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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Satyam Saga
3 shortlisted for top job

Hyderabad, January 23
The additional funding arrangements to meet the operational expenses of the fraud-hit Satyam Computers were in the “final stages” while the appointment of new CEO and CFO would be done within a week.

Raju’s custody extended till Jan 31
B Ramalinga Raju SEBI’s plea to quiz Raju rejected
Hyderabad, January 23
The disgraced former chairman of Satyam Computers B Ramalinga Raju will remain in jail with a local court here today extending his judicial custody till January 31.

Rs 33-crore service tax notice to Infosys
New Delhi, January 23
The Indian IT sector continues to be in the news for all wrong reasons with another leading firm, Infosys, coming under the government scanner for alleged evasion of service tax worth Rs 33 crore on commission paid by the company for its global issue.

L&T ups stake in Satyam to 12%
Mumbai, January 23
Hinting towards a possible takeover of Satyam Computer, engineering major Larsen & Toubro today raised its stake in the beleaguered IT firm to 12 per cent through open market share purchases.



EARLIER STORIES




President and managing director of General Motors, Karl Slym (L) and P. Balendran, vice-president, GM India, pose with the Chevrolet Captiva Automatic at its launch in New Delhi on Friday. The car is priced at Rs 20.4 lakh.
President and managing director of General Motors, Karl Slym (L) and P. Balendran, vice-president, GM India, pose with the Chevrolet Captiva Automatic at its launch in New Delhi on Friday. The car is priced at Rs 20.4 lakh. Tribune photo: Manas Ranjan Bhui

PM’s panel lowers growth forecast
New Delhi, January 23
The Prime Minister’s Economic Advisory Council (PMEAC), which released its forecast for the Indian economy today, has cut the growth rate projection to 7.1 per cent, as against 7.7 per cent projected earlier.

Export of agri products decline by 21 pc
Chandigarh, January 23
The export of agri products have gone down by 21 per cent this year, mainly on account of the ban on export of these products so as to boost supplies in the domestic market. Though the agri products exports have continued to grow at 25 per cent this year, it is much less as compared to a growth of 46 per cent in exports last year.


A woman walks past a shop front in High Wycombe, in southern England on Friday. Britain entered recession for the first time since 1991 on Friday when figures showed output contracted by 1.5 per cent in the final three months of 2008.
A woman walks past a shop front in High Wycombe, in southern England on Friday. Britain entered recession for the first time since 1991 on Friday when figures showed output contracted by 1.5 per cent in the final three months of 2008. — Reuters

J&K industrialists seek sops
Jammu, January 23
Even as National Conference-Congress government has expressed its commitment to reviving the industry in the state, it has a tough task in its hand in view of the setbacks that industrial sector has received since February last. Talking to The Tribune, president of Association of Small Scale Industries, Gangyal, Tejwant Singh Reen, said, "The industrial units here are on the verge of closure. The withdrawal of Central excise package in February last year has hit the industry hard. While the new ventures are being shifted out of the state, the Industries Department has not registered even a single new unit in the past 9 months."

Import of toys from China banned
New Delhi, January 23
India today banned import of toys from China, providing protection to the domestic manufacturers against cheap competition from the neighbouring country. 

Corporate Results

 





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Satyam Saga
3 shortlisted for top job
Suresh Dharur
Tribune News Service

Hyderabad, January 23
The additional funding arrangements to meet the operational expenses of the fraud-hit Satyam Computers were in the “final stages” while the appointment of new CEO and CFO would be done within a week.

The announcement was made after a crucial two-day meeting of the enlarged board of the software company here today.

The meeting, attended by all six government-appointed members, announced that they have narrowed the shortlist for the CEO and CFO positions to the final three and would finalise their decision in the coming week.

The selected person will be uniquely qualified to lead the company during this period of transition and will be a leader of global standing and recognition, the company release said after the conclusion of the board meeting.

“This is a crucial decision for the company and its stakeholders. We fully recognise the urgency and importance to have the right person with the right experience and abilities to successfully steer the company through these turbulent times,” the release said.

The meeting, the third in 13 days since its reconstitution, was chaired by Tarun Das and focused on the twin issues of mobilisation of funds and selection of new CEO and CFO for ensuring business continuity.

“To tide over the ongoing requirements for operational expenses, including salaries and vendor payments, the board announced that additional funding arrangements are in the final stages of being concluded. This is expected to be formally announced before January 28,” Deepak Parekh, a key member of the board, said.

