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iGate pulls out of Satyam race
L&T, Spice, Tech Mahindra submit EoIs

New Delhi, March 20
Diversified business groups Larsen & Toubro, Spice Corp and software maker Tech Mahindra today submitted expressions of interest (EoIs) to acquire control of fraud-hit Satyam Computers, while iGate opted out possibly for want of more financial information.

IMF paints gloomy picture of global economy
Washington, March 20
The International Monetary Fund has said the global economy in 2009 is likely to contract for the first time since the Second World War.

CBI gets Rajus’ custody for 2 more days
Hyderabad, March 20
The disgraced former chairman of Satyam Computers B Ramalinga Raju and two other top officials of the fraud-hit software giant would be grilled further by the CBI following permission by a local court here for extension of their custody by two days. The 14th Additional Chief Metropolitan Magistrate granted extension of CBI custody of Ramalinga Raju, his brother and former managing director B Rama Raju and former chief financial officer V Srinivas.



EARLIER STORIES




Siddhratha Behura
Siddhratha Behura

Mobile number portability by year-end
BSNL launches Blackberry service
Chandigarh, March 20
The 370 million mobile subscribers in India will soon be able to change their mobile operator without fear of personal data loss, even as they retain their original number. The government is all set to roll out mobile number portability (MNP) by the end of this year.

US House passes bonus tax Bill
Washington, March 20
The House of Representatives has passed a legislation for levying a tax on bonuses granted to employees of companies, which have received at least $5 billion from the US Federal government's financial bailout packages.
This file picture taken on January 9, 2009 in South Shields, north east England, shows new Nissan vehicles parked at Tyne docks. Car production in Britain slumped by nearly 60 per cent in February as demand was battered by a recession, industry body SMMT said on Friday. The news comes one day after the British International Motor Show was scrapped for 2010 due to the sharp economic downturn.
This file picture taken on January 9, 2009 in South Shields, north east England, shows new Nissan vehicles parked at Tyne docks. Car production in Britain slumped by nearly 60 per cent in February as demand was battered by a recession, industry body SMMT said on Friday. The news comes one day after the British International Motor Show was scrapped for 2010 due to the sharp economic downturn. — AFP

Low inflation – No good news
New Delhi, March 20
The falling of inflation to nearly zero level is neither a good news for the common man nor for the economy. In fact, economists say, it has a mixed effect. Firstly, the food items remain expensive for the common man and the inflation is just a number game when it comes to making purchases for the household.

Worst yet to come for Indian economy: Moody’s
New Delhi, March 20
The positive movement of the stock market and mixed economic indicators are expected to be short-lived and the worst is not over for the Indian economy, according to Moody's.

Telenor pays 1,250 cr to Unitech
New Delhi, March 20
Days after the Norway-based Telenor Group announced that it was increasing its stake in the start-up telecom firm Unitech, it today made the payment of the first instalment of Rs 1,250 crore that gave it a stake of 33.5 per cent in the telecom JV. The investment also marked the entry of the Norwegian company into the world's fastest-growing wireless market.

Cairn India to start production in April
New Delhi, March 20
Cairn India has said it will start crude oil production from its prolific Rajasthan oil discovery next month even though the government is yet to find a buyer for the oil. Cairn in a letter to the Petroleum Ministry stated that it would be starting oil production from Barmer fields next month with an initial output of 4,000-5,000 barrels per day.


This file photo shows a high-speed ICE train entering the station of Jena-Paradies, eastern Germany. The German group Siemens said on Friday it had won a Chinese contract for 100 high-speed trains worth 750 million euros
This file photo shows a high-speed ICE train entering the station of Jena-Paradies, eastern Germany. The German group Siemens said on Friday it had won a Chinese contract for 100 high-speed trains worth 750 million euros. — AFP

IOC seeks 50:50 JV for RIL’s petrol pumps
New Delhi, March 20
State-run Indian Oil Corp has sought a 50:50 partnership with Reliance Industries for operating the private firm's closed 1,432 petrol pumps. Besides IOC, Royal Dutch Shell too is believed to have evinced interest in reviving the petrol pumps, industry sources said.

