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Satyam buyer will have to make 20% open offer: Gupta
New Delhi, March 5
As the process for bidding for the fraud-hit Satyam Computer Services seems to be heating up, the government today clarified that the prospective buyer of the company would have to make an open offer of 20 per cent.

Govt appoints 2 directors on Maytas board
New Delhi, March 5
The government today appointed two new directors on the board of Maytas Infra, a company promoted by the kin of Satyam Computer founder B Ramalinga Raju.

Meltdown hits industry in J&K
More than 300 units shut shop
Jammu, March 5
The ghost of global economic meltdown has come to haunt the state of Jammu and Kashmir as more than 300 industrial units, including the walnut kernel processing units, have come to a halt and many others are in the process to wind up their businesses.



EARLIER STORIES

Satyam, 26/11 hit India
March 5, 2009
Sensex ends lowest in 3 yrs
March 4, 2009
RPL-RIL merger okayed
March 3, 2009
Worst is over: Nath
March 2, 2009
Chevron to quit RPL
March 1, 2009
Re breaches 51-mark
February 28, 2009
Govt unveils steps to boost exports
February 27, 2009
Moody's pegs Q3 growth at 6.1 pc
February 26, 2009
Another cut in fuel prices likely
February 25, 2009
10 SEZs approved
February 24, 2009

Bollywood actor and brand ambassador of Mahindra Renault, Kunal Kapoor at the launch of ‘Logan Edge Connect’ in Chandigarh on Thursday.
Bollywood actor and brand ambassador of Mahindra Renault, Kunal Kapoor at the launch of ‘Logan Edge Connect’ in Chandigarh on Thursday. The car is priced in the range of Rs 5.46 lakh and 7.40 lakh. Tribune photo: Kamal Kishore

Exports fall 13 pc in February
New Delhi, March 5
Even the truncated exports target of $175 billion for the fiscal would be hard to meet as the country's overseas sales dipped by 13 per cent in February — the fifth decline in a row.

Inflation slips to 3.03 pc
New Delhi, March 5
Inflation for the week ended February 21 dropped to 3.03 per cent, a seven-year low, on the back of low prices of food items. This brings the annual inflation, as measured by wholesale price index, at 3.36 per cent.

GoM to look into 3G spectrum issue
New Delhi, March 5
The government last night constituted a Group of Ministers (GoM) to look into various issues plaguing the auction of the next generation 3G spectrum, besides deciding its pricing and the number of players who should be allowed to operate this third generation service.

Rate cut by RBI
Cost of doing business still very high
New Delhi, March 5
The intention behind the rate cut by the RBI yesterday is to stimulate demand so that purchase of home, cars, white goods etc is more attractive for the consumer. For the industry, it means making investment in manufacturing and services more profitable.

Adani Agri woos farmers with gifts
Wheat Storage at Silos
Chandigarh, March 5
Adani Agri Logistics has come up with an ambitious marketing plan to woo farmers so that they bring their wheat produce directly at the silos located at Moga (Punjab) and Kaithal (Haryana). The company is reaching out to the farmers to create awareness about their state-of-the-art storage facilities, besides assuring farmers that they would get an additional bonus if they were to bring their produce directly to the silo.





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Satyam buyer will have to make 20% open offer: Gupta
Girja Shankar Kaura
Tribune News Service

New Delhi, March 5
As the process for bidding for the fraud-hit Satyam Computer Services seems to be heating up, the government today clarified that the prospective buyer of the company would have to make an open offer of 20 per cent.

The comment from Corporate Affairs Minister P C Gupta came a day after he asserted that the process for the bidding of the country’s fourth largest software exporter would be carried in a transparent manner.

Talking to reporters here, Gupta said, "Whether it (stake to be offered in Satyam) is 31 per cent or 26 per cent, anybody coming in would have to make an open offer of 20 per cent in the market and then the number of shares with the person or with the bidder could be higher than 31 per cent or 26 per cent.”

Satyam board has plans to invite bids for a strategic investor for the company in the next few days. It is hopeful that the company would be able to garner a healthy amount as investment.

The board is working on the modalities for inviting the bids and is hopeful that the funding from this investor would lend further financial stability to the company.

Satyam is also likely to submit its proposal to market regulator SEBI and get the clearance for the bidding soon. The Satyam board is expected to invite Expression of Interest (EoI) from bidders after getting approvals from capital market regulator.

SEBI earlier amended the Takeover Code that allows companies, whose boards have been superseded by the government, to seek exemption from applicability of provisions of takeover regulations, such as mandatory open offer and 26-week average price.

The open offer allows existing shareholders to exit the company by selling equity to the acquirer at a pre-determined price.

