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B U S I N E S S

Overseas investment norms for MFs eased
Mumbai, September 25
The Reserve Bank of India today relaxed the norms for outbound investments by mutual funds and raised the limit for companies to prepay their external loans as part of efforts to flush out excess foreign capital and check the rise in rupee value against other currencies.

Govt may issue oil bonds by Oct 15
New Delhi, September 25
In a move to compensate the oil companies for selling fuel at below cost, at a time when crude oil costs have surged to a record high, the government is likely to issue bonds worth Rs 12,000 crore by mid-October.

Mittal to invest $20 bn in India
London, September 25
Steel tycoon Lakshmi Niwas Mittal has pledged an investment of about $ 20 billion for building two 12-million-tonne steel plants in India, where the demand for the commodity is growing rapidly.

Hutch Deal
Vodafone liabile to pay tax: Govt
New Delhi, September 25
Contesting Vodafone's view that it had no obligation to pay tax on its deal to buy stake in Hutch-Essar, a senior official today said the British firm was responsible for paying tax to the government.



EARLIER STORIES

 

P Chidambaram Chidambaram in race to chair IMF panel
New Delhi, September 25
Finance minister P Chidambaram is the front-runner in the race for chairing the International Monetary & Financial Committee (IMFC), a crucial governing body at the International Monetary Fund (IMF), sources said. If Chidambaram makes it to the coveted post, he would the first leader from the emerging markets to occupy the coveted post.

Sharon Ee (R), head of business, South Asia, Palm Inc., Sumeet Gugnani (2nd from left), director, mobile business communication, Microsoft India, and Sanjay Gupta, chief marketing officer, mobile services, Bharti Airtel, at the launch of Palm Treo 750 smartphone in New Delhi on Tuesday.
Sharon Ee (R), head of business, South Asia, Palm Inc., Sumeet Gugnani (2nd from left), director, mobile business communication, Microsoft India, and Sanjay Gupta, chief marketing officer, mobile services, Bharti Airtel, at the launch of Palm Treo 750 smartphone in New Delhi on Tuesday. It is the first Treo smartphone to be introduced on Airtel's network and also the first windows mobile-based Treo smartphone. It will be available for Rs 26,990. Tribune photo: Manas Ranjan Bhui

Indiastar picks up 18.5 pc in IOL Chemicals
New Delhi, September 25
Mauritius-based foreign equity investor Indiastar has picked up 18.5 per cent equity stake in Punjab-based IOL Chemicals and Pharmaceuticals Ltd.

Shortfall in crude, gas production in August
New Delhi, September 25
India witnessed a shortfall of crude oil as well as natural gas production in August against planned targets by 2.8 per cent and 4.9 per cent, respectively.

Richest Indian
Mukesh Ambani worth Rs 2 trillion
Mumbai, September 25
Reliance Industries chairman Mukesh Ambani today became the first person in the country with a net worth of more than Rs 2 trillion as a booming stock market pushed the value of his shareholding in various group firms.

An employee of Japanese toy-maker Sega Toys displays the world's smallest "Grand Pianist —Hello Kitty Version", in Tokyo on Tuesday.
An employee of Japanese toy-maker Sega Toys displays the world's smallest "Grand Pianist —Hello Kitty Version", in Tokyo on Tuesday. It has 88 working keys and can automatically play 115 pre-installed musical songs, including 15 Hello Kitty-related pieces. The original version of the Grand Pianist started selling here on April 1 and the new white Hello Kitty version will be put on the market next month. — AFP

RIL mulls telecom foray for captive use
New Delhi, September 25
Reliance Industries (RIL) is likely to enter the telecom sector soon and is exploring various options in the sector, where chairman Mukesh Ambani's pet project Reliance Infocom was given to younger brother Anil as part of a family settlement.

Opening of legal services sector on the anvil
New Delhi, September 25
Minister of law and justice H.R. Bhardwaj today said the government would shortly permit foreign law firms to set up their offices in India in close collaboration with their domestic partners so that competition is introduced in this field also, which has hitherto been isolated from after effects of liberalisation process.

