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MTN Deal
Govt rules out rollback of fuel price hike
TM buys addl 15% stake in Idea
Aviation Notes |
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Investor Guidance PPF account can be extended any number of times Q: In the application form of the PPF account it is mentioned that we can extend our account without any loss or profit after the initial period of 15 years.
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MTN Deal
New Delhi, June 14 After its late evening statement to the media yesterday, informing about the letter written by the RIL to MTN staking claim on the equity and its first right to refusal, as was decided at the time the two brothers from the country's richest family decided to part ways, the ADAG today sent out a strongly worded letter to the Mukesh Ambani-led group saying that it would claim damages. In its reaction to RIL's threat to go legal against ADAG to enforce its right of first refusal, Reliance Communications (RCom) said, if RIL chose to take any legal action, the same would be vigorously defended by RCom, and it would claim cost and damages from RIL. The battle between the two flared up yesterday after RIL wrote to MTN and ADAG, copies of which were sent to the bankers, cautioning that the amalgamation deal through reverse swap would tantamount to breach of RIL's first right of refusal to acquire a controlling stake in RCom. The deal with MTN is estimated to create a combined entity worth a size of about $70 billion and also among the top 10 telecom companies in the world. Besides, it could have operating profits higher than RIL, India's largest private sector firm. After RIL sent its letter to MTN yesterday, the latter reacted by saying that in a mala fide effort to disrupt the talks, Reliance Industries, part of the Mukesh Ambani group, sent a communication to MTN Group, making a false claim of an alleged right of first refusal to buy the controlling stake in Reliance Communications Ltd (RCom). ADAG said there was no question of taking note of any alleged rights on RIL's part... its claim is legally and factually untenable, baseless and misconceived, to be dismissed with contempt it deserves. ADAG spokesperson further said there was no change in RCom's stand from what was stated yesterday, the company sources said, the use of threatening and coercive language by RIL, with MTN, a globally respected telecom major, was Claiming that the RIL's communication to MTN was based on a 'unilateral' agreement of January 12, 2006, signed by RIL officials, ADAG said the agreement for effecting the family settlement was held unfair and unjust by the Bombay High Court later that year. Sources further said Mukesh Ambani's RIL's action in sending copies of the letter to a large number of banks and intermediaries without even first communicating with RCom reflects its ulterior and mala fide motives. Reliance Industries said it has also notified ADAG that it would adopt legal proceedings against them to enforce its rights in the Bombay High Court and would also add MTN as one of the defendants. Meanwhile, an MTN spokesperson said as far as it was concerned nothing has changed and the two groups were continuing the talks.
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Govt rules out rollback of fuel price hike
Kolkata, June 14 Talking to reporters here today, he said, “Let the Left parties do whatever they want. The oil prices will not be rolled back”. He said in the wake of the “alarming” increase in the prices of oil in
all the international markets, there was no other option but to enhance the prices of petrol, diesel and LPG. |
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TM buys addl 15% stake in Idea
New Delhi, June 14 This values the Birla company at over $10 billion. The preferential offer has been made to Telekom Malaysia (TM) at a substantial premium to the current market price of Idea Cellular. Idea's scrip closed at Rs 108.25 on BSE yesterday. Its market cap stood at Rs 28,527 crore. Sources said Telekom Malaysia (TM) is learnt to have paid Rs 158 a share for about 15 per cent additional stake in Idea Cellular. Idea would now buy out the Modi's 40.8 per cent stake in Spice and merge with it and TM would have 20 per cent equity in the merged entity. While an Idea spokesperson declined to comment on this, the company in a filing to stock exchange said the company keeps pursing growth opportunities and can not comment on the reports of TM picking up 15 per cent additional stake in Idea Cellular and as and when any definitive proposal of any nature is considered and approved by the company's board, the company shall inform the exchange.— PTI
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Aviation Notes
The steep rise in fuel prices has left all airlines, government and private, bleeding profusely. The fares have risen and airlines losses have increased.
