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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

SEBI gets SC nod to quiz Raju
New Delhi, February 3
The Supreme Court today permitted market regulator SEBI to interrogate in jail Satyam Computer founder Ramalinga Raju and his brother Rama Raju for three consecutive days from tomorrow in connection with fudging of account books and siphoning off Rs 7,800 crore.

Satyam board to discuss buyout proposals
Mumbai, February 3
The two-day Satyam board meeting beginning tomorrow will consider six-seven proposals for buyout of the beleaguered IT major and discuss the Rs 600-700-crore short-term funding requirements to be provided by three public sector banks.

Satyam wins 15 new contracts
New Delhi, February 3
Amid concerns being raised over its revival, the scandal-hit Satyam Computer today said it has won as many as 15 new outsourcing contracts in January from clients in the US, Europe and rest of the world.





EARLIER STORIES



A logo of Citigroup is shown in Tokyo
A logo of Citigroup is shown in Tokyo on Tuesday. Citigroup Inc plans to start auctioning its Japanese brokerage as early as this month, and the country's top three banks are expected to bid in a deal likely to be worth up to $3.4 billion, sources with the knowledge of the matter said on Tuesday. — Reuters

A pedestrian walks under a large advertisement for Japanese electronics giant Hitachi in Tokyo
A pedestrian walks under a large advertisement for Japanese electronics giant Hitachi in Tokyo on Tuesday. Hitachi reported a $4 billion net loss for the nine months to December and maintained its forecast to end the year deep in the red. — AFP

Minister, secy split over export target
New Delhi, February 3

Despite the dismal show of trade last month, Commerce Minister Kamal Nath is hopeful that the exports from India will meet the target of $200 billion by the end of this fiscal.

100 oil blocks to be auctioned in NELP VIII
Bagru (Jaipur), February 3
Unperturbed by the global economic crisis, India will launch next month its biggest-ever auction of oil exploration blocks with about 100 areas likely to be offered for bidding.

RIL to start gas supply from Feb 25
Hyderabad, February 3
Reliance Industries Limited (RIL), which struck a major gas find in Krishna-Godavari basin of Andhra Pradesh, will commence supply of natural gas from February 25, providing a big boost to the state.

Sonia commissions HPCL’s pipeline
Bagru (Jaipur), February 3
UPA chairperson Sonia Gandhi today commissioned Hindustan Petroleum Corp's Rs 1,757-crore Mundra-Delhi pipeline, which will help the nation's second-largest oil firm to transport petrol, diesel and kerosene to the northern part of the country.

Recession Woes
South India’s Manchester facing hard times
Coimbatore, February 3
Coimbatore, the prosperous city in the west of Tamil Nadu, called the Manchester of South India, due to the presence of textile industries is facing hard times due to the recession in the US and Europe.

Andhra Pradesh also feels the heat
Hyderabad, February 3
Despite being one of the fastest-growing economies in the country, Andhra Pradesh has started feeling the heat of the global meltdown. The state’s dream run for the past four years, achieving an average annual growth rate of 8.96 per cent and a peak of 10.64 per cent in 2007-08, is expected to slow down considerably due to the impact of recession.





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SEBI gets SC nod to quiz Raju
Legal Correspondent

New Delhi, February 3
The Supreme Court today permitted market regulator SEBI to interrogate in jail Satyam Computer founder Ramalinga Raju and his brother Rama Raju for three consecutive days from tomorrow in connection with fudging of account books and siphoning off Rs 7,800 crore.

A Bench headed by Chief Justice K G Balakrishnan directed Chanchalguda prison chief to allow SEBI general manager Sunil Kumar to question the tainted brothers.

Solicitor General G E Vahanvati, appearing for SEBI, said their interrogation was necessary to get to the bottom of the largest scam of the country. Vital files were going missing on a daily basis and destruction of evidence this way would affect the investigation, he said.

Andhra Pradesh counsel Bharati B. Reddy said the state government was in full agreement with the SEBI stand.

Since January 8, the day after Ramalinga Raju had admitted to the Satyam fraud, SEBI has been trying to question the brothers who had been arrested by the CID department of the Andhra Pradesh police. A Hyderabad court had declined permission to SEBI, stating that the market regulator had no powers under CrPC to investigate the case.

Even the Andhra Pradesh High Court declined to give immediate permission to SEBI to quiz the Raju brothers, prompting the regulator to approach the apex court.

Vahanvati clarified in the apex court that SEBI was not seeking their custody and only wanted to obtain their version.

