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SEBI puts cap on MF investment in banks
Mumbai, April 16
Mutual funds cannot invest more than 10 per cent of the total net assets of a scheme in the short-term deposits of a single bank, market regulator SEBI said today.

Essar buys Algoma Steel for Rs 6,700 cr
New Delhi, April 16
Adding further impetus to the merger and acquisition (M&A) in steel space, Indian conglomerate Essar Group has agreed to buy Canada’s Algoma Steel for about $1.58 billion (Rs 6,700 cr).

Rupee at 9-yr high, breaches 42-mark
Mumbai, April 16
The rupee today climbed to a nine-year high as it breached the 42-mark to close at 41.90/92 against a dollar, which was sold heavily by exporters amid sustained FII inflow into equity market.

ONGC to invest Rs 18,000 cr
New Delhi, April 16
The ONGC will invest Rs 18,000 crore for exploration and production of oil and gas in financial year 2007-08.

GSM Tender
Motorola drops case against BSNL
New Delhi, April 16
BSNL today got clearance to scale up capacity as equipment maker Motorola dropped a case challenging award of contracts to add 45.5 million new lines to rival firms.

Jet to rename Air Sahara as Jetlite

Mumbai, April 16
The days of cheap airfares are ending. Jet Airways, which took over Air Sahara, will soon begin to charge premium fares, according to chairman Naresh Goyal.

Bollywood actors Shabana Azmi and Shah Rukh Khan interact at a function to showcase the new Jet Airways logo and uniform in Mumbai on Monday.
Bollywood actors Shabana Azmi and Shah Rukh Khan interact at a function to showcase the new Jet Airways logo and uniform in Mumbai on Monday. — AFP

Doha Round
India, China against renegotiating principles
Beijing, April 16
India and China today jointly rejected any renegotiation of principles and elements embodied in the Doha mandate of WTO and asked developed nations to remove trade distortions and open up their markets to fulfil the Doha Development Agenda (DDA).


The Omega watch, ‘Seamaster Planet Ocean’ model, worn by actor Daniel Craig during the filming of James Bond movie ‘Casino Royale’.
The Omega watch, ‘Seamaster Planet Ocean’ model, worn by actor Daniel Craig during the filming of James Bond movie ‘Casino Royale’. This watch has been sold for 156,000 euros to a British buyer, according to the auctioneers, Antiquorum. — AFP

EARLIER STORIES

 

Towards social transformation
Tata Tea for partial employee ownership
Guwahati, April 16
Tata Tea, a leading player in the global beverages market with significant presence in over 40 countries, has decided to restructure its “goldmine”, North India Plantation Operation (NIPO) into a new company called Amalgamated Plantations Pvt Ltd (APPL) comprising its 20 tea estates in Assam and four in West Bengal.

In this file photo, a Barclays Bank branch signboard is pictured in north London (top) and the headquarters of Dutch banking group ABN Amro in Amsterdam (bottom). British banking group Barclays and its Dutch counterpart ABN Amro, which are in exclusive merger talks, have set themselves a deadline of Wednesday to agree to the deal, the Financial Times said on Monday.
In this file photo, a Barclays Bank branch signboard is pictured in north London (top) and the headquarters of Dutch banking group ABN Amro in Amsterdam (bottom). British banking group Barclays and its Dutch counterpart ABN Amro, which are in exclusive merger talks, have set themselves a deadline of Wednesday to agree to the deal, the Financial Times said on Monday. — AFP 

Falling inflation to moderate interest rates: FM
Kolar, April 16
The UPA government will moderate the interest rate once the inflation comes down, union finance minister P Chidambaram said here yesterday.

High steel prices hit industrial output
Ludhiana, April 16
Unprecedented hike in steel prices have badly affected the industrial production and the small-scale industries in particular are in a very bad shape. There has been an increase of 30 to 40 per cent in steel prices in the past one year. The small-scale industrial units will be wiped out if immediate steps are not taken to reduce the steel prices, warn the industrialists.

TCS posts profit of Rs 1,195 cr
Mumbai, April 16
Beating all market expectations, Tata Consultancy Services (TCS), the leading IT services firm in the country, posted a net profit of Rs 1,195 crore for the financial year 2006-2007.

Punj Lloyd to construct pipeline in Oman
New Delhi, April 16
Punj Lloyd Limited, a global EPC services provider in energy and infrastructure domains, has secured a contract for construction of pipeline for Oman Gas Company in Oman. The contract is valued at Rs 530 crore.