West Bengal nod to Videocon’s 15,000-cr steel plant
Kolkata, September 25
The state Cabinet today formally approved the Videocon’s Rs 15000-crore steel plant proposal in the state. The 3 million tonnes capacity steel plant would be built near Durgapur industrial town, about 170 km from Kolkata. The plant, when completed after next five-year, would employ about 10,000 unemployed youths.

Essar Comm to raise $3.59 bn
London, September 25
Essar Communications today said it has mandated four international banks to raise a syndicated loan of $ 3.59 billion dollars to refinance existing debt and fund further investment and expansion plans of the group.

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Overseas investment norms for MFs eased

Mumbai, September 25
The Reserve Bank of India today relaxed the norms for outbound investments by mutual funds and raised the limit for companies to prepay their external loans as part of efforts to flush out excess foreign capital and check the rise in rupee value against other currencies.

As per the liberalised norms, companies can now prepay up to $500 million of their external commercial borrowings (ECBs) without RBI approval as against the earlier limit of $400 million, the central bank said in a statement.

The banking regulator also raised the aggregate ceiling of overseas investment by mutual funds from $4 billion to $5 billion. It also doubled the overseas investment limit by individuals to $200,000 (about Rs 80 lakh) per fiscal.

RBI increased the investment limit by residents under the Liberalised Remittance Scheme (LRS) from $100,000 earlier to encourage individuals to invest overseas.

On investments by mutual funds, RBI clarified that the limit of $5 billion would be in addition to existing facility of investing up to $1 billion in overseas exchange traded funds.

The relaxed norms are aimed at checking the appreciating trend in rupee which has pierced the Rs 40 to a dollar mark to touch a nine-year high against the US greenback.

The changes in the outbound investment norms are aimed at accelerating the implementation of the third phase of the recommendations of the Committee on Fuller Capital Account Convertibility, the statement said.

As regards overseas investment by individuals under the LRS, a resident will now be allowed to remit up to $200,000 per year for acquiring property, investing in financial assets or maintaining a foreign currency bank account.

Under the new rules, Indian companies would be permitted to invest up to 400 per cent of their net worth in overseas joint ventures or wholly-owned subsidiaries under the automatic route. — PTI

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Govt may issue oil bonds by Oct 15
Tribune News Service

New Delhi, September 25
In a move to compensate the oil companies for selling fuel at below cost, at a time when crude oil costs have surged to a record high, the government is likely to issue bonds worth Rs 12,000 crore by mid-October.

"We are expecting Rs 24,000 crore worth of oil bonds this fiscal. In the first trance (to be issued by October 15 for first half of the current fiscal), we are expecting Rs 12,000 crore worth of oil bonds,'' petroleum secretary M.S. Srinivasan told reporters here.

"A joint exercise by petroleum and finance ministries has been undertaken to assess the revenue loss of oil companies (on selling petrol, diesel, domestic LPG and kerosene),'' he said.

The two ministries are likely to converge on the quantum of loss in the next 10 days and the government in all probability will issue oil bonds by October 15, he said.

The government issues these bonds to the oil marketing companies — Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation — to partly compensate them for selling petrol, diesel, LPG and kerosene at subsidised prices.

Srinivasan said the spike in international crude oil prices, which touched a record $84 a barrel, was a matter of grave concern for the country.

India imports 73 per cent of its crude oil needs to meet the fuel requirement of the growing economy. He, however, refused to say if retail petrol and diesel prices would be raised.

The basket of crude oil that Indian refiners buy softened to $76.96 a barrel on Monday, from its all-time-high of $77.26 a barrel on Friday.

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Mittal to invest $20 bn in India

London, September 25
Steel tycoon Lakshmi Niwas Mittal has pledged an investment of about $ 20 billion for building two 12-million-tonne steel plants in India, where the demand for the commodity is growing rapidly.