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Satyam board to discuss buyout proposals

Mumbai, February 3
The two-day Satyam board meeting beginning tomorrow will consider six-seven proposals for buyout of the beleaguered IT major and discuss the Rs 600-700-crore short-term funding requirements to be provided by three public sector banks.

"We have received 6-7 EoIs from potential buyers that will be examined in tomorrow's board meeting. The priorities of the board, while considering these proposals, will be to guard the larger interests of Satyam, besides getting a good pricing," a top source told PTI here today.

The source, however, did not reveal the names of the companies, which have submitted EoIs, but it could be engineering major Larsen & Toubro, Mahindra Group, Hindujas, Spice and i-Gate, among others.

Meanwhile, three PSBs have given in-principle nod to Satyam to provide short-term loans for meeting salary, working capital, payment of arrears to vendors, provident fund dues, TDS and rentals charges.

"Satyam has reached an in-principle agreement with three leading state-owned banks to get short-term loans. The company can mortgage its land bank to avail this funding," he said.

Though Satyam has received proposals from both domestic and foreign players, the board may give preference to a local entity.

Satyam's land bank is worth Rs 1,500-1,700-crore and hence it would not be difficult to secure Rs 600-700 crore loan pledging this property, the source said.

The IT-giant already has a long-standing relationship with the global banking major, Citibank. — PTI

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Satyam wins 15 new contracts

New Delhi, February 3
Amid concerns being raised over its revival, the scandal-hit Satyam Computer today said it has won as many as 15 new outsourcing contracts in January from clients in the US, Europe and rest of the world.

"The company has got three new contracts from the US market, including one each in insurance and pharmaceuticals and a contract extension from an existing technology unit," a Satyam spokesperson told PTI over phone from Hyderabad.

"In Europe, the company has managed to win two accounts — one in the chemical manufacturing sector and the other in the services business," the spokesperson added.

Besides, there are 10 other contracts from the rest of the world, including renewals in Japan, Africa, Middle East, Asia-Pacific and Australia-New Zealand regions, she added. — PTI

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US SEC team coming today

Mumbai: A team of officials from the US Securities and Exchange Commission (SEC) is arriving in India on Wednesday to obtain more information on the Satyam Computer Services scandal, according to SEBI sources here. SEC will be investigating Satyam since shares of the company have been listed in the New York Stock Exchange and affects investors in the US, officials here say. Apart from meeting SEBI officials, the SEC representatives will also question members of the Satyam board. — TNS

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Minister, secy split over export target
Bhagyashree Pande
Tribune News Service

New Delhi, February 3
Despite the dismal show of trade last month, Commerce Minister Kamal Nath is hopeful that the exports from India will meet the target of $200 billion by the end of this fiscal.

On the other side, Commerce Secretary G K Pillai says that it will be an achievement if we reach the $160-billion mark even in next fiscal (2009-2010).

According to provisional figures of the government, the exports plummeted by 22 per cent to about $11.5 billion in January.

“Export growth will not be even five per cent this fiscal,” said G K Pillai while releasing the figures. Total shipments could be around $170 billion in 2008-09 against $162 billion in the previous fiscal (2007-08), he said.

The Commerce Secretary said the dismal performance could be seen ahead as the order books were drying up and no fresh orders for the coming year beyond March were being committed.

However, Commerce Minister brushed aside the trend saying, “I don't think we should look at provisional figures, we will meet the target and the economy will grow excess of 7 per cent in the current fiscal year.”

The trade minister also lauded the achievements made by the exports carried out from the special economic zones (SEZs) and exports-oriented units (EOUs).

In the past three years, incremental investments of more than Rs 900 billion have taken place in the SEZs. During this period, SEZs have provided direct employment to over 2,27,000 persons. Exports from SEZs have gone up from Rs 228.40 billion in 2005-06 to Rs 666.38 billion in 2007-08. By the end of December 2008, Indian exports from the SEZs stood at Rs 700 billion, the minister added.

The minister’s comment of above 7 per cent growth comes from the fact that the government is taking further steps towards pushing more liquidity in the market and that the fundamentals of the Indian economy are strong and all efforts are afoot to put on sound track the export sector, particularly labour-intensive industries.

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100 oil blocks to be auctioned in NELP VIII

Bagru (Jaipur), February 3
Unperturbed by the global economic crisis, India will launch next month its biggest-ever auction of oil exploration blocks with about 100 areas likely to be offered for bidding.

