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B U S I N E S S

Good & Bad Day For Anil Ambani Group
RCom gets nod for GSM services
New Delhi, December 7
Amid the battle between telecom operators over spectrum allocation norms, the government has allowed Anil Ambani-led CDMA mobile player Reliance Communications (RCom) to start GSM-based services in 14 circles.

GSM lobby pulls out of review panel
New Delhi, December 7
Cellular Operators Association of India, the GSM-based operators’ lobby, today pulled out of an official panel for reviewing spectrum allocation norms, alleging that the committee was ignoring all its suggestions.

IPO complaints referred to SEBI
New Delhi, December 7
The government today said it has referred a large number of complaints against the upcoming initial public offering (IPO) of Anil Ambani group firm Reliance Power to market regulator SEBI for necessary action.

Plans plant at Palwal
M&M in pact with BAE Systems?
New Delhi, December 7
Indian conglomerate Mahindra and Mahindra (M&M) is understood to have emerged as a preferred partner of international defence equipments major BAE Systems for a manufacturing joint venture in India.

WB grant to Nepal doubled
The World Bank has decided to offer its largest ever support package to Nepal, which is suffering from economic and development crisis due to decade-long insurgency, with $253 million in grants.

Hike in car prices from next year
New Delhi, December 7
The new year will begin on a costly note for car buyers with major players, including Maruti Suzuki, Hyundai Motors and General Motors, planning to increase prices of the vehicles by as much as Rs 12,000.

Indian stock market 2nd most expensive
Mumbai, December 7
Indian stock market is the second most expensive after China's in the Asian region, following strong rally driven by robust economic growth, a report says.


Actress Aishwarya Rai at a promotional event for a watch company in Kolkata on Friday.
Actress Aishwarya Rai at a promotional event for a watch company in Kolkata on Friday. — Reuters photo

EARLIER STORIES

 
Nicholas Lambourn (R), head of sales for the modern and contemporary Australian art auction at Christies auction house, gestures while talking about Frederick McCubbin's oil on canvas painting "Sawing Timber" (1907) at Christies in London on Friday.
Nicholas Lambourn (R), head of sales for the modern and contemp
orary Australian art auction at Christies auction house, gestures while talking about Frederick McCubbin's oil on canvas painting "Sawing Timber" (1907) at Christies in London on Friday. The painting is expected to fetch £250,000 - 350,000 at an auction in London on December 12. — AFP photo

ArcelorMittal eyes major stake in Chinese steel Co
Beijing, December 7
ArcelorMittal today said it will pay at least $2 billion for a controlling stake in Chinese steelmaker China Oriental (COGL), in which it already holds a 28 per cent stake.

Govt may allow 10 pc PF in stocks
New Delhi, December 7
The government may double to 10 per cent the ceiling of retirement funds managed by private organisations for investing in listed companies, a move that could further boost the already bullish stock markets.

ICICI premium via mobile phone
Mumbai, December 7
ICICI Prudential Life Insurance today announced that all its policy-holders can now pay their premiums through their mobile phones.

Frankfinn set to launch low-cost airline
Amritsar, December 7
It is a real life story of K.S.Kohli (45), chairman, Frankfinn Aviation Services, who had started his business with Rs 40,000, borrowed from a friend in 1997 and within 10 years, he made his company the largest in India.
K.S. Kohli
K.S.Kohli


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Good & Bad Day For Anil Ambani Group
RCom gets nod for GSM services

New Delhi, December 7
Amid the battle between telecom operators over spectrum allocation norms, the government has allowed Anil Ambani-led CDMA mobile player Reliance Communications (RCom) to start GSM-based services in 14 circles.

The government made necessary changes in the Unified Access Services Licence (UASL) and gave a go-ahead to RCom for starting services under the GSM technology platform in 14 telecom circles.

Anil Ambani Group firm Reliance Telecom already provides GSM services in eight circles. Official sources said the changes in licensing norms to allow RCom to start GSM services is subject to availability of spectrum. RCom officials were not immediately available for comments.

