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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Recession to last long, says IMF
Washington, April 16
The International Monetary Fund said on Thursday the current global recession, the worst after World War II, is likely to continue for a longer duration and the recovery would be sluggish.

Satyam Buyout
Tech Mahindra gets CLB nod
New Delhi, April 16
As Spice Corp is trying to seek answers over the sale of the crisis-ridden Satyam Computer Services, the Company Law Board (CLB) today approved the takeover of fraud-hit company by mid-sized outsourcer Tech Mahindra.

Development fee at nine more airports likely
New Delhi, April 16
After imposing development fee at four private airports, the government is mulling charging it from passengers departing from another nine airports in the country.

Kashmir Apiaries aims at 100% growth
To add 10 new destinations for exports
Chandigarh, April 16
The largest honey exporter in the country, Doraha-based Kashmir Apiaries Exports (KAE), is targeting a 100 per cent growth in current fiscal by exporting its honey to 10 new destinations across Europe and Africa.





EARLIER STORIES



Jamnagar refinery no more an EoU
RIL to sell petrol, diesel in local market
New Delhi, April 16
The export-oriented unit (EoU) status of Reliance Industries' Jamnagar refinery in Gujarat has ended, allowing the company to sell petrol and diesel locally, including through its 1,432 now-closed petrol pumps. "The EoU status of the 33 million tonnes a year refinery has ended this week," an industry official said.
Employees of ArcelorMittal block railway tracks at the entrance of their plant in Florange
Employees of ArcelorMittal block railway tracks at the entrance of their plant in Florange on Wednesday. ArcelorMittal, the world's largest steelmaker, extended its production cuts in Europe into the second quarter because inventory levels had not fallen as quickly there as envisaged. — Reuters

SEBI’s info on FII figures flawed?
Mumbai, April 16
The appreciation of dollar vis-a-vis rupee may be causing havoc for exporters and the economy, but the capital market regulator SEBI seems to be oblivious of the movement in greenback and is using the exchange rate of October 2007 for divulging details of foreign investments.

Inflation falls to 0.18 pc
New Delhi, April 16
Inflation eased to 0.18 per cent, a new low in over 30 years, during the week ended April 4 against 0.26 per cent in the previous week. Food items like pulses, cereals, vegetables continued to remain costly.

US industrial output falls to 10-yr low
Washington, April 16
The US industrial production fell in March for the fifth consecutive month, by 1.5 per cent, to the lowest level in a decade amid a prolonged recession, government data showed yesterday.

Suzlon ‘faces’ trouble in China
New York, April 16
The world's fifth largest wind power equipment maker, Suzlon Energy, is facing new blade production problems at a project in China's Shandong province, media report says.





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Recession to last long, says IMF

Washington, April 16
The International Monetary Fund said on Thursday the current global recession, the worst after World War II, is likely to continue for a longer duration and the recovery would be sluggish.

However, strong countercyclical policy action, combined with action to restore confidence in the financial sector, could improve prospects for recovery, the IMF said as it released the World Economic Outlook.

"The analysis suggests that the combination of financial crisis and a globally synchronised downturn is likely to result in an unusually severe and long-lasting recession," said the IMF report, released at its headquarters in Washington.

Observing that this combination is historically rare, and inferences should be drawn cautiously, the IMF said: "Nonetheless, the fact that the current downturn is highly synchronised and associated with deep financial crises suggests that it is likely to be persistent, with a weaker-than-average recovery."

A typical recession, according to IMF, persists for about a year, while an expansion often lasts more than five years. Recoveries from recessions are strong, reflecting the presence of a bounce-back effect.

However, recessions and expansions in the advanced economies have changed over time — since the mid-1980s, recessions have become less frequent and milder, while expansions have become long lasting.

The IMF said macroeconomic policies can play a valuable role in reducing the severity of recessions and bringing forward recoveries. Monetary policy has typically played an important role in ending recessions and strengthening recoveries, although it is less effective during financial crises.

