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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Satyam Saga
WHO reviews contracts

New Delhi, February 6
The World Health Organisation (WHO) has said it has found no evidence of fraudulent practices by its vendor Satyam, even as the UN body began a review of contracts awarded to the Indian IT company.

RBI to provide sufficient liquidity: Subbarao
Mumbai, February 6
The Reserve Bank of India is bracing for difficult financial times when borrowing by the government is expected to accelerate. D Subbarao, governor of the apex bank, said the institution was doing its best to balance the twin goals of maintaining comfortable liquidity position even while managing the government’s borrowing programme in a “least disruptive manner”.

Kingfisher slashes salaries of pilots
Mumbai, February 6
Private air-carrier Kingfisher Airlines has affected a Rs 80,000 cut in the salaries of its pilots. “Earlier, we were being paid a salary of Rs 4.30-lakh per month. Now it has been cut to Rs 3.50-lakh, all in the name of integration (with the erstwhile Deccan),” a Kingfisher pilot said here on condition of anonymity.



EARLIER STORIES




Montek Singh Ahluwalia, deputy chairman, Planning Commission, receives IST PNB global credit card from Punjab National Bank CMD KC Chakrabarty in New Delhi on Friday. PNB has launched a global credit card in association with VISA.
Montek Singh Ahluwalia, deputy chairman, Planning Commission, receives IST PNB global credit card from Punjab National Bank CMD KC Chakrabarty in New Delhi on Friday. PNB has launched a global credit card in association with VISA. Tribune photograph

Royal Mail may cut 16,000 jobs
London, February 6
Postal service firm Royal Mail is looking to cut up to 16,000 jobs or 10 per cent of its total workforce as a part of its huge cost-reduction plan, a media report says.

RBS ousts seven directors
London, February 6
Royal Bank of Scotland ousted seven directors in a boardroom cull on Friday to leave the government-backed bank better positioned for restructuring. The seven non-executive directors will retire immediately, RBS said, just three days after Philip Hampton replaced Tom McKillop as chairman.

Toyota posts $1.8 b losses
Tokyo, February 6
Driving through a bumpy economy, Japanese automaker Toyota Motor has skidded into a net loss of about $1.80 billion for the December quarter and warned of crashing into a full-year operating loss in 71 years.

Meltdown Pangs

An employee walks in front of electronics company Amkor Technology in Manila on Friday. The US firm has laid off 1,500 workers from its two plants in the Philippines due to declining orders from overseas in the face of the global financial crisis, a company official said.
An employee walks in front of electronics company Amkor Technology in Manila on Friday. The US firm has laid off 1,500 workers from its two plants in the Philippines due to declining orders from overseas in the face of the global financial crisis, a company official said. — AFP

Reliance Big in pact with Julia Roberts
Mumbai, February 6
Anil Ambani's Reliance Big Entertainment has tied up with Hollywood star Julia Roberts and director Brett Ratner to produce films for the international market, according to a company statement.

Pranab aims to target labour-intensive sector
New Delhi, February 6
The government will take further steps to ensure that the labour-intensive sectors are less adversely affected. This was stated by External Affairs Minister Pranab Mukherjee at the silver jubilee conference of Research and Information.

RCom launches GSM services in J&K
Jammu, February 6
Reliance Communications today launched its GSM services in Jammu and Kashmir. The service will cover over 50 towns and more than 5,000 villages in the state. Company’s regional hub head Arvind Kumar announced the launch of the service here.

Essar to set up steel unit in K’taka
Mumbai, February 6
Ruias-promoted Essar Steel will set up a 6-MTPA steel unit in Karnataka at an investment of Rs 17,760 crore as it looks to prop up its annual capacity to 25 million tonnes by 2015.

Godrej Consumer Products
MUMBAI: Godrej Consumer Products on Friday announced the appointment of Dalip Sehgal as the new managing director of the company. Under the reconstitution of board, Adi Godrej would now be the company's chairman, Godrej Consumer Products said. He is at present the chairman and managing director of the company. The reconstitution of the board would come in effect from April 1 and are subject to shareholders' approval, the company added. — PTI






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Satyam Saga
WHO reviews contracts

New Delhi, February 6
The World Health Organisation (WHO) has said it has found no evidence of fraudulent practices by its vendor Satyam, even as the UN body began a review of contracts awarded to the Indian IT company.

Besides a $55.5-million global management system (GSM) project, where Satyam was the key vendor, WHO had awarded three other contracts totalling nearly $4,00,000 to the Indian firm, a WHO spokesperson said from Geneva.

Murty gives pep talk to staff

New Delhi: Confident, blow; positive, impossible; stability, challenges; critical, beginning anew are some of the words AS Murty uttered in his maiden message as Satyam’s CEO to instill confidence in employees.