Arcelor Mittal, world’s largest steelmaker, will spend $ 35 billion on capacity expansion of steel plants across the world, the company CEO said in an interview with the Financial Times.

”Of the $ 35 billion, $ 20 billion will go on two steel plants in India, in the states of Jharkhand and Orissa. If all goes according to plan, each plant will be making 12 million tonnes of steel a year by around 2015,” he told the daily.

According to the report, Mittal believed that two plants in India made sense in a country where the demand for steel was growing fast, even though many in the industry had assumed that only one of the two projects would go ahead.

By 2020, India could be consuming 200 million tonnes of steel a year (roughly four times higher than now), the steelmaker said.

The overall spending plans, with significant focus on India, were justified by strong demand for steel in most countries, Mittal pointed out.

Most of the company’s customers were not exposed to the recent credit problems in the banking and financial markets, he said, adding “I continue to see conditions for the steel industry as being very favourable.”

Pointing out that steel demand was noticeably weak in the US, Mittal said this, however, would have a limited effect on Arcelor Mittal, since only about a fifth of its steel was sold there.

Of the total money $ 10 billion will be spent on increasing the capacity of Arcelor Mittal’s existing steel plants, mainly in regions experiencing high economic growth, such as in Brazil, Mexico, Ukraine, South Africa, Kazakhstan and eastern Europe.

Excluding the new Indian plants, the company’s steel output is likely to rise from 110 million tonnes last year to 131 million tonnes in 2012, the Financial Times said.

The projections assume world steel demand will rise by about 5 per cent a year with consumption considerably higher in high-growth nations such as India, China and Russia, it said. — PTI

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Hutch Deal
Vodafone liabile to pay tax: Govt

New Delhi, September 25
Contesting Vodafone's view that it had no obligation to pay tax on its deal to buy stake in Hutch-Essar, a senior official today said the British firm was responsible for paying tax to the government.

"Vodafone is the payer in this case. So, it has a liability of the payer," G.C. Srivastava, director general (international tax) in the ministry of finance, told reporters on the sidelines of an Assocham seminar here.

The liability of payer and payee is different. Vodafone has the liability of a payer, Srivastava said, indicating that Vodafone should have deducted tax at source before making payment to Hutchison and deposited it in the kitty of the government.

The Income Tax Deparment has sent a notice to Vodafone, seeking around $1.7 billion in capital gains tax related to the sale of Hutchison Telecom International Ltd's 67 per cent stake in Hutch-Essar, now renamed Vodafone-Essar.

However, the company has contested this notice and approached the Bombay High Court. — PTI

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Chidambaram in race to chair IMF panel

New Delhi, September 25
Finance minister P Chidambaram is the front-runner in the race for chairing the International Monetary & Financial Committee (IMFC), a crucial governing body at the International Monetary Fund (IMF), sources said.

If Chidambaram makes it to the coveted post, he would the first leader from the emerging markets to occupy the coveted post. Till now, the IMF has been chaired by finance ministers from the developed world.

Finance ministers of Canada and Italy are also in the race for the influential post.

The position has been vacant since July after the previous incumbent British finance minister Gordon Brown vacated the post after becoming the Prime Minister. Brown chaired IMFC for a decade.

Chidambaram, who was in Germany and Brussels last week, is believed to have sought their support for his candidature.

He is also expected to canvas support in the US during his current visit.

Finance secretary D Subbarao, who is leaving for London next week, may also hold talks on the issue with his British counterparts.

The IMFC is one of the key committees of the body, which monitors transfer of resources to developing nations among other things.

It also advises the Board of Governors on matters relating to Boards functions and supervises the management of the international monetary and financial system.

The sources said the elected chairman would take over the charge before the body of 24 members holds its annual meeting next month. — PTI

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Indiastar picks up 18.5 pc in IOL Chemicals
Tribune News Service

New Delhi, September 25
Mauritius-based foreign equity investor Indiastar has picked up 18.5 per cent equity stake in Punjab-based IOL Chemicals and Pharmaceuticals Ltd.