Fiscal policy, the report said, appears to be more reliable in these episodes, consistent with evidence that fiscal policy is more effective when economic agents face tighter liquidity constraints. Fiscal stimulus is also associated with stronger recoveries; however, the impact of fiscal policy on the strength of the recovery is found to be smaller for economies that have higher levels of public debt, the IMF said.

Dealing with the current global recession, the World Economic Outlook 2009 said, will require coordinated monetary, fiscal and financial policies.

"Aggressive monetary and fiscal policy measures are needed to support aggregate demand in the short term. Even with such measures, one of the most important lessons from episodes of financial crises is that restoring confidence in the financial sector is critically important for macroeconomic policies to be effective and for recovery to take hold," it said.

The report further said that a coordinated policy response by advanced and emerging economies is required to prevent further escalation and spreading of financial stress.

"Reducing individual country vulnerabilities cannot insulate emerging economies from a major financial shock in advanced economies," it said.

As stronger current account and fiscal balances do little to mitigate the transmission of financial stress from advanced economies in periods of financial crisis, the IMF said they may, however, help dampen the impact on the real sector of emerging economies and help reestablish financial stability and foreign capital inflows once financial stress subsides. — PTI

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Satyam Buyout
Tech Mahindra gets CLB nod
Girja Shankar Kaura
Tribune News Service

Satyam gets more time to declare results

Giving relief to the scam-hit Satyam Computer, the CLB on Thursday extended time limit for the IT company to declare quarterly financial results and file statutory documents up to December 31, 2009.

"Since the company has to restate the accounts for nearly six years after complete audit, which is in progress, I extend the time for filing of returns/documents, which are required to be filed with various statutory authorities...up to December 31, 2009", CLB chairman S Balasubramanian said.

The extension of time limit, the order said, would also apply to "publication of quarterly financial reports as required by the listing agreement, whether overdue or to become due". — PTI

New Delhi, April 16
As Spice Corp is trying to seek answers over the sale of the crisis-ridden Satyam Computer Services, the Company Law Board (CLB) today approved the takeover of fraud-hit company by mid-sized outsourcer Tech Mahindra.

CLB chairman S. Balasubramanian issued a statement here which said, "Having convinced myself that the board of directors has selected a technically and financially competent/qualified strategic investor... I accept the recommendation."

Satyam Computer Services had yesterday moved the Company Law Board (CLB) to seek approval of its proposal to sell the IT company to Tech Mahindra.

The approval of the CLB is necessary for the new management to come in and take control of Satyam, which is currently being managed by the government-appointed board members.

The approval from CLB came as B K Modi, chairman of Spice Corp, which pulled out of the Satyam bidding process has said that they were planning to approach the CLB alleging lack of disclosures in the exercise and violations of CLB directions in many ways.

"We are writing a letter to Justice S P Bharucha and one copy of the same letter will go to CLB as well. We were asking for revelation of bidders' name. If that was followed, then the name of one common director, who was on the board of Satyam as well as on the highest bidder's board would have come to light at that very time," said Modi.

Deepak Parekh, board member of Satyam, is also on the board of M&M, the major shareholder of Tech Mahindra. But Parekh was not present on the day of bidding to avoid 'conflict of interest'.

There were further allegations as Modi said earlier bidders were told to submit at least Rs 1,500 crore cash availability upfront, but it appears that Tech Mahindra had only Rs 700 crore cash available with it and the rest it was now raising from the market.

Besides, he has pointed out that the selection of the highest bidder was also not through e-auction, which was a major lacuna.

However, with the CLB’s approval how far the controversy being raised by the Spice Corp would go is unclear.

But with the takeover of Satyam being formally approved Tech Mahindra would now have to make an open offer for an additional 20 per cent stake within a week.

Tech Mahindra was the highest bidder for a controlling stake in Satyam on Monday. The deal will propel Tech Mahindra into the top tier of Indian IT firms and throw a lifeline to the firm at the centre of India's biggest corporate scandal.