On October 19, the company had paid Rs 1,651 crore to the Department of Telecom for a pan-India licence to start GSM services. However, since the group already has presence in eight circles, it has been now given permission to start GSM operations in the remaining 14 circles.

The development comes amid the bitter fight between the CDMA lobby led by Reliance Communications and rival GSM camp led by Bharti Airtel.

The GSM operators lobby, COAI, has also challenged in telecom tribunal TDSAT, the government's decision to permit use of dual technology and the case is coming up for hearing on December 12.

With today's amendment in the licence, a communication regarding which has been sent to RCom, all the formalities have been completed and the company can start GSM services as soon as it gets spectrum.

Another leading CDMA operator, Tata Teleservices, which has quizzed the government on how it plans to prioritise allocation of spectrum, has also sought DoT's permission to offer GSM services. — PTI

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GSM lobby pulls out of review panel

New Delhi, December 7
Cellular Operators Association of India, the GSM-based operators’ lobby, today pulled out of an official panel for reviewing spectrum allocation norms, alleging that the committee was ignoring all its suggestions.

“The committee has either completely ignored our submissions or has cherry-picked our inputs and applied its own assumptions to arrive at incorrect conclusions without affording us any opportunity to refute the same,” T.V. Ramachandran, the nominee of GSM players, said in a letter today to R Bandhopadhyay, chairman of the committee.

The COAI’s decision comes after the Department of Telecom yesterday allowed rival CDMA player Reliance Communications to expand its GSM-based mobile services across the country.

Ramachandran said till date there have been no deliberations among the committee members on the existing criteria of March 2006, inputs received from different stakeholders, and the concerns being voiced by the GSM industry.

The government had last month constituted the panel to look into the spectrum allocation as recommended by the telecom engineering centre (TEC). The GSM operators had protested against the TEC report, saying the subscriber figures for allocation of additional spectrum have been arrived at in an arbitrary manner, and wanted a review of the report.

According to COAI, the terms of reference of the committee explicitly stated that the review should be done in a scientific and practicable manner. — PTI

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IPO complaints referred to SEBI

New Delhi, December 7
The government today said it has referred a large number of complaints against the upcoming initial public offering (IPO) of Anil Ambani group firm Reliance Power to market regulator SEBI for necessary action.

"Copies of complaints have also been forwarded to the ministry of corporate affairs," minister of state for finance Pawan Kumar Bansal told Lok Sabha in a written reply.

The company is currently awaiting a go-ahead from SEBI on its draft red herring prospectus for its IPO that could raise up to $3 billion (Rs 12,000 crore).

The minister said "the union government has received a large number of complaints against an application filed with SEBI for IPO by Reliance Power Ltd."

"Since these (complaints) are governed under SEBI Act 1992, they have been forwarded to SEBI for necessary action.

SEBI has sent the complaints to lead managers of the IPO for redressal at their end, he added. In reply to a query that whether the matter has been placed before the SEBI board, the minister replied in the negative.

Reliance Power had filed for the IPO in October, but the market regulator is yet to issue its observations, which is necessary to go ahead with the public issue.

This would be the first ever IPO from the Anil Ambani group, whose listed entities include RCom, Reliance Energy, Reliance Capital and RNRL. — PTI

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Plans plant at Palwal
M&M in pact with BAE Systems?

New Delhi, December 7
Indian conglomerate Mahindra and Mahindra (M&M) is understood to have emerged as a preferred partner of international defence equipments major BAE Systems for a manufacturing joint venture in India.

The UK-based BAE Systems has zeroed in on M&M and is believed to have signed a memorandum of understanding (MoU) after holding talks with at least two other leading corporates — Tatas and Larsen and Toubro (L&T) for its Indian Land Systems project, sources close to the development said.

The proposed JV will manufacture combat vehicles and other land-based defence equipments. Sources said that the project would cater to Indian Army besides looking for exports from Indian soil.

