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RIL approves Rs 570 as share buyback price
Budget 2005 to revamp tax structure: Chidambaram
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ONGG Videsh eyes Sibneft
New Delhi, December 27 ONGC Videsh Ltd (OVL), the foreign arm of Oil and Natural Gas Corp, is eyeing equity in Russia’s fast growing oil firm, Sibneft, and has tied up with Russian Rosneft for the purpose. “OVL and Rosneft have entered into a Confidentiality Agreement to acquire Sibneft,” a senior company official said.
New patent regime may hit farmers
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RIL approves Rs 570 as share buyback price
Mumbai, December 27 Minutes before today’s board meeting, which decided on a buyback price of Rs 570 per share, Anil Ambani told reporters that there was something fishy about the movement of RIL’s scrip in the bourses. “.... if we look at the recent run up in the stock prices post the announcement of buyback, I believe that there is more than what meets the eyes in terms of what is happening in the market place,” Anil Ambani
said.
The younger Ambani informed that he was not a party to the share buyback plan. “I was not consulted nor informed before making the announcement to the stock exchanges on the proposed buyback. I believe that considering a buyback at this stage is completely inappropriate as there are several other issues that the group faces and those need to be addressed,” Ambani told journalists camping outside RIL’s headquarters. He also disassociated himself from virtually all decisions taken by the BoD since “hey were neither discussed nor approved by him.” Anil Ambani’s comments caused market regulator Securities and Exchange Board of India to look closely into the share buyback offer, sources said here. Sebi chairman G.N. Bajpai is said to be personally monitoring the movement of the RIL scrip, sources said. It is, however, not clear if a formal inquiry would be ordered into the matter. Anil Ambani’s statements dragged down the Reliance scrip in bourses. It closed at Rs 516.85, 1.29 per cent lower despite a general bullish sentiment. Share price
The RIL board, however, has decided to buy back shares at the rate of Rs 570 per share despite opposition from Anil Ambani. Sources close to him said he had abstained from voting and had even walked out in a huff. The meeting was attended by all RIL directors, including M L Bhakta, who had earlier resigned from the board. The board also cleared the appointment of investment bankers J M Morgan Stanley and DSP Merrill Lynch as managers and advisors, respectively, to the share buyback proposal of Reliance Industries Ltd (RIL). Chairman of J.M. Morgan Stanley Nimesh Kampani and DSP Merrill Lynch Chairman Hemandra Kothari were present at the RIL headquarters, where the crucial board meeting was held. RIL is to seek approval of the Securities and Exchange Board of India before January 10 and the buyback offer would be open for a year, company sources said adding they would like to complete the process as early as possible Reliance Industries Ltd vice chairman and managing director, Anil Ambani today, slammed the decision by the company’s board to buyback the Reliance shares.
Endorses Mukesh
The board also endorsed the chairmanship of Mukesh Ambani. “The RIL board resolved that the present organically integrated structure of the company envisioned and created by the founder chairman Dhirubhai Ambani should not be altered in any manner,” RIL said in a press statement. The board felt that this would be in the larger interests of providing, on a sustained basis, financial resources, growth opportunities and stability, extending handsome benefits to its very large family of shareholders and significant contribution to the national economy, the release added. According to RIL the company has decided to set up a standing committee of independent directors to oversee various matters concerning corporate governance. The board also backed Mukesh Ambani’s investments in Reliance Infocomm. RIL sources said the board lauded the management of Reliance Infocomm for successfully executing a loan agreement with US Exim Bank and Export Development, Canada, for an aggregate term loan of $750 million on attractive terms. The board noted that there was no infringement of any laws or regulations in the matter of Mukesh Ambani acquiring 50 crore shares in Reliance Infocomm and his exercise of the option. The grant of option and its exercise by Mukesh Ambani have been annulled at his request the board noted. Sources say, the board also resolved to constitute a committee comprising of the present six independent directors of RIL to consider all matters pertaining to exercise of the company’s option to convert 162 crore cumulative convertible/ redeemable preference shares of the aggregate value of Rs 8,100 crore. The committee will also consider appointing one or more valuers of international repute to determine the fair value of the equity shares of Reliance Infocomm Limited.
