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THE TRIBUNE SPECIALS
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B U S I N E S S

Govt nod to SBI Bill
To buy RBI stake in NHB, Nabard by June next
New Delhi, August 20
The government plans to buy Reserve Bank’s stake in National Housing Bank and Nabard by June next year so as to ensure the central bank does not own the institutions it regulates. “We plan to buy RBI’s stake in NHB and Nabard by June 2008. Since these two are unlisted entities, there is no great urgency,” Finance Minister P Chidambaram said here.

India funds hit the most in global turmoil
New Delhi, August 20
India-focussed funds have seen the biggest outflow of $262 million in the Asia-Pacific region during the past couple of weeks, even as net redemption from all offshore Asian funds was low compared to the equity market meltdown earlier in March this year and May-June 2006.

A graphic of the Google stock price is shown on the board on the Nasdaq stock exchange in New York
A graphic of the Google stock price is shown on the board on the Nasdaq stock exchange in New York. The Nasdaq Stock Market said Monday that it is abandoning its £797 million ($1.58 billion) stake in the London Stock Exchange, five months after its takeover bid failed, as it focuses on buying Nordic exchange operator OMX. Nasdaq Stock Market Inc, which needs overseas acquisitions to gain an international foothold, is locked in a $4 billion bidding war with Borse Dubai for OMX, which owns exchanges in Sweden, Denmark, Finland, Iceland and the Baltic states. — AFP



Maruti raises discount to boost car sales.
(56k)


EARLIER STORIES

 
Workers unload steel from an iron and steel mill yard in Hefei, central China's Anhui province
Workers unload steel from an iron and steel mill yard in Hefei, central China's Anhui province. Chinese steel makers continue to increase world supplies of cheap exports, hurting profits for the US and European producers, while China is the world's biggest consumer of iron ore, importing 326.3 million tonnes in 2006, an increase of 18.6 per cent from 2005, while in 2007, China is expected to import 367 million tonnes of iron ore.
— AFP

Panel for smaller SEZs
New Delhi, August 20
Seeking a freeze on notifications of special economic zones, a parliamentary committee has asked the government to cut the maximum area of such zones coming up on cultivable land to 2,000 hectares.

Paswan for full waiver of import duty on scrap
New Delhi, August 20
Minister for Steel, Chemicals and Fertilisers Ram Vilas Paswan today said his ministry will urge the finance ministry to waive 5 per cent customs duty on imported scrap, making it zero per cent.

E-filing of stamp papers for corporates soon
New Delhi, August 20
The Department of Company Affairs today announced that in next 3-4 months it would refuse to accept off-line physical documentation, including those of stamp papers from corporates to meet their various legal obligations, as part of its drive to make e-governance initiatives 100 per cent compliant.

Blackstone buys 50.1 pc stake in Gokaldas
Bangalore, August 20
Global private equity giant Blackstone Group today announced acquiring up to 70.1 per cent stake in Gokaldas Exports Ltd, the country's biggest apparel exporter, for an estimated Rs 675 crore.

Biocon may list abroad
Bangalore, August 20
Biotech firm Biocon Ltd is scouting for acquisitions and may list shares on international bourses in its effort to strengthen pharmaceutical business. "We will look at inorganic growth. We are definitely having a strategy to look for an appropriate opportunity.

Officers of oil PSUs on stir from today
New Delhi, August 20
Officers of PSU oil firms today rejected an offer of interim hike in pay and decided to strike work from tomorrow demanding better salary and the removal of a senior petroleum ministry official, whose attitude they blamed for collapse of talks they had with the government.

Aussie keen on FTA with India
Melbourne, August 20
In a bid to launch a new strategic approach towards India, the Australian Cabinet has endorsed a plan to negotiate a Free Trade Agreement with New Delhi. In what would be a historic shift in relations with India, being seen as an emerging economic powerhouse in South Asia.

PTL to expand foundry capacity
Chandigarh, August 20
Punjab Tractors Limited today said it would invest Rs 32 crore on the modernisation of foundry facility in Mohali, thereby expanding its capacity and will further focus on developing new tractors for the export market.





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Govt nod to SBI Bill
To buy RBI stake in NHB, Nabard by June next

New Delhi, August 20
The government plans to buy Reserve Bank’s stake in National Housing Bank and Nabard by June next year so as to ensure the central bank does not own the institutions it regulates. “We plan to buy RBI’s stake in NHB and Nabard by June 2008. Since these two are unlisted entities, there is no great urgency,” Finance Minister P Chidambaram said here. This would ensure that RBI does not own the institutions it regulates, he said in Lok Sabha. The Reserve Bank owns 72.50 per cent in Nabard and 100 per cent in NHB. The Union Government has already bought RBI’s 59.73 per cent stake in State Bank of India.

