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Centre may probe Centaur divestment
Uproar in RS over ITC issue
EPF: minister meets PM
Cabinet clears SEZ legislation |
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Flextronics proposes to delist Indian arm
Traders release post-VAT white paper
Cable & Wireless ties up with VSNL
EuroNews on Dish TV
Boeing joins issue with Airbus
A-I Express puts Oman flight on hold
US Federal Reserve
hikes interest rates
Corporate results
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Centre may probe Centaur divestment
New Delhi, May 4 The assurance came after Left Parties raised the matter in Parliament accusing the erstwhile NDA Government of selling the hotel for a paltry Rs 153 crore and demanded cancellation of the sale deed. The Left Parties and certain members of the UPA Government claimed to have found a major scam worth over Rs 200 crore in the controversial disinvestment deal made in 2002. They demanded a high- level CBI or judicial inquiry and sought cancellation of the sale agreement. Finance Minister P. Chidambaram assured them that the government would definitely consider a probe once the final report of the CAG was submitted. The preliminary report of the CAG has already expressed serious doubts over the process of the deal in which a prime property of Air- India was handed over to M/s Tulip Hospitality Services Ltd. (THSL), a company floated by the Sahara
Group. The CAG is expected to submit the final report shortly. The Department of Disinvestment under Mr Arun Shourie had pushed the deal for which initially 20 parties had submitted expression of interest (EOI). Three were found ineligible while 16 did not furnish the prescribed EOI letters, thus leaving the field open for the only bidder, THSL. Replying to a call-attention motion moved by CPM leader Basudev Acharaya in the Lok Sabha today, the Finance Minister said: “After going through all papers of the agreement, I can draw an inference that former Disinvestment Minister (Arun Shourie) took an ‘active’ interest in processing the transaction deal, though he himself had decided to revoke the bank guarantee of the lone bidder, THSL, twice after it had failed to keep the schedule of the payments.” The BJP- led NDA would have found itself in a embarrassing situation as the Centaur hotel disinvestment and the statement of Defence Minister Pranab Mukherjee on the “misuse” of IAF VIP plane by Justice Phukan of the Phukan Commission and other members dominated the proceeding in the Lower House. Mr Chidambaram told Parliament that his ministry had asked the seven banks and financial institutions, including Vijay Bank, Bank of India, Indian Bank, UTI, and LIC to take “ all necessary pre-emptive steps to recover their loans extended to the THSL, amounting Rs 129 crore, as the company has already defaulted in making payment. It has reported losses worth over Rs 70 crore during the past two
years." The Civil Aviation Ministry had also been asked to take steps to safeguard the post-disinvestment issues, except financial matters, he said. Mr Achyara alleged the previous government sold the public sector property at a throwaway price of Rs 153 crore, which had now appreciated to over Rs 350 crore. Moreover, he said, “ the NDA Government asked public sector financial institutions to finance the deal though the company with little assets had failed later to repay the loans.” Further, the THSL had also not kept its promised regarding VRS payments to its around 800 employees. “ Is it not a fact that Ajit Kelekar was a member of the Air- India Board and sub-committee constituted to take disinvestment decision, and later became a buyer?” he asked Finance Minister. Mr
Chidambaram agreed that till December 10,1998 Mr Kelekar was the member of the Air- India Board, but later he was removed and he became a buyer.