Reliance at all-time high
Mumbai, April 16
Shares of Reliance Industries limited (RIL) today rose to a new life-time high of Rs 1,465, taking the company’s market value to over Rs 2,00,000 crore. RIL shares settled at Rs 1460, 3.50 per cent higher at the BSE.

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SEBI puts cap on MF investment in banks

Mumbai, April 16
Mutual funds cannot invest more than 10 per cent of the total net assets of a scheme in the short-term deposits of a single bank, market regulator SEBI said today.

Announcing guidelines for parking of funds in short-termdeposits of scheduled commercial banks (SCBs) by MFs, the regulator said investment cap would also take into account the deposit schemes of the bank's subsidiaries.

The SEBI has also defined "short term" for funds' investment purposes as a period not exceeding 91 days.

Besides, the parking of funds in short-term deposits of all SCBs has been capped at 15 per cent of the net asset value (NAV) of a scheme, which can be raised to 20 per cent with prior approval of the trustees.

The parking of funds in short-term deposits of associate and sponsor SCBs together should not exceed 20 per cent of total deployment by the MF in short-term deposits, it added.

SEBI said these guidelines are aimed at ensuring that funds collected in a scheme are invested as per the investment objective stated in the offer document of an MF scheme.

The new guidelines would be applicable to all fresh investments whether in a new scheme or an existing one. In cases of an existing scheme, where the scheme has already parked funds in short-term deposits, the asset management company have been given three-months time to conform with the new guidelines.

SEBI has also asked the trustees of a fund to ensure that no funds are parked by a scheme in short-term deposit of a bank, which has invested in that particular scheme.

The SEBI guidelines says AMCs shall not be permitted to charge any investment and advisory fees for parking of funds in short-term deposits of banks in case of liquid and debt-oriented schemes.

It has also asked the trustees to disclose details of all such funds parked in short-term deposits in half-yearly portfolio statements under a separate heading and has said that AMCs should also certify the same in its bi-monthly compliance test report.

All short-term deposits by MFs should be held in the name of the scheme concerned only, it added. — PTI

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Essar buys Algoma Steel for Rs 6,700 cr

New Delhi, April 16
Adding further impetus to the merger and acquisition (M&A) in steel space, Indian conglomerate Essar Group has agreed to buy Canada’s Algoma Steel for about $1.58 billion (Rs 6,700 cr).

The deal marks the third major M&A transaction involving an Indian in the recent past after Lakshmi Mittal’s takeover of European giant Arcelor and Tata group’s acquisition of UK-based Corus group.

Algoma, which specialises in making steel sheets for automotive industry, would provide Essar with an excellent platform for Canadian and North American market, Essar chairman Shashi Ruia said. It expects access to a number of leading car makers in the USA after the acquisition.

The deal is expected to close in June and is likely to be instrumental in the global expansion plans of Essar.

Algoma chairman Benjamin Duster said: “The board of directors unanimously supports the Essar proposal as it reflects a significant premium to the historical share price of Algoma.” Algoma is an integrated steel producer based in Ontario with steel shipments of 2.4 million tonnes in 2006 and a revenue of 1.9 billion Canadian dollars.

The offer price of 56 Canadian dollar per share represents a premium of 48 per cent to Algoma’s stock price for the 20-day period ending on February 14, 2007 when Algoma confirmed that it was in discussions regarding a potential transaction. The deal is subject to the approval of shareholders of Algoma, who are expected to meet in June. — PTI

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Rupee at 9-yr high, breaches 42-mark

Mumbai, April 16
The rupee today climbed to a nine-year high as it breached the 42-mark to close at 41.90/92 against a dollar, which was sold heavily by exporters amid sustained FII inflow into equity market.

The Indian unit’s closing, the highest since June 1998, was also boosted by absence of any intervention by the RBI and dollar demand from oil companies.
In very active trade at the inter-bank foreign exchange (forex) market, the local currency surged by unprecedented margins after resuming steady at 42.51/52 a dollar and touching intra-day high of 41.88 due largely to panic selling by exporters, which attempted to protect their earnings, after the RBI kept aloof from the market.

It has gained about 1.4 per cent in a single session today on sustained dollar selling.
The rupee has gained 5.3 per cent so far in the current year, becoming the top performing currency in Asia. It soared by more than 6.0 per cent after closing at a low of 44.63/64 on March 5, mainly because of liquidity crunch in the banking system, forex dealers said.

