SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI


THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Satyam Saga
Raju’s bail plea deferred till Jan 19
Hyderabad, January 16
The disgraced former chairman of Satyam Computers B Ramalinga Raju’s bail petition has been posted for hearing in a local court on January 19, along with the market regulator SEBI’s petition seeking permission to question him while in judicial custody.

Govt not to alter gas allocation from RIL’s KG field 
New Delhi, January 16
The government has refused to change allocation of the initial gas output from Reliance Industries' eastern offshore KG-D6 field and will consider giving fuel to proposed power plants, including Anil Ambani Group's (ADAG) Dadri project, when these plants are ready to begin production.

RBI unlikely to cut key rates
New Delhi, January 16
The Reserve Bank of India (RBI) may not go in for key policy rate cuts in its quarterly policy review slated for January 23, said a senior finance ministry official.

HDFC cuts home loan rates
New Delhi, January 16
The country's top housing finance provider HDFC today announced a lower interest rate of 9.75 per cent for new loans up to Rs 30 lakh —bringing the rates to lowest level in about three years.



EARLIER STORIES



$138-b lifeline for Bank of America
Washington, January 16
In yet another rescue act, the Federal government will inject $20 billion of fresh capital into financial services major Bank of America, apart from standing guarantee to its toxic assets worth $118 billion.

A branch of an Anglo Irish Bank is pictured in Belfast, in Northern Ireland, on Friday. The Irish government announced on Thursday that it would nationalise Anglo Irish Bank, saying a planned injection of public money was no longer enough to secure the troubled bank's future.
A branch of an Anglo Irish Bank is pictured in Belfast, in Northern Ireland, on Friday. The Irish government announced on Thursday that it would nationalise Anglo Irish Bank, saying a planned injection of public money was no longer enough to secure the troubled bank's future.— AFP

Corporate Results
Bajaj Auto Q3 net down 22 pc
Mumbai, January 16
Hit by a massive sales slump, Bajaj Auto today reported a 22.43 per cent decline in net profit for the quarter ended December 2008, at Rs 166 crore as against Rs 214 crore in the comparable period of the previous year.

Re stronger  by 24 paise
Mumbai, January 16
Moving in tandem with stock markets, the Indian rupee today closed stronger by 24 paise to close at sub-49 level against the greenback. Traders in foreign exchange said the rupee sentiment was aided by recovery in Asian indices including the Bombay Stock Exchange benchmark Sensex which jumped nearly 277 points today. It moved in a narrow range before settling the day near its opening level of 48.79/81 a dollar. — PTI

Negative Growth
Private insurers try to win back investors’ confidence
Chandigarh, January 16
The de-growth in the life insurance sector in the past couple of months has forced the private life insurers to get in an overdrive to win back the investor confidence.

Outsourcing Cos explore relocation
Chandigarh, January 16
The once flourishing outsourcing industry in the country is being jolted by one negative development after the other, forcing a rethink among its top brains to seriously consider relocating to more enabling places in South East Asia, Eastern Europe and central America.







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Satyam Saga
Raju’s bail plea deferred till Jan 19
Tribune News Service

Hyderabad, January 16
The disgraced former chairman of Satyam Computers B Ramalinga Raju’s bail petition has been posted for hearing in a local court on January 19, along with the market regulator SEBI’s petition seeking permission to question him while in judicial custody.

The sixth additional Metropolitan Magistrate here reserved the order for tomorrow on another plea filed by Andhra Pradesh CID seeking police custody of Raju, his brother and former managing director Rama Raju and chief financial officer V Srinivas.

All three petitions came up before the court for consideration today.

Opposing SEBI’s petition, Raju’s lawyer S Bharat Kumar argued that the market regulator cannot interrogate his client while in judicial custody since he has no access to records and documents.

“Raju will need legal consultation prior to the interrogation which is not possible in custody,” the lawyer contended.

The SEBI’s lawyer K Pradyumna Reddy urged the court to grant permission for questioning Raju as SEBI alone was equipped to handle a financial accounting fraud involving a listed company.

The court posted the matter for hearing on January 19. The bail application moved by Raju and his associates will also come up for hearing on Monday.

Raju’s lawyer also sought special status for him in jail on the ground that he has stature in society and is used to a certain standard of lifestyle.

However, counsel for prosecutors opposed any special treatment, arguing that Raju had committed a crime and should be treated like any other criminal.