Commenting on the serious doubts being raised over the exact headcount in the company, in the wake of the claim by Andhra Pradesh police that Ramalinga Raju had inflated the employees’ number, the board said “Prima facie, there appears to be no basis to doubt the same. The independent investigation process is expected to reaffirm this fact in the coming weeks.”

The board also interacted with a number of investment bankers and will take a decision on the appointment of the new investment banker for the company in the next few days.

“The collections from receivables have been robust, so far. However, taking note of the demanding financial situation, the board discussed ways and means to expedite collections due from customers and to execute prudent measures for cost optimisation,” the release added.

The immovable properties of the company, including all campuses owned by it, are free of any encumbrance, it said.

Noting that Satyam’s existing customers continued to release new work orders, it said that many of them have already visited the company’s development centers and expressed satisfaction over the team’s commitment towards their projects.

“There is a pronounced shift in customer attitudes - from being alarmed in the initial days, it has changed to a sense of cautious optimism. The planned actions will have a distinct impact on the customer confidence” said Kiran Karnik, another board member.

The Board is expected to meet again on January 26-27. 

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Raju’s custody extended till Jan 31
SEBI’s plea to quiz Raju rejected
Tribune News Service

Hyderabad, January 23
The disgraced former chairman of Satyam Computers B Ramalinga Raju will remain in jail with a local court here today extending his judicial custody till January 31.

Along with Raju, his brother and former managing director Rama Raju and former chief financial officer V Srinivas will remain in judicial custody for another week.

The bail petitions of Raju and Srinivas have been posted for hearing on January 27 while the bail plea of Rama Raju will come up for consideration before the sixth additional chief metropolitan magistrate Ramakrishna the next day.

Meanwhile, the court dismissed a petition filed by SEBI, seeking permission to question Raju and other top executives of the fraud-hit software company.

"The court upheld our contention that the SEBI petition was not maintainable and that it has no jurisdiction to entertain such applications," Ramalinga Raju's counsel S Bharath Kumar said.

After intense grilling, the CID sleuths produced Raju and Srinivas before the court at 4 pm when the five-day police custody ended.

Looking calm and composed, 53-year-old Raju told the judge that he was treated well by the police during the custody and that he had no complaints.

The court had initially granted four-day police custody. With fresh revelations emerging in the case, the court had yesterday extended the police custody by a day.

The CID sought extension of custody in case of Raju and Srinivas while leaving out Rama Raju who was sent back to Chanchalguda jail yesterday following completion of four-day custody.

After the court pronounced its orders, Raju and Srinivas were shifted to Chanchalguda jail amid tight security.

Meanwhile, the CID sleuths arrested Raju’s relative Gopalakrishna Raju, general manager of SRSR Holdings through which Satyam founder’s family members held a stake in the software company.

SRSR Holdings is owned by Suryanarayana Raju whose house was also raided by the police in connection with the Rs 7,100-crore accounting fraud in Satyam.

Raju’s family members held 8.27 per cent stake in Satyam through SRSR Holdings at the end of September quarter.

But the stake had declined to 2.34 per cent as of January 8, the day after Raju’s disgraceful exit, following the share sale by lenders, with whom all promoter's equity had been pledged.

The interrogation of the fallen IT icon revealed that he had fudged fixed deposit documents, headcount figures and diverted Satyam funds to Maytas Properties and Maytas Infra, the real estate and infrastructure companies owned by his sons.

The Raju brothers were arrested on January 9 soon after their surrender before Andhra Pradesh Director General of Police S S P Yadav while Srinivas was nabbed the next day. 

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Rs 33-crore service tax notice to Infosys

New Delhi, January 23
The Indian IT sector continues to be in the news for all wrong reasons with another leading firm, Infosys, coming under the government scanner for alleged evasion of service tax worth Rs 33 crore on commission paid by the company for its global issue.

"We have issued show-cause notice as the company has not paid service tax on the underwriting commission paid by Infosys towards American Depository Receipt (ADR) for the years 2003, 2005 and 2006," said a senior tax official.

The service tax commissionerate in Bangalore issued show-cause notice to the company on October 24, 2008, he said.

However, the company in this regard has said the notice is not a determination of any liability and that the company has time till the first week of February to reply.

