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Satyam gets nod for sale process
New Delhi, February 19
Scam-hit IT firm Satyam today moved closer to get a new owner, with the Company Law Board allowing it to induct one or more strategic investors through a public auction and raise funds by preferential allotment of shares.

Pranab rules out bailout
New Delhi, February 19
On a day when the government made it clear that there would be no bailout for the fraud-hit Satyam Computer Services, the three former directors, including former interim CEO Ram Mynampati, were today given more time by the Company Law Board (CLB) to file their replies.

Inflation slips to 3.92 pc
New Delhi, February 19
Inflation declined to over 14-month low of 3.92 per cent for the week ended February 7, on account of lower prices of manufactured items. During the week, prices of manufactured items such as sugar, imported edible oil and textile items such as cotton yarn got cheaper.

More steps to boost economy in offing
New Delhi, February 19
The government today indicated it could take more measures in the coming weeks to boost the economy.



EARLIER STORIES



Veteran Bollywood actress and brand ambassador of Kent RO System, Hema Malini at the launch of company’s new water purifier, ‘Kent Grand Plus’, in New Delhi on Thursday.
Veteran Bollywood actress and brand ambassador of Kent RO System, Hema Malini at the launch of company’s new water purifier, ‘Kent Grand Plus’, in New Delhi on Thursday. Tribune photo: Manas Ranjan Bhui

DoT to carry out special audit of RCom
New Delhi, February 19
Facing allegations of violating revenue reporting norms by showing income from non-voice services under its Internet services licence, Reliance Communications (RCom) would face a special audit, Parliament was informed today.

Meltdown fallout: India’s forex reserves dry up
New Delhi, February 19
The fallout of economic crisis is slowly grappling India in terms of decline in remittances from Indians working abroad and demand of dollars, leading to fast depletion of foreign exchange reserves.

SanDisk to bring solid state drives into India
Chandigarh, February 19
The world’s largest supplier of flash memory products, SanDisk Corporation, is now all set to bring in the solid state drives (SSD) in the country. As the devices get smaller in size, this technology will completely replace the hard disk.

Job seekers attend the education and careers expo in Hong Kong on Thursday.
Job seekers attend the education and careers expo in Hong Kong on Thursday. Hong Kong's unemployment rate jumped to 4.6 per cent in the three months to the end of January 2009, as economic gloom meant more than 14,000 persons lost their jobs, official data showed. — AFP
The Swiss Parliament (L) is pictured with the logo of Swiss bank UBS in Bern on Thursday.
The Swiss Parliament (L) is pictured with the logo of Swiss bank UBS in Bern on Thursday. UBS has admitted US tax fraud and agreed to pay $780 million to the US government, cooperate in an ongoing probe and name scofflaw clients, the Justice Department said on Wednesday. — AFP





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Satyam gets nod for sale process

New Delhi, February 19
Scam-hit IT firm Satyam today moved closer to get a new owner, with the Company Law Board allowing it to induct one or more strategic investors through a public auction and raise funds by preferential allotment of shares.

A day after it sought permission to conduct an open auction of bidders seeking equity stakes and to raise funds needed for various working expenses, CLB today authorised Satyam's government-appointed board to devise the process.

In its order, CLB chairman S Balasubramanian said it was necessary for the company to bring in long-term funds by inducting a strategic investor and accordingly the Satyam board can pass a resolution to enhance the company's authorised equity capital to Rs 280 crore, comprising 140 crore shares of Rs 2 each, from the current Rs 160 crore.

The board has also been authorised to make a preferential allotment of shares at par or at premium without the need of calling an AGM.

While allowing the board to induct one or more strategic investors, CLB said it would be subject to the proposed plan providing for "a transparent, open and competitive process without furthering the interests of any particular acquirer".

CLB further said the process would also be subject to the board getting the required approvals from SEBI in terms of the regulator's takeover code, and the selection process being "transparent, open and by way of a competitive price bid auction, overseen by a retired judge of the Supreme Court/a former Chief Justice of India." The Satyam board would also have to seek CLB approval before actually allotting the shares on a preferential basis and provide it with full details about selection of the strategic investors.

