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CHANDIGARH

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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Satyam Fallout: SEBI to amend open offer rules
Mumbai, February 2
Market regulator SEBI is mulling changes in regulations governing takeovers of companies in the wake of the Satyam Computers' scandal. SEBI's board at its meeting held here today was considering an amendment to rules governing open offers of shares of companies. 

Telecom panel okays ISD, STD calling cards
New Delhi, February 2
The Telecom Commission is today understood to have approved introduction of national and international calling cards that would bring down calling charges, but has referred the issue of Internet telephony, which would have brought down the rates for STD calls to as low as 10 paise per minute, back to the telecom sector regulator.

Yes Bank plans e-payment facility for SMEs
Chandigarh, February 2
Yes Bank has pioneered a unique customised ERP integrated e-payment product for its corporate clients. After having successfully operated it with leading corporates at Delhi and Mumbai, the bank will now be launching this service for SMEs here.



EARLIER STORIES




Fanta brand ambassador and actress Genelia D’Souza poses with a bottle of Fanta Apple at its national launch in New Delhi on Monday.
Fanta brand ambassador and actress Genelia D’Souza poses with a bottle of Fanta Apple at its national launch in New Delhi on Monday. Tribune photo: Manas Ranjan Bhui

Another Satyam in the making?
Hyderabad, February 2
Former Andhra Pradesh Chief Minister and TDP president N Chandrababu Naidu is caught in the eye of a storm over allegations of a “Satyam-like fraud” in Heritage Foods Limited owned by his family members.

Maruti sales up 5.39% in Jan
New Delhi, February 2
Country’s largest car manufacturer Maruti Suzuki India Ltd (MSIL) has overcome three months of sluggish sales to show a 5.39 per cent rise in its sales during January on the back of its highest-ever monthly sales while its nearest competitor Hyundai Motor India (HMIL) reported a fall in sales for another month.

Subhiksha shuts half of its stores in region
Chandigarh, February 2
Subhiksha, a food and grocery retail chain, has shut down majority of its convenience stores across the region in the last one month. In the stores that are still operational, the company has withdrawn fresh food segment (fruits and vegetables) and cut down supplies of pharmaceutical products.

Bharti-Wal-Mart to start operations from Punjab
Mumbai, February 2
Bharti Wal-Mart Pvt Ltd (Bharti Wal-Mart), the joint venture between Bharti Enterprises and Wal-Mart Stores Inc, today announced that its wholesale stores would be called ''BestPrice Modern Wholesale'' and will start operations from Punjab this year.

Exports decline 22% in Jan
New Delhi, February 2
India’s exports declined by 1.1 per cent in December, 2008, posting negative growth for the third month running under the impact of a slowdown in major global markets.

 





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Satyam Fallout: SEBI to amend open offer rules
Shiv Kumar
Tribune News Service

Mumbai, February 2
Market regulator SEBI is mulling changes in regulations governing takeovers of companies in the wake of the Satyam Computers' scandal. SEBI's board at its meeting held here today was considering an amendment to rules governing open offers of shares of companies. 

The market watchdog is mulling such changes after Larsen and Toubro, which is planning to make an open offer to Satyam's shareholders, approached it to relax regulations on the offer pricing of target companies. SEBI chairman C B Bhave said it was also approached by the government-appointed board of Satyam Computer for a relaxation of open offer rules.

"The board decided that the rules be changed to evolve a transparent process rather than bring about a one-off exemption for Satyam Computers," Bhave told reporters after the SEBI board meeting today.

"There must be a mechanism to deal with abnormal cases," Bhave said.

As per the existing rules, an acquirer who accumulates a 15 per cent stake in a company is required to make an open offer for another 20 per cent stake at a price equivalent to the average share price of the previous six months. L&T has sought a relaxation of this rule, saying it would otherwise be forced to make an open offer of more than Rs 350 per share of Satyam. The share closed at Rs 57.60 on the Bombay Stock Exchange on Monday. L&T holds around 12 per cent stake in the company.

Bhave also informed that SEBI's board is pushing for more market reforms. Henceforth, it would now be mandatory for listed companies to declare dividends on per share basis. The market watchdog has also reduced the time line for bonus issues. In addition, promoters making an initial public offering would be required to announce the price band two days before the issue opens. On the issue of warrants, upfront payments have been hiked to 25 per cent from 10 per cent," Bhave said.

Moves SC to quiz Raju

New Delhi: Market regulator SEBI is seeking the Supreme Court's permission to interrogate Satyam's disgraced founder Ramalinga Raju and his brother Rama Raju in connection with the Rs 7,800-crore fraud in the IT company.