Ludhiana-based IOL Chemicals and Pharmaceuticals Limited (formerly known as Industrial Organics Limited), is a leading manufacturer of industrial chemicals and bulk drugs in the country.

The Board of IOL Chemicals and Pharmaceuticals today approved to issue up to 13.30 lakh equity shares of face value of Rs 10 each at a premium of Rs 65 per share to M/s. Indiastar (Mauritius) Limited and 14 lakh unsecured fully-convertible debentures (FCDs) of Rs 100 each aggregating to Rs 14 crore, a release said here.

The Board has also decided to issue up to 23 lakh warrants, out of which 12 lakhs warrants to Mayadevi Polycot Limited (promoter of the company) and 11 lakh warrants to Indiastar (Mauritius) Limited.

The company for the year-ended March has posted a sales of Rs 232 crore with a profit after tax of Rs 7.55 crore. The company is also going in for expansion with Rs 180 crore.

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Shortfall in crude, gas production in August
Tribune News Service

New Delhi, September 25
India witnessed a shortfall of crude oil as well as natural gas production in August against planned targets by 2.8 per cent and 4.9 per cent, respectively.

Against targeted production of 2.958 million tonnes (mt), actual production amounted to 2.874 mt.

For the April-August period, shortfall was much less at 1.5 per cent, with actual production amounting to 14.146 mt against targeted production of 14.367 mt, according to data released by the petroleum ministry.

The figure registered a rise over the 14.008 actual production notched up in the April-August period last year.

Company-wise, while ONGC’s production saw shortfall of 5.3 per cent (2.176 mt actual production against 2.298 targeted production), Oil India’s shortfall was double at 10.9 per cent (0.262 mt against 0.294 mt).

However, private companies together recorded a surplus production of 19.1 per cent (0.436 mt against 0.366 mt).

Overall, natural gas production for August registered 4.9 per cent shortfall (2,690 million cubic m against 2,828 million cubic m).

ONGC reported 1,918 mcm of gas production in August, a surplus of 1.6 pct over the planned target, on the back of higher-than-expected production from most regions.

OIL registered a 19.5 pct shortfall at 190 mcm, hit by lower production in Assam. Private players and joint ventures faced a shortfall of 17.4 pct in production at 582 mcm, it added.

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Richest Indian
Mukesh Ambani worth Rs 2 trillion

Mumbai, September 25
Reliance Industries chairman Mukesh Ambani today became the first person in the country with a net worth of more than Rs 2 trillion as a booming stock market pushed the value of his shareholding in various group firms.

Ambani’s cumulative wealth based on his promoter holding in group companies, led by India’s most valued firm RIL, rose to Rs 2,04,945 crore at the close of today’s trading, consolidating his position as the richest Indian businessman.

His younger brother Anil Ambani stood at second position with a net worth of Rs 1,17,710 crore, taking a marginal lead over realty giant DLF’s K P Singh who has a net worth of Rs 1,15,225 crore.

The two Ambani brothers and Singh are the only three rupee trillionaires in the country, based on the wealth from promoter shareholdings in various group companies.

Telecom major Bharti Airtel’s Sunil Mittal is seen moving toward joining this super-elite club with a net worth of about Rs 91,500 crore. Wipro’s Azim Premji, once the richest Indian, is at fifth place with a net worth of about Rs 50,600 crore.

The collective wealth of the five richest Indians has surged to about Rs 5,60,000 crore, over 11 per cent of the total investor wealth of about Rs 51,11,546 crore invested in Indian stock market.

The collective market capitalisation of all four Mukesh Ambani group companies - RIL, Reliance Petroleum, IPCL and Reliance Industrial Infrastructure Ltd (RIIL) - has grown to Rs 4,22,170 crore, while the same for various Anil Ambani group firms is about Rs 2,00,500 crore.