When contacted, BAE Systems' Media Relations Director John Neilson told PTI from London, "BAE Systems has made no secret of ambitions to develop its partnership with India and continues to have discussions with potential industrial partners in the country."

Until such time as these discussions are completed, it would be premature to predict their outcome, he said when asked about the signing of MoU with M&M earlier this week.

Officials of the Indian company could not be contacted for comments.

Next step after the MoU would be creation of a joint venture, for which the two sides would soon approach the authorities for necessary regulatory approvals. A government nod is mandatory in India for defence production.

Mahindras have also developed a land system called Axe, known as an Indian version of American Hummer's military variant. Mahindra Defence Systems currently manufactures vehicles based on its own technology for the Indian Army.

M&M is currently in the process of setting up a special military vehicle plant at Palwal in Haryana, where it would manufacture Axe and its variants for civilian law enforcement roles. — PTI

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WB grant to Nepal doubled
Bishnu Budhathoki writes from Kathmandu

The World Bank has decided to offer its largest ever support package to Nepal, which is suffering from economic and development crisis due to decade-long insurgency, with $253 million in grants.

The World Bank said the approved support package was designed to improve access to basic and primary education, enhance irrigation, expand rural roads, and improve living conditions, livelihoods, and empowerment among the rural poor.

The program intends to support implementation of a development program that enjoys the backing of the seven-party coalition in their efforts to sustain the peace and build new Nepal, said Praful Patel, World Bank vice-president (South Asia).

The new support package doubles the amount of development resources currently available from the bank to Nepal.

Funds amounting to the tune of $100-million for the poverty alleviation fund project II (PAF II) supports the second phase of the PAF.

The $60-million in additional financing for the education for all project is designed to improve access to and benefits from basic and primary education for children, especially from disadvantaged groups, and from literacy programs to poor adults.

The $50-million for the irrigation and water resources management project aims to improve irrigated agriculture productivity and management of selected irrigation schemes.

The $42.6-million for the road sector development project supports upgrading roads in five hill districts, which will help improve access to economic centres and social services.

The grants are from the International Development Association, the World Bank’s concessionary lending arm.

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Hike in car prices from next year

New Delhi, December 7
The new year will begin on a costly note for car buyers with major players, including Maruti Suzuki, Hyundai Motors and General Motors, planning to increase prices of the vehicles by as much as Rs 12,000.

The companies are citing higher costs of raw materials such as lead and aluminium, besides rising freight charges as well as petroleum products, among the reasons for increasing the vehicle prices.

According to dealer sources, Maruti Suzuki India Ltd has told its distributors to gear up for an increase in prices across all models by up to Rs 12,000. The price hike would be applicable on dispatches of vehicles from the date of announcement of the hike in January. When contacted, officials of the country’s biggest carmaker declined to comment.

Sources said Maruti has also written to its dealers that it will shut down production facilities for maintenance activities during December 24-31 and the dealers should plan their bookings accordingly.

Hyundai Motors is also planning a price hike of up to two per cent across different models by December-end or January next year. Hyundai’s lowest price car is the Santro non-AC which comes for Rs 2.72 lakh, while the high-end Sonata Embera is priced Rs 15.71 lakh.

Sources said HMIL may also revise the price of its recently introduced global car ‘i10’, which has been priced at Rs 3.39 lakh onward. While Hyundai officials declined to comment, General Motors (GMI) confirmed it will be revising prices.

“We will be hiking prices of our products between 1-2 per cent across all models by January,” GMI vice-president (marketing and sales) Ankush Arora said. He said increase in diesel prices along with input costs have made it necessary to hike the car prices. — PTI

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Indian stock market 2nd most expensive

Mumbai, December 7
Indian stock market is the second most expensive after China's in the Asian region, following strong rally driven by robust economic growth, a report says.

"India is the second most expensive market in Asia after China. However, unlike China, its momentum has deteriorated rather than improved from October," global financial service major Citigroup said in a research report.