Solicitor General G E Vahanvati submitted the request before a Bench headed by Chief Justice K G Balakrishnan on behalf of SEBI.

The bench has posted the matter for mentioning tomorrow.

Last week, the Andhra Pradesh High Court had posted SEBI's identical plea for hearing on February 9 without giving an ex-parte order allowing the regulator to quiz the Raju brothers.

SEBI had moved the high court challenging a lower court order, which denied it permission to interrogate the Raju brothers, who are in judicial custody.

A probe team from SEBI had landed in Hyderabad on January 8, a day after Ramalinga Raju disclosed the massive accounting fraud in the IT company. — PTI 

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Telecom panel okays ISD, STD calling cards
Tribune News Service

New Delhi, February 2
The Telecom Commission is today understood to have approved introduction of national and international calling cards that would bring down calling charges, but has referred the issue of Internet telephony, which would have brought down the rates for STD calls to as low as 10 paise per minute, back to the telecom sector regulator.

Reports here said that after deliberating on the issue of Internet telephony, the commission sent back the proposal seeking more clarity on how it would function. An official here said, there were lot of issues to be sorted out and hence the issue has been referred back to TRAI.

TRAI had last year recommended unrestricted domestic telephony, which would have allowed mobile subscribers in India to route their STD calls via the Internet, thus making them very cheap, as low as 10 paise per minute.

Incidentally, Internet Service Providers (ISPs) like Net4 and Sify have offered to provide STD calls at 40 paise per minute, much cheaper than Rs 2.40 per minute that customers currently pay for STD calls via mobile networks, but the delay in taking the decision would put back the implementation.

The referral back to TRAI would also mean that the issue may not be resolved during the tenure of this government.

Cellular mobile operators are dead against allowing of free domestic net telephony. Mobile operators were arguing on the fact that UASL (Universal Access Licence Holders) had paid huge licence fee (upwards of Rs 1,600 crore) and allowance of domestic Internet telephony will provide an advantage to ISPs.

Full-fledged Internet telephony will allow the customers to make calls from their personal computers and laptops to any landline or mobile phones in India. The system also works vice-versa and is very popular across the world.

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Yes Bank plans e-payment facility for SMEs
Tribune News Service

Chandigarh, February 2
Yes Bank has pioneered a unique customised ERP integrated e-payment product for its corporate clients. After having successfully operated it with leading corporates at Delhi and Mumbai, the bank will now be launching this service for SMEs here.

Taking to TNS here, Suresh Sethi, president of Transaction Banking Group, Yes Bank, said in times of liquidity crunch, the bank was laying a lot of emphasis on strengthening the financial supply chain management. “For this, Real Time Gross Settlement (RTGS) and NEFT have helped us develop unique product prepositions for extending benefits of advancements in e-payments to customers’ desktops. We have also adopted several measures on the collection side,” he added.

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Another Satyam in the making?
Suresh Dharur
Tribune News Service

Hyderabad, February 2
Former Andhra Pradesh Chief Minister and TDP president N Chandrababu Naidu is caught in the eye of a storm over allegations of a “Satyam-like fraud” in Heritage Foods Limited owned by his family members.

The ruling Congress, which has been facing the Opposition’s heat over the Satyam fiasco, has sought to turn the tables on Naidu by raising allegations of irregularities in Heritage Foods Limited, run by his wife N Bhuvaneswari and other family members.

Alleging diversion of funds and fudging of profits by Heritage Foods Limited, the Congress MP from Rajahmundry U Arun Kumar wrote to Union Minister for Corporate Affairs Premchand Gupta demanding a probe by central agencies.

The crux of the charges against Heritage Foods Limited is that it had sold a piece of prime land to its own subsidiary Heritage Infra at a nominal price, thus, depriving its shareholders their legitimate value. Later, Heritage Infra overvalued the land at Rs 85 crore to obtain a loan of Rs 45 crore from Maharashtra-based Sicom Limited in June 2008.

Subsequently, Heritage Foods sold away their entire shareholding of 51 per cent to Sri Chakra Merchandise, a virtually non-existent company registered in Chennai and said to be belonging to Sujana Group of Companies, for Rs 38 crore, the Congress MP alleged.

“With the help of this, Heritage Foods Limited could show profits in their books, hoodwinking the shareholders. This is actually suspected to be cycling of funds rather than genuine transactions. The entire operation somewhat resembles what Ramalinga Raju did in Satyam Computers,” Kumar said.

Interestingly, the Congress leader based his allegations on a report published in Telugu daily “Sakshi” run by Chief Minister YS Rajasekhar Reddy’s son YS Jaganmohan Reddy and widely seen as a mouthpiece of the ruling party.