Tech Mahindra, 31 per cent owned by Britain's BT Group, outbid the engineering giant L&T with an offer of Rs 58 a share, entailing up to Rs 2,900 crore for a majority stake in Satyam.

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Development fee at nine more airports likely

New Delhi, April 16
After imposing development fee at four private airports, the government is mulling charging it from passengers departing from another nine airports in the country.

A proposal to impose development fee on passengers departing from nine airports being modernised by the Airports Authority of India (AAI) is likely to get the government's nod soon, which would enable the state-owned body recover its cash shortfall, official sources said today.

The proposal is being vetted by the Finance Ministry, the sources said, adding that the fee would be levied from May 1 for a "limited period", if approved.

The fee would be about Rs 200-250 for outbound domestic passengers and Rs 1,000 for departing international travellers, in line with those being imposed on passengers travelling out of major privatised airports at Bangalore, Hyderabad, Delhi and Mumbai.

The nine airports where AAI is carrying out major expansion and modernisation activities include Kolkata, Chennai, Jaipur, Thiruvananthapuram, Amritsar and Trichy, the sources said.

The cash shortfall, the sources said, has arisen out of the falling income, reduction in flights and passenger traffic due to the slowdown affecting the aviation sector and increase in costs.

The passenger traffic in the first three months of this year has fallen by almost 12 per cent over the same period last year.

"Our purpose is not to tax the travelling public, but to raise cash to meet the shortfall in carrying out the modernisation work at these airports," sources said.

With the AAI developing a total of 35 non-metro airports, the imposition of the development fee for the remaining airports would be decided on a "case-to-case" basis, depending on the cost situation and the shortfall, they said.

Sources said a major reason for the fund shortage was due to the fact that though several airports were being modernised and expanded, the air traffic was not improving as airlines were not operating more flights from these destinations due to the economic slowdown.

The privatisation of major airports like those in Hyderabad and Bangalore as well as the closure of the existing airports at the two cities have had an adverse impact on AAI's revenue, with the government-owned airport developer suffering an annual loss of Rs 330 crore. — PTI

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Kashmir Apiaries aims at 100% growth
To add 10 new destinations for exports

Ruchika M. Khanna
Tribune News Service

Chandigarh, April 16
The largest honey exporter in the country, Doraha-based Kashmir Apiaries Exports (KAE), is targeting a 100 per cent growth in current fiscal by exporting its honey to 10 new destinations across Europe and Africa.

Talking to TNS here today, A K Singh, vice-president, international business of Kashmir Apiaries, said they would now begin exporting honey to Japan, France, Italy, Spain, South Africa, Nigeria, Kenya, Sudan, Tanzania and Ghana. “We are already exporting honey to 45 countries. By adding 10 new destinations for export, we hope to increase our turnover from Rs 218 crore in last fiscal to Rs 400 crore this year,” he said.

KAE is also looking at setting up warehouses and honey processing units in some of its niche export markets like USA, Germany and UK this year. “We will first be setting up warehouses in these three countries. Processing units will also be established, so that value addition can be done to honey exported from here and this can later be sold at a premium during lean season. The first warehouse will be set up in Germany and will be ready by June this year,” he said.

He further informed that this year they propose to increase the production from 20,000 metric tonnes (MT) to 23,000 MT. “Since we are looking at major expansion this year, we are in talks with private equity partners and venture capitalists to fund our expansion plans,” he said, adding that some part of the expansion would be funded through internal accruals.

“We will be expanding our own bee-keeping facility by several times. Besides, we also have an arrangement with private bee keepers, who sell their produce to us. We are also increasing the base of these private farmers to get more honey,” he said.