"In the interest of the company, its employees, shareholders, customers and in the larger public interest, further induction of long-term funds through induction of a strategic investor is necessary. I authorise the board of the company," said CLB chairman while passing the order.

Seeking to expedite the process of its sale, Satyam yesterday sought CLB's permission to conduct a public auction for induction of a strategic investor and get the funds needed to ensure its uninterrupted operations.

The company also warned that many of its key clients and staff had threatened to quit due to the firm's financial distress and that it urgently needed fresh capital. Those having evinced interest in acquiring Satyam include engineering major L&T, B K Modi group and Hindujas. — PTI

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Pranab rules out bailout
Girja Shankar Kaura/Vibha Sharma
Tribune News Service

New Delhi, February 19
On a day when the government made it clear that there would be no bailout for the fraud-hit Satyam Computer Services, the three former directors, including former interim CEO Ram Mynampati, were today given more time by the Company Law Board (CLB) to file their replies.

While replying to question during the question hour in the Rajya Sabha, Minister for External Affairs, Pranab Mukherjee, who is also holding additional charge of the Finance Ministry, said investigation into the matter would be conducted and the guilty punished, adding that there would be no bailout for the company.

Meanwhile, in a related development, the CLB gave Mynampati as well as former independent directors Krishna Palepu and Vinod Dham, time till March 31 to file their replies to the petition filed by the government.

The CLB had earlier called for their replies by tomorrow in connection with the scam at the distressed IT firm. The directions had been given by the CLB while dismissing the board of Satyam Computer on January 9 following a petition filed by the central government.

Besides Satyam's founder and then chairman Ramalinga Raju and his brother and former CEO and MD Rama Raju, the government had also named the company's CA and auditor PriceWaterhouse, company secretary as well as all directors as respondents.

In his reply in the Rajya Sabha, Mukherjee said, "Let me make it clear that the government has no intention to bail out the company. The company has adequate assets (to survive) if run professionally."

He was responding to the questions and allegations that the investigations into the fraud were being handled with “kid-gloves”.

"It is in the government's interest that an important company, with a large number of international clients and with a good name, if run professionally can be (re)-established," the minister maintained. While pointing out that the CBI had been handed over the investigations into the Rs 7,800-crore scam, the minister also brushed away suggestions that the Andhra Pradesh government was trying to shield the perpetrators by interfering in the multi-agency investigations.

"There is no question of interfering or barring the statutory authorities from functioning. The Chief Minister has completely assured me of full cooperation with all agencies. The Chief Secretary has been designated as the nodal officer (for the investigating agencies).

A related issue was raised by Praveen Rashtrapal of the Congress who wanted to know whether any changes were being contemplated in the role of the industry watchdog, Institute of Chartered Accountants of India (ICAI).

In his reply, Mukherjee said, "If it is found that someone has indulged in unlawful activities, action will be taken. But one should not blame an institution for the actions of some individuals.”

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Inflation slips to 3.92 pc
Tribune News Service

New Delhi, February 19
Inflation declined to over 14-month low of 3.92 per cent for the week ended February 7, on account of lower prices of manufactured items. During the week, prices of manufactured items such as sugar, imported edible oil and textile items such as cotton yarn got cheaper.

Rapidly declining inflation is causing a new set of problems. Firstly, the danger of deflation, and secondly, of demand.

Experts say this is beneficial for RBI to cut rates further, but there is a doubt if demand is really there for goods and services. Much of this doubt comes from the fact that factory output is slowing down due to high inventory and low demand.

Experts believe that RBI may cut rates by 50-100 basis points, but if there is no demand, due to inventory pile-up, chances are that it will make a small difference. Though RBI Governor D Subbarao said in Tokyo yesterday that reduction in inflation did not mean that rates would be lowered automatically, yet some economists think that the RBI may not slash policy rates and keep an eye on the economy and the demand arising thereof.

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More steps to boost economy in offing
Tribune News Service

New Delhi, February 19
The government today indicated it could take more measures in the coming weeks to boost the economy.

Replying to supplementaries in the Rajya Sabha, Finance Minister Pranab Mukherjee said all measures necessary to boost the economy would be taken. “Support which the economy requires will be given. When I reply to the debate (on the Budget next week), I may be in a position to indicate some more detailed information,” he said.