According to the media report, Heritage Foods Limited sold 3.23 acres at Kondapur on the city outskirts to Heritage Infra for Rs 2.74 crore in March 2006. The value was boosted to Rs 85 crore while obtaining a loan last year.

Heritage Infra had only two investors: Naidu’s family and Sri Chakra Merchandise Pvt Ltd. It was floated in January 2006, just two months before the sale of land.

After obtaining the loan, Naidu’s family reduced its share in Heritage Infra to 30 per cent and sold 19 per cent to Sri Chakra Merchandise Pvt Ltd that already had a 51 per cent stake in the company. Heritage Infra was renamed SCM Infra in December 2008. Interestingly, the firm had not done any business since its inception.

Denying the allegations, president of Heritage Foods and former IAS officer M Sambasiva Rao justified the deal stating that the company had bought the land for Rs 19.65 lakh and sold it to Heritage Infra at Rs 2.74 crore, indicating that shareholders had benefited.

He said the basic value of the land as per the Stamps and Registration Department in March 2006 was Rs 30 lakh per acre against its sale price of Rs 80 lakh per acre.

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Maruti sales up 5.39% in Jan
Tribune News Service

New Delhi, February 2
Country’s largest car manufacturer Maruti Suzuki India Ltd (MSIL) has overcome three months of sluggish sales to show a 5.39 per cent rise in its sales during January on the back of its highest-ever monthly sales while its nearest competitor Hyundai Motor India (HMIL) reported a fall in sales for another month.

MSIL, which had been seeing a major fall in its sales due to the global meltdown and also posted lower profits in the quarter ended December said here today that it sold a total of 71,779 vehicles last month compared with 68,107 units in the year-ago period.

After September last year, MSIL's sales were declining drastically for the next three consecutive months at 7.1 per cent, 27.4 per cent and 10 per cent, respectively.

Incidentally, it saw the highest sales ever in January with the previous highest being registered in March 2007 when the company sold 71,772 units. The domestic sales of MSIL stood at 67,005 units compared with 63,459 units in the same month a year-ago, up by 5.59 per cent, the company said.

Meanwhile, country’s second largest car manufacturer Hyundai Motor (HMIL) reported a 13.5 per cent decline in domestic sales at 21,016 units in January as against 24,301 units for the same month last year. MSIL exports also grew by 2.71 per cent at 4,774 units against 4,648 units in the corresponding month last year.

HMIL said its exports totalled 16,200 units in January as against 13,399 units in the year-ago period, up 20.9 per cent.

Meanwhile, Honda Motorcycle & Scooter India (HMSI) reported 22 per cent increase in two-wheeler sales during January this year at 94,982 units against 77,755 units in the same month previous year.

The company said its motorcycle sales grew by 58 per cent at 40,153 units against 25,469 units in January 2008.

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Subhiksha shuts half of its stores in region
Ruchika M. Khanna
Tribune News Service

Chandigarh, February 2
Subhiksha, a food and grocery retail chain, has shut down majority of its convenience stores across the region in the last one month. In the stores that are still operational, the company has withdrawn fresh food segment (fruits and vegetables) and cut down supplies of pharmaceutical products.

A closed Subhiksha store in Chandigarh on Monday.
A closed Subhiksha store in Chandigarh on Monday. Tribune photo: Manoj Mahajan

Though the company had been surfing in troubled waters since September 2008, the closure of a large number of its stores has come as a shock to customers. According to information available with The Tribune, the company had stopped replenishing stocks in its stores since September last year. The retail stores were not getting adequate supply of fruits and vegetables, groceries and toiletries, and the stores were resenting a barren look till the time they began closing down last month.

Though the exact figures of the number of stores that have closed down is not available, it is learnt that more than 50 per cent of the 110 stores in Punjab and Haryana have been closed down. Sources say that the high rentals of these stores were a huge drain on the company’s finances. This, coupled with less-than-expected footfalls, drove the operational costs to unsustainable levels, forcing the company to close down some of its stores.

The company has also delayed payment of salaries to some of its employees. Some ex-employees have also complained about non-settlement of their dues.

However, company officials maintain that only those stores have been closed down where the footfalls were low. “Some stores may not perform as per expectations. Since the company works on thin margins, we could not sustain the loss-making stores and decided to close these down,” said a senior company executive.

Subhiksha, with its USP of supplying goods at discounted rates, had found a huge market in the region. But repeated problems of supply constraints were hampering its growth story here. Though the company officials claim that the supply chain has been temporarily cut so as to upgrade the IT system and redesign the stores, sources say that the company had also run into trouble with its suppliers over payment issues, which affected its supply chain.