Murty said that he would work with the board and special advisers to design a plan that would address stakeholders interests within 30, 60 or 90 days.

“I have no misgivings about the enormity of the task infront of us, but together with my colleagues, I am confident that we can accomplish the impossible,” he said.

“Satyam is bidding for one future contract, unrelated to GSM,” the official said.

Responding to queries on whether the fraud at Satyam would affect the IT firm's dealings with WHO, the spokesperson said: “WHO is reviewing carefully its current contractual agreements with Satyam and possible contingency arrangements for completion of GSM project work, in the event that Satyam were no longer able to perform.” Satyam has been debarred by World Bank, while it has been suspended from the vendor database of the UN Secretariat.

The company founded by Ramalinga Raju, who is in jail pending probe into an accounting fraud disclosed by him, also came in for criticism from the Comptroller and Auditor General of India for its tardy implementation of a project at WHO.

“Until now, Satyam has carried out technical activities for 21,131 (man) days and thereby may claim a total of $28.6 million, exceeding the contracted amount by $1.4 million,” CAG Vinod Rai said in the audit report submitted to WHO's Health Assembly in May 2008.

The $55.5-million project was initially targeted to go live in September 2007, but was given its first extension until December 2007, then a second until March 2008 and a third until June 2008, the auditor said. However, even the extended deadline has been missed. — PTI

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RBI to provide sufficient liquidity: Subbarao
Tribune News Service & PTI

Mumbai, February 6
The Reserve Bank of India is bracing for difficult financial times when borrowing by the government is expected to accelerate. D Subbarao, governor of the apex bank, said the institution was doing its best to balance the twin goals of maintaining comfortable liquidity position even while managing the government’s borrowing programme in a “least disruptive manner”.

“We will maintain a comfortable liquidity position and there are several options and measures at our disposal to manage liquidity,” Subbarao told reporters on the sidelines of the 6th Convocation Programme at the Indira Gandhi Institute of Development Research, here.

“We will have to ensure the market's stability. We will see there is no volatility,” Subbarao said, adding: “All options are open. We will manage to borrow in a transparent manner.” Describing the present global crisis as unprecedented he said the apex bank had, in its policy statement, stated: “2009-10 will be a difficult year than 2008-09.”

Asked whether the RBI would consider tweaking rules for private placement of bonds, Subbarao said: “At this point, we have not decided. We are discussing with the government about the borrowing programme and how we need to borrow.” On swaps, Subbarao said there were no difficulties but suggestions had come up during the RBI's meeting with bankers that the swap facility should be extended.

The RBI has now extended the time period for forex swap facility for tenors up to three months to public and private sector banks of the country having overseas operations till March 31, 2010. 

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Kingfisher slashes salaries of pilots

Mumbai, February 6
Private air-carrier Kingfisher Airlines has affected a Rs 80,000 cut in the salaries of its pilots. “Earlier, we were being paid a salary of Rs 4.30-lakh per month. Now it has been cut to Rs 3.50-lakh, all in the name of integration (with the erstwhile Deccan),” a Kingfisher pilot said here on condition of anonymity.

The salary package is mainly based on the flying hours of about 70 hours, he said, adding: “The whole package has been revised downwards in the name of bringing parity with the erstwhile Deccan pilots.”

Kingfisher’s management, while slashing the salaries, has taken the defence that it was only implementing the “Deccan-Kingfisher package structure in Kingfisher post-merger,” the pilot said. — PTI

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Royal Mail may cut 16,000 jobs

London, February 6
Postal service firm Royal Mail is looking to cut up to 16,000 jobs or 10 per cent of its total workforce as a part of its huge cost-reduction plan, a media report says.

“Royal Mail is intending to cut up to 16,000 jobs one in 10 of its workforce to reduce costs by 10 per cent,” The Daily Mirror newspaper said.

The company is writing to staff with details of redundancy offers under a plan naming ‘Project Tiger’ in a move to reduce its wage bill by £470 million a year.

The Mirror further noted that those opting for part-time jobs would have their hours cut from 40 a week to less than 25. — PTI

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RBS ousts seven directors

London, February 6
Royal Bank of Scotland ousted seven directors in a boardroom cull on Friday to leave the government-backed bank better positioned for restructuring. The seven non-executive directors will retire immediately, RBS said, just three days after Philip Hampton replaced Tom McKillop as chairman.

RBS's board has been criticised for allowing former chief executive Fred Goodwin to make too many acquisitions and pursue a risky strategy. The government has had to pump £20 billion ($29.3 billion) into the bank that is set to report a 2008 loss of up to £28 billion, a record for a UK company.

The directors going in the dramatic clear-out include Peter Sutherland, the former attorney general of Ireland and chairman of oil major BP and Goldman Sachs International, and Bob Scott, the senior non-executive of RBS and chairman of publisher Yell.