Raju and his brother were arrested by the AP police on January 9, three days after he confessed to committing a massive Rs 7,000-crore accounting fraud in the software company he had floated 21 years ago.

The Raju brothers were sent to Chanchalguda central jail the next day after the local court remanded them to judicial custody till January 23.

The duo was booked under non-bailable IPC Sections 120 B (criminal conspiracy), 420 (cheating), 409 (criminal breach of trust), 468 (forgery) and 471 (falsification of records).

Later, the company CFO Srinivas was also arrested and sent to jail. 

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Govt not to alter gas allocation from RIL’s KG field 

New Delhi, January 16
The government has refused to change allocation of the initial gas output from Reliance Industries' eastern offshore KG-D6 field and will consider giving fuel to proposed power plants, including Anil Ambani Group's (ADAG) Dadri project, when these plants are ready to begin production.

An Empowered Group of Ministers, last week, decided that "subject to the availability of gas, necessary allocations from KG-D6 fields will be made to projects in the pipeline, including Dadri power project, as and when they are ready to commence production.

"This will be without prejudice to the decisions of the court cases," the EGoM, headed by External Affairs Minister Pranab Mukherjee, said.

ADAG has claimed rights over 70 per cent of the initial output of 40 million cubic meters per day from the KG-D6 expected this year, by virtue of a family split. It wants 28 mmscmd gas from KG-D6 field for Dadri plant at $2.34 per million British thermal unit, rates lower than the government approved sale price of $4.20 per mmBtu and has taken the Mukesh Ambani firm to court for performance of the contract.

Sources said the EGoM decided that 14 mmscmd gas from the initial output would go to fertiliser units. Thereafter, existing power plants will get 18 mmscmd, including up to 8.5 mmscmd to beleagured Dabhol power plant.

The EGoM on January 8 decided that within the allocation for power sector, plants in Andhra Pradesh would be given priority. It asked the Power Ministry to work out individual plant allocations.

Reliance is expected to reach a plateau of 80 mmscmd by 2012, which will start dwindling from 2017 onwards till 2020.

If Dadri project comes by then, it may be allocated gas, the sources said. — PTI 

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RBI unlikely to cut key rates

New Delhi, January 16
The Reserve Bank of India (RBI) may not go in for key policy rate cuts in its quarterly policy review slated for January 23, said a senior finance ministry official.

"We don't expect rate cuts by the RBI," the offical said, adding the repo and reverse repo rates (short-term lending and borrowing rates) and policy ratios like the cash reserve ratio (CRR) are likely to be retained at the existing level.

The RBI is slated to announce a review of monetary policy on January 23 after taking into account the latest developments in international and domestic markets.

The central bank on January 4 reduced the repo rate (at which banks borrow from the RBI) by 100 basis points to 5.5 per cent, the reverse repo rate (at which the RBI pays to banks) by 100 basis points to 4 per cent, and the CRR (the amount banks are required to park with the RBI) from 5.50 per cent to 5 per cent.

These monetary steps were aimed at injecting more funds into the system and signalling a softer interest rate regime to boost economic growth.

The RBI has been reducing key policy rates since October to neutralise the impact of the global financial meltdown on the Indian economy.

While the repo rate and the CRR were at nine per cent in October, the reverse repo rate was at 6 per cent.

Bankers and analysts, however, have been expecting further cuts in key policy rates by the RBI in its January review as inflation has come down to 5.24 per cent from a peak of 12.91 per cent in August last year. — PTI 

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HDFC cuts home loan rates

New Delhi, January 16
The country's top housing finance provider HDFC today announced a lower interest rate of 9.75 per cent for new loans up to Rs 30 lakh —bringing the rates to lowest level in about three years.

Under the limited period offer applicable to new floating rate customers, the lender would charge 9.75 per cent for loans up to Rs 30 lakh and 10.75 per cent for bigger loans.

Prior to the special period offer announced today, HDFC was charging 10.25 per cent for loans up to Rs 20 lakh and 11.25 per cent for bigger loans.

"The new rates are applicable for a limited period and follows a reduction in our deposit rates by 0.50-0.75 per cent effective yesterday," HDFC joint managing director Renu Sud Karnad told PTI over phone.

"As the cost of borrowing has come down for HDFC, we decided to pass on the benefit to our borrowers also," she said, while adding that the lower rates should encourage more home buyers to come to the market and then the property developers to lower their prices.

