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Satyam gets takeover offers
Speculation rife over L&T as prospective buyer

New Delhi, January 20
Fraud-hit Satyam Computer Services has been approached for takeover by domestic and foreign companies with reports suggesting that the major stake holder in the firm, Larsen & Toubro (L&T), was leading the race.

Accounts fudged at Educomp?
New Delhi, January 20
The government today said it would seek information from education-focused IT firm Educomp over alleged fudging of accounts even as the company said there were no fictitious assets and the promoters sold only 5 per cent of their stake.

SEBI to tighten disclosure norms 
Mumbai, January 20
Market regulator SEBI is all set to force promoters of companies to provide additional disclosures to the exchanges in the wake of the Satyam scam.

Export cess on basmati goes
Chandigarh, January 20
The Empowered Group of Ministers today decided to remove the export cess on basmati rice and reduce the Minimum Export Price (MEP) by $100 per tonne. 



EARLIER STORIES



S. Ramadorai (L), chief executive of Tata Consultancy Services (TCS), shakes hand with Gabriele Torchio, chief executive & president of Ducati, in Mumbai
S. Ramadorai (L), chief executive of Tata Consultancy Services (TCS), shakes hand with Gabriele Torchio, chief executive & president of Ducati, in Mumbai on Tuesday. TCS said on Tuesday it had signed a multi-million dollar, multi-year deal with Ducati Motor Holding to deliver technology-based services to the Italian bikemaker and its subsidiaries in Europe. — Reuters

Montek promises more steps to arrest slowdown
New Delhi, January 20
Indications that the government will take more active steps to control the slowing economic situation was felt today with the deputy chairman of Planning Commission, Montek Singh Ahluwalia, indicating that the government will actively use both monetary and fiscal policies in the coming year. He said this on the sidelines of the CII Partnership Summit.

Punjab’s Industrial Policy
State should acquire land: PHDCCI

New Delhi, January 20
Punjab has been advised that while formulating industrial policy it should liberally allow land use change specially with increasing demand of services sector. The revenues, thus generated, may help the industry to improve business activity and showcase Punjab as a destination for new investments.

International garment fair inaugurated
Gurgaon, January 20
Models display spring/summer collection 2010 at the India International Garment Fair in Gurgaon "The fiscal 2008-09 is an unusual year and it is the temporary phase the exporters are facing and that will pass soon," said Montek Singh Ahluwalia, deputy chairman of the Planning Commission. He was here to inaugurate a four-day 42nd India International Garment Fair (IIGF) at Apparel House here today.

Models display spring/summer collection 2010 at the India International Garment Fair in Gurgaon on Tuesday. Tribune photo: Rajesh Kumar Yadav

Infosys for more powers to independent directors
Mumbai, January 20
The Satyam Computer scam has highlighted the need for more powers for independent directors and reforming internal auditing standards, a top Infosys official said today.

Nano Project
Tata Motors to invest Rs 2,246 cr

Ahmedabad, January 20 
Tata Motors Ltd (TML) has said it will make an investment of Rs 2,246 crore in the first phase of Nano car project in Gujarat, while shifting and relocation expenses will cost an additional Rs 650 crore.






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Satyam gets takeover offers
Speculation rife over L&T as prospective buyer
Girja Shankar Kaura
Tribune News Service

New Delhi, January 20
Fraud-hit Satyam Computer Services has been approached for takeover by domestic and foreign companies with reports suggesting that the major stake holder in the firm, Larsen & Toubro (L&T), was leading the race.

While earlier reports suggested that L&T was looking at coming forward with a proposal for a takeover as it was the largest stake-holder, speculation became rife after L&T chairman A M Naik met Corporate Affairs Minister P.C. Gupta later in the afternoon.

Although Naik refused to comment on what transpired between him and the minister at the meeting, sources close to the development said he had put forward a proposal.

Emerging from the meeting, Naik said, "I am concerned about my stake in Satyam". When asked specifically whether he had put forward a suggestion to buy out Satyam, Naik said, “No comments”.

Since the disclosure of the Rs 7,800-crore fraud by Satyam founder Ramalinga Raju on January 7, company shares on the country’s exchanges have dropped by almost 90 per cent.

Reports also said that L&T had also appointed Japanese financial services firm Nomura to advise on a possible deal with Satyam.

The engineering major currently holds about four per cent stake in Satyam. The government has has appointed a new six-member board to run the company. The other major stakeholder in Satyam, LIC, has already managed to get one of its senior official as the member of the new board, which is again expected to meet on Thursday in Hyderabad.

Earlier in the day, one of the newly appointed members to the Satyam board, Tarun Das, said the company had been approached for buyouts by both international and Indian IT firms.