"Next month, we will come out with the next round of bidding (of NELP) with about 100 blocks," Petroleum Secretary R S Pandey said at a function organised to inaugurate Mundra-Delhi pipeline.

Pandey said the round seven of New Exploration and Licensing Policy (NELP) saw a maximum number of blocks being awarded and NELP VIII will be even larger. "In NELP VII we signed contracts for 44 oil and gas blocks." Later talking to reporters, he said the government was keen to keep economic activities alive during the global downturn so that the investments take place.

"It is more important in slowdown that we generate maximum economic activity," he said.

Pandey, however, said there could be resource crunch for international oil companies due to global credit squeeze. "The major investments in NELP blocks come only after 4-5 years of exploration. And we think things will improve by then," Pandey added.

Under the first six rounds of NELP, a total investment of $8.3 billion in exploration of oil and gas was committed, out of which about $4.5 billion has already been incurred on exploration and $1.4 billion on development of discoveries.

A further $1.5 billion exploration spend is budgeted for NELP VII.

So far, 68 oil and gas discoveries in 19 blocks with inplace reserves of 500 million tonnes of oil and oil-equivalent gas had been established.

With exploration development efforts made under NELP, natural gas production in the country is likely to be doubled from its present level of about 80 million standard cubic metres per day by the end of 11th Five-Year Plan. — PTI

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RIL to start gas supply from Feb 25
Suresh Dharur
Tribune News Service

Hyderabad, February 3
Reliance Industries Limited (RIL), which struck a major gas find in Krishna-Godavari basin of Andhra Pradesh, will commence supply of natural gas from February 25, providing a big boost to the state.

Making the announcement while addressing a joint session of the Assembly and Council on the opening day of the brief budget session yesterday, Governor N D Tiwari said the RIL gas would help bring into operation an additional 1,700 MW of gas-based power projects which have been lying idle for want of fuel supply.

“The supply of RIL gas will also give a boost to the state’s manufacturing sector,” the Governor said amidst noisy interruptions from the opposition benches.

The Krishna-Godavari Gas Network Limited (KGGNL), a special purpose vehicle (SPV) for development of natural gas network in the state, was recently re-structured by inducting Reliance Gas Corporation, a subsidiary of RIL, as a consortium partner.

“This is expected to take up the city gas distribution which includes provision of gas for CNG for automobiles, piped gas as a substitute for LPG for domestic consumers and gas for the use by the industries and commercial establishments,” the Governor said.

KGGNL is a joint venture of AP government, Gujarat State Petroleum Corporation (GSPC) and Infrastructure Development Finance Corporation (IDFC). It was constituted in September 2006 to develop a network of pipelines to take the gas from KG basin to every district in the state.

As per the restructured equity pattern, Reliance Gas Corporation will hold 67 per cent equity while the state government, GSPC and IDFC will hold 11 per cent stake each.

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Sonia commissions HPCL’s pipeline

Bagru (Jaipur), February 3
UPA chairperson Sonia Gandhi today commissioned Hindustan Petroleum Corp's Rs 1,757-crore Mundra-Delhi pipeline, which will help the nation's second-largest oil firm to transport petrol, diesel and kerosene to the northern part of the country.

The 1,054-km pipeline, built in just 36 months, is one of the country's longest cross-country oil-product pipelines and has been commissioned under the common carrier principle wherein 30 per cent of the capacity can be accessed by companies other than HPCL.

HPCL will pump Euro-II and Euro-II grade petrol, diesel and kerosene from the Gujarat coast to the national capital through the 18-inch pipeline. Besides HPCL, private sector Essar and state-run IndianOil Corp may also use the pipeline.

The pipeline connects supply centres in Gujarat in the west to the consumption areas in the western state (Gujarat), Rajasthan, Haryana, Delhi, Uttar Pradesh, Punjab and further north. — PTI

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Recession Woes
South India’s Manchester facing hard times
N Ravikumar
Tribune News Service

Coimbatore, February 3
Coimbatore, the prosperous city in the west of Tamil Nadu, called the Manchester of South India, due to the presence of textile industries is facing hard times due to the recession in the US and Europe.

Almost a cotton mill is closing everyday and thousands of workers are losing their jobs in Coimbatore as well as the neigbouring Tiruppur district. The orders for production had suddenly dried up and the payments are delayed, resulting in a crisis situation for the textile industry.

President of Coimbatore Small Industries Association Ilango said "we are relying on the US and Europe for orders. Now, the orders have come down due to recession faced by those countries. Even those companies, which continue to give us orders are delaying the payments. In this situation, we are not able to repay the loans we got for purchasing raw materials."

