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THE TRIBUNE SPECIALS
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B U S I N E S S

7 suitors line up for Satyam
New Delhi, January 29
Scam-hit Satyam Computer has been approached by as many as seven possible suitors, including private equity players, even as the company's investment bankers are trying to find the best match.

SEBI’s writ petition to be heard today
Hyderabad, January 29
A writ petition filed by market regulator Securities and Exchanges Board of India (SEBI), challenging denial of permission by a lower court to question former Satyam Computers Chairman B Ramalinga Raju, will be heard by Andhra Pradesh High Court tomorrow.

Centre rules out bailout
Mumbai, January 29
Union Minister of State for Industry Ashwani Kumar here today said that Centre would not arrange any bailout for Satyam Computer Services, as the company itself was in a position to raise funds from the market.



EARLIER STORIES



India warns of rising protectionism
Commerce Minister Kamal Nath at a press conference in Davos on Thursday on the second day of the World Economic Forum.Davos, January 29
India sees growing signs of protectionism and will respond by taking measures of its own if its exporters are threatened, its trade minister said on Thursday. His comments at the World Economic Forum in the Swiss ski resort of Davos were the latest warning that the global economic crisis could fuel protectionism to protect national industries and jobs.

Commerce Minister Kamal Nath at a press conference in Davos on Thursday on the second day of the World Economic Forum. — AFP

Corus plans to sell stake: Report 
London, January 29
Tatas-owned Corus, Britain's biggest steelmaker, plans to sell a majority stake in a large steel plant on Teesside for about $450 million, securing about 2,000 jobs at the site, media reports said.

Inflation rises to 5.64%
New Delhi, January 29
Driven by higher prices of essential food articles, inflation inched up further for the second consecutive week, to 5.64 per cent for the week ended January 17.

US House clears $819-b stimulus package
Washington, January 29
The US House of Representatives has passed the $819-billion mega stimulus package, which is aimed at reviving American economy that is reeling under the worst-ever crisis since the great depression of last century.

Starbucks cuts 6,000 jobs 
New York, January 29
Joining major companies cutting jobs as recession deepens, popular coffee giant Starbucks and internet services major America online plans to lay off about 6,700 employees in the coming months.

200 m workers under threat, warns ILO
New York, January 29
A top UN agency has called on the governments to focus on productive investment, decent work and social protection as it warned the current global crisis could push some 200 million workers into extreme poverty worldwide.

Debt relief norms eased
New Delhi, January 29
Aimed at operationalising the second stimulus package which would help boost the economy, the government last night gave its approval to relax the debt relief guidelines that would allow states to borrow an additional Rs 30,000 crore to step up capital expenditure.

Café Coffee Day plans expansion
Chandigarh, January 29
Café Coffee Day has lined up a major expansion plan across the country. The coffee chain major is also planning to move up the value chain by launching new verticals like lounges and flagship stores that would showcase how coffee is picked and brewed.

Cabinet refers 3G issue to GoM
New Delhi, January 29
In a clear indication that the auction for the spectrum of the next generation 3G services for mobile phones might not take place during the tenure of the current Congress-led UPA government, the Union Cabinet yesterday decided to refer the issue to a Group of Ministers (GoM).

 





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7 suitors line up for Satyam

New Delhi, January 29
Scam-hit Satyam Computer has been approached by as many as seven possible suitors, including private equity players, even as the company's investment bankers are trying to find the best match.

"So far we are aware of four (companies that have approached Satyam Computer). But we have heard that another two or three firms are also interested," Satyam Computer board member Tarun Das, who is also the chief mentor of industry body CII told reporters here.

Investment bankers are talking to everybody and finding out which firm is interested, what is the level of seriousness and are evaluating the proposal before getting back to the board. The process is likely to take six weeks, Das added.

Earlier this week, the board of Satyam Computer Services appointed Goldman Sachs and Avendus Capital as investment bankers and mandated Boston Consulting Group (BCG) to act as its management adviser.