Unconfirmed reports have also said that the company might soon appoint investment bankers to advise on a merger or sale. Another board member, Deepak Parekh, had earlier said that option of merger was always open for the company.

Das also said the board would meet for two days starting January 22 and would discuss issues such as search CEO and CFO, legal matters and immediate cash requirements to run the company. It will also discuss whether it needs to ask the government to stand as a guarantor for raising loans. The board meeting is also expected to take up the issue of class action lawsuits filed against the company in the US.

In a related development, reports also suggested that government may also takeover the other two companies promoted by the Raju family.

Only yesterday, the government expanded the scope of a 'serious fraud' probe to cover two other Raju family-promoted companies — Maytas Properties and Maytas Infrastructure, where supposedly the money outflow has been from Satyam.

The Registrar of Companies (RoC) in its report has also said that the ex-promoters and top officials of the Hyderabad-based IT firm may have indulged in insider trading.

Meanwhile, reports also suggested that most of the big clients of Satyam have as yet not decided to move away from the company, which, at present, has more than 650 clients facing trouble as a result of fraud at the firm. However, it could be soon that its clients start to desert, experts said.

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Accounts fudged at Educomp?

New Delhi, January 20
The government today said it would seek information from education-focused IT firm Educomp over alleged fudging of accounts even as the company said there were no fictitious assets and the promoters sold only 5 per cent of their stake.

"There are no fictitious assets as all assets are installed in the schools. It is wrong to say that intangible assets are mainly purchased from subsidiary companies. In fact, the total expense on account of intangible assets are Rs 25.82 crore in FY'08 whereas the purchase from subsidiaries companies (EducomP Learning Pvt Ltd) is Rs 7.28 crore," the company said in its response to a media report.

The report had cited Educomp booking fictitious assets to adjust bogus profits arising out of bogus sales and purchases. The report said that the intangible assets are mainly purchased from its subsidiaries indicating fictitious purchases.

The company also rejected reports of promoters diluting their stake in the company to the extent of up to Rs 250 crore at the high time of share market price.

"The promoters group has so far sold only about 5.07 per cent from the IPO till date. The promoters still hold 55.03 per cent in the company," Educomp said. Taking a note of the media report, the government said it would seek information from the company.

"I have read certain reports in the media today and there are allegations about certain irregularities... I will ask for the report and we will find it out," Corporate Affairs Minister Prem Chand Gupta told reporters here. — PTI 

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SEBI to tighten disclosure norms 
Shiv Kumar
Tribune News Service

Mumbai, January 20
Market regulator SEBI is all set to force promoters of companies to provide additional disclosures to the exchanges in the wake of the Satyam scam.

On Monday, SEBI's capital market advisory committee recommended that it be made mandatory for promoters to disclose pledging and unpledging of shares to financial institutions to the exchanges within 24 hours. At present, it is not compulsory for promoters to inform about pledging of their shares to third parties to raise funds though such rules exist in the developed markets.

The committee's recommendation will be taken up by the SEBI's board, sources said. However, it is a foregone conclusion that this rule would be passed since the Union Finance Ministry is said to be in favour of it, according to sources. Prime Minister Manmohan Singh, who handles the finance ministry, is said to be in favour of tightening the rules so that scandals like the Satyam case do not recur, according to sources here.

SEBI has been concerned about the plight of investors when financial institutions to whom the promoters had pledged their shares dumped the holdings in the market following a fall in price. This dumping pulled down the prices of the shares even further hurting retail investors.

Other measures to be undertaken by SEBI include compulsory filing of consolidated statements by listed companies after every quarter. At present, most companies get away by filing the quarterly results of the listed entity with the consolidated statements being filed just once a year. Companies may also be forced to file balance sheets at the end of every quarter as well, say sources. It is not clear if such a rule will come into immediate effect.

Companies are understandably not in favour of this provision being imposed immediately. If SEBI decides to make these disclosures compulsory, companies will have to follow them from the first quarter of the next financial year. The fourth quarterly results and the annual statements of companies will be made public from May this year in the normal course.

The committee has also recommended that promoters be made to pay a margin of 25 per cent while issuing optionally convertible warrants to themselves. So far, the margin paid by promoters and other entities was 10 per cent. However, with the markets tanking, promoters of several companies have decided to forego the margin money since the price of the share was much lower than the warrant conversion price.

During bull markets, promoters tended to benefit by buying shares at lower than market prices following the issue of the warrants. Some promoters are known to have even diluted their holdings before the start of the bear markets.