Ruias eye European firm
Kolkata, March 20
The city-based Ruia Group is planning to acquire another European rubber sealing systems company and its chairman Pawan Kumar Ruia is in Europe to ink the deal, industry and banking sources familiar with the development said Thursday.

 





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iGate pulls out of Satyam race
L&T, Spice, Tech Mahindra submit EoIs

New Delhi, March 20
Diversified business groups Larsen & Toubro, Spice Corp and software maker Tech Mahindra today submitted expressions of interest (EoIs) to acquire control of fraud-hit Satyam Computers, while iGate opted out possibly for want of more financial information.

As the deadline for submitting formal proposals ended this evening, the suitors sent in detailed EoIs and proof that they have cash of Rs 1,500 crore. At today's price of Rs 43.90 a share, Satyam is valued at Rs 2,954 crore.

The board of Satyam met in Hyderabad to evaluate the EoIs for acquiring a majority stake in the outsourcer. After this, Satyam would provide shortlisted bidders access to business, financial and legal information.

iGate, a US-based company, today said: "Based on further analysis, it has decided not to participate...in the bidding." It did not give any specific reason for its decision but its CEO Phaneesh Murthy had earlier said that he would opt out if he does not get fresh financial data. Satyam's accounts are in the process of being restated by KPMG and Deloitte following founder Ramalinga Raju's admission of cooking books.

On March 12, during the registration process, Hinduja group had decided not to participate in the bidding.

Officials of L&T, which owns about 12 per cent in Satyam, and Spice said they have put in the EoIs. Tech Mahindra also said it has decided to participate in the bidding.

The Satyam board is expected to finish the shortlisting before March 25 and hand over the confidential documents to them for due diligence. This would be followed by financial bids.

The general expectation from the bidders' side is if they go ahead with the bids, they would look for all details about the crisis-ridden company's business status, and the attrition that has taken place in the last three months after the scam came to light.

All parties have asked the board for a complete disclosure of all liabilities, including forex losses, and whether the company has any inter-corporate deposits.

"If I don't get the fresh set of financial information including the January and February numbers, I would not be interested in bidding. If we get the full financial information, we need to study and understand the extent of liabilities for us to take a call on whether we want to take it forward", Murthy had earlier told PTI.

Industry sources said unforeseen liabilities in the form of US class action suits, cost of ongoing 'Upaid' legal case, reports of huge client loss and attrition prompted Murthy to decide against participating in the bid.— PTI

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IMF paints gloomy picture of global economy

Washington, March 20
The International Monetary Fund has said the global economy in 2009 is likely to contract for the first time since the Second World War.

"At this point, we expect global GDP to decline between half a per cent and one per cent in 2009 before recovery gradually gets underway in 2010," a senior IMF official told reporters at its Washington headquarters on a briefing held to release its G-20 Surveillance Note yesterday.

"The major advanced economies, the United States, the Euro Area and Japan, are all suffering severe recessions. The emerging and developing economies are slowing abruptly and many of these are also likely to see falls in activity in 2009," the official said.

However, he added that the forecast is not complete yet.

This downgrade essentially reflects two assessments.

"First, the data for the fourth quarter of 2008 and for early 2009 show an even sharper contraction in output and trade than we had anticipated earlier as negative interactions between real and financial sectors have intensified," he said.

The IMF now estimates that global GDP contracted by an extraordinary 5 per cent at an annualised rate in the fourth quarter of 2008. Moreover, global output continues to decline at a similar pace in the current quarter based on recent data on industrial production, business and household sentiment and trade.

"Second, progress in putting in place policies to deal with the financial crisis has been slow and financial strains are likely to place a continuing drag on activity," the senior IMF official said.

Observing that credit conditions remain severely impaired and uncertainty about bank balance sheets remains high impeding a return of market confidence," the official said.

"We do still see a global recovery getting gradually underway in 2010, but I should emphasise that the turnaround depends on strong policy implementation." Asserting that there will be no enduring recovery until financial-sector stability is restored, the official said this will require determined and well-coordinated policy implementation by financial authorities.