Finance Minister P Chidambaram attributed rupee’s appreciation to this level to strong inflow of capital FDI, FII, export earning and remittances, considered healthy for the country. — PTI

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ONGC to invest Rs 18,000 cr
Tribune News Service

New Delhi, April 16
The ONGC will invest Rs 18,000 crore for exploration and production of oil and gas in financial year 2007-08.

Of the Rs 18,000 crore, about Rs 5,000 crore would be for exploration and the remaining would be for improving recovery from existing fields and developing new ones, company’s acting chairman R S Sharma said today.

He said the company would raise Rs 7,000 crore in the next six months to part finance its Mangalore refinery upgradation programme.

The project will raise capacity of the refinery to 15 million tonnes per annum by 2010.

He said the company would seek concession from Andhra Pradesh government for setting up a 15 million tonne refinery at a cost of Rs 19,000 to Rs 20,000 crore at Kakinada. The refinery, currently promoted by ONGC subsidiary MRPL, is proposed to be taken on the books of ONGC since the balance sheet of MRPL is not strong enough to finance the project, Sharma said.

MRPL will hold 46 per cent stake in the Kakinada Refinery and Petrochemicals Limited (KRPL), the company that will build the green field refinery at Kakinada SEZ.

Sharma said KRPL might go for an initial public offering in two years time and may divest about 26 per cent stake.

The Kakinada Refinery was originally conceived as a 7.5 million tonne refinery but the size was found not viable and has been raised to 15 mn tonnes now.

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GSM Tender
Motorola drops case against BSNL

New Delhi, April 16
BSNL today got clearance to scale up capacity as equipment maker Motorola dropped a case challenging award of contracts to add 45.5 million new lines to rival firms.

The Delhi High Court had earlier ordered BSNL, which enjoys 22.59 per cent mobile market share, to freeze the Rs 20,000-crore contracts awarded to Ericsson and Nokia.

Justice Manmohan Sarin and Justice S.L. Bhayana vacated the interim stay on the award of contract by BSNL, for adding 45.5 million lines in its GSM network, after Motorola counsel submitted before the court that it wants to withdraw the petition to maintain cordial business relations with BSNL.

Motorola, however, clarified that withdrawal of petition did not reflect any change in its original position.

“The withdrawal ought not to be deemed in any manner to reflect upon the merits of the petition filed and that the reason for withdrawal is essentially for maintaining mutually cordial business relationship and to assist BSNL in its proposed expansion,” Motorola said.

The contracts to add 45.5 million lines to BSNL’s GSM network, which had gone to Ericsson and Nokia, will now be implemented with the withdrawal of the petition.

Ericsson, which was the lowest bidder, would get 60 per cent of the 45.5 million lines, while the second lowest bidder, Nokia, would get the remaining share of the north east and west zone.

Motorola was disqualified on technical grounds on October 7, just two days before opening of financial bids. The equipment supplier later challenged the decision in the High Court.

BSNL had said Motorola was not eligible as it failed to satisfy the techno-commercial aspect of the tender. It had also said Motorola failed on financial parameters.

Motorola said, “BSNL is a valued customer and the company looks forward to its continued partnership with BSNL and other customers to connect the unconnected”. — PTI 

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Jet to rename Air Sahara as Jetlite
Tribune News Service

Mumbai, April 16
The days of cheap airfares are ending. Jet Airways, which took over Air Sahara, will soon begin to charge premium fares, according to chairman Naresh Goyal.

Air Sahara itself would be operated under the name Jetlite. However, the airline will not compete with low-cost airlines like Air Deccan.

Goyal said the market share of the combined entity would be 33 per cent and the combined FY08 net revenues of the two airlines is estimated at $2.5 billion. He added that no Air Sahara employee would lose job.

He further said Jet Airways would raise $400 million to fund overseas expansion. Also, Jet and Air Sahara will operate as independent companies.

Jet has a fleet of 49 classic and next generation Boeing 737 aircraft. It also has eight modern ATR 72-500 turboprop aircraft operating in the domestic services.

“The Boeing 737 aircraft will be fitted with the state-of -the-art advanced in-flight entertainment system from Panasonic,” Goyal added.

Jet airfares would soon be hiked to premium category since all facilities offered would be in the premium range and Boeing 777-300 ER will be configured in three classes — first class, premier and economy while the A330 will be configured in two classes of 30 premier and 190 economy seats.