Asked whether Satyam's founder Ramalinga Raju had inflated employee numbers as claimed by the Andhra Pradesh police, Das said: "We have done a headcount using external agencies and we believe in the basis of investigation that we are well over 50,000 people in Satyam. So I do not think that there is any inflated numbers." — PTI 

Fidelity buys 2.5% stake for $19 m

Mumbai: Asset manager Fidelity Investments bought a 2.5 per cent stake in fraud-scarred Satyam Computer Services for $18.7 million through two block deals on Wednesday, stock exchange data showed. Two funds managed by Fidelity bought a total of 17.13 million shares at a weighted average price of Rs 53.4, data from the National Stock Exchange showed. — Reuters

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SEBI’s writ petition to be heard today
Tribune News Service

Hyderabad, January 29
A writ petition filed by market regulator Securities and Exchanges Board of India (SEBI), challenging denial of permission by a lower court to question former Satyam Computers Chairman B Ramalinga Raju, will be heard by Andhra Pradesh High Court tomorrow.

The sixth additional chief metropolitan magistrate had earlier rejected the SEBI petition seeking its permission to quiz Raju, his brother and former Managing Director Rama Raju and former Chief Financial Officer V Srinivas in connection with the Rs 7,100-rore accounting fraud in the software giant.

Following this, SEBI had moved the High Court, seeking reversal of lower court order. The petition came up before the court which posted it for hearing tomorrow. Meanwhile, the sixth additional chief metropolitan magistrate sent SRSR General Manager Gopalakrishna Raju, a distant relative of Ramalinga Raju, to police custody for 30 hours, with effect from 10 am tomorrow.

Gopalakrishna Raju headed SRSR which managed the Raju family’s stakes in Satyam Computers. The magistrate also reserved his orders on the bail petitions moved by the arrested auditors of PriceWaterhouseCoopers, S Goapalakrishnan and T Srinivas for February 2. 

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Centre rules out bailout
Tribune News Service

Mumbai, January 29
Union Minister of State for Industry Ashwani Kumar here today said that Centre would not arrange any bailout for Satyam Computer Services, as the company itself was in a position to raise funds from the market.

“The board has all the ability to raise funds and there will be no bailout for the company,” Kumar said in an interaction with mediapersons.

The Minister said the government was keen on getting to the bottom of the matter so that everyone involved in the fraud could be brought to book. "I promise there will not be any let-up in bringing the guilty to book."

Kumar said the government was in the process of appointing a chief executive officer and a chief financial officer for Satyam. 

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India warns of rising protectionism

Davos, January 29
India sees growing signs of protectionism and will respond by taking measures of its own if its exporters are threatened, its trade minister said on Thursday.

His comments at the World Economic Forum in the Swiss ski resort of Davos were the latest warning that the global economic crisis could fuel protectionism to protect national industries and jobs.

''In some places there are sounds of protectionism, in some places it is real,'' Commerce and Industry Minister Kamal Nath told Reuters. ''We are seeing greater use in the western world of anti-dumping measures, non-tariff barriers being used in Europe.'' As an example, Nath cited Dutch authorities' seizure last week of a Brazil-bound shipment of a generic high blood pressure drug made in India.

He said India had taken up the issue with the Dutch authorities and the European Union, and hoped to resolve it.

''If there are protectionist measures India will be compelled to also take commensurate measures against those countries which will be good for no one.'' India itself has raised tariffs on steel to protect local producers, a measure which trade experts say was aimed at China, which India does not regard as a market economy.

Nath said India would impose safeguard or anti-dumping duties on products from any country selling goods below cost.

The deepening economic crisis, and the failure to complete the World Trade Organisation's long-running Doha round on freeing up global commerce, have raised fears that countries would block their partners' exports to protect jobs at home.

Such protectionism, if it leads to tit-for-tat retaliation, would intensify the crisis, as happened in the 1930s during the Great Depression.

Nath said it was important for trading powers to continue efforts to complete the Doha round, launched in late 2001.

Despite the global crisis, Nath said India expects exports to grow by 17 per cent this year. Exports in April to November were 19.4 per cent higher than a year earlier, but fell at an annual 9.9 percent rate in November itself. — Reuters

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Corus plans to sell stake: Report 

London, January 29
Tatas-owned Corus, Britain's biggest steelmaker, plans to sell a majority stake in a large steel plant on Teesside for about $450 million, securing about 2,000 jobs at the site, media reports said.