Mukesh Ambani’s rise to two-trillion-rupee club was led by RIL, whose share price today closed 1.8 per cent up at Rs 2,399.60, after hitting a new all-time peak of Rs 2,426.

Among his other group companies, RIIL rose 5 per cent to its all-time peak of Rs 1,204.75, while soon-to-be-delisted IPCL also rose to a new record high of Rs 476.80. IPCL later closed 1.5 per cent up at Rs 471.90. However, RPL shares closed 4.7 per cent down at Rs 159.50. — PTI

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RIL mulls telecom foray for captive use

New Delhi, September 25
Reliance Industries (RIL) is likely to enter the telecom sector soon and is exploring various options in the sector, where chairman Mukesh Ambani's pet project Reliance Infocom was given to younger brother Anil as part of a family settlement.

Working on the presumption that a communications network is essential for its burgeoning retail network, special economic zones as well as oil and gas exploration and production business, RIL is contemplating creating its own telecom infrastructure for captive usage.

While some of the RIL officials are now frequently seen at the communications ministry meeting senior officials, there is speculation that some working or former executives of Anil Ambani group firm Reliance Communication are also being contacted for the purpose.

RIL may soon put together a team of 70-80 experts for the telecom business to leverage from its in-house talent that preferred to stay back after the family settlement. RIL is planning to connect its retail and oil outlets with a backbone for internal purpose after taking leased circuits from the infrastructure providers. — PTI

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Opening of legal services sector on the anvil
Tribune News Service

New Delhi, September 25
Minister of law and justice H.R. Bhardwaj today said the government would shortly permit foreign law firms to set up their offices in India in close collaboration with their domestic partners so that competition is introduced in this field also, which has hitherto been isolated from after effects of liberalisation process.

Inaugurating an Assocham-organised international tax conference here, the minister clarified that the ministry of law and justice was working on cushion package for domestic law firms so that overseas law firms’ entry in Indian market is absorbed without any hitch.

Bhardwaj also disclosed that he held serious deliberations with over 100 leading law firms in the past week, persuading them not to oppose foreign law firms’ entry into India and promised them a cushion package as per their legitimate requirements so that it becomes comfortable to compete in a fair and free manner.

He, however, clarified that the consultation process with other domestic legal firms on the issue of unopposed entry of overseas legal firms into India was still on and come to an end by December 2007.

Thereafter, a regulatory mechanism would be evolved with proper level- playing field in place to facilitate foreign law firms’ entry into India.

The minister also hinted that advanced law institutions would also be set up in India in collaboration with leading legal institutes spread in London and the USA and create faculties that can teach the combination of economics and law to legal aspirants to write bilateral agreements in a manner that can resolve disputes in acceptable manner to aggrieved parties.

On the issue of service tax, the law minister held that his ministry would take up the issue with the finance minister for its removal, particularly on rentals accruing out of sub-letting of properties by property owners as it is pinching them the most.

Bhardwaj said service tax’s unnecessary extension would force the taxpayers to evade its payment and on the contrary sought that tax regime should be honest so that corporates and individuals do not hire services of professional chartered accountants and lawyers for either evasion or avoidance of taxes.

Tax policies should be framed in such a way that they supports the government’s fiscal position and provide a better business environment in view of globalisation and liberalisation, he added.

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West Bengal nod to Videocon’s 15,000-cr steel plant
Tribune News Service

Kolkata, September 25
The state Cabinet today formally approved the Videocon’s Rs 15000-crore steel plant proposal in the state. The 3 million tonnes capacity steel plant would be built near Durgapur industrial town, about 170 km from Kolkata. The plant, when completed after next five-year, would employ about 10,000 unemployed youths.

The company would also build a 1200-MW capacity power plant in the vicinity for its own requirement.

State chief secretary A.K.Deb said all necessary arrangements had been made to acquire and transfer about 2,450 acres of land to the Videcon.

Deb said most of the land-owners near Durgapur had already agreed to sell their land to the company at the market prices. Moreover, a large part of the said lands had been under the possession of the government as ‘khas’ lands.