Citigroup said November was a turbulent month for Asian markets with MSCI AC Asia Pacific index ending down 8.39 per cent.

All constituents of this index, except Indonesia, generated negative returns in the period under review. Japan is not a part of this index.

The monthly report reveals that India's earning sentiment had turned negative last month, though its price momentum is still going strong.

"India is supported by strong momentum in expectation of its strong economic growth," the report said.

Rising stock prices make the market more expensive, but it also implies improving long-term price momentum and all else being equal, stronger momentum characteristics, it added.

Last month, the benchmark Sensex had witnessed global pressure and the index lost 361.16 points in the period.

The index ended at 19,363.19 points after falling to a low of 18,182.83 in November, as investors turned cautious after Foreign Institutional Investors (FIIs) pulled out sizable funds from equity. — PTI

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ArcelorMittal eyes major stake in Chinese steel Co

Beijing, December 7
ArcelorMittal today said it will pay at least $2 billion for a controlling stake in Chinese steelmaker China Oriental (COGL), in which it already holds a 28 per cent stake.

World’s biggest steelmaker ArcelorMittal today said it will make an open offer to purchase shares not already owned by it at a price not less than HK $6.12 per share - an offer that values the company at about $2.2 billion.

On November 6, Mittal had acquired a 28.02 per cent stake held by Diana Chen Ningning, a former director, for about $635 million.

Besides buying out Ningning’s stake, Mittal has also won over the support of Jingyuan and a circular filed by the company to the Hong Kong stock exchange (HKSE) yesterday showed that the current “controlling shareholders”, led by Jingyuan, are now “parties acting in concert with Mittal Steel.”

These shareholders currently own 45.11 per cent stake in the company, which, along with a 28.02 per cent stake, now in Mittal Steel’s name takes the total holding of Mittal and his associates to 73.13 per cent.

The other shareholders own 26.87 per cent stake, as per the latest shareholding pattern filed with the exchange.

“ArcelorMittal has entered into a shareholders’ agreement with the controlling shareholders of China Oriental regarding their shareholdings in and the management of the company,” the Luxembourg-based steel giant said.

Mittal said it has also signed a business cooperation agreement with China Oriental and these pacts would help it strengthen its position in China’s fast growing steel market. He intends to keep COGL listed on the HKSE after the acquisition. — PTI

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Govt may allow 10 pc PF in stocks

New Delhi, December 7
The government may double to 10 per cent the ceiling of retirement funds managed by private organisations for investing in listed companies, a move that could further boost the already bullish stock markets.

Finance ministry is likely to take a final decision next week on allowing private provident funds, superannuation funds and gratuity funds to invest up to 10 per cent of their funds in listed shares.

“We had invited public comments on the proposed investment pattern for non-government provident funds, and would take a decision in this regard next week after studying the comments,” a senior finance ministry official said.

If these guidelines are followed by private provident funds that have an aggregate investible amount of nearly Rs 300,000 crore, employees could expect higher yield on their savings as against the present rate of 8.5 per cent. The stock markets have given an average of 25-40 per cent returns in recent years.

The official said the investment pattern guidelines for non-government provident funds would be revised after about two-and-a-half years.

The ministry has proposed that provident funds operated by firms could be allowed to invest their funds in shares of companies that have an investment grade debt rating from at least one credit rating agency or companies listed on the BSE or NSE, besides in equity linked schemes of mutual funds regulated by Sebi. — PTI

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ICICI premium via mobile phone

Mumbai, December 7
ICICI Prudential Life Insurance today announced that all its policy-holders can now pay their premiums through their mobile phones.

The company has entered into a partnership with mChek, a Visa-certified secure and simple system, to enable its policy-holders make their premium payments through a simple SMS and by using their credit card, a release said here today.

However, this unique service is available to all Airtel mobile service users only, across the country. — PTI

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Frankfinn set to launch low-cost airline
Varinder Walia
Tribune News Service

Amritsar, December 7
It is a real life story of K.S.Kohli (45), chairman, Frankfinn Aviation Services, who had started his business with Rs 40,000, borrowed from a friend in 1997 and within 10 years, he made his company the largest in India.