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Budget 2005 to revamp tax structure: Chidambaram
New Delhi, December 27 He assured fiscal reforms in textile, petroleum, telecom and sugar in the 2005-06 Budget by replacing the current convoluted duty structure by a simplified tax regime to give a fillip to domestic investment in these sectors. Inaugurating the 77th AGM of the Federation of Indian Chambers of Commerce and Industry (Ficci here today, the Finance Minister exhorted captains of trade and industry to cash in on four areas identified by the government for maximum investment focus —power, roads, air and sea ports and tourism. “What is common among textiles, petroleum, sugar and telecom sectors is a convoluted tax structure. We have to unravel it and make it simpler and investment-friendly. We will come up with a strategy in the next Budget,” he said. On textiles, Mr Chidambaram said the government had announced a simpler tax regime for natural fibres and the next Budget would attempt to unravel the tax structure for man-made fibres. “You often complain that the FDI news stories hog the headlines on the front pages of the newspapers. But it may be due to the fact that you are satisfied on page 3. I want to bring Indian investment stories on page 1,” he said while asking the industry to come forward to grab the opportunities in infrastructure sector. There is no shortage of savers in India, but what is lacking is transfer of savings to investment, dependent on factors like corporate governance and transparency, said the Finance Minister. Mr Chidambaram told the industry that newly -constituted Investment Commission, headed by Ratan Tata, would have regular meetings with the Industrial chambers to discuss sectoral issues. He said investment intentions and proposals recorded a whopping 26.9 per cent growth at Rs 17,93,979 crore till October 2004, which was in sharp contrast to a declining trend since 2001-02. Investment proposals were at Rs 15,43,378 crore in October 2001, which came down by 2.8 per cent a year later and further dipped by 5.7 per cent to Rs 14,13,698 crore in October 2003. Investments have since then picked up by 26.9 per cent mainly on account of major projects coming up in chemicals and pertrochemicals, metals, mining, electricity and road sectors, the Finance Minister said. “All these augur well for future. India Inc has rediscovered its confidence. Next year will be better (for the economy) than 2004,” he said.
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ONGG Videsh eyes Sibneft
New Delhi, December 27 Rosneft had made it clear that OVL would be their first preferred partner for such acquisitions but OVL now expects that the situation might change with their merger with Gazprom. Independent observers feel Rosneft-Gazprom would be the ultimate beneficiary of Sibneft. OVL, which made unsuccessful attempts to tie-up with Gazprom to bid for acquiring Russian oil firm Yukos’ main producing asset Yuganskneft, also plans to participate in the vast, yet to be-developed East Siberian field. Rosneft, Gazprom and Surgutneftegaz have been given East Siberia and Far East to develop. With the Rosneft-Gazprom merger, East Siberian fields would be taken up for development. The Russian government companies do not have the financial muscle to acquire these firms, thus foreign companies would be required to support the merged entity’s acquisition. The official said OVL was also eyeing stake in Russia’s Vankor oil and gas field.
Gail stake
Gas utility Gas Authority of India Ltd (Gail) will get a majority stake of 29 per cent in Tripura National Gas Co Ltd (TNGCL), which will undertake retail gas distribution in Tripura. Tripura Industrial Development Corp and Assam Gas Co Ltd will hold 10 per cent equity each while public, financial institutions and others would hold the remaining 51 per cent, a company release said here. “An agreement to this effect, between Gail, TIDC and AGCL will be signed soon. As per the agreement, 29 per cent shares of TNGCL at par of the initial authorised share capital of Rs 10 crore will be offered to Gail,” it said.
— PTI, TNS
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Woodland plans 2 units at Baddi
New Delhi, December 27 Mr Harkirat Singh, Managing Director of the Aero Club, that owns Woodland brand, announced this here today adding that company was aiming to meet Rs 150 crore turnover this year from Rs 100 crore registered last year. The company plans to achieve 40 per cent annual growth, and double its sales turnover to Rs 300 crore within the next three years, he said. Addressing a press conference, the managing director of the company said: “We are finding it difficult to meet the rising demand for our high-quality premium shoes. The new units in Baddi, and one more unit to be set up in Dehra Dun will supplement our supplies from Delhi and Noida plants.”
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New patent regime may hit farmers
New Delhi, December 27 By bringing the Ordinance, the Government has met the deadline, December 31, set by WTO to become a party in the international system of intellectual property rights. Farmer Organisations are apprehending that with the introduction of “Product based Patent system,” smaller and marginal farmers would be forced to buy seeds from the market at exorbitant prices. They are likely to take up the matter with the Left and the government to introduce “adequate safeguards for millions of farmers in the country,” before passing the Bill in the Parliament. Allaying apprehensions of rise in drug prices, Mr Kamal Nath said: “Fears of spiralling of drug prices were completely unfounded. Ninety seven per cent of the drugs are off-patent,” he said while giving “selective details” of the Ordinance today. The Ordinance allows product patents in food, drug and chemicals and embedded software. However, regarding the agriculture sector, the Minister said “now all traditional varieties of seeds will have to be implemented. The Product patents will also be applicable for the food items as well,” when asked about the impact of patent regime on the agriculture sector. Since the government has not released the details of the Ordinance, it remains to be seen what will be the actual impact of the Patent regime on the seed prices. The agriculture experts claim that government has not made it clear, who will patent the “thousands of traditional varieties” of seeds — whether the agricultural universities or the government. They cite the cases of patent controversies over basmati and other varieties by the MNCs. The farmer organisations have so far failed to take up the issue with the government in a successful manner. He said of the three per cent drugs, which can be patented, there were methods and various alternatives available to the government to ensure their availability at affordable prices.
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Anil Ambani, the Reliance Industries Vice-Chairman who is locked in a bitter battle with elder brother and Group Chairman Mukesh Ambani made veiled allegations of insider trading on the RIL scrip ahead of today’s share buyback announcement, which has sparked off a probe by Sebi, the market watchdog.