Official sources said the Videocon chief would meet the chief minister soon to hold talks on the quick acquiring of the land and other allied matters.

The Videocon’s steel proposal will be a part of the Rs 42,000-crore steel plant proposals offered to the state by different private entrepreneurs in the country, M/s Jindal, Bhushan Steel, Abhijit Steel and Jay Balaji steel. Beside these, the centre agreed to spend Rs 6,400 crore for revamping the Burn & Steel company at Asansol.

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Essar Comm to raise $3.59 bn

London, September 25
Essar Communications today said it has mandated four international banks to raise a syndicated loan of $ 3.59 billion dollars to refinance existing debt and fund further investment and expansion plans of the group.

The loan facility enables the telecom arm of Ruias- promoted conglomerate Essar group to monetise the liquidity rights agreed with Vodafone, which gives the UK firm an option to buy Essar’s stake in Indian operator Vodafone Essar.

The loan facility will be used to refinance existing debt and to fund further investment and expansion plans of the Essar group, a company statement said here. — PTI

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BRIEFLY

IOC plan
Mumbai, September 25
The country's biggest refiner, Indian Oil Corporation (IOC), has said it would spend Rs 43,250 crore over the next five years to carry out its expansion programmes. The company is also looking at acquiring oil producing blocks. The company controls 10 out of India's 19 refineries and accounts for 40.4 per cent share of national refining capacity. It has 60.2 million metric tonnes per annum (mmtpa) refining capacity.— PTI

ICICI Prudential
Chandigarh, September 25
ICICI Prudential Life Insurance today announced the launch of its SMS helpline service. This innovative service will enable the company's policyholders to receive instant update of their policies by sending an SMS to 56767. They can know the policy status, due date for paying premium, policy NAV and portfolio fund value. Policyholders can get these details by typing PST followed by space followed by their policy number and sending an SMS. — TNS

Yuvraj Singh
Chennai, September 25
Donear Industries today announced Indian cricketer Yuvraj Singh as its brand ambassador for Donear suitings and shirtings. Donear executive director Ajay Agarwal said ''Donear means "Do Near" — getting people nearer. Also, Donear is a product mix of various fabrics, designs and range of products.'' Similarly, Yuvraj Singh was an all-rounder, a youth icon and has a great fan following. — UNI

Ford variant
Chennai, September 25
Car major, Ford, today unveiled a limited version of its popular sedan Fiesta here today in view of the possible demand during the approaching festive season. The Fiesta 1.6 Fida is priced at Rs 6.6 lakh (ex-showroom, Chennai), powered by 1.6 l duratec engine, offering various high-end features.— PTI

Spicejet
Chennai, September 25
Low-cost carrier Spicejet will introduce air services from Chennai to Port Blair and to Pune from October 5, a top company official said today. It would also start operations to Coimbatore from Chennai from October 25, Spicejet executive chairman Siddhanta Sharma told reporters here today. The airlines would soon be starting a series of daily flights from Coimbatore to Delhi, Mumbai and Hyderabad, he said. — PTI

PFC invites bids
New Delhi, September 25
Power Finance Corporation (PFC), the nodal agency for ultra mega power plants, today invited preliminary bids from prospective developers for setting up a 4,000 MW project at Tilaiya in Jharkhand. The bidding will be a two-stage process — request for qualification and request for proposal. Companies can procure RfQ documents till November 5 and submit these preliminary bidding papers by November 12.— PTI

Panacea plan
Baddi (HP), September 25
The country's second largest vaccine maker, Panacea Biotec, today said the company is planning to set up a greenfield oncology products manufacturing facility to cater to both domestic and international markets. "Our focus would increase on oncology drugs for both international and domestic markets. We are in the process of fine-tuning our plans to set up a dedicated anti-cancer drug manufacturing facility in Baddi," Panacea Biotec joint managing director Rajesh Jain said. — PTI

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