The Finance Minister also said he could not announce many radical measures in the Interim Budget due to Constitutional constraints. “I had Constitutional constraints to take too many measures involving too much resources because mandate of the government is coming to an end,” he added.

The government had earlier announced two stimulus packages to boost economic growth, which is expected to moderate from 9 per cent to 7.1 per cent during the current fiscal.

He said fiscal correction and monetary changes should go side by side so that impact on the economy was maximum. The Finance Ministry, he added, was in touch with the RBI for future course of action to boost the economy.

To overcome economic slowdown, which has been reflected in negative growth in industrial output and exports, the minister said more investments would have to be made in sectors that would create more jobs. In course of time, it will be possible for us to put the economy on right track, he said.

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DoT to carry out special audit of RCom
Girja Shankar Kaura
Tribune News Service

New Delhi, February 19
Facing allegations of violating revenue reporting norms by showing income from non-voice services under its Internet services licence, Reliance Communications (RCom) would face a special audit, Parliament was informed today.

The Department of Telecom (DoT) has decided to do a special audit of RCom telecom licence companies, Jyotiraditya Scindia, Minister of State for Telecom and IT said in a written reply in the Rajya Sabha.

He said Parekh & Co has been selected as auditor to carry out the special audit of RCom (standalone), Reliance Telecom and Reliance Communications Infrastructure for 2006-07 and 2007-08.

According to the minister, "The special auditor will verify whether there (has been) any evasion of licence fees."

The auditor has been shortlisted from the panel of auditors obtained from CAG and after obtaining details on their experience in the telecom business.

While five auditing firms were shortlisted, DoT approved the appointment of Parekh & Co to audit RCom's accounts for 2007-08.

The step for carrying out the special audit has been taken after it was alleged that the company was separating its revenues generated from data services to give lower revenue share to the government.

Income from services such as R-world, SMS, rural telephones under support from USO fund, Internet browsing was reported under RCom's Internet subsidiary as the government levies a lower revenue share on revenues from ISP licence.

Incidentally, the company has strongly refuted all allegations. RCom is of the view that its accounts have been duly audited and certified by internationally recognised auditors and are in full compliance with the prescribed reporting framework.

The company has a wide range of telecom services using multiple technologies in order to serve the communication needs of its customers in the country. These services are classified under the respective licences for reporting to authorities according to the prescribed guidelines.

The Chief Vigilance Commission had asked DoT to investigate alleged irregular revenue reporting by RCom.

The issue had come to light after the Cellular Operators' Association of India had pointed out to the government that RCom was showing its income from non-voice services under the Internet licence even though the facility was being provided through the cellular network.

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Meltdown fallout: India’s forex reserves dry up
Bhagyashree Pande
Tribune News Service

New Delhi, February 19
The fallout of economic crisis is slowly grappling India in terms of decline in remittances from Indians working abroad and demand of dollars, leading to fast depletion of foreign exchange reserves.

The West Asia, which used to be the biggest employer for Indian construction and related skilled and semi-skilled workers, is now losing its sheen. Reason being the construction boom is coming to a halt as West Asia suffers exchange rate loss because of a rising dollar as against its currency and falling value of crude oil.

According to estimates, approximately five million workers, through remittances from the Gulf countries, contribute 3 per cent of India’s GDP.

India’s foreign exchange reserves that are held in dollar have also shown a depletion as the dollar demand rises thus leading to the fall of the rupee. According to an Assocham study, the country's foreign exchange reserves dipped from $315.6 billion in June 2008 to $248.6 billion by January-end.

The currency has lost its value by nearly 25 per cent to date, from Rs 39.95 to Rs 49.99 as on February 18.

Experts say much of this has to do with demand for dollars increasing, as the equity market investors withdraw their money and convert to dollars to repatriate so that their balance sheet looks healthy on account of earnings from foreign operations.

Even though the US economy is in a bad shape, most of the foreign exchange is held in dollars by investing in the US Treasury bonds and bills thus accelerating the demand for dollars.

Experts say, currency markets are linked world over. If the rupee lost value against the dollar, some currencies have held on their own thus giving ample arbitrage opportunity to foreign currency players.