"We strongly believe that since it is a sponsored ADR programme, the company had not taken any taxable services and only facilitated the issue. The services were basically taken by the selling shareholders. We will be replying in detail to the authorities in due course," Infosys CFO Balakrishnan V said. — PTI 

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L&T ups stake in Satyam to 12%

Mumbai, January 23
Hinting towards a possible takeover of Satyam Computer, engineering major Larsen & Toubro today raised its stake in the beleaguered IT firm to 12 per cent through open market share purchases.

An L&T spokesperson said that the company purchased additional shares from the market taking its total holding from four per cent to 12 per cent. However, he declined to comment on whether it would further raise its stake in Satyam.

L&T, which was already having a little over four per cent stake in Satyam before today's open market purchase, is reportedly in the forefront to acquire Satyam.

If L&T's stake in Satyam reaches 15 per cent, it would trigger an open offer to acquire additional up to 20 per cent stake in the IT firm.

According to bulk-deal data at the bourses, L&T purchased 3.9 crore shares of Satyam at National Stock Exchange at an average price of Rs 34.52 per share, amounting to Rs 134 crore. The additional shares purchased today at NSE account for about 5.8 per cent stake in Satyam, while shares were purchased at the BSE also.

Satyam shares today surged by over 31.25 per cent to close at Rs 38.85, while L&T declined 3.5 per cent at Rs 640.85 on the Bombay Stock Exchange today. — PTI 

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PM’s panel lowers growth forecast
Tribune News Service

New Delhi, January 23
The Prime Minister’s Economic Advisory Council (PMEAC), which released its forecast for the Indian economy today, has cut the growth rate projection to 7.1 per cent, as against 7.7 per cent projected earlier.

“The GDP growth is estimated at 7.1 per cent during the year, lower than the projection of 7.7 per cent made in our July, 2008, outlook,” Suresh Tendulkar, chairman, PMEAC, said.

Prime Minister Manmohan Singh had recently lowered his growth forecast for fiscal 2008-09 to 6-7 per cent, stating that the period of hardship was not yet over for the Indian economy and it would continue till early next year.

However, there is a good news on the price front as the council predicts that the annual inflation will fall further to 4.1 per cent by the end of February.

Economic conditions in the advanced economies might continue to be recessionary in the first half of 2009, stated the council, but growth might resurface in the third quarter of the calendar year.

However, Indian economy is likely to remain relatively weak in the first quarter of the fiscal 2009-10 and slowly pickup thereafter, and is expected to show fairly strong recovery in growth in the second half of the fiscal.

As regards the farm sector, the council expects that the harvests of wheat, oilseeds and other winter crops will show good growth. On this basis, the council predicts that the farm sector will grow by 3 per cent in the GDP in 2008-09 with the possibility of it going higher to 3.5 per cent also.

As regards exports, the council has stated that the recovery of advanced economies in 2009 was unlikely to be robust and thus the export market recovery will be limited.

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Export of agri products decline by 21 pc
Ruchika M. Khanna
Tribune News Service

Chandigarh, January 23
The export of agri products have gone down by 21 per cent this year, mainly on account of the ban on export of these products so as to boost supplies in the domestic market. Though the agri products exports have continued to grow at 25 per cent this year, it is much less as compared to a growth of 46 per cent in exports last year.

Talking to TNS here, on the sidelines of a seminar organised by PHDCCI, P K Chaudhery, additional secretary, Ministry of Commerce, said one of the main reasons for the slowdown in growth was the ban on export of non-basmati rice and export cess and high Minimum Export Price (MEP) on basmati exports. “With the export cess now having been removed and the reduction in the MEP, we are expecting a good take off and hope to achieve a steady growth rate of 25 per cent this year,” he said.

He also said there has been a slowdown in exports of meat products to West Asia, as people there are not willing to place long- term orders. The export of processed vegetables and honey, too, has taken a hit. “But this is mainly because of high pesticide residues in our food items. On the positive side, we have seen a rise in export of spices, organic cotton and organic tea,” he added.

Asit Tripathy, chairman, Agricultural & Processed Food Export Development Authority (APEDA), who was also present on the occasion, said that this was a temporary phase. “The slowdown in exports of these products has little to do with the global recession. Since 35 per cent of agri exports are done to countries in West Asia, which is not under recession, we hope to achieve a good growth rate. We are now trying to tap the niche market for agri products export and are now promoting organic farming in a big way, by organising farmers to produce organic pepper, grapes, wheat and other fruits,” he said.

Tripathy said they were also working on building infrastructure for providing certification to organic farmers and a network of laboratories have been set up across the country. “Since EU comes out with regular policy changes with regards to minimum pesticide residual levels in food items, we will upgrade our laboratories and increase our surveillance on farmers regularly,” he added. 