Meanwhile, the Lok Sabha today passed the State Bank of India (Amendment) Bill, 2007, with Chidambaram giving an assurance that the transfer of shareholding of the RBI in the SBI to the Central government, which the legislation entails, will not interfere with the autonomy of the largest bank in the country.

Replying to the debate in the House on the Bill, Chidambaram said the entire transaction in this regard has been done in a "completely transparent, efficient and upfront manner."

The transfer has been effected as there was inconsistency in the RBI's role as a supervisor and that of the owner.

Chidambaram commended the perfomance of the SBI as also of all other public sector banks, saying that their performance on all fronts has improved in the last fiscal. The improvement becomes even more marked if the performance indicators are taken for the last three years.

The finance minister said the enhanced performance in terms of all parametres has been on account of greater autonomy and not by restricting this.

The government will thus ensure that autonomy of the SBI is guarded zealously so that the biggest bank of the country maintains the upswing in terms of performance parametres.

Chidambaram drew a distinction between the ownership and management control. He said while the ownership was shifting from the RBI to the Central government, the managerial autonomy vests with the Board of Directors and Chairman and Managing Director.

Chidambaram said the transfer of shareholding involved the entire equity held by the RBI in SBI, that is, 31,43,200 shares comprising 59.73 per cent of its total equity shares. He said in the current year's Budget a sum of Rs 40,000 crores has been provided for this purpose.

The minister cited figures to justify that banks have been doing well in terms of advances, deposits, NPAs and loans to priority areas such as agriculture, small scale industry, or social sectors.

Chidambaram said a comprehensive SBI amendment Bill is pending before the Standing Committee of Finance, which will provide all members an opportunity to discuss all facets of the Banks' performance. The Bill seeks to merge the associate banks of the SBI with the parent bank. — Agencies

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India funds hit the most in global turmoil

New Delhi, August 20
India-focussed funds have seen the biggest outflow of $262 million in the Asia-Pacific region during the past couple of weeks, even as net redemption from all offshore Asian funds was low compared to the equity market meltdown earlier in March this year and May-June 2006.

The offshore country funds are those in which residents of foreign countries park their money and those funds in turn invest in stocks with exposure to the target countries — thus giving the investors an indirect exposure to these market.

Net outflows from all offshore Asian funds were just $74 million in past two weeks when the markets were in turmoil — $73.5 million in the first week of August followed by just $0.1 million in the second week, according to global brokerage house Citigroup.

When unwinding of yen carry trade hit Asian equities in March 2007, huge redemption of $4.5 billion was seen in three weeks, while outflow amid May-June market correction last year was $4.9 billion over a six-week period.

The current market fall has caught investors by surprise and they have yet to react, Citigroup analyst Elaine Chu wrote in a research note. "We would not be surprised to see more redemptions when Asian markets rebound in response to the Fed's discount rate cut last Friday," Chu said.

Money was withdrawn the most from India country funds, followed by China funds ($200 million) and Singapore funds ($159 million).

In the week ended August 15 also, India registered the biggest outflow at $122.6 million, followed by $51.3 million in Malaysia and $36.8 million in China.

However, for the past one month and year-to-date periods, outflow from China funds were higher than India.

China-focussed funds saw highest outflow of $496.1 million in the four-week period and $3.6 billion so far in 2007, followed by $265.5 million and $1.96 billion, respectively from India funds.

India's benchmark index had lost more than 1,350 points since the beginning of this month, before a recovery witnessed on the bourses today. FIIs have sold shares worth a net of more than $1.3 billion (Rs 5,400 crore) so far this month, while domestic mutual funds have been net buyers of shares worth about $200 million (Rs 811 crore). — PTI

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Panel for smaller SEZs

New Delhi, August 20
Seeking a freeze on notifications of special economic zones (SEZ), a parliamentary committee has asked the government to cut the maximum area of such zones coming up on cultivable land to 2,000 hectares.

"No further SEZs should be notified till the SEZ Act and rules have been amended to meet public concerns," the Parliamentary Standing Committee on SEZs said in its report, tabled in Parliament today.

The committee said undue haste in approving SEZs and their proliferation has contributed to the resistance against the policy. "There is an imperative need to understand the cause of farmers' agitation and grievance," it said.

Demanding a ceiling of 2,000 hectares on multi-product SEZs coming up on cultivable land, it said if cultivable land was indiscriminately given to SEZs, the country would plunge into a famine-like situation.

On July 6, after presenting the report to then Rajya Sabha Chairman Bhairon Singh Shekhawat, Head of the Committee BJP leader Murli Manohar Joshi had said: "There should preferably be a ban on the use of irrigated double crop land for setting up SEZs and normally waste and barren land should be used".

The committee lodged a strong protest against local administration for not allowing Members of Parliament to meet the affected farmers.