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Uproar in RS over ITC issue
New Delhi, May 4 Vociferously raising the issue during zero hour, Congress members, led by Mr Rajeev Shukla, and Mr Dipankar Mukherjee (CPM) said it was important that the names be disclosed as withdrawal of the ordinance would have led to loss of revenue to the exchequer. Following the ordinance issued in December last, the government was able to come to a settlement with the ITC on the issue through which government retained Rs 350 crore deposited by the company against the excise claim and agreed to forego the balance of Rs 450-odd crore. The members were demanding disclosure of the names as Mr Chidambaram while winding up discussions on the Finance Bill in Lok Sabha had said two senior NDA leaders had requested him against bringing in an ordinance to extract the dues. The Finance Minister had also said if he had yielded to their suggestion the Government would not have got Rs 350 crore from ITC as part of the settlement on the this excise issue. Chairman Bhairon Singh Shekhawat said he was not in favour of concealing facts but would like to know contents of the letter before the names are revealed, as it was a “double-edged weapon”. The members said it was a question of probity and, hence, the names should be revealed. Earlier, yesterday, while the BJP-led Opposition continued its boycott of Parliament, the treasury bench members raised an uproar in the Lok Sabha demanding that Finance Minister P Chidambaram disclose the names of two NDA leaders who had allegedly lobbied for waiver of Rs 850 crore in taxes from tobacco giant ITC.
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EPF: minister meets PM
New Delhi, May 4 Finance Minister P. Chidambaram was also present at the meeting, official sources said. The Finance Ministry recently ratified the rate of interest for 2002-03 and 2003-04 at 9.5 per cent, which may involve a net outgo of about Rs 66 crore. While the fund earned a surplus of Rs 204.92 crore during 2002-03, there was a shortfall of Rs 271 crore in the following fiscal. For 2004-05, the Finance Ministry is awaiting the recommendation from the EPF Board for the interest rate. The Labour Minister is the Chairman of the board. The sources said that higher returns could be offered only if there were changes in the investment patterns and that is the reason why the CBT had recently appointed global consultant Mercer for suggesting ways to earn higher returns on its investments. The Finance Ministry is understood to be reluctant to allow the EPFO to reinvest in the special deposit scheme.
— Agencies
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Cabinet clears SEZ legislation
New Delhi, May 4 The umbrella legislation approved by Union Cabinet provides single-window mechanism for SEZs and their units, Information and Broadcasting Minister S Jaipal Reddy told reporters here. SEZ units will be eligible for 100 per cent tax exemption for five years, 50 per cent next five years and 50 per cent of the ploughed back export profits for the next five years. The developers of the zones will continue to get 100 per cent income tax exemption for 10 years in a block period of 15 years. It may be noted that the Budget had introduced an amendment in the Income Tax Act bringing in a sunset clause as per which SEZ units were to get these benefits only till 2009. The provision will be superseded if this legislation is passed by Parliament. It provides for establishment of designated courts and a single enforcement agency to ensure speedy trial and investigation of offences committed in SEZs. It encourages state governments to liberalise state laws and delegate their powers to the development commissioners of the SEZS to facilitate single window clearance.
— PTI
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Flextronics proposes to delist Indian arm
Singapore, May 4 Flextronics currently owns 69.7 per cent of FSS through its wholly-owned subsidiary, Flextronics Sales and Marketing (L-A) Ltd. Flextronics Chief Executive Officer Michael Marks said stated: “Completion of this transaction will enhance our operating flexibility, streamline our service offering in this area and provide an attractive exit opportunity to public shareholders. “However, if we find that the ultimate terms of this proposal are not acceptable to Flextronics, we will examine alternative strategies for our Indian operations.” Flextronics intends to acquire the outstanding shares of FSS in accordance with the delisting guidelines of the Securities and Exchange Board of India (SEBI) through a shareholder-led reverse book building process, a company press note here said. Shareholders of FSS may tender their shares to Flextronics Sales and Marketing at a price at or above the “floor price” to be determined in accordance with the SEBI guidelines. Flextronics is prepared to acquire the shares offered to it at Rs 575 per share, subject to all requisite shareholder and regulatory approvals being obtained, including the number of shares required for delisting being offered at this price. This price represents a premium of approximately 9.7 per cent to the average of the closing prices of the FSS shares as quoted on the NSE in the six months preceding the date of this statement and a 4.5 per cent premium to the closing price of Rs 550 per share on May 3, 2005, the last trading day before the delisting proposal was communicated to the Board of Directors of FSS, it said. Additionally, Flextronics believes that given the low liquidity in the FSS stock, the delisting offer would provide the public investors of FSS with an attractive exit opportunity. Flextronics reserves the right not to acquire the offered shares if the final price, as determined by the SEBI delisting guidelines is more than Rs 575 per share, the company added.