According to The Financial Times, the deal should provide more breathing space for the Anglo-Dutch steelmaker as it attempts to implement a difficult restructuring programme necessitated by the worst downturn in the steel industry in more than 60 years.

Under the proposed transaction, a stake of about 75 per cent will be transferred by Corus to an Italian-led partnership of two non-UK steel makers — Marcegaglia of Italy and Dongkuk of South Korea — leaving Corus with a stake of about 25 per cent.

The new ownership arrangement in which Marcegaglia would be the senior partner, with an overall stake of 40-45 per cent, would provide much needed cash to bolster Corus's balance sheet. — PTI 

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Inflation rises to 5.64%

New Delhi, January 29
Driven by higher prices of essential food articles, inflation inched up further for the second consecutive week, to 5.64 per cent for the week ended January 17.

Inflation was higher by 0.04 per cent from 5.60 per cent a week before. Food items that became expensive during the week as a result of the eight-day truckers' strike include maize, bajra, jowar, rice, sugar and gur.

The truckers' strike restricted the movement of goods, leading to shortage and price rise. — PTI

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US House clears $819-b stimulus package

Washington, January 29
The US House of Representatives has passed the $819-billion mega stimulus package, which is aimed at reviving American economy that is reeling under the worst-ever crisis since the great depression of last century.

The stimulus package passed by the House of Representatives by 244-188 votes, however, failed to receive even a single vote from the opposition Republican lawmakers, marking the the first major setback to President Barack Obama in gaining bipartisan support to his major policy decisions.

Obama had spent hours on Tuesday meeting Republican leaders at the Capitol Hill making his personal appeal to them.

Eleven Democrats also voted against the American Recovery and Reinvestment Act, which now moves to the Senate for vote, before it could be signed into law by Obama.

In a statement, soon thereafter Obama hoped that it would receive bipartisan support in the Senate.

"I hope that we can continue to strengthen this plan before it gets to my desk. But what we can't do is drag our feet or allow the same partisan differences to get in our way.

"We must move swiftly and boldly to put Americans back to work, and that is exactly what this plan begins to do," he said.

At a time when thousands of jobs are being lost every week, the American Recovery and Reinvestment Act is expected to create more than three million new jobs in the next few years. — PTI

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Starbucks cuts 6,000 jobs 

New York, January 29
Joining major companies cutting jobs as recession deepens, popular coffee giant Starbucks and internet services major America online plans to lay off about 6,700 employees in the coming months.

Starbucks, which has reported a 69 per cent drop in profit for the first fiscal quarter, has announced slashing its headcount by 6,000 and closing of 300 stores.

AOL chief executive Randy Falco sent an internal memo to employees yesterday about plans to cut jobs — 7,000 or 10 per cent of its workforce.

It also plans to introduce other cost-saving measures, including freezes on salary increases. One reason for tight position that the companies finds itself is that recession has forces many companies to cut advertisements.

The announcements follow a staggering over 80,000 single-day job-cut declarations made earlier this week by big companies, including Construction machinery manufacturer Caterpillar. — PTI 

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200 m workers under threat, warns ILO

New York, January 29
A top UN agency has called on the governments to focus on productive investment, decent work and social protection as it warned the current global crisis could push some 200 million workers into extreme poverty worldwide.

"The Decent Work Agenda is an appropriate policy framework to confront the crisis," International Labour Office (ILO) Director General Juan Somavia said while releasing the annual Global Employment Trends (GET) report.

Somavia called on the G-20 group of large economies, scheduled to meet in London on April 2, to urgently agree on priority measures on employment and social protections for workers and to include labour considerations in their planning alongside financial issues.

Based on new developments in the labour market and depending on the timeliness and effectiveness of recovery efforts, the GET report says global unemployment in 2009 could increase over 2007 by a range of 18 million to 30 million workers, and more than 50 million representing a 7.1 global rate if the situation continues to deteriorate.

