheat. — PTI 

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Overseas liabilities of banks touch Rs 2,45,533 cr 
Tribune News Service

New Delhi, December 8
Due to increase in foreign currency borrowings, issue of ADRs/GDRs and equities of banks held by non-residents, the international liabilities of banks are increasing.
The outstanding total international liabilities of Indian commercial banks were Rs 1,76,694 crore, Rs 2,06,852 crore and Rs 2,45,533 crore as at end of March 2004, 2005 and 2006, respectively.

In the mid-term review of annual policy statement for the year 2006-07, the RBI has proposed to modify the norms for authorised dealer banks to borrow funds from their overseas branches and correspondent banks (including borrowings for financing export credit, ECBs and overdrafts from their head office/Nostro account) up to a limit of 50 per cent of their unimpaired Tier I capital or $10 million, whichever is higher, as against the earlier overall limit of 25 per cent (excluding borrowings for financing export credit).

Short-term borrowings up to a period of one year or less, however, should not exceed 20 per cent of unimpaired Tier I capital within the overall limit of 50 per cent. Mr Pawan Kumar Bansal, Minister of State for Finance, gave this information in reply to a question in the Lok Sabha today.

Scheme for senior citizens

The government has constituted an expert group to ensure that the interests of small investors be protected and they be given new avenues for safe investment of their savings.

The expert group on protection of interests of small investors has recommended a new scheme, to be called “Senior Citizens Inflation Protection Savings Scheme”, to ensure a certain real rate of return to senior citizens.

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ONGC to invest Rs 13,000 cr

Mumbai, December 8
The ONGC is planning to invest Rs 13,000 crore in 12 projects in three years in the western offshore fields. Through the redevelopment of these projects by 2030, an additional 10.6 million tonnes of crude oil and 2.265 billion cubic metres of natural gas will be available, company sources said. The western offshore fields consist of Mumbai High, Neelam and Heera Vasai and Satelite fields.

The ONGC has multibillion dollar infrastructure offshore consisting of platforms, rigs, pipelines, among other things. The offshore logistic provides support through marine logistic, air logistic, inspection and marine repair and pipeline division with an operating budget of $350 million. — UNI

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Punjab may get 2 textile parks

New Delhi, December 8
The government is likely to clear two private sector textile parks in Punjab out of the four sanctioned all over the country by the Planning Commission.
The Textile Ministry received a nod for four parks from the Planning Commission early last month under the Scheme for Integrated Textile Parks (SITP), sources said.

The Plan panel had recommended that at least two textile parks should be set up in Punjab while stipulating that the number of parks should not exceed 30 under the 10th Plan, they said.

Till now, the government has cleared 26 textile parks under the current Plan period that ends in March 31, 2007.

The Centre has received two proposals from Punjab-- Abhishek integrated textile park in Sangrur and Ludhiana integrated textile park, Ludhiana, a Textile Ministry official confirmed.

Out of the 26 parks cleared under the SITP, none has come in Punjab.

The Abhishek textile park would be set up with an investment of Rs 110 crore in around 75 acres in Sangrur district by the Trident group in association with six other promoters.

The other park at Ludhiana has been promoted by 60 local entrepreneurs who have floated a company -- Ludhiana Integrated Textile Park Ltd --for the purpose. They plan to set up the park in about 150 acres of land. — PTI

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Oracle offers Rs 2,100 for i-flex share

Mumbai, December 8
Riding high on global software giant Oracle's announcement of revising its offer to buy a 34.14 per cent stake in i-flex by nearly Rs 600 per share, the domestic software company's shares surged nearly 17 per cent today. The shares of the company settled at Rs 2,048, gaining Rs 267 or 17 per cent on the Bombay Stock Exchange.

Oracle would now shell out Rs 2,100 per share, a 42 per cent premium to the original offer of Rs 1,475 each.

This is the highest price paid by Oracle for shares of i-flex in which Oracle already owns 55.07 per cent.

Oracle CEO Larry Ellison said in a statement "this is the last opportunity for i-flex shareholders to tender their shares to Oracle”.

Oracle Corporation has substantially raised the open offer price for i-flex from Rs 1,475 per share to Rs 2,100 per share in its bid to raise its stake in i-flex to 90 per cent.

The open offer for the shareholders of i-flex will close on December 23. — PTI

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Bihar sugar industry attracts Rs 4,600 crore
Tribune News Service

Patna, December 8
The economy of Bihar is now expected to grow rapidly because of private investments to the tune of Rs 4,600 crore attracted by the sugar industry.
Bihar Sugarcane Minister Nitish Mishra said the government had already sanctioned proposals for 10 sugar complexes in the private sector and received detailed project reports for 15 other sugar mills.

Bihar has been included in the select list of states by the Petroleum Ministry which are allowed to produce ethanol, a purified form of alcohol, which would be used as additives in petrol. Bihar follows the Brazil model, which is known to be the largest producer of ethanol to use as additives in petrol to overcome its fuel shortage.