"We have already seen builders in select areas slashing their prices by 10-20 per cent, which coupled with lower interest rates should encourage more middle-income buyers to come to the market," Karnad added.

Asked if further correction in property prices could be anticipated, Karnad said, "I hope so...developers who have not already cut their prices should follow the suit... those who have already cut their prices could also announce further reductions." — PTI 

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$138-b lifeline for Bank of America

Washington, January 16
In yet another rescue act, the Federal government will inject $20 billion of fresh capital into financial services major Bank of America, apart from standing guarantee to its toxic assets worth $118 billion.

The latest move would help Bank of America absorb a major chunk of losses incurred after the acquisition of collapsed Merrill Lynch.

"The US government entered into an agreement today with Bank of America to provide a package of guarantees, liquidity access, and capital as part of its commitment to support financial market stability," the Federal Reserve, Treasury and Federal Deposit Insurance Corp (FDIC) said in a joint statement on Thursday.

While the Treasury will invest $20 billion in the firm in return for preferred stocks, FDIC, along with the Treasury, will guarantee bad assets worth $118 billion. Bank of America would also comply with enhanced executive compensation restrictions.

Concerns about the financial health of the company had sparked fears about the country's banking system and shares of Bank of America even lost nearly 20 per cent on Thursday.

The bank, which recently acquired Merrill Lynch, has already received $25 billion from the Troubled Asset Relief Program.

The fresh capital of $20 billion would come from $700-billion worth TARP funds, in exchange for preferred stocks, with an eight per cent dividend to the Treasury.

"Treasury and the Federal Deposit Insurance Corporation would provide protection against the possibility of unusually large losses on an asset pool of about $118 billion of loans, securities backed by residential and commercial real estate loans, and other such assets," the statement said.

Most of Bank of America’s bad assets were assumed after the buyout of Merrill Lynch.

Yesterday, Bank of America shares took a severe beating on the New York Stock Exchange. The scrip plunged 18.43 per cent to $8.32.— PTI 

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Corporate Results
Bajaj Auto Q3 net down 22 pc

Mumbai, January 16
Hit by a massive sales slump, Bajaj Auto today reported a 22.43 per cent decline in net profit for the quarter ended December 2008, at Rs 166 crore as against Rs 214 crore in the comparable period of the previous year.

The company said the turnover during the quarter dipped by 15.84 per cent at Rs 2,141 crore as against Rs 2,544 crore in the corresponding quarter of 2007-08.

Total sales during the third quarter declined by a whopping 31 per cent at 493,748 units as compared to 713,135 units in the same period a year ago.

Jet posts 214-cr loss

Private carrier Jet Airways' net loss widened today to Rs 214.18 crore for the third quarter ended December 31 from Rs 91.12 crore in the year-ago period.

The Naresh Goyal-led firm told in a filing to the Bombay Stock Exchange that total income rose 24.60 per cent to Rs 3,022.83 crore during the quarter under review, from Rs 2,425.98 crore in the corresponding period a year ago.

"The company during the quarter and nine months ended December 31, 2008 suffered losses mainly on account of high fuel and other operating costs and lower load factors resulting into lower revenues than expected," Jet Airways said in a statement.

For the nine months ended December 31, 2008, Jet Airways reported a net loss of Rs 455.33 crore, while it had a net loss of Rs 31.88 crore in the corresponding period a year-ago.

Federal Bank

Private sector lender Federal Bank today announced a net profit at Rs 203.89 crore for the quarter ended December 31.

The bank had a net profit of Rs 182.92 crore in the same quarter last FY'08, the Kerala-based bank said in a filing to the Bombay Stock Exchange.

The total income of the bank stood at Rs 1,041.23 crore for the quarter under review, while it had a total income of Rs 733.61 crore for the same period a year ago. — Agencies

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Negative Growth
Private insurers try to win back 
investors’ confidence
Ruchika M. Khanna
Tribune News Service

Chandigarh, January 16
The de-growth in the life insurance sector in the past couple of months has forced the private life insurers to get in an overdrive to win back the investor confidence. From harping on selling of need- based insurance products to reaching out to their jittery customers; aggressive training of their agents to launching a media blitzkrieg — these insurance companies are going all out to woo back their clients.

The top executives of these companies are now directly communicating with their lakhs of clients, trying to tell them about the sound fundamentals of the company. Others are leveraging technology so as to provide Internet access to the clients’ policy details and fund values, whenever they want to.