For instance, Chinese Yuan Renminbi held strong against the US dollar due to strong current as well as capital account surplus. The Chinese currency depreciated by a miniscule 0.19 per cent between September 2008 and January 2009.

According to Assocham study, since the financial crisis led global currency imbalances, international reserves position is rapidly deteriorating the world over. In addition to this, foreign exchange reserves act as cushion in face of speculative capital movements between countries.

International currency imbalances eroded foreign exchange reserves of Russia by a whopping 10 per cent of GDP, India by 3.5 per cent of GDP, while Brazil managed a smaller decline of 0.4 per cent of GDP, with China actually adding by a magnitude of 1 per cent of GDP.

During April-November 2008, the RBI sold US dollars to the tune of 31.4 billion against net purchases of $55.2 billion made during the corresponding period in 2007.

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SanDisk to bring solid state drives into India
Ruchika M. Khanna
Tribune News Service

Chandigarh, February 19
The world’s largest supplier of flash memory products, SanDisk Corporation, is now all set to bring in the solid state drives (SSD) in the country. As the devices get smaller in size, this technology will completely replace the hard disk.

The technology is currently being developed across the R&D centres of SanDisk, including its centre in Bangalore. This flash memory file system for solid-state drives would greatly accelerate the writing speed of existing products. This new technology can also "learn" usage patterns to store frequently accessed data in areas where it's more easily accessible to maximise performance of the drive. These SSDs would be four times faster than the current generation and nearly six times that of the latest 2.5-inch hard drives.

Talking to TNS here today, Manisha Sood, country manager, India and SAARC, SanDisk, said handsets have become far more than just phones — they've become mobile jukeboxes, mobile offices, even mobile movie theatres. Even the computers and digital cameras now need more storage for memory. “Thus there is a need to innovate and get more storage capacity, in the smallest size possible,” she said.

She said eversince SanDisk has entered into the Indian market, it has reduced the size of the grey market in memory card space. “Till 2006, memory card market was highly disorganised with 95 per cent of memory card being sold in the grey market. With the government having reduced the import duty from 22 per cent to four per cent now, at least 60 per cent of the market has now become organised,” she said.

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BRIEFLY

Hindustan Zinc cuts prices
New Delhi:
Vedanta Resources group firm Hindustan Zinc on Thursday said it has cut prices of zinc by Rs 1,000 to Rs 67,900 per tonne with effect from Thursday. The company has also lowered lead rates, used primarily by battery, rubber and paint industry, by Rs 1,300 to Rs 68,900 a tonne. The price revision is effective from Thursday, a company circular said.— PTI

Gold at record high
New Delhi:
Surging gold prices set yet another record of Rs 15,800 per 10 gram in the national capital on Thursday in line with the surging global bullion markets on speculation that the global recession will deepen further. The precious metal recorded fresh gains of Rs 50 to Rs 15,800, a level never seen before, after poor economic data of Russia and Japan raised concerns of a growing malaise of global recession.— PTI

Tata Power hikes stake in Tata Comm
Mumbai:
Telecom major Tata Communications on Thursday said one of its promoter Tata Power has hiked its stake to 2.48 per cent from 0.90 per cent by purchasing shares worth Rs 195.30 crore through open-market transaction. In a disclosure on the Bombay Stock Exchange, the company said that on February 16 Tata Power purchased 45 lakh shares representing 1.56 per cent.— PTI

Ashok Leyland bags $43-m order
New Delhi:
Hinduja Group flagship brand Ashok Leyland on Thursday announced that it has bagged an order worth $43.5 million from the Angolan government for 1,000 buses. The order has been bagged from the Ministry of Transport of Angola, Ashok Leyland said. — PTI

NHPC to set up 12 hydro power units in Orissa
Bhubaneswar:
After inking deals with 21 Independent Power Producers (IPPs), the Orissa government is to sign yet another with the National Hydro Power Corporation (NHPC) for setting up of 12 medium hydel projects at an investment of Rs 10,000 crore, official sources said. While the state government would have 49 per cent stake in the proposed projects, NHPC would have 51 per cent in establishing medium hydro generation units. — PTI

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