Jet Airways will launch daily services to New York via Brussels in early August. It also plans daily services to San Fransisco via Shanghai soon.The A330 will be deployed on daily Delhi-London services and flights from India to Singapore, Kuala Lumpur, Johannesburg and Toronto via Brussels.

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Doha Round
India, China against renegotiating principles

Beijing, April 16
India and China today jointly rejected any renegotiation of principles and elements embodied in the Doha mandate of WTO and asked developed nations to remove trade distortions and open up their markets to fulfil the Doha Development Agenda (DDA).

The powerful message to the developed nations was chalked out in an India-China joint ministerial statement issued here by visiting commerce and industry minister Kamal Nath and his Chinese counterpart Bo Xilai.

Nath and Bo compared notes and exchanged views in order to review the progress of negotiations on the DDA and to safeguard the common interests of developing country members in the future course of talks.

Assessing the progress of negotiations in the Doha Round, the two leaders agreed that the major issue holding back progress in the round is the lack of movement by developed countries — in terms of early removal of distortions, caused by huge subsidies and significant market access barriers.

They were categorical that unless the outcome of negotiations upholds the proposals of developing countries, the objectives of the round will not be fulfilled.

The two ministers reiterated that special products (SPs) and the special safeguard mechanism (SSM) play a vital role in addressing the food security, rural development and livelihood concerns of developing countries and the outcome of Doha negotiations for these flexibilities can be sustainable only if it enables the developing countries to meet their development objectives. — PTI

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Towards social transformation
Tata Tea for partial employee ownership
Bijay Sankar Bora
Tribune News Service

Guwahati, April 16
Tata Tea, a leading player in the global beverages market with significant presence in over 40 countries, has decided to restructure its “goldmine”, North India Plantation Operation (NIPO) into a new company called Amalgamated Plantations Pvt Ltd (APPL) comprising its 20 tea estates in Assam and four in West Bengal.

Tata Tea director Percy T Siganporia said the restructuring was part of the company’s social transformation agenda powered by a new business model that would allow employees to participate as owners and partner value creation for mutual benefits.

The vice-president of NIPO, Dipankar Borah, who will be the executive director of the new company, claimed, “The move is based on our belief that our unique business model involving partial employee ownership and participation coupled with revenue streams beyond tea will enhance long-term sustainability and trigger social transformation across the area where tea estates are located”.

The process of restructuring of NIPO to the new company is in the final stage and is expected to be completed early part of this financial year. All management staff, officials and workers now involved in tea plantation operations of NIPO will be transferred to the new company.

Permanent employees of NIPO will be encouraged to subscribe to shares of the new company and interests-free loan against shares issues have been arranged to enable employees to purchase shares. However, it has not made mandatory for a tea worker or an office staff to buy equity of the new company.

Tata Tea Ltd and Tata Investment Corporation Ltd will participate substantially in the equity of the new company. Tata Tea will also support the new company by entering into an agreement to purchase tea for packaged tea.

World Bank-funded International Finance Corporation (IFC) and Infrastructure Leasing and Financial Services (ILFS) will acquire significant stake to the tune of 40 per cent in the new company.

NIPO produces average 30 million kg of tea per year out of which about 26 million kg produced by estates in Assam and the rest by its estates in Dooars in West Bengal. It has over 30,000 staff both in Assam and West Bengal estates. Actual land under tea cultivation of the company is estimated to be 12,400 hectares in Assam and 2,100 hectares in Dooars in West Bengal.

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Falling inflation to moderate interest rates: FM
Jangveer Singh
Tribune News Service

Kolar, April 16
The UPA government will moderate the interest rate once the inflation comes down, union finance minister P Chidambaram said here yesterday.

The minister, while speaking to newsmen on the sidelines of a conclave for women self-help groups here, said the interest rates were increased to bring down inflation which had crossed the 6 per cent mark. He said this would occur in a phased manner with no time frame having been fixed for the move.

Asserting that the inflation rate had been high earlier also, Chidambaram said during 2000 and 2001 inflation rate was above 6 per cent for 48 weeks out of 52 weeks. “In comparison to this the inflation rate has crossed the 6 per cent figure only for the last nine to 10 weeks”. He said the government was already working to bring it down to the 5 per cent mark.

Commenting on the rupee, he said the currency still retained its competiveness though some currencies had appreciated more as compare to it. He said the appreciation of the rupee had come about due to huge inflow of capital, export earnings and remittances by NRIs, all factors which were good for the economy in the long run.