— UNI
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Traders release post-VAT white paper
New Delhi, May 4 CAIT, in its paper has alleged that the states have brushed aside the unanimity concept evolved at the Empowered Committee of State Finance Ministers and each state has defined VAT law in its own way, making it a “free for all law”. “This has culminated into an atmosphere of utter confusion, uncertainty and chaos all over the country,” CAIT said. CAIT Secretary General Praveen Khandelwal said the Empowered Committee, in its White Paper on VAT in January, had promised uniform implementation of the tax system throughout the country. “It was also stated that the prices in general will fall, Inspector Raj will be abolished and
taxation will be simplified,” he said. Mr Khandelwal regretted that instead of making VAT a transparent system, the state governments have adopted independent attitude in matter of tax rates and other important provisions. Even the Empowered Committee has admitted that VAT Laws suffered from anomalies and disparities.
— UNI
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US Federal Reserve hikes interest rates
Washington, May 4 But a rare twist on a carefully choreographed release whipsawed financial markets. The Fed admitted nearly two hours later that it accidentally left out a planned reassurance about long-term inflation expectations. That omission initially drove bond prices lower as traders saw it as a sign of growing Fed worries about prices. Bond prices rallied after the Fed issued a corrected
statement. The policy — setting Federal open market committee without dissent voted to lift the key federal funds rate — which affects credit costs throughout the economy — by a quarter-percentage point to 3 per cent, as expected. “Pressures on inflation have picked up in recent months and pricing power is more evident,” the Fed said in a clear warning that rates will keep rising for now. The Fed said spending had slowed in the face of higher energy prices but the job market was improving.
— Reuters
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Cable & Wireless ties up with VSNL
New Delhi, May 4 The alliance will allow corporate customers in India to access the Cable & Wireless global network through VSNL’s existing domestic and international access infrastructure. It aims to address the growing need for high-speed global connectivity for voice, data, multimedia, videoconferencing and Voice over Internet Protocol (VoIP) services, especially by IT and ITeS firms. “With this tie-up with C&W, we will now be in a leadership position to deliver unmatched solutions and seamless network to our clients in Europe as well as rest of the world,” Tata Indicom Enterprise Business Unit President Sandeep Mathur said in a statement here. Global network nodes have been set up in Mumbai, Bangalore and Chennai to facilitate this access. The joint network put in place has diverse redundant connectivity using different cables on both the eastern and western routes out of India.
— UNI
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New Delhi, May 4 EuroNews, launched on January 1, 1993, by a consortium of European public service broadcasters, reaches 155 million households across Europe, the Middle East, Africa and North and South Americas. “India is the first foray for EuroNews in the Asian region” a senior official said last night, as the channel started its feed on Dish TV. Dish TV is the country’s first DTH operator and 115 TV channels and 13 radio channels. — PTI
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Boeing joins issue with Airbus
New Delhi, May 4 “It is absolutely incredible that Airbus is questioning Air-India’s evaluation (for purchase of aircraft). There is no doubt about Air-India’s evaluation process and tender norms.... It can stand any scrutiny,” Boeing’s Senior Vice-President (Sales) Dinesh Keskar told reporters here. He said the CVC issue was “an internal matter of the government and the airline, who together can decide on this”. He hit back at Airbus, asking “did we ask for a CVC probe” when Indian Airlines finalised the deal for procuring A-320s from Airbus. On the Air-India Board’s decision to acquire 50 Boeing aircraft, he compared the Boeing 777-200 (long range), 777-300 (extended range) and 787-8 with their competitors A-340-500 and A-340-600, claiming that the Boeing aircraft fleet would enable AI to earn $ 180 million worth of operating profits per year, depending on the routes the Indian carrier was planning to operate. “The cumulative operating profit per year for AI with a fleet of these 50 airplanes is $ 185 million dollars, greater than that of an Airbus fleet,” Mr Keskar claimed. Maintaining that the operating costs of AI would also be lower with a Boeing fleet, he claimed the Indian flag carrier would realise savings of over two million gallons of aviation fuel per aircraft per year with B-777-200LR compared with A-340-500 and over one million gallons per year by operating B-777-300ER rather than the A-330-200s. The Boeing aircraft would be able to carry more passengers and burn less fuel than their Airbus competitor, he said, adding that the Boeing planes would also have “a larger resale value than its competitor”. He said the Boeing company was in discussions with AI and the existing and new Indian private carriers in constructing maintenance and training support infrastructure in the country, including facilities to carry out “heavy checks” on planes and pilot training.