The minister hoped that all new and renovated sugar complexes, once fully operational in the next two-three years, could produce around 500 MW of excess power to sell to the Bihar State Electricity Board. 

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Malaysia's IOI to buy Aditya Birla’s palm oil biz

Kuala Lumpur, December 8
Malaysia's biggest plantation group IOI Corp is acquiring Aditya Birla's Pan Century group, which runs refinery and oleochemical businesses in the country, under a deal worth over $119 million.

The deal would make IOI the world's biggest vegetable oil-based fatty acid producer in the world.

The proposed acquisition of Pan Century Edible Oils and Pan Century Oleochemicals will be funded by cash and borrowings, IOI said.

The Pan Century Group first set up operations in Malaysia in 1978 and commanded a quarter of the country's market share in the 1990s.

It competes with other refiners owned by Kulim, IOI Corp Bhd and the Kuok Group's Pasir Gudang Edible Oils Sdn Bhd.

Pan Century owns one of the largest single location vertically integrated palm oil refinery and oliochemical complexes in the world.

The proposed purchase is due to be completed by March 2007, subject to the approval of the Ministry of International Trade and Industry.— PTI

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GAIL buys 30 pc in Myanmar block

Mumbai, December 8
GAIL has acquired a 30 per cent stake in Block A-7 in Myanmar as a consortium partner with Silver Wave Energy.
GAIL signed the production sharing contract with Myanmar Oil and Gas Enterprise on Wednesday for Block A-7 located in the Rakhine offshore Area, Myanmar, the company said today. Accordingly, the company shall hold a 30 per cent participating interest whereas the remaining 70 per cent shall be with Silver Wave Energy.

The company now holds a participating interest in 17 exploration blocks, along with national and international consortium partners, Of these, seven are on-land blocks and 10 are offshore blocks. In India there are 13 blocks which are in basins such as Mahanadi, Bengal, Gujarat (Saurashtra), Mumbai, Cambay, Assam-Akaran and Cauvery.

The company has also got a stake in the A-1 and A-3 blocks in Myanmar and Block No 56 in Oman. — UNI

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IFCI can sell Haryana Steel’s NPAs: HC

New Delhi, December 8
In what could prove to be a setback to ailing Haryana Steel and Alloys Ltd (HSAL), the Delhi High Court has ruled that the IFCI could sell bad assets of the sick company to recover its dues.

The judgment by a Division Bench of the court upheld the decision by a single judge Bench, which was challenged by HSAL, seeking that the IFCI be restrained from selling its non-performing assets to Kotak Mahindra Bank, the highest bidder with an offer of Rs 5 crore.

HSAL had sought directions to the IFCI that it should reconsider one-time settlement (OTS) offer of Rs 5.2 crore instead of selling the company's assets. — PTI

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PNB to raise Rs 400 cr

Kolkata, December 8
Punjab National Bank (PNB) has decided to raise Rs 400 crore as Tier-II capital next month and make provisions to open a number of foreign offices by March 2007, PNB CMD S.C. Gupta said here today.

Regarding his plan to go global to improve PNB's business portfolios further within the next one year, Mr Gupta said so far PNB had operated only one full fledged overseas branch at Kabul in addition to three representative offices in Shanghai, Dubai and London. — UNI

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Federal Bank branch in Amritsar

Amritsar, December 8
Federal Bank Ltd will enter life insurance for which it has inked an agreement with IDBI and Fortis International, Mr M. Venugpalan, Chairman and CEO of the bank, said here today where the 517th branch of the bank was inaugurated by Governor of Kerala Raghunanadan Lal Bhatia.— UNI

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Inflation down

New Delhi, December 8
The annual inflation rate down to below 5 per cent, it stood at 5.30 per cent for the week ended November 25. However, it was considerably low from 5.45 per cent as reported during the previous week. The Wholesale Price Index for all commodities for the week ended November 25, declined by 0.1 per cent to 208.6 from 208.8 for the previous week. — UNI

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BRIEFLY

UTV to buy stake in gaming Cos
Mumbai, December 8
UTV Software plans to acquire a controlling stake in the UK-based Ignition Entertainment and city-based Indiagames for Rs 128 crore, marking its foray into the gaming industry. The company has entered into an arrangement with Indiagames and its promoters for acquisition of the majority stake in the mobile and online gaming company for around Rs 68 crore, UTV Software said. In another such exercise, UTV is reported to be in arrangement with Ignition Entertainment and its promoters for the acquisition of a controlling equity stake in the UK based company, involved in developing console games, for around Rs 60 crore. — PTI

M&M sale
Mumbai, December 8
The Mahindra group today announced the sale of the cable accessories division of its Pune-based Mahindra Engineering and Chemical Company Ltd to 3M Electro and Communication India Pvt Ltd. MECP Director Raghu Murti said here the sale was in line with Mahindra and Mahindra's (M&M) strategic intent to exit non-core business. The M&M’s Pune division is a leading supplier of accessories in India, including that of electrical cable jointing kits. — PTI

 

 



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