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J&K industrialists seek sops
Perneet Singh/Tribune News Service

Jammu, January 23
Even as National Conference-Congress government has expressed its commitment to reviving the industry in the state, it has a tough task in its hand in view of the setbacks that industrial sector has received since February last.

Talking to The Tribune, president of Association of Small Scale Industries, Gangyal, Tejwant Singh Reen, said, "The industrial units here are on the verge of closure. The withdrawal of Central excise package in February last year has hit the industry hard. While the new ventures are being shifted out of the state, the Industries Department has not registered even a single new unit in the past 9 months."

He said the move has sent a wrong message to the new investors, as the package was scrapped mid-way from the newly set up units. No good business house would invest its money in such a state, he said, adding that all their pleas to restore the package had fallen on deaf ears. He said if the state government cannot help them get the package back, at least it should provide them some relief in lieu of the package.

Reen lamented that the government, on the one hand, was providing power supply only for 14 hours in a day, and on the other, it has increased the power tariff by 100 to 150 per cent in different categories.

He rued that the government has also not provided any succour to the industry on account of losses they had suffered during the two-month long Amarnath land agitation. "We were expecting reimbursement of interest on our limits, but nothing concrete came out," he averred.

Raising another issue, he said while in other states the provident fund facility is available if the employees strength is over 10, but in Jammu and Kashmir, it applies even if the staff strength is above 5. The state Assembly had brought this norm at par with other states in February last year, but the government was yet to issue a notification in this regard, he claimed.

Former Federation of Industries chairman Annil Suri said the new government, instead of making future announcements, should first address the pending issues. "The government is talking of calling people from outside to invest in the state and getting the Central excise package restored, which are long-term issues," he said. There were many issues that had been cleared by the state administration in the past, but were awaiting implementation. He said though the power infrastructure has improved in the state, it has not led to any progress in terms of supply hours.

Ram Sahai of Chamber of Commerce and Industry said though there was no forward movement on their demands as of now, but the CM has promised to hold a detailed discussion to redress their woes.

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Import of toys from China banned

New Delhi, January 23
India today banned import of toys from China, providing protection to the domestic manufacturers against cheap competition from the neighbouring country. 

The ban, notified by the Directorate General of Foreign Trade, will remain valid for six months. The government, which gave no reason for slapping the prohibition, was concerned over a rise in import of toys.

Besides, concern was also raised over the safety of children playing with the Chinese toys. — PTI 

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Corporate Results
Canara Bank Q3 net up 53%

Bangalore/Mumbai, January 23
Canara Bank today reported a 53 per cent jump in third quarter net profit at Rs 702 crore compared to Rs 459 crore in the year-ago period, and said its aggregate business crossed Rs 3 lakh crore as at December 2008. The bank's third quarter income rose to Rs 5,383 crore, a year-on-year growth of 31 per cent.

RCom net up 3.51 pc

Anil Ambani group firm Reliance Communications (RCom) today reported a 3.51 per cent growth rate in net profit at Rs 1,444.17 crore for the third quarter ended December 31, 2008.

RCom's total income rose by 18.75 per cent to Rs 5,671.82 crore for the quarter under review from Rs 4,776.26 crore in the corresponding period last fiscal.

HCL profit up 49 pc

Software exporter HCL Technologies today said its net profit for the second quarter ended December 2008, grew 49 per cent at Rs 398.01 crore over the same period a year ago.

Total income of the IT firm rose to Rs 1,304.85 crore in the quarter under review from Rs 1,129.20 crore a year ago. Besides, the board has declared an interim dividend of 100 per cent at the rate of Rs 2 per share.

Union Bank

Union Bank of India today said its net profit for the third quarter of the current fiscal grew 84.03 per cent at Rs 671.74 crore over the corresponding period a year ago.

The bank had a net profit of Rs 365.02 crore in the third quarter of financial year 2008, Union Bank of India said in a filing to the Bombay Stock Exchange.

The PSU lender's total income rose to Rs 3,653.79 crore for the quarter ended December 31, from Rs 2,806.04 crore a year ago.

Tech Mahindra

Software firm Tech Mahindra today reported a 12 per cent growth in its net profit at Rs 222.90 crore for the third quarter ended December 31, 2008. The total income rose 17 per cent to Rs 1,132.20 crore for the quarter under review, from Rs 970.40 crore in the corresponding period last fiscal. — PTI

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