"The essential elements include credible recognition of losses in problem assets, public support for the recapitalisation of weak but still viable banks and for the effective resolution of insolvent banks," he said.

"It will be important for greater international coordination of financial-sector policies to avoid unintended cross-border spillovers. It will also be important that actions taken be consistent with a long-term vision of a healthy, efficient and dynamic financial system," the senior IMF official said. — PTI 

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CBI gets Rajus’ custody for 2 more days
Tribune News Service

Hyderabad, March 20
The disgraced former chairman of Satyam Computers B Ramalinga Raju and two other top officials of the fraud-hit software giant would be grilled further by the CBI following permission by a local court here for extension of their custody by two days.

The 14th Additional Chief Metropolitan Magistrate granted extension of CBI custody of Ramalinga Raju, his brother and former managing director B Rama Raju and former chief financial officer V Srinivas.

Earlier, the seven-day CBI custody of the three accused ended on March 17. After hearing the arguments during which the CBI counsel sought extension of the custody to ferret out more facts, the magistrate S Samuel Victor Emmanuel gave two more days for the central investigating agency, beginning tomorrow, to interrogate the Satyam top brass.

Meanwhile, the court extended by two more weeks the judicial remand of Raju brothers, Srinivas and the sacked PriceWaterhouse partners S Gopalakrishnan and T Srinivas. They will remain in Chanchalguda jail here till April 2.

There are allegations that Raju had diverted Satyam funds to real estate and infrastructure firms owned by his sons.

Ramalinga Raju had on January 7 confessed to cooking the company's account books and inflating profits for several years. He was arrested on January 9 along with his brother. 

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Mobile number portability by year-end
BSNL launches Blackberry service
Ruchika M. Khanna
Tribune News Service

Chandigarh, March 20
The 370 million mobile subscribers in India will soon be able to change their mobile operator without fear of personal data loss, even as they retain their original number. The government is all set to roll out mobile number portability (MNP) by the end of this year.

Siddhratha Behura, Secretary, Telecom, today said this service would allow users to retain their mobile numbers even if they switch operators by paying some money to the original operator. It will initially be launched in Delhi, Mumbai, Chennai and Kolkata in the next six months. “We have already granted licences to two US based companies — Telecordia and Syniverse Technologies, for rolling out MNP across the country,” he said.

The country will be divided into two MNP zones, with each licencee operating 11 service areas and two metros each. Syniverse Technologies has been awarded zone I, comprising of North and West India, while Telcordia, the American joint partner company to MNP Interconnection Telecom Solutions India, has been awarded zone II, which comprises of South and East.

Behura, who was here to launch 3G-enabled BSNL's Blackberry service, said telecom had become a growth driver for the Indian economy. “The teledensity in the country has gone up to 35 per cent, and we are hopeful that the growth momentum would sustain. By year 2010, we are hoping to have 500 million telecom connections and 20 million broadband connections. The reduction in tariffs and introduction of value-added services would ensure that this sector continues to grow,” he said.

Asked about the auction of 3G spectrum, Behura said the auction would be held by the middle of this year. “BSNL, which launched its 3G service last month, has already rolled it out in 12 cities, and would launch it in 50 cities by the end of this month. As the year ends, this service would be launched by the telecom behemoth across 700 cities,” he said.

The chairman and managing director of BSNL, Kuldeep Goyal said BSNL had 72 million customers and was expecting to add another 8 million by the end of this year.

He also said the BSNL board of directors had approved to offload its equity through an IPO, and they were awaiting the government’s nod for the same. BSNL had planned to launch India's biggest IPO to raise about Rs 40,000 crore by diluting 10 per cent stake, which was opposed by BSNL union.

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US House passes bonus tax Bill

Washington, March 20
The House of Representatives has passed a legislation for levying a tax on bonuses granted to employees of companies, which have received at least $5 billion from the US Federal government's financial bailout packages.

The legislation would impose a new 90 per cent tax on bonuses received by employees of companies which received funds from the Troubled Asset Relief Program (TARP), according to the details of the Bill available on the website of the House of Representatives.