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Export cess on basmati goes
Ruchika M. Khanna
Tribune News Service

Chandigarh, January 20
The Empowered Group of Ministers today decided to remove the export cess on basmati rice and reduce the Minimum Export Price (MEP) by $100 per tonne. This cess of Rs 8,000 per tonne was imposed by the Centre in April 2008, over and above the Minimum Export Price of $1,200 per metric tonne, to ensure better availability of rice in the domestic market.

Sources informed TNS that this was a long-pending proposal before the empowered group and had been approved by the Ministries of Food, Civil Supplies and Public Distribution and Commerce. Though the Ministry of Finance had earlier opposed the move, it later relented after the export of basmati rice from India came to a virtual standstill.

The removal of export cess and reduction of MEP would now enable the Indian basmati exporters to sell larger consignments of basmati to countries in West Asia and Europe. An average three million tonnes of Indian basmati is exported annually. But because of the high MEP and export cess, its exports had become highly uncompetitive. Since the Pakistani basmati variety was selling at $200 per tonne less than the price of Indian basmati, the exporters were turning to Pakistan for getting orders.

Sources in the basmati trade informed TNS that over the past couple of months, the export of basmati rice had slowed down. As a result, the rice exporters are now stuck with a huge inventory. Not only did the exports take a beating, but the buyers also started re-negotiating the prices agreed to earlier, so as to exploit the situation to their advantage. The Indian exporters, who had paid a high purchasing price to farmers in hope of getting good global sales and returns, were stuck with over Rs 5,000 crore of supplies.

Vijay Setia, president of All India Rice Exporters Association, said this was a welcome step as export contracts had stopped last month because of the high prices. "This will make our basmati exports more competitive and we can once again reap good dividends," he said. He added that now basmati farmers, whose payments had been withheld by exporters and commission agents because of low exports, will now get their dues as exports resume. 

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Montek promises more steps to arrest slowdown
Bhagyashree Pande
Tribune News Service

New Delhi, January 20
Indications that the government will take more active steps to control the slowing economic situation was felt today with the deputy chairman of Planning Commission, Montek Singh Ahluwalia, indicating that the government will actively use both monetary and fiscal policies in the coming year. He said this on the sidelines of the CII Partnership Summit.

“Obviously there is a room to do more and we are working on it,” Ahluwalia said.

However, job losses in the export sector has been an area of concern for the government, especially since it is a major employer. Speaking at the summit, Commerce and Industry Minister Kamal Nath said job loss situation was being analysed and the ministry would hold meeting with various export organisations on Wednesday to take stock of the situation. He said the government was prepared to take steps to minimise job losses taking place in the export sector.

In the same light, Ahluwalia said, “the most important thing on the stimulus is we have made some very large and important announcements. If we can implement what has been announced, it will inject a lot of expenditure into the economy.”

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Punjab’s Industrial Policy
State should acquire land: PHDCCI
Bhagyashree Pande
Tribune News Service

New Delhi, January 20
Punjab has been advised that while formulating industrial policy it should liberally allow land use change specially with increasing demand of services sector. The revenues, thus generated, may help the industry to improve business activity and showcase Punjab as a destination for new investments.

Satish Bagrodia, president, PHDCCI, said since the cost of industrial plots was very high, the state government should acquire land for the development of more industrial areas in the state so that entrepreneurs could set up new units on competitive rates.

The chamber has also suggested that a cooperative society type of model may be created wherein industrialists could join hands to acquire the land and develop a focal point for small and medium enterprises (SME) sector.

The suggestion to the state government also includes the development of focal point by giving capital subsidy, exemption of stamp and electricity duty to encourage the SME sector. The scheme can be made conditional like minimum of 50 acres or 100 units.

Where the state is unable to provide facilities, there it should encourage adoption of the public-private partnership (PPP) model.

PHD Chamber has already submitted a proposal for one-time settlement scheme for the revival of sick and ailing industry. “We trust this proposal shall help in revival and allowance of exit to sick units thus providing relief to the ailing industry,” Bagrodia said.

A set-up must be created under the PPP mode wherein the revenues generated from various sources can be used for maintenance and development of infrastructure at focal points in terms of roads, sewerage system, water supply and street lights.

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International garment fair inaugurated
Tribune News Service

Gurgaon, January 20
"The fiscal 2008-09 is an unusual year and it is the temporary phase the exporters are facing and that will pass soon," said Montek Singh Ahluwalia, deputy chairman of the Planning Commission. He was here to inaugurate a four-day 42nd India International Garment Fair (IIGF) at Apparel House here today.

"The export growth has declined this year in comparison to last year. This is a bad year for all exporters and also India is losing market share globally due to the recession," he added.