A few companies have already expressed their intent to invest in Satyam, prominent among them being Larsen & Toubro, the Hinduja group and the B K Modi-led Spice group. The bidding would be invited even as the market value of the assets of the company has been estimated at around Rs 4,000 crore after netting current and long-term liabilities.

According to reports, prospective bidders are set to be furnished with the gross market value of assets at around Rs 3,500-4,000 crore.

On the issue of management control given only in case of the bidder acquiring 51 per cent, Gupta delinked both issues saying, "How many companies in India are managed by our corporate sector with 51 per cent shareholding?"

On the reserve price for bidding being linked with the net worth of the company, the minister said, "Let the board of Satyam first make up its mind. They have international consultants. They are the best experts to suggest."

He reiterated that the bidding would be a transparent process without any favour or disfavour to any bidder.

The Company Law Board has already authorised the Satyam board to make a minimum 26 per cent preferential allotment to a strategic investor and raise the company's capital base to Rs 280 crore from Rs 160 crore, or to 140 crore shares from 80 crore shares.

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Govt appoints 2 directors on Maytas board
Tribune News Service

New Delhi, March 5
The government today appointed two new directors on the board of Maytas Infra, a company promoted by the kin of Satyam Computer founder B Ramalinga Raju.

Those appointed by the government are former ICAI president Ved Jain and noted tax lawyer O P Vaish. Ved Jain has been appointed director on the board of Maytas Properties also, another company promoted by the Raju family.

The announcement from the government came after the Company Law Board (CLB) allowed it to appoint four directors on the board of Maytas Infra and one on the board of Maytas Properties.

Briefing newsmen here, Corporate Affairs Minister Prem Chand Gupta said, "Two other directors, including chairman of Maytas Infra, will be appointed later."

Earlier in the day, partly accepting the petitions of the government, the CLB said four nominee directors on the board of Maytas Infra would include chairman.

The government had sought the authorisation of the CLB to supersede the boards of Maytas Infra and Maytas Properties, and appoint 10 nominees on each board. However, that move of the government was not accepted by the CLB.

The CLB, in its order, said the two boards would also be required to furnish monthly reports on the affairs of the companies to the government as well as the CLB starting from April 2009.

While saying that the two Maytas boards would have full powers to deal with the affairs of the companies, the CLB made it clear that no government agency would initiate any civil or criminal proceedings against the nominated directors without its prior approvals.

It also said that the Maytas board meeting would require the presence of at least one nominee director of the government.

Gupta said the government had moved the CLB to enable change of management in these two companies to prevent "mismanagement and enable transparency in their functioning".

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Meltdown hits industry in J&K
More than 300 units shut shop
Tejinder Singh Sodhi
Tribune News Service

Jammu, March 5
The ghost of global economic meltdown has come to haunt the state of Jammu and Kashmir as more than 300 industrial units, including the walnut kernel processing units, have come to a halt and many others are in the process to wind up their businesses.

The other severe blow that the industry of the state has been facing is the withdrawal of the central excise refund that was extended to the state by central government as a special package for the growth of industry.

Speaking to The Tribune, chairman of the Bari Brahmana Industries Association, Annil Suri said, “The state industry has suffered a severe blow due to the global economic meltdown. Withdrawal of the excise refund package has further compounded the issue.”

He further said, “Marred by the recession and the withdrawal of the central excise refund incentive, more than 300 industrial units have already been closed in the state and many others were in the process to wind up their businesses.”

Giving details of the industries that have been closed in the state, he said industries, including menthol, non-ferrous and units manufacturing mosquito coils have been shut.

“The pharma industry of the state has also suffered a lot and many of them were on the verge of closure,” Suri said.

Majority of the units which have been closed in the state were into the business of exporting their products and they had to close their units following the unprecedented decline in export orders.

The Jammu and Kashmir Finance Minister A R Rather said the ongoing economic recession was a global phenomenon and the state government had no role to play in it.

He said there was a steep decline in the amount of items that were being exported from the state of Jammu and Kashmir.

“There has been a decline in the items that are being exported, be it handicraft industry, handloom industry, walnut industry every industry in the state has suffered due to the economic recession,” Rather said.

Industry experts say that the ongoing effect of recession on the trade and industry was only tip of the iceberg and the real heat of the same would be felt after two or three months.

“The real effect of the crisis on the state industry would actually be visible in two or three month’s time. Due to global meltdown our entire export orders stand cancelled; we were exporting walnut, black mushroom to Europe and America, we were exporting rice but all orders have been cancelled,” Ram Sahai president of Chamber of Commerce and Industries, Jammu, told The Tribune.