The tax would also apply to any bonus given after December 31, 2008. It would apply to people who earned more than $2,50,000 ($1,25,000 for married couples filing individually) from companies that have received over $5 billion through TARP.

However, employees with adjusted gross incomes of below $2,50,000 (including bonuses) would not be impacted by the proposed tax. — PTI 

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Low inflation – No good news
Bhagyashree Pande
Tribune News Service

New Delhi, March 20
The falling of inflation to nearly zero level is neither a good news for the common man nor for the economy. In fact, economists say, it has a mixed effect. Firstly, the food items remain expensive for the common man and the inflation is just a number game when it comes to making purchases for the household.

Annual inflation for food articles remains high even though it has eased from the 10-year high of 11.64 per cent witnessed in first week of January. Inflation for food articles is at 7.35 per cent for the first week of March.

Retail inflation, as measured by the Consumer Price Index, which really affects common man and rural labourers, has eased to 10.79 per cent in February, a marginal dip from 11.62 per cent in January 2009.

What has really come down is the price of industrial metals and goods that are used as intermediates in the production process. Economists say, there is no comparison of prices between last year and this year, because last year around this time, the prices were on the upward curve and inflation had gone up to 13 per cent till August 2008. So, this year a normal or cooling down of prices will look too low and hence what we see is cascading effect, explain economists. The inflation rate will also go down to negative very soon and will continue to do so till August 2009, according to economists.

Deflation or negative inflation means that there is demand destruction. In India, that is not the case, we see demand from rural sector which is not really affected by the world situation. In fact, the rural demand is strengthening because of good minimum support price that they have received and will continue to receive for their produce. Add to this is the farm loan waiver, which has really left more money in the hands of most rural buyers, thus adding to the demand.

In addition to this, there is another segment from where the demand is coming, and that is from the public and government sector workforce, which constitute nearly 50 per cent of the entire working population of the country. This segment has got a hike in salary in the sixth pay commission, so they will have more spending power and this will also drive demand.

What really is an area of concern is that industrial output is likely to fall and a further reduction in consumption of these goods.

Economists say falling inflation means that firms will postpone their expansion and production plans. The potential of demand is slowing down because everybody is expecting that prices will go down further and hence postpone the purchases, say economists.

Another critical issue is the reduction of interest rates, which are expected anytime now, though RBI will announce the same in its annual policy review on April 21. There has been a fall in credit growth from a high of nearly 29 per cent in October-November 2008, to nearly 18 per cent. Economists say this can be interpreted as a fall in demand by the firms because they expect lower interest rates.

Sources in banking circles say that there is a fear amongst bankers that cheap flow of credit may lead to non-performing advances and bad loans on a later date.

The government will meet bankers later this month to review credit flow in the economy and examine whether banks could lend more actively.

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Worst yet to come for Indian economy: Moody’s

New Delhi, March 20
The positive movement of the stock market and mixed economic indicators are expected to be short-lived and the worst is not over for the Indian economy, according to Moody's.

"The positive sentiment is expected to be short-lived, as India essentially only started feeling the pinch of the global downturn in the December quarter and the worst is yet to come," Moody's economy.com said in a research report.

The industrial production growth slipped into negative territory for the third time in the current fiscal by 0.5 per cent in January while exports also dropped by 15.9 per cent on a year-on-year (yoy) basis in the month.

However, expectations of further monetary easing measures by the Reserve Bank increased after inflation fell to 0.44 per cent for the first week of March against 2.43 per cent a week ago.

Since October, RBI has infused over Rs 4,00,000 crore in the system by cutting ratios and signalling interest rate cut.

There is also some positive news from Dalal Street as the Bombay Stock Exchange benchmark index Sensex surged 245 points in this week.

Moody's added that the Indian economy was likely to grow by 6.3 per cent with some downward risk in the current fiscal against government estimate of 7.1 per cent.

For the year 2009, India's growth rate is unlikely to exceed five per cent, but a recovery in the opening quarter of 2010 due to expected rebound of the US economy in the December quarter, should lift annual expansion to about five per cent for fiscal 2009-2010, it said.