The mega event showcasing garments for men, women and children by over 300 exhibitors opened with a dazzling collection for autumn and winter seasons of 2009-10. Leading apparel manufacturers and exporters from all over the country are participating.

The IIGF has been jointly organised by International Garment Fair Association, Apparel Export Promotion Council, Garment Exporters Association, the Clothing Manufacturers Association of India, Apparel Exporters and Manufacturers Association and Apparel and Handloom Exporters Association.

"The turnout has been very good despite recessionary trends worldwide," Lalit Thukral, IGFA convener told The Tribune.

"The Indian apparel and fashion industry can definitely hope for a major rise in its exports during this year," he said.

The IIGF is one of the world's largest and most popular apparel fair held twice a year. Over 700 buyers from 60 countries and their agents are expected to converge here this week.

On the first day itself, nearly 150 buyers and their agents registered to attend the fair.

The fair offers a large collection of garments, fabrics and fashion accessories manufactured by some of the country's premier fashion and export houses.

With exhibition area of over 16,150 square metres, the show is focussed on strengthening existing markets and exploring new ones.

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Infosys for more powers to independent directors

Mumbai, January 20
The Satyam Computer scam has highlighted the need for more powers for independent directors and reforming internal auditing standards, a top Infosys official said today.

"We have to improve the institutional framework of companies ... (and) need to give more powers and authority to independent directors. Also, the regulations should be enforced much faster," Infosys Technologies board member Director (Human Resources) TV Mohandas Pai told reporters on the sidelines of an IBA-organised seminar here.

Noting that the Satyam case is an aberration and unlikely to affect the domestic IT industry, Pai said the law needs to be amended to ensure that auditing standards are enforceable. He said larger companies should move to International Financial Reporting Standards by 2010 for greater transparency in Indian firms. — PTI

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Nano Project
Tata Motors to invest Rs 2,246 cr

Ahmedabad, January 20 
Tata Motors Ltd (TML) has said it will make an investment of Rs 2,246 crore in the first phase of Nano car project in Gujarat, while shifting and relocation expenses will cost an additional Rs 650 crore.

A Government Resolution (GR) passed by the state government on January 1 regarding the Nano project and incentives it offered to lure the auto makers to Gujarat also talks about the details of various components of investments to be made by TML.

As per the GR details, the Tatas will not make any investment in the 1,100-acre land provided by the government in the first phase. TML will pay land price to the government in eight annual instalments, which will begin only after production starts at the plant.

The real investment to be made is Rs 614 crore in erecting the plant, Rs 1,189 crore in plants and machinery, Rs 199 crore in product development, Rs 135 crore in toolings, Rs 87 crore in IT and utilities and Rs 22 crore in others. In total, TML will invest Rs 2,246 crore apart from Rs 650 crore as shifting and relocation expenses. 
— PTI 

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BRIEFLY

Mumbai
Dewan Housing bids for IDBI's home loan unit:
Dewan Housing Finance has emerged as the front-runner to buy IDBI Bank's home finance subsidiary, IDBI Home Finance, having put the highest bid amongst the three shortlisted bidders. IDBI Bank's Board will meet on Friday to "consider and approve the selection" from the three shortlisted companies, a senior IDBI Bank official said here on condition of anonymity.— PTI

Rupee at 49.20: After a two-session gap, the Indian rupee breached the 49-level again to close at more than one-month low of 49.20/22 against the US currency amid a steep decline in stock markets and dollar gaining strength in the overseas market. Dealers at the Interbank Foreign Exchange (forex) market said weakness in equity markets, where the benchmark index Sensex shed nearly 230 points, raised fears of further capital outflows which is the key driver behind the domestic unit.
— PTI

New Delhi
Tata JV shortlisted for CTL project:
The Tata group's joint venture with Sasol of South Africa, and Jindal Steel and Power have pipped Reliance Industries Ltd (RIL) and state-run GAIL to the post and got shortlisted for the prestigious $6-8 billion project to convert coal into liquid petroleum. An Inter-Ministerial Group that scrutinised applications from 22 firms has recommended awarding the coal-to-liquid (CTL) pilot project to the Tata-Sasol JV — Strategic Energy Technology Systems Ltd — and JSPL, a top government official said.— PTI

Chandigarh
Dish TV offer:
Dish TV on Tuesday announced a recharge free offer for its existing and new subscribers, as it readies to cross the 25 million viewers mark by the end of March. Salil Kapoor, COO, Dish TV said for whatever amount the subscribers recharge their connection, they will get the service free for a similar amount. This is a limited period offer and is valid till March end, he said. This is a new concept in the DTH industry where subscribers can top-up their subscription using tailor-made package cards.— TNS

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