The walnut export business in the state used to generate a revenue of Rs 230 crore in foreign exchange and 120 crore from domestic sales. However, with the cancellation of orders, the rates have dropped.

“The state produces an estimate of 1.10 lakh metric tonnes of walnut, however, due to the meltdown, we are not able to sell even half of it.” Ghulam Rasool Bhat, president of Jammu and Kashmir Fruit Growers Association said.

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Exports fall 13 pc in February

New Delhi, March 5
Even the truncated exports target of $175 billion for the fiscal would be hard to meet as the country's overseas sales dipped by 13 per cent in February — the fifth decline in a row.

According to quick estimates of the government, imports also fell for second consecutive month by about 18 per cent during the period.

Exports in February contracted to $13.04 billion, while imports shrank by 18.1 per cent to $17.02 billion, reducing the trade deficit to $4 billion compared to $5.69 billion in the same period last year.

The cumulative exports during April-February 2008-09 stood at $157.3 billion compared to $142.85 billion in the corresponding period last year. While imports in the same period grew by 21 per cent to $260.35 billion from $215.22 billion in the year-ago period.

Even to touch the $175 billion exports target, the country requires about $18 billion in the next three weeks, which appears a toll order.

"By seeing the continuous dip in the exports, we expect that India's exports will end up on $168-170 billion during the financial year," Federation of Indian Export Organisations (FIEO) president A Sakthivel said.

He said still the country requires over 18 per cent growth in exports to meet the scaled down target of $175 billion.

After registering a handsome growth of over 30 per cent in the first half of the financial year, Indian exports entered into the negative territory and plunged by 12.1 per cent in October 2008.

In November exports dipped 9.9 per cent dip, 1.1 per cent in December and 15.9 per cent in January 2009. — PTI

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Inflation slips to 3.03 pc
Tribune News Service

New Delhi, March 5
Inflation for the week ended February 21 dropped to 3.03 per cent, a seven-year low, on the back of low prices of food items. This brings the annual inflation, as measured by wholesale price index, at 3.36 per cent.

Food prices, which have been hovering around 10-year high of 11.5 per cent in the beginning of the year, fell to 8.24 per cent in the week under consideration, on the back of higher base effect and easing of prices of fruits, vegetables and certain cereals. Prices of manufactured items eased over the week as metals and transport equipments became cheaper over the week.

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GoM to look into 3G spectrum issue
Tribune News Service

New Delhi, March 5
The government last night constituted a Group of Ministers (GoM) to look into various issues plaguing the auction of the next generation 3G spectrum, besides deciding its pricing and the number of players who should be allowed to operate this third generation service.

The 10-member GoM was notified late last night and is to be headed by External Affairs Minister Pranab Mukherjee. The other members include senior UPA cabinet ministers like Defence Minister A K Antony, Home Minister P Chidambaram, Agriculture Minister Sharad Pawar and Telecom Minister A Raja.

It also has Railways Minister Lalu Yadav, Chemical and Fertilisers Minister Ram Vilas Paswan, Law and Justice Minister H R Bhardwaj, Minister of State for External Affairs Ananad Sharma and Planning Commission Deputy Chairman Montek Singh Ahluwalia as members.

The setting up of the GoM comes even though the next round of general elections has been announced and despite the admission from the government in Parliament during the presentation of the Interim Budget that the auction would take place only in the next fiscal year.

The government has been facing a lack of interest from foreign bidders for the spectrum space and also opposition from the armed forces for vacating the spectrum till they were provided with an alternate spectrum.

Incidentally, a recent report brought out by an industry think tank clearly says that the government will face as much as a $ 13-billion loss in the event of delaying the auction of the 3G services further.

"The telecom industry is losing a revenue of $3 billion each year on account of delay in spectrum allocation," Assocham Communications Convergence Committee chairman C.S. Rao said in a study.

The government is losing a huge sum of money in terms of import duty and other taxes, as a great deal of equipment and devices needs to be imported for popular installation of Wimax technology.

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Rate cut by RBI
Cost of doing business still very high
Bhagyashree Pande
Tribune News Service

New Delhi, March 5
The intention behind the rate cut by the RBI yesterday is to stimulate demand so that purchase of home, cars, white goods etc is more attractive for the consumer. For the industry, it means making investment in manufacturing and services more profitable.

In India, despite the aggressive cuts that the RBI has carried out since October 2008, the cost of doing business is still very high. Corporates borrow money at 12 per cent, which is hardly a climb down from the 14-16 per cent of mid-2008 levels, as compared to outside world like China, which lends money for doing business at 6-7 per cent.

The falling exports and a drop in industrial output, as can be seen in recently released numbers, have made banks more risk averse and lending to the corporates is not taking place full throttle despite the cuts and arm-twisting by the Finance Ministry of public sector banks, say banking sources.