Earlier, the finance minister said the UPA government would bring five to seven lakh women under the credit link plan every year. Speaking at a conclave organised at Canara bank here, he said as many as 25 lakh self-help groups (SHG) were availing micro credit at present. ”We want this figure to go up to 50 lakh or even to one crore in the next few years”, he added.

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High steel prices hit industrial output
K S Chawla

Ludhiana, April 16
Unprecedented hike in steel prices have badly affected the industrial production and the small-scale industries in particular are in a very bad shape. There has been an increase of 30 to 40 per cent in steel prices in the past one year. The small-scale industrial units will be wiped out if immediate steps are not taken to reduce the steel prices, warn the industrialists.

Besides steel, the prices of other raw materials are also rising, causing concern to the industry. Meanwhile, the central government has adopted apathetic attitude and is not at all bothered about the health of the small and tiny units.

Enquiries made by The Tribune shows that prices of HR coil alone have witnessed an increase of Rs 8,000 per tonne in one year. The price of HR coil was quoted at Rs 32,700 per tonne today against Rs 24,500 per tonne last year in April.

Similarly, the CR Coil was being sold for Rs 40,000 per tonne against the price of Rs 32,000 per tonne last year. The prices of MS rounds have also shot up to a record high of Rs 29,000 per tonne from Rs 22,500 per tonne in a year.

Rerolled steel material (patra), which is manufactured at Mandi Gobindgarh, has shot up to Rs 32,500 per tonne from Rs 21,500 per tonne, an increase of more than Rs 10,000 per tonne.

Inderjit Singh Pradhan, president and Avtar Singh, general secretary, Chamber of Industrial and Commercial Undertakings, today alleged that the main steel producers were raising the prices of steel at will and the central government was not taking any steps.

They disclosed that nickle metal has also increased from Rs 850/- per kg to Rs 2,550 per kg. The government had imposed 5 per cent custom duty, 16 per cent central excise duty and 4 per cent special custom duty on nickle as a result of which the prices have risen. The chamber has written number of letters to the central government to reduce the duties, but the government has not bothered to listen to their woes, they said.

P.D. Sharma, president, Apex Chamber of Commerce and Industry, Punjab, alleged that the main steel producers had formed a cartel and they were dictating terms to the government and the small scale industry was suffering because of their nefarious acts.

Pradhan and Avtar Singh revealed that due to the spurt in steel prices, the profitability of the small-scale units had fallen and the production had also been hit hard.

The export of bicycle and cycle parts had been very badly affected due to the rising cost of steel. There was steep fall in the export of bicycle and cycle parts.

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TCS posts profit of Rs 1,195 cr

Mumbai, April 16
Beating all market expectations, Tata Consultancy Services (TCS), the leading IT services firm in the country, posted a net profit of Rs 1,195 crore for the financial year 2006-2007.

Commenting on another stand-out year for TCS, Company CEO S Ramadorai said ''TCS's robust business model has given us the pole position to capitalise from the strong demand that exsists globally.'' He said the company was planning to open a new development centre at Morocco.

Commenting on the strong financial performance against the backdrop of currency volatility in the market, TCS chief financial officer S Mahalingam said ''To achieve our $4 billion in revenues this year and over a billion dollars in operating income, we have excercised several levers in terms of pricing, off shore leverage and cost controls to strengthen profit margins despite a fluctuating rupee.'' The company added 43 new clients and 5,827 associates in this and closed 12 deals of $50 million plus during the financial year 2006-07. To further strengthen its market position globally, the company has also launched a global branding and marketing campaign. — UNI

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Punj Lloyd to construct pipeline in Oman
Tribune News Service

New Delhi, April 16
Punj Lloyd Limited, a global EPC services provider in energy and infrastructure domains, has secured a contract for construction of pipeline for Oman Gas Company in Oman. The contract is valued at Rs 530 crore.

The scope of work involves engineering, procurement and construction of a 24-inch, 40 km pipeline from Murayrat to Barka and a 32-inch, 252 km pipeline from Saih Rawl to Mukhaizna loopline.

The project is likely to be completed by October 2008.

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Reliance at all-time high

Mumbai, April 16
Shares of Reliance Industries limited (RIL) today rose to a new life-time high of Rs 1,465, taking the company’s market value to over Rs 2,00,000 crore. RIL shares settled at Rs 1460, 3.50 per cent higher at the BSE.

Gains in the shares followed a statement from the company chairman that it anticipates robust demand for petrochemicals over the next 12-18 months. — PTI

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