It further added that the market sentiment is still unstable in India and so far in 2009 there has been a net outflow from the Indian stock market. Even businesses in India continue to be troubled by liquidity concerns and tight access to credit.

"As the current focus of many firms is to refinance debt and survive the financial turmoil, investment is expected to be subdued this year," the report added. — PTI 

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Telenor pays 1,250 cr to Unitech
Tribune News Service

New Delhi, March 20
Days after the Norway-based Telenor Group announced that it was increasing its stake in the start-up telecom firm Unitech, it today made the payment of the first instalment of Rs 1,250 crore that gave it a stake of 33.5 per cent in the telecom JV. The investment also marked the entry of the Norwegian company into the world's fastest-growing wireless market.

Only last week, Telenor had announced that it would inject a total of Rs 6,120 crore of new equity into Unitech Wireless for 67.25 per cent stake in the firm. Telenor's remaining investment of Rs 4,870 crore will be completed in three tranches during 2009.

After another start-up telecom company, the Swan group had announced the sale of its 45 per cent stake to Telecommunications Corp. (Etisalat) for $900 million. Unitech had come to an agreement of sale of stake in its telecom arm to Telenor in October last.

Following this investment, Telenor's ownership stake in Unitech Wireless is 33.5 per cent, Telenor, Fornebu-based Telenor said here.

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Cairn India to start production in April

New Delhi, March 20
Cairn India has said it will start crude oil production from its prolific Rajasthan oil discovery next month even though the government is yet to find a buyer for the oil. Cairn in a letter to the Petroleum Ministry stated that it would be starting oil production from Barmer fields next month with an initial output of 4,000-5,000 barrels per day.

The company, sources said, proposes to truck the oil to a refinery named by the government for processing the crude.

Petroleum Secretary R S Pandey had few weeks back stated that buyers for the Rajasthan crude oil would be found by mid-February, but no refiner has yet been named.

Under the production sharing contract (PSC) for the Cairn block, the government has to appoint the buyers of the crude before the actual production.

The government had previously nominated Mangalore Refinery and Petrochemicals Ltd as the buyer of Rajasthan crude, but it is unwilling to take anything more than 1.02 million tonnes out of the peak output of 8.75 million tonnes, sources said.

While state refiners are reluctant, Reliance Industries has placed a demand for 30,000 to 60,000 bpd (1.5-3 million tonnes) of Cairn crude at each for its two refineries at Jamnagar in Gujarat while Essar Oil has written for 30,000 bpd this year and 120,000 bpd (6 million tonnes) by 2011 when it expands its Vadinar refinery in Jamnagar district.

The Mangala field, the first of the three discoveries Cairn is putting to production, is expected to produce 30,000 bpd by the second quarter of 2009-10 fiscal, sources said.

Production is then expected to ramp up to 80,000 bpd by the end of 2009 before reaching a plateau of 125,000 bpd during H1 of 2010.— PTI 

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IOC seeks 50:50 JV for RIL’s petrol pumps

New Delhi, March 20
State-run Indian Oil Corp has sought a 50:50 partnership with Reliance Industries for operating the private firm's closed 1,432 petrol pumps. Besides IOC, Royal Dutch Shell too is believed to have evinced interest in reviving the petrol pumps, industry sources said.

Reliance as part of a two part bid process had sought Expression of Interest (EoI) from IOC, Shell, Bharat Petroleum and Hindustan Petroleum by today for a possible partnership for reopening the petrol pumps.

The company will set up a data room and interested parties will now do due diligence before making a firm financial proposal, based on which billionaire Mukesh Ambani's firm will choose a partner.

Sources said while Reliance had wanted the retailers to select between 26, 50 and 74 per cent equity stake they would like in the proposed joint venture company that would be set up with the hived-off pumps, IOC had preferred equal partnership.

An equity lesser than 50 per cent did not make sense for IOC as it was not looking for a portfolio investment. Also, a stake higher than 50 per cent would turn the company into a public sector company which was also not what IOC was looking for.