The year-on-year growth in bank credit has dropped to 19.5 per cent in third week of February 2009, from around 30 per cent levels in last few years.

In the past few days, the pressure had intensified on the apex bank to cut rates after the government said the Indian economy in the third quarter of the current fiscal grew slowest at 5.3 per cent since 2003, when the growth was at 5.5 per cent.

On the contrary, firms and individual borrowers may not have much to cheer as banks have limited scope to lower their prime lending rates. The problem is that if the prime lending rates are brought down, then the deposit rates will also have to be revisited.

Bankers explain yesterday’s cut of reverse repo - interest RBI pays when banks park their funds - to 3.5 per cent as a discouragement for banks to park funds and encouragement to lend.

Recently, the State Bank of India offered home loan at 8.25 per cent and auto loan at 10 pc. These are far more competitive than the rates that had gone as high as 13-14 per cent in mid 2008.

In March 2004 , repo rate - rate banks pay to RBI to borrow funds - was 6 per cent, which rose to 9 per cent in June 2008, and has fallen every month and has now dipped to 5 per cent. Similarly, reverse repo, which was at 4.5 per cent in March 2004, rose to 6 per cent in Jan 2006, remained stable there till October-November 2008 period, and then started falling down to 3.5 per cent as of yesterday.

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Adani Agri woos farmers with gifts
Wheat Storage at Silos
Ruchika M. Khanna
Tribune News Service

Chandigarh, March 5
Adani Agri Logistics has come up with an ambitious marketing plan to woo farmers so that they bring their wheat produce directly at the silos located at Moga (Punjab) and Kaithal (Haryana). The company is reaching out to the farmers to create awareness about their state-of-the-art storage facilities, besides assuring farmers that they would get an additional bonus if they were to bring their produce directly to the silo.

Over the past few months, the company has been participating in several rural fairs and kisan melas in both states to create awareness about their silos. The company is also wooing farmers with assured gifts if they bring their produce directly to the silos. After the company failed to attract farmers for procuring wheat directly (without the intervention of commission agents), Adani officials are leaving nothing to chance as wheat procurement is set to begin next month.

“This year, we hope to receive at least 50,000 tonnes of wheat directly at our silos, which were declared as market yards last year. Though, initially, the idea was to break the existing chain of foodgrain procurement without the intervention of commission agents, the government has now decided to allow the commission agents’ involvement in bringing the farm produce to these silos complexes,” said Munishwar Vasudeva, vice-president, Adani Agri Logistics.

Last year, the government had tried to get farmers to bring their produce to the Moga and Kaithal silos. It was believed that the move would help the Food Corporation of India (FCI) to procure wheat directly at the two state-of-the-art storages. The government, too, would have saved Rs 29 per quintal by getting the wheat directly at the silos storage, which is the expenditure on sorting, packaging and transportation to warehouses. In fact, a bonus of Rs 19.17 per quintal (over the MSP) was also announced for those who brought their produce to the silos. This year, the bonus is expected to be raised to Rs 25 per quintal.

However, only 700 tonnes of wheat was received at the Kaithal silo and 3,000 tonnes at the Moga facility. Officials in FCI informed TNS that it was not possible to completely leave out the commission agents from the procurement process. "Last year, we had to transport all grains procured in the mandis to these silos complexes, and managed to store 2.25 lakh tonnes of grain in each of the two silos," said the official.

Vasudeva said by the time procurement begins in April, they would have moved 1 lakh quintal of wheat from each of the storages, allowing it enough space to procure wheat directly, and also offer 50,000 metric tonnes of space to FCI to store wheat procured by them.

These silos were built on a build-own-operate basis by Adani Agri Logistics and FCI has given a 20-year guarantee for usage of these storage facilities and will pay the company at the rate of Rs 200 per quintal per annum. While the mother depot at Moga is linked to three field depots in Chennai, Coimbatore and Bangalore, the one at Kaithal is linked to Navi Mumbai and Hooghly.

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BRIEFLY

BSNL offer
Chandigarh:
BSNL has launched a special trade discount scheme, wherein they would hold a lucky draw for all its landline customers billed during the latest bill cycle. These 20 customers, to be selected each month, would be given free call-now card of the value of the bill of the customer, said Naresh Sharma, principal general manager, telecom. — TNS

Punjab govt’s decision hailed
Chandigarh:
The Hotel and Restaurant Association of Northern India has hailed the decision of the Punjab government to reduce the luxury tax on hotel industry from 8 per cent to 4 per cent. Vijai Pande, president of the association, said this would help the hotel industry tide over the economic crisis being faced by them on account of recession in tourism sector.— TNS

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