Jittery investor confidence and a weak demand seem to have spoilt the party for private life insurers. From growing at a steady 56 per cent till September 2008, the insurance sector has been witnessing a slump, with the growth having come down to 27 per cent, according to the latest data released by the Insurance Regulatory and Development Authority (IRDA). This is for the second consecutive month that the industry has witnessed a negative growth in first-year premium collection. Compared with last year, the first-year premium collection was down by 6.7 per cent to Rs 5,087 crore in October. For November, the collections have slid further by 7.1 per cent to Rs 5,652.39 crore.

Talking to TNS, Rajender Sud, director and head agency, Max New York Life, said though they had managed to maintain their growth rate at 56 per cent, they have launched an awareness and education campaign.

Pranav Misra, senior vice-president and head, products and sales development, ICICI Prudential Life, said they were proactively engaging with consumers through various consumer education initiatives to inform and educate them about the right investing principles that will help them meet their long-term financial goals.“We have also pioneered in portfolio disclosure, being the first company to disclose fund performance vis a-vis benchmark in the public domain.

In order to enhance customer convenience, ICICI Prudential Life has successfully leveraged technology and now provides the customers with secure Internet access to their policy details and fund values. We also have strong risk management controls which ensure that there is adequate diversification in the portfolio with negligible concentration risk at any point of time”, he said.

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Outsourcing Cos explore relocation
Tribune News Service

Chandigarh, January 16
The once flourishing outsourcing industry in the country is being jolted by one negative development after the other, forcing a rethink among its top brains to seriously consider relocating to more enabling places in South East Asia, Eastern Europe and central America.

The pain pangs appear to be getting shriller, particularly for North India, including Punjab, where even well-heeled outsourcing companies, including KPOs, with major expansion plans, are exploring options of locating their future projects to countries like Philippines, Singapore, Mexico and the Caribbean nations. These countries, besides offering both the labour arbitrage opportunity and large pools of skilled labour with English language proficiency, have friendlier regulatory environment and a more robust infrastructure.

Mahesh Dhillon, founder of Mohali-based KPO, Agilyst Consulting, which offers operational support to major communication clients in North America, said, “First the very unfortunate Mumbai terror attacks, which led to the natural and expected outcome of escalated tensions with Pakistan, and now the Satyam debacle have raised in the minds of customers the perceived risk of doing business with a India-based outsourcing companies. The snapping of multiple undersea communication cables in the Mediterranean for the second time in the past 12 months has resulted in additional pain for the industry”.

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BRIEFLY

Toyota cuts North American output
Tokyo:
Toyota Motor Corp, the world's largest car maker, said it would cut production at several North American plants over the next few months in a bid to halve its inventory of vehicles. Toyota shares gained nearly 3 per cent in Tokyo, outperforming the overall market. Toyota's announcement followed a newspaper report that Nissan Motor Co would move production of its key subcompact to Thailand from Japan as part of a structural overhaul to cut costs.— Reuters

Star Tribune files for bankruptcy
New York:
Leading media house The Star Tribune has filed for bankruptcy protection after facing sharp revenue decline, a move that will help it cut costs and restructure debt. The Star Tribune plans to continue with its operation as usual and publish its award-winning newspaper Star Tribue and website Startribune.com without interruption during its reorganisation process, a company statement said.— PTI

Hyatt to develop 6 hotels
New Delhi:
Current economic slowdown and slump in hotel demand notwithstanding, hospitality major Global Hyatt Corporation plans to develop six properties in India with an investment of around Rs 1,000 crore in 3-4 years in joint venture with real estate firm Emaar MGF. The hotels, to be launched under the brand 'Hyatt Place', would come up in Mysore, Lucknow, Indore, Hyderabad, Gurgaon and Mangalore with a total of 950 rooms.— PTI

SpiceJet CFO quits
New Delhi:
The chief financial officer (CFO) of low-cost airline Spicejet, Parthasarthi Basu, on Friday said he has resigned from the company. "I have resigned from the airline due to personal reasons," Basu said, and added he would join consumer durables firm Whirlpool India Ltd as vice-president, finance. — PTI

UCO Bank to raise Rs 1,400 cr
New Delhi:
UCO Bank on Friday said it would raise Rs 1,400 crore from debt in the next three months. "We plan to raise Rs 700 crore from tier 1 bonds and remaining Rs 700 crore from upper tier 2 bonds by March end," UCO Bank chairman and managing director S K Goel told reporters here.— PTI

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