RBS has pledged to name three new non-executive directors, to be appointed with the approval of UK Financial Investments, the body set up to oversee the government’s near 70 per cent stake in the lender.

The board keeps its three executives - new chief executive Stephen Hester, finance director Guy Whittaker and Gordon Pell, head of regional markets. — Reuters 

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Toyota posts $1.8 b losses

Tokyo, February 6
Driving through a bumpy economy, Japanese automaker Toyota Motor has skidded into a net loss of about $1.80 billion for the December quarter and warned of crashing into a full-year operating loss in 71 years.

As plunging sales and soaring yen continues to take a toll, the auto giant now expects to record an operating loss of 450 billion yen for the financial year ending March 31, 2009.

The car maker today reported a net loss of 164.7 billion yen for the third quarter as compared to a net profit of 458.6 billion yen in the year-ago period, it said. — PTI 

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Reliance Big in pact with Julia Roberts
Tribune News Service

Mumbai, February 6
Anil Ambani's Reliance Big Entertainment has tied up with Hollywood star Julia Roberts and director Brett Ratner to produce films for the international market, according to a company statement.

As per the tie up with Roberts’ Red Om Films and Ratner’s Rat Entertainment, Big Entertainment will jointly produce films over the next few months. Amit Khanna, chairman of Reliance Big Entertainment, said: “We were immediately impressed by both Julia’s and Brett’s enthusiasm for our creative partnership plan.”

According to Reliance Big projects, with all the above players on the floor. According to the company, the filmmakers would be given creative and financial freedom. While some eight projects have been approved another 20 are in the pipeline, the company said. 

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Pranab aims to target labour-intensive sector
Tribune news Service

New Delhi, February 6
The government will take further steps to ensure that the labour-intensive sectors are less adversely affected. This was stated by External Affairs Minister Pranab Mukherjee at the silver jubilee conference of Research and Information.

He urged global financial institutions to put more resources into developing nations, especially in rural areas, skill development, and infrastructure, and to strengthen local communities. “There is a necessity to revisit Gandhian economics with its emphasis on rural self-help and sustainable economic development,” Mukherjee added.

Strident rate of development in the developing economies is likely to change the structure of global economic governance and the failure to recognise changing structure of the global economy would result in new investment barriers and global market fragmentation, he stressed.

When asked about the measures to be announced in the forthcoming budget to be presented on February 16, Mukherjee said it was not decided as to when some of the measures would be announced. “You will have to wait till I present the budget,” he said.

A government survey released on Wednesday showed as many as 5,00,000 workers lost their jobs in the December quarter. Export lobby group Federation of Indian Export Organisation projected the figure to go up to 10 million till March-end.

As next years outlook is more downbeat, the economy is expected to grow at 7 per cent in 2008-09, after an average growth rate of 9 per cent for the last five years, the minister said.

“A regional financial architecture, drawing upon the high currency balances in Asia, would mitigate the severity of the economic crisis for us. A coordination mechanism could help improve surveillance and prevent another crisis,” Mukherjee opined.

Warning that the global crisis is likely to deepen, as it shows no signs of abating, the finance minister said when necessary the government would take further steps to ensure that labour-intensive sectors were less adversely affected.

The government has cut interest rates, slashed duties and pledged extra spending to prime the economy and stem job losses as it prepares for general elections due by May.

Mukherjee is scheduled to present the government's interim budget in Parliament on February 16, and the industry expects more stimulus measures for a slowing economy.

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RCom launches GSM services in J&K
Tribune News Service

Jammu, February 6
Reliance Communications today launched its GSM services in Jammu and Kashmir. The service will cover over 50 towns and more than 5,000 villages in the state. Company’s regional hub head Arvind Kumar announced the launch of the service here.

“The launch of Reliance Mobile’s GSM services in Jammu and Kashmir marks the completion of the company’s nationwide footprint that already covers over one billion Indians in other states of the country,” RCom president (wireless) SP Shukla told mediapersons.

He said: “The subscribers in the state can now experience best-in-class telephony services at the most friendly price points, including local calling and SMS, STD, ISD, roaming and value-added services, which are being used by millions of Indians across the country.

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Essar to set up steel unit in K’taka

Mumbai, February 6
Ruias-promoted Essar Steel will set up a 6-MTPA steel unit in Karnataka at an investment of Rs 17,760 crore as it looks to prop up its annual capacity to 25 million tonnes by 2015.

“Our investment proposal (for the steel plant) has been cleared by the Karnataka government,” an Essar Steel spokesperson said. The plant is to be set up at Bagalkot in the state.

Initially, the plant would have a 3 MTPA capacity, which would be doubled to 6 MTPA in the second phase, sources said.

The proposal is to set up a pellet plant, a coke oven plant and a battery in the first phase for which the company has asked the state government to lease an iron ore mine for uninterrupted supply of the raw material. — PTI

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