G Soundarrajan, South Indian Small Mills Association’s president, said "another reason for the crisis is the lack of protection to the textile industry. The total investment for cotton mills in the country is about Rs 75,000 crore. But, there is no guarantee for the supply of cotton yarn."

"This year, lot of cotton yarn was exported, due to the abundant production. But, what will happen, when the production of cotton yarn is reduced next year? What will happen to the thousands of workers, who depend on the industry?", he asked.

He said about 10 per cent of the cotton mills had been closed and 20 per cent of the mills were about to be closed. If the situation is not controlled, nearly 70 per cent of the mills would be closed, he said.

Most of the mill owners appealed to the banks to grant more time for repaying the loans.

The mill owners also appealed to the state government to provide uninterrupted power supply to them. They complained that their mills were functioning only with 50 per cent capacity, due to lack of power supply. Most of them said they could make profits only if their mills functioned with at least 92 per cent capacity. Some of the mill owners suggested that the Centre should allow them to import super kerosene oil, which they could use for generating current.

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Andhra Pradesh also feels the heat
Suresh Dharur
Tribune News Service

Hyderabad, February 3
Despite being one of the fastest-growing economies in the country, Andhra Pradesh has started feeling the heat of the global meltdown.

The state’s dream run for the past four years, achieving an average annual growth rate of 8.96 per cent and a peak of 10.64 per cent in 2007-08, is expected to slow down considerably due to the impact of recession.

Admitting this during his address to the joint sitting of the state Assembly and Council on the opening day of the brief budget session yesterday, Governor N D Tiwari said “The gross domestic product growth estimates for the country are reviewed downwards to 7 per cent for the current year as against 9 per cent for the last year. A similar reduction is also projected for our state.”

As part of measures to insulate the economy from the impact of global slowdown, the state government has sought permission from the Centre to raise additional resources through borrowings to the tune of 0.5 per cent of the GSDP, amounting to Rs 4,775 crore, the Governor said.

This, he said, would help meet the shortfall in the state’s resources for the current year in order to ensure that the plan expenditure for the year is met.

“We are confident that we can rein in the situation arising out of the global slowdown,” Tiwari said.

“Last 12 months have witnessed an unprecedented global turmoil. Though India is not affected in the same way as some of the developed countries, some impact is certainly felt,” he said.

In sharp contrast to the gloomy economic scenario that had prevailed during 1999-2004, when TDP was in power, the performance during the past four years of Congress rule has been creditable in all aspects.

The average growth rate in agriculture sector during the past four years has been 7.13 per cent as against 2.18 per cent for the preceding five years while the revenues as percentage of GSDP increased to 20.14 per cent from 12.92 per cent for the period 1994-2004 and the fiscal deficit fell to 2.95 per cent from 3.99 per cent.

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BRIEFLY

SC lifts cap on credit card interest rates
New Delhi:
The Supreme Court on Tuesday lifted the 30 per cent ceiling on the interest rates charged by credit card companies for late payment by card users. The order by a Bench, headed by Justice B N Agarwal, came on a petition filed by HSBC, Citibank, American Express and Standard Chartered. Earlier, a consumer court had capped the interest rates at 30 per cent. — TNS

BSNL landline scheme
Chandigarh:
BSNL has launched a special scheme under which all landline customers whose average monthly bill (rental and usage charges of landline) for the past six months is more than Rs 500, can get one rent-free landline connection at the same premises. There will be no security deposit, no installation charges and no free calls in this connection and all calls will be charged at Rs 1.20 per MCU, said an official release. — TNS

Tata Capital to start PE biz
New Delhi:
Tata Capital on Tuesday said it was planning to launch its private equity business by the end of first quarter of the next financial year. "We will be launching our private equity business by the end of first quarter of the next financial year," Tata Capital CEO Praveen P Kadle said. — PTI

Railway Board chairman
New Delhi:
S S Khurana has taken over as the new chairman, Railway Board, and ex-officio Principal Secretary to the Ministry of Railways. An officer of the 1971 batch of the Indian Railway Service, Khurana has worked in various capacities in Indian Railways. — TNS

Indiabulls okays share buyback
Mumbai:
Brokerage firm Indiabulls Securities on Tuesday said its board has approved a Rs 83.18-crore share buyback proposal. Its board has approved the buying back of shares from the open market at a price not exceeding Rs 33 per equity share. — PTI

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