A sub-committee visited Jhajjar in Haryana, Hyderabad, Bangalore, Jamnagar and Mumbai for meeting farmers. "The committee is pained to note that at some places farmers were not allowed to meet MPs".

The committee suggested that land should be taken from farmers on lease so that they not only get lump-sum payment but periodic rentals for sustenance.

Moreover, state governments should set the benchmark price for land and farmers should be paid above that rate. — PTI

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Paswan for full waiver of import duty on scrap

New Delhi, August 20
Minister for Steel, Chemicals and Fertilisers Ram Vilas Paswan today said his ministry will urge the finance ministry to waive 5 per cent customs duty on imported scrap, making it zero per cent.

Talking to newsmen after addressing the Steel Consumers Council meeting here, the minister said that secondary steel producers made a demand for abolishing the 5 per cent import duty at the council meeting saying that there is already a 4 per cent CVD on scrap, barring a few exceptions.

Paswan said the positioning of stockyards of Steel Authority of India (SAIL) and Rashtriya Ispat Nigam Ltd (RINL) across the country will be reviewed to ensure availability of steel.

He said, SAIL has already established a dealership network of about 1,100 outlets across 602 districts and its product is now available at district headquarters at the same price as the state capitals.

He said India will produce about 85 million tonnes by 2011-12 and may reach 200 million tonnes by 2020.

Paswan said India will become the second largest steel maker in the world by 2015.

The minister said SAIL is now implementing an expansion plan of over Rs 49,000 crore which will take its capacity to 26.18 million tonnes by 2010 and RINL’s modernisation and expansion programme will cost about Rs 9,000 crore and will be completed by 2010 also.

He said strict monitoring of implementation of the expansion programme is being done to ensure timely completion.

On Chiria mines issue, the minister said SAIL will set up a 15 million tonnes plant in Jharkhand if the lease for two billion tonnes iron ore is renewed in favour of SAIL by the state government.

He said steel is a deregulated sector but a price monitoring committee has been set up with officials, steel producers and consumers as its member, to keep a watch over the price movements and the committee will work on plans to avoid volatility in the steel price movements.

Earlier, in his inaugural address at the meeting of the council, the minister said in order to contain the prices, the steel producers have been requested by the committee to keep a check on the ex-factory prices of long products and also to balance their exports keeping in view the domestic demand and not to commit exports at the cost of domestic demand.

Paswan said the steel sector which contributes about 2 per cent of the GDP is set for rapid growth. The production of steel has gone up form 35 million tonnes to 51 million tonnes during the last three years making India the fifth largest producer in the world.

The minister informed the Steel Consumers Council will henceforth meet once in six months to ensure better coordination. — UNI

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E-filing of stamp papers for corporates soon
Tribune News Service

New Delhi, August 20
The Department of Company Affairs (DCA) today announced that in next 3-4 months it would refuse to accept off-line physical documentation, including those of stamp papers from corporates to meet their various legal obligations, as part of its drive to make e-governance initiatives 100 per cent compliant.

Disclosing this here, secretary, ministry of corporate affairs, Anurag Goel, said the DCA was in constant consultation with state governments even to accept the stamp paper deliveries from corporates to it through online mode since the issue of stamp paper falls under their jurisdiction.

Most of the states have agreed to the request of DCA and with accomplishment of a few legal formalities, the DCA would start even stamp paper deliveries from corporates in next 3 to 4 months, he added. He was speaking at Assocham-organised six-day Independent Director’s Course for senior defence officials, which began here today.

Goel added that in the past few months, the DCA has already achieved physical acceptance of corporates legal obligations through e-filing to the extent of 90 per cent.

Referring to much talked about new Company Act, he informed that its drafting was over and was currently being assessed by Parliamentary Standing Committee and hoped that its enactment would turn out to be a smooth sailing in winter session of Parliament.

He said that the new Act would be much simpler, leaner and thinner and be virtually without any complexities and corporates would hail it as disclosure based and user-friendly.

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Blackstone buys 50.1 pc stake in Gokaldas

Bangalore, August 20
Global private equity giant Blackstone Group today announced acquiring up to 70.1 per cent stake in Gokaldas Exports Ltd, the country's biggest apparel exporter, for an estimated Rs 675 crore.

Blackstone, which manages around $90 billion of assets worldwide, has agreed to buy 50.1 per cent stake for Rs 475 crore. It will also make an open offer for an additional 20 per cent, taking the total deal size to Rs 675 crore.

The deal for 50.1 per cent stake was struck at Rs 275 a share. Blackstone will also make an open offer to the public shareholders at the same price, Gokaldas' managing director Rajendra Hinduja told PTI here.

This is a substantial premium to the company's closing price of Rs 229.10 on the National Stock Exchange today.

"Subject to regulatory approvals, Blackstone would invest $165 million (around Rs 675 crore), including open offer, and have representation on the board of directors," a Gokaldas Exports statement said.