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Jamnagar refinery no more an EoU
RIL to sell petrol, diesel in local market

New Delhi, April 16
The export-oriented unit (EoU) status of Reliance Industries' Jamnagar refinery in Gujarat has ended, allowing the company to sell petrol and diesel locally, including through its 1,432 now-closed petrol pumps. "The EoU status of the 33 million tonnes a year refinery has ended this week," an industry official said.

Jamnagar refinery, which was commissioned in July 1999 and now known as J-1, was converted into an EoU with effect from April 16, 2007. Reliance Petroleum, a unit of the company, in December 2008 commissioned a new only-for-exports refinery J-2, adjacent to the old unit.

The official said Reliance will continue to export most of the fuel from J-1 but will also sell petrol and diesel in domestic market. It may sell 2.5-3 million tonnes of diesel to public sector fuel retailers — Indian Oil, Bharat Petroleum and Hindustan Petroleum — to meet the deficit they are expected to have in 2009-10. Also, it may reopen the 1,432 petrol pumps it had shut last year as it could not compete with subsidised fuel sold by public sector retailers.

Though the margins on petrol and diesel had turned positive with the fall in international oil prices since October 2008, Reliance still could not sell fuel from J-1 through the petrol pumps as the EoU status made it prohobitive for the company to sell fuel locally.

The EoU status gave the company the benefit of duty-free import of raw material crude oil and tax exemptions in exchange for exporting at least two-third of the products. As per the law, if an EoU was to sell fuel locally, double customs and excise duties were levied to make petrol and diesel dearer by Rs 9-10 a litre.

When it was commissioned in July 1999, Reliance availed of special tax rebates, including income-tax holiday, sales tax and excise-duty concessions, all of which had expired by 2007. — PTI

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SEBI’s info on FII figures flawed?

Mumbai, April 16
The appreciation of dollar vis-a-vis rupee may be causing havoc for exporters and the economy, but the capital market regulator SEBI seems to be oblivious of the movement in greenback and is using the exchange rate of October 2007 for divulging details of foreign investments.

The static exchange rate, which could be due to technical negligence, has led to dissemination of false FII investment figures in the US currency for about one and a half years.

Moreover, the exchange rate that SEBI has been using to provide dollar investment figures during this period stands at Rs 40.34 for a dollar as against close to 50-level today.

The officials at SEBI could not be immediately contacted for their comments on the issue and an emailed media query to them remained unanswered.

SEBI provides information about FII investments in equity as well as debt markets on a daily basis on its website, which is widely consulted by market participants and other entities to understand the trend adopted by overseas investors.

The SEBI website provides daily investment figures for the previous trading day in rupee as well as dollar terms at "month exchange rate." The latest daily figure, for yesterday's trade, gives an exchange rate of Rs 40.34 for a dollar and the same exchange rate has been mentioned for each day's trade since October 9, 2007. — PTI

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Inflation falls to 0.18 pc
Tribune News Service

New Delhi, April 16
Inflation eased to 0.18 per cent, a new low in over 30 years, during the week ended April 4 against 0.26 per cent in the previous week. Food items like pulses, cereals, vegetables continued to remain costly. Even the jet fuel, naphtha and other fuel items were dearer during the week. The wholesale price based index declined by 0.08 per cent against 0.26 per cent in the previous week. The decline was mainly due to higher base effect that is the prices last year, and falling prices of some manufactured products. Inflation was at 7.71 per cent in the same week a year ago.

Declining inflation has raised hopes for the industry that RBI would cut key policy rates in its annual review on April 21. However, bankers say RBI will still monitor the inflationary movement and may cut rates only in June.

PTI adds: "Prices of food items like pulses have remained high because of poor harvest. Some odd categories like vegetables are seasonal. They have gone up by 25 per cent. Vegetable prices are quite volatile. They will correct themselves very quickly," Crisil principal economist D K Joshi said.

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US industrial output falls to 10-yr low

Washington, April 16
The US industrial production fell in March for the fifth consecutive month, by 1.5 per cent, to the lowest level in a decade amid a prolonged recession, government data showed yesterday.