Now, total worth of his assets is said to be more than Rs 4,000 crore. Moving a step further from creating manpower for the aviation industry, Frankfinn Aviation Services will start a low-cost airline by 2009 and plans to tap the capital market for funding the new venture.

“It will be a low-cost airline with frills. We will offer lot of exclusive services and make other airlines run for their money,” he said.

It has already entered into the entertainment business with an initial investment of Rs 250 crore. Within a couple of months, Frankfinn would enter Bollywood by producing Hindi and Punjabi films .

Talking to The Tribune, Kohli said when the government announced ‘open sky policy’ for private players in early nineties, he got hooked by the idea. Frankfinn gave up medical data business and started providing flight attendant training. It also got renamed Frankfinn Aviation Services.

Initially , he started a seven-day basic cabin crew training and within a year, it became India’s best aviation institute, though about 250 other insitutes were already giving training for airhostesses. He was here in connection with ‘Mr Singh International Contest’ organised by Akal Purkh Ki Fauj, headed by SGPC member Jaswinder Singh (advocate).

Today, the network has 120 centres in 95 cities. It has also leased an Airbus A300 to impart real-time training. Frankfinn’s students have been placed in national and international airlines and also in hotels.

Going ahead with its outsourcing spree, budget-carrier Air Deccan tied up with Frankfinn Institute of Airhostess Training as an exclusive cabin crew partner. Kohli said his company had got its name registered in the Limca Book of World Records.

“As per the contract, which is for an initial period of two years, only Frankfinn students will be recruited as cabin crew by the airlines with up to 400 placements guaranteed each year during the contract,” Frankfinn chairman said.

The boom in the aviation industry has resulted in the growing demand of trained manpower with more than 25,000 skilled youth required all over the country in near future. He said a number of airlines, both domestic and international, were outsourcing their manpower from India. Kohli said Frankfinn was opening six more centres abroad at Dubai, Bangladesh, Sri Lanka, and Bahrain.

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BRIEFLY

DIAL tie-up
New Delhi, December 7
Delhi International Airport Ltd (DIAL) today said it has secured a Rs 4,940-crore loan to modernise the national capital’s airport. The public-private partnership initiative said it signed key financing documents with its project lenders for Rs 3,650 crore and foreign currency loan of $350 million to fund the project. — PTI

Inflation dips
New Delhi, December 7
Cheaper food prices, especially that of vegetables, pulled down inflation to 3.01 per cent for the week ended November 24, but it may not lead to a cut in interest rates as global crude oil prices remain high. The wholesale prices index-based inflation stood at 3.21 per cent in the previous week and 5.55 per cent during the same period last year. — PTI

Bosch plans
Mumbai, December 7
Bosch has decided to step up its investment in the country and expand its local development and manufacturing activities. “The company, which will have invested over Rs 1,800 crore between 2005 and 2008, will now invest additional Rs 850 crore by 2010,” Bernd Bohr, chairman and member of the Bosch board of management, said. — PTI

Kingfisher
Mumbai, December 7
Kingfisher training academy (KTA) plans to set up centres in Dubai and Colombo along with 11 cities across the country, a top company official said today. “KTA is launching 12 new centres at Delhi, Chandigarh, Jaipur, Ahmedabad, Pune, Thane, Indore, Nagpur, Kolkata, Guwahati, Hyderabad and Bangalore by February besides Colombo and Dubai to meet the acute shortage of manpower in the airlines and hospitality sectors,” KTA’s chief mentor Rajesh Verma said. — PTI

Microsoft
Mumbai, December 7
Microsoft India has introduced a new email domain, @live.in, for India as a part
of its worldwide roll out of new country-specific live domains. “Live.in opens up a
whole new set of possible names so customers have a new opportunity to sign up for an ID name they really want,” said Samir Saraiya, product head (windows live services). — UNI

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