The founder promoters would continue to lead the company with Madanlal Hinduja as the chairman, Rajendra Hinduja as the managing director and Dinesh Hinduja as executive director.

Gokaldas Exports was incorporated in 1979 and has 47,000 employees in 46 manufacturing facilities. — PTI

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Biocon may list abroad

Bangalore, August 20
Biotech firm Biocon Ltd is scouting for acquisitions and may list shares on international bourses in its effort to strengthen pharmaceutical business.

"We will look at inorganic growth. We are definitely having a strategy to look for an appropriate opportunity. We are looking at how to grow our pharmaceutical business," Biocon Chairman and Managing Director Kiran Mazumdar Shaw told PTI in an interview.

"We will look at an international listing. That's a very important objective for us," Shaw said, adding that "we will do it at a time when we are really in a position to partner one of our programmes at a very, very high valuation."

Biocon made a string of announcements in the last couple of months like striking agreements with Nasdaq-listed Abraxis Bioscience and Invitrgogen, setting up a joint venture in Dubai and divesting its enzymes business for $115 million.

"We focus strongly, and have created an infrastructure to address global scale. Now, we are looking at how do we access global markets," she said.

Shaw said West Asia as a very large market and the company plans to take advantage of this market.

Mazumdar-Shaw said the company would invest more on its discovery programmes, which has shown a "lot of promise" and needed investment to "unlock huge value". — PTI

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Officers of oil PSUs on stir from today

New Delhi, August 20
Officers of PSU oil firms today rejected an offer of interim hike in pay and decided to strike work from tomorrow demanding better salary and the removal of a senior petroleum ministry official, whose attitude they blamed for collapse of talks they had with the government.

Nearly 45,000 officers are likely to join the indefinite stir, which could immediately hit operations of refineries and aviation refuelling facilities, and oil and gas production units later.

"We will not talk to a man who is so arrogant... we want him (additional secretary in petroleum ministry S Sundresan) to be removed," Oil Sector Officers Association (OSOA) convener Ashok Singh said, peeved by the official's remark that officers being part of management had no right to strike and that the OSOA was not a union but merely an association.

OSOA, a representative body of officers from the nine oil sector PSUs, is seeking merger of 50 per cent dearness allowance with basic pay, release of ad hoc payment and withdrawal of tax on perquisites like company-provided accommodation. The officers of oil PSUs, who walked out of the meeting with government officials, said the strike would commence at 0600 hrs tomorrow.

A strike by officers could immediately cripple aviation refuelling facilities and lead to petrol stations running dry in 48 hours. — PTI

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Aussie keen on FTA with India

Melbourne, August 20
In a bid to launch a new strategic approach towards India, the Australian Cabinet has endorsed a plan to negotiate a Free Trade Agreement (FTA) with New Delhi.

In what would be a historic shift in relations with India, being seen as an emerging economic powerhouse in South Asia, the proposed FTA will be as important as the embrace of China in the ‘80s and '90s, and Australia's earlier engagement with Japan.

According to The Australian, the submission by Foreign Minister Alexander Downer went to the full Cabinet, unlike the decision to allow the sale of uranium to India, which was considered by the national security committee.

The FTA proposal comes after the government figures surprised at how rapidly the Indian economy has grown. An FTA with India is likely to provide enormous opportunities for Australian companies in the services sector, apart from the obvious synergy in energy trade, the familiar common-law system, and India's success in IT sector.

According to the paper, the submission regarding India contains a raft of specific initiatives, and is designed to elevate the relationship with India to a core element in Australia's international orientation, along with the US, Japan, China and Indonesia.

While negotiating an FTA with New Delhi, Canberra will continue its full fledged engagement in the quadrilateral talks involving the US, Japan and India, despite Chinese opposition. The Cabinet submission, which recognises India's growing importance to Australia, contains a series of specific proposals to enhance relations.

Canberra is also mulling establishing an Indian studies centre on the lines of the American Studies Centre being set up at the Sydney University. — ANI

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PTL to expand foundry capacity

Chandigarh, August 20
Punjab Tractors Limited (PTL) today said it would invest Rs 32 crore on the modernisation of foundry facility in Mohali, thereby expanding its capacity and will further focus on developing new tractors for the export market.

Besides, the company is also emphasising on rejuvenating itself by laying focus on product development, strengthening sales and marketing, business process reengineering (BPR) and talent management.

It was for the first time, the company announced its focus areas after Mahindra and Mahindra took 43 per cent stake in it this year.

"We are going to invest close to Rs 32 crore on our foundry facility in Mohali whereby the capacity of casting will be increased from 8,000 tonnes to 35,000 tonnes by the end of this fiscal, besides improving the efficiency level of thecurrent facility," PTL managing director and CEO Bishwambhar Mishra said today. — PTI

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