The seasonaly adjusted monthly decline matched the revised 1.5 per cent drop in February, the Federal Reserve said, adding 0.1 point to the initial February estimate. The March slide was much steeper than the 0.9 per cent decline expected by most analysts.

Output in March dropped to its lowest level since December 1998 and was nearly 13 per cent below its year-earlier level.

For the first quarter of the year, industrial output dropped at an annual rate of 20.0 per cent, the largest quarterly decline "of the current contraction," the Fed said.

The world's largest economy slid into recession in December 2007. — AFP

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Suzlon ‘faces’ trouble in China

New York, April 16
The world's fifth largest wind power equipment maker, Suzlon Energy, is facing new blade production problems at a project in China's Shandong province, media report says.

Citing people familiar with the matter, the Wall Street Journal said "India's Suzlon Energy Ltd, one of the world's largest producers of wind turbines, faces new blade-production problems." Earlier last year, Suzlon won a contract with Germany's REpower Systems AG to produce blades for 75 turbines for the China project and an option on 75 more.

Quoting people familiar with the matter, the newspaper said "REpower rejected Suzlon's prototype for the initial blades for not meeting REpower's quality standards and obtained them from other suppliers".

REpower lost at least 6 million euro on the first 75 turbines by having to ship stand-in blades to China from Europe, one of the people familiar with the matter told the WSJ. — PTI

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BRIEFLY

Naina Lal KidwaiNaina Kidwai to head HSBC India
Mumbai:
Well known woman banker Naina Lal Kidwai has been appointed as the country head of HSBC group companies in India. Kidwai will assume the chairmanship of HSBC India operations and the appointment is effective from April 15, an HSBC statement said. She has been with HSBC as CEO and deputy CEO for the past five years. Prior to that, she was vice-chairwoman and managing director of HSBC Securities and Capital Markets India, the statement added. — PTI

M&M wins cybersquatting case at WIPO
New Delhi:
Farm equipment-to-software group Mahindra & Mahindra has won a cybersquatting case at the World Intellectual Property Organisation (WIPO) against a US-based firm, which had tried to block domain name, 'mahindralogistics.com'. M&M had challenged registering of the domain name by Portfolio Brains LLC of the US, at the World Intellectual Property Organisation stating it was identical and confusing with its subsidiary, Mahindra Logistics Ltd and "deceptively similar to the Mahindra marks". — PTI

Tata Comm to take part in West African Cable System
New Delhi:
Telecom services provider, Tata Communications on Thursday said it would participate in the $600 million West African Cable System (WACS) that would link countries in Southern Africa, Western Africa and the Europe to enhance the firm's foothold in the region. "This investment would further boost Tata Communications global reach and enhance the company's investments in the region," the company said. — PTI

Microsoft software for SMEs
New Delhi:
IT major Microsoft on Thursday launched its Window Server 2008 Foundation targeted at the SME segment and has partnered with HP and Dell to roll out the product in India. "We are looking at making the product available at affordable prices and within the reach of small businesses. We have already parterned with HP and Dell to roll out the product by month- end," Microsoft president Bob Muglia said. — PTI

AIPL to invest Rs 1,200 cr
Chandigarh:
AIPL Ambuja, a joint venture of Ambuja Realty and Advance India Projects Limited, will be investing Rs 1,200 crore in the next three years to set up integrated townships across North India. Talking to mediapersons here on Thursday, Gurpreet Singh, CEO, said in the first phase, the company would be focusing on Punjab and townships called ‘DreamCity’ would be set up at Amritsar, Khanna and Mohali. — TNS

Oil rises in Asian trade
Singapore:
Oil prices rose in Asian trade on Thursday, buoyed by Wall Street's overnight rally, analysts said. New York's main futures contract, light sweet crude for delivery in May, gained 97 cents to $50.22 a barrel. Brent North Sea crude for June delivery rose 89 cents to $53.33. — AFP

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