In that last scenario some 200 million workers, mostly in developing economies, could be pushed into extreme poverty, the report says.

The report maintains that the effects of the downturn could be minimized if a large number of countries put in place such policies, and other worker-oriented initiatives, using their own accumulated reserves, emergency loans from the International Monetary Fund (IMF) and stronger aid mechanisms.

In a related development, the IMF today revised its global growth forecast steeply downward, to its lowest level since the Second World War, because financial markets remain under stress and are pulling down the rest of the economy. The Fund now expects the global economy to come to a virtual standstill in 2009, growing by just one half of one per cent.

According to its latest projections, advanced economies will experience sharp contractions, with declines of 1.5 per cent in the United States, 2 per cent in the Euro area, and 2.5 per cent in Japan. Emerging and developing economies are expected to fare better, but will still see significant slowdowns in growth, the Fund says. — PTI 

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Debt relief norms eased
Tribune News Service

New Delhi, January 29
Aimed at operationalising the second stimulus package which would help boost the economy, the government last night gave its approval to relax the debt relief guidelines that would allow states to borrow an additional Rs 30,000 crore to step up capital expenditure.

The approval was given at the meeting of the Union Cabinet headed by External Affairs Minister Pranab Mukherjee last night.

With the latest decision, the states would be able to borrow an additional 0.5 per cent of their gross state domestic product (GSDP), amounting to Rs 30,000 crore, for capital expenditure without losing the debt relief benefits recommended by the Finance Commission.

Pursuant to the recommendations of the 12th Finance Commission, the government had permitted the states to borrow up to 3 per cent of GSDP. However, following yesterday’s decision this limit has now been raised to 3.5 per cent.

The statement issued by the government said the relaxation dealing with the fiscal deficit targets and borrowing ceiling of the states would be a one-time measure.

The release further said that the Finance Ministry could also allow states to borrow an additional 0.5 per cent of GSDP, over and above 3.5 per cent, for undertaking capital expenditure. However, states borrowing more than the ceiling of 3.5 per cent of their GSDP will not be entitled to debt relief benefits under debt consolidation and relief facility.

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Café Coffee Day plans expansion
Tribune News Service

Chandigarh, January 29
Café Coffee Day has lined up a major expansion plan across the country. The coffee chain major is also planning to move up the value chain by launching new verticals like lounges and flagship stores that would showcase how coffee is picked and brewed.

Cafe Coffee Day (CCD), part of the Bangalore-headquartered Amalgamated Bean Coffee Trading Company Ltd, also plans to invest about Rs 120-150 crore to increase its number of cafes from current 723 to 1,000 during the next year as part of its expansion plans, said Bidisha, president marketing, Café Coffee Day.

Addressng mediapersons here today, she said, “The chain will open about 60-80 lounge-format outlets and another five square outlets in major metros in India.”

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Cabinet refers 3G issue to GoM
Girja Shankar Kaura
Tribune News Service

New Delhi, January 29
In a clear indication that the auction for the spectrum of the next generation 3G services for mobile phones might not take place during the tenure of the current Congress-led UPA government, the Union Cabinet yesterday decided to refer the issue to a Group of Ministers (GoM).

The differences between various ministries involved in the auction process over the floor price for the auction of 3G airwaves seems to have led the Cabinet to refer the proposal to the GoM.

Besides, the ministries are also divided over the number of players to be allowed to offer 3G services in an area.

The Union Cabinet was to take up the issue yesterday, especially after the Department of Telecom (DoT) had forwarded its proposals as desired by the Finance Ministry. It was to take up the auction plan and set a base price for the 3G spectrum.

Experts feel that the reference to the GoM could indefinitely delay the auction for 3G airwaves and could actually not happen during the tenure of the UPA government.

With elections due in April, there is a feeling that the differences may not get resolved before the model code of conduct gets implemented. The Election Commission may impose the model code of conduct by early March.

The 3G spectrum auction was scheduled to he held on January 16 and after a poor response to the pre-bid meet here in December last, it was then postponed to January 30.

However, now with the issue being referred to the GoM, the DoT will fail to meet this deadline as well. 

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