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Bharti-Wal-Mart to start operations from Punjab

Mumbai, February 2
Bharti Wal-Mart Pvt Ltd (Bharti Wal-Mart), the joint venture between Bharti Enterprises and Wal-Mart Stores Inc, today announced that its wholesale stores would be called ''BestPrice Modern Wholesale'' and will start operations from Punjab this year.

The company, in a release here, said membership drive for its wholesale, business-to-business, cash-and-carry and back-end supply chain management operations in India had already begun. It expected that nearly 65,000 business owners would benefit from the membership.

Offering the advantage of best fixed and fair prices with unmatched convenience, choice, quality and hygiene, the stores will be open exclusively to business owners, not end-consumers, the release said.

The ''BestPrice Modern Wholesale'' store will be a one-stop shop that meets the day-to-day needs of traders, restaurant owners, hoteliers, caterers, fruit and vegetable sellers, general stores, other retail store owners, offices and institutions. — UNI 

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Exports decline 22% in Jan
Tribune News Service

New Delhi, February 2 
Taking a hard knock in the recession-hit US and other major markets, India's exports nosedived by 22 per cent in January, dashing all hopes of a recovery riding on the December figures.

After the official figures for December showed exports declining by just about 1.1 per cent, Commerce Secretary G K Pillai came out with "unexpected" trends of overseas shipments taking a plunge in January in the face of a slump in demand for Indian goods in the global market.

"It is little unexpected. There were not many orders in the last quarter," Pillai told PTI.

Pillai said India would at best achieve $170 bilion exports in the current fiscal. The government had set a target of $200 billion on the back of $162 billion achieved in 2007-08.

"Exports are going to come down and we have to live with it," he added.

Declining by 1.1 per cent in December, exports showed negative growth for the third month running, but the sharp fall since October was arrested giving hopes of a recovery.

Exports dropped to $12.6 billion in December this fiscal, from $12.8 billion a year ago.

A sharp correction in the crude oil prices led to the country's imports growing by a modest 8.8 per cent to $20.2 billion in December.

With a reduction of 30.9 per cent in oil imports, the trade gap narrowed to $7.56 billion in December against $10 billion in November. — PTI

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BRIEFLY

UCO Bank cuts PLR
Kolkata
: In a proactive move aimed at providing funds at cheaper rates to domestic customers and business people, the UCO Bank has reduced its Benchmark Prime Lending Rate (BPLR) by 75 basis points with effect from February 1, 2009. Now the lending rate will be available at 13 per cent per annum. — UNI

KF posts Rs 626-cr loss
Mumbai
: Private air carrier Kingfisher Airlines has reported a net loss of Rs 626 crore during Q3 FY09 as against Rs 423 crore in the same quarter last year. The company's net income during the period was Rs 1,447 crore as compared to Rs 1,353 crore in the same quarter in the previous year. — PTI

Infosys cuts US staff
New Delhi
: Infosys Technologies is believed to have slashed its on-site employees in the US, according to sources. In response to a query on this, the company spokesperson said, "We undergo an organisation restructuring at periodic intervals, during which a very small number of roles may get redundant due to merger/consolidation at the business unit level. This is a normal process".— PTI

LIC ups stake in Canara Bank
Mumbai
: Country's largest insurer Life Insurance Corporation (LIC) has raised its stake in state-run Canara Bank to 5.08 per cent through open market transactions estimated over Rs 7 crore. In a disclosure to the Bombay Stock Exchange, Canara Bank said, state-run LIC has acquired 4.24 lakh shares, representing 0.10 per cent stake in the bank via market purchase on January 29.— PTI

Westside store
Jammu
: Westside, the stylish store from the house of Tatas’ launched its first store at KC Central on Canal Road, here, to offer a complete fashion wardrobe along with a collection of household, gift items, cosmetics and accessories. With the launch of its store in Jammu, Westside is now present in 20 cities and has 36 outlets. — TNS

GTL Infra plan
New Delhi
: Telecom tower firm GTL Infrastructure on Monday said it was planning to roll out 25,000 towers in the country by 2012, entailing an investment of $1.8 billion. "We are planning to roll out 25,00 telecom towers by March 2012," GTL Infrastructure COO Prakash Ranjalkar told reporters here.— PTI

Reliance Money e-magazine
Mumbai
: ADAG firm Reliance Money on Monday said it has launched an online magazine 'Money Advisor' that deals with mutual funds as a part of its investor education drive. The magazine aims to provide a synopsis on the mutual fund industry and include the latest trends in AUMs, overview and recommendations on equity and debt funds. — PTI

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