— PTI
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A-I Express puts Oman flight on hold
Dubai, May 4 The inaugural flight of India’s first international budget airline, which offers fares that are 25 to 40 per cent below full-service airlines, began on April 29 with a flight to Abu Dhabi, but it skipped Muscat because of the delay in getting landing permission. The flight, which is touted as a boon to Indian workers in Gulf countries, is operated with aircraft having 181 seats and offers fares on a sliding scale with earlier booking attracting higher discounts. The airline has announced 40 flights a week from India to the UAE and Oman with promises of extending the services to all six-nation Gulf Cooperation Council countries next year, with the exception of Saudi Arabia.
— UNI
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US Federal Reserve
hikes interest rates
Washington, May 4 But a rare twist on a carefully choreographed release whipsawed financial markets. The Fed admitted nearly two hours later that it accidentally left out a planned reassurance about long-term inflation expectations. That omission initially drove bond prices lower as traders saw it as a sign of growing Fed worries about prices. Bond prices rallied after the Fed issued a corrected statement.The policy — setting Federal open market committee without dissent voted to lift the key federal funds rate — which affects credit costs throughout the economy — by a quarter-percentage point to 3 per cent, as expected. “Pressures on inflation have picked up in recent months and pricing power is more evident,” the Fed said in a clear warning that rates will keep rising for now. The Fed said spending had slowed in the face of higher energy prices but the job market was improving.
— Reuters
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Union Bank’s net up
Mumbai, May 4 The board has proposed a final dividend of 15 per cent, taking the total dividend for 2004-05 to 35 per cent, the public sector bank informed the Bombay Stock Exchange today. The total income for the reporting year rose to Rs 5,735.89 crore from Rs 5,347.77 crore for year ended March 31, 2004, it said. The net profit and total income for the fourth quarter ended March 31, 2005 stood at Rs 238.91 crore (Rs 236.26 crore in Q4 of 2003-04) and Rs 1,500.86 crore (Rs 1,441.09 crore), it added. Ajanta PAT grows
Buoyed by strong export performance, Ajanta Pharma Ltd has recorded 58 per cent jump in its profit after tax (but before extraordinary items) in the financial year ended March 31, 2005, while its sales surged by 48 per cent during the same period. “Profit after tax but before extraordinary items for the year stood at Rs 7.44 crore against Rs 4.72 crore for the previous year,” a company press note said. The company’s sales for FY 04-05 stood at Rs 178.80 crore against Rs 120.65 crore in the previous year, posting a 48 per cent increase, it added. The consolidated sales grew by 36 per cent in FY04-05 at Rs 202.03 crore against Rs 148.34 crore in the previous year, it added. “The consolidated profit after tax before extraordinary items for the year was Rs 9.85 crore against Rs 5.60 crore for the previous year,” it said.
Tanishq turnover
Tanishq, the Tata group-promoted jewellery brand, today said it had ended fiscal 2004-05 with a turnover of Rs 570 crore, with diamond jewellery sales contributing about 35 per cent to the turnover. “During 2003-04, Tanishq reported a turnover of Rs 416 crore and for the financial year ended March 31, 2005, we clocked a turnover of Rs 570 crore,” Brand Manager, Tanishq, Rupal Sheth,
said. — PTI
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