The 1,432 petrol pumps, that were shut in March 2008, had captured 15 per cent auto fuel market share, selling 4-4.5 million tonnes of petrol and diesel annually.

IOC, sources said, feels it can get atleast 2 million tonnes of additional sales through the pumps considering the fact that the RIL's pumps would eat into volumes of the three retailers - IOC, BPCL and HPCL - in proportion to their current share of 50:25:25 respectively.

For Shell, it made business sense as these petrol pumps would add to the 75-80 outlets it already as on the ground and help it get a respectable market share. Of the 75-80 pumps it had set up, Shell is currently operating about 55. IOC has about 17,600 petrol pumps.

The partnership with state-run firms would help Reliance overcome the handicap of not being able to use fuel from its two refineries at Jamnagar in Gujarat because they have been converted into only-for-exports units. — PTI

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Ruias eye European firm

Kolkata, March 20
The city-based Ruia Group is planning to acquire another European rubber sealing systems company and its chairman Pawan Kumar Ruia is in Europe to ink the deal, industry and banking sources familiar with the development said Thursday.

"The Ruia group has identified its next takeover target. This company is also into rubber sealing systems in Germany," said one source, who was involved in a similar takeover deal last year, requesting anonymity.

"The negotiations are in the final stages and bankers expect the deal to be concluded in a few days. In fact, the group's chairman is in Europe to finalise the deal," the source said. — IANS

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BRIEFLY

RBI’s monetary policy on April 21
Mumbai
: The RBI on Friday said it would release its annual monetary policy statement for the year 2009-10 on April 21. "The presentation will be made at a meeting of the chief executives of major scheduled commercial banks at 11 am on that day", RBI said in a statement.— TNS

ThyssenKrupp to cut 3,000 jobs
Frankfurt
: German industrial conglomerate ThyssenKrupp plans to cut more than 3,000 jobs or about 1.5 per cent of its total staff amid a slump in demand, the Financial Times reported on Friday. The cutbacks will affect the group's steel and car parts unit as well as its shipyards, the newspaper cited people close to the situation as saying.— Reuters

Tata Tea enters cold drink market
Mumbai
: Tata Tea is foraying into the branded cold drink market with the launch of its cold beverage T!ON, the company said on Friday. The product will be available in three flavours — mango rush, peach punch and apple buzz — and would be initially launched in Chennai, a press release said here. The 400 ml bottle has been competitively priced at Rs 22. — PTI

NTPC to scale up coal import
New Delhi:
The country's largest power producer, NTPC, on Friday said it would scale up its import of coal to 8.33 per cent of the requirement in 2009-10 to produce 3,000 MW more in the next financial year. "We would import 12.5 million tonnes of coal in the next financial year (out of the total requirement of 150 million tonnes). We will add 3,000 MW power capacity during the same period," NTPC chairman and managing director R S Sharma told reporters here.— PTI

Wal-Mart gives $933 m in bonus
New York
: At a time when companies are cutting costs and jobs to tackle the economic downturn, global retail chain major Wal-Mart has doled out $933.6 million in bonuses to its workers. "Wal-Mart Stores Inc handed out $933.6 million in bonuses to its rank-and-file US workers on Thursday, an increase of 46.7 per cent compared to last year," the Wall Street Journal said in a report published online.— PTI

Gold spurts by Rs 170
New Delhi
: Gold prices on Friday spurted for the second straight session in the bullion market here and gained Rs 170 to Rs 15,500 per 10 gram on aggressive buying by stockists sparked by bullish trend in overseas market. Silver also attracted brisk buying and recorded a jump of Rs 960 to Rs 22,400 per kg on stockists and industrial units buying.— PTI

Re ends 25 paise lower
Mumbai:
After a strong start, the Indian rupee turned weak and ended 25 paise lower at 50.63/64 against the greenback on Friday on heavy dollar demand from banks and some major corporates amid negligible capital inflows. Despite a weak dollar overseas and expectations of revival of portfolio inflows into equity, the rupee came under pressure as a few big corporates heavily bought dollars after the US Federal Reserve's unexpected decision to inject $1 trillion into the financial system to revive the sliding economy.— PTI

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