The minister of state for civil aviation Praful Patel knocked at the doors of Prime Minister Manmohan Singh and finance minister P. Chidambaram. Sadly, he did not get any assurance from them. "This downgrade scenario is likely to affect growth of airport infrastructure development programmes throughout the country", fears the minister. The situation has turned murkier than it was until recently. As there is no possibility of arresting overhead expenses, quite a few scheduled and no-frills carriers have decided to reduce their operations. Some are even facing the possibility of closure. As the current situation exists, there is a scope for only the fittest three or four carriers to survive. While dark clouds are hovering around Indian skies, the minister is trying to secure relaxation in rules so that more private airlines are able to fly on international routes. This will be possible only if the government relaxes the rule of the minimum five years of operations. While passenger traffic has hit turbulent weather, there is an enormous growth in cargo movement on both national and international sectors. The airline bigwigs are convinced that what they lose on passenger traffic can be offset through cargo
uplift. The National Aviation Company's rating has risen from ninth position in September 2007 to number one in March-April 2008. The director of commercial (cargo) Anita Khurana is optimistic that airline's operation from new hub of freighter in Nagpur will be immensely successful. This has been her theme song even when she was heading cargo section of the merged identity, Indian Airlines. Equally optimistic in this regard is Blue Dart's managing director Tulsi Mirchandaney. "Time is money" and majority of corporates are now concentrating on sending their goods through air instead of depending upon road, rail or steamer. "The quick turnover of the money is the key to success", say cargo handlers. The congestion at the Indira Gandhi International Airport (IGIA) will continue to worry operators and passengers as new runway, 3rd, will not be ready until end of this year. It was scheduled to be ready by March 2008 and then by June 2008. Now much work remains to be done and the authorities fear it will not be operational until middle of 2009. The civil work like construction of road on the runway remains far behind. Until this work is completed, the gadgets cannot be installed. "We are besieged with several other unforeseen problems and the operations will be delayed for a considerable period", said one official. The authorities connected with civil aviation have, in the meantime, issued certain 'tips' to the commanders how to save fuel and cut costs. Some commanders, however, do not subscribe to the views of the authorities. |
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Investor Guidance
Q: In the application form of the PPF account it is mentioned that we can extend our account without any loss or profit after the initial period of 15 years.
What does that mean? Does it mean that we will not get any interest after 15 years if we extend the same account? For how long can we extend our PPF account I mean maximum time limit to continue my account? In case if I change my PPF account from one city to another or from one bank to any other bank or post office, will I lose any interest of that transaction period in shifting the account? In case I close my account after 15 years can I open a fresh account after that? A: The account can be closed on completion of the term or it can be continued for a block of 5 years. This facility is available for a further block of 5 years on expiry of 20 years and yet another 5 years on expiry of 25 years and so on for any number of blocks - Yes, any number of blocks. The continuation can be with or without contribution. Once an account is continued without contributions for more than a year, the subscriber cannot opt to change over to continue the account with contributions. [Notification F.3(6)-PD/86 dt. 20.8.86]. A subscriber, continuing his account with fresh subscriptions, can withdraw up to 60% of the balance to his credit at the commencement of each extended period in one or more installments, but only one per year. On the other hand, the balance can be merely retained in the account without contribution till it is needed. Any amount, in part or full, can be withdrawn in installments, not exceeding one in a year. The balance will continue to earn interest till it is completely withdrawn. Form-H is to be used to declare the intention of continuing the account with subscription whereas no special intimation is necessary to continue the account without subscription. You may find difficulty in transferring the account to another bank or even the branch of the same bank, unless you have good reasons to do so. However, you do not lose interest. Yes, you can open another account after closing the first account. Though you have not asked whether it is wise to do so, allow me to give you an unsolicited advice that you will do well by opting for post-maturity continuation. The 8% tax-free interest coupled with its absolute safety is very attractive. Capital gains tax
Q: I have purchased a house which was under construction in March ’05. The first installment of EMI I paid was in February
’05. The construction was completed and I have got the occupation certificate for the house in July
’07. If I sell the house in July ’08 what would be the nature of tax I would have to
pay? A: Even though you have been paying the EMIs since 2005, the house is completed and ready for possession only in FY 07-08. Therefore, the period of holding would be considered from June 2007 and not from February 2005. Since the house has been held for less than three years prior to the date of sale, the gains would be short-term in nature. You will have to pay short-term capital gains tax. Refund of deceased
Q: Our mother expired in 2008 without a proper will. A family settlement has been executed by the family members. Our problem is that an income tax refund of Rs.31,104 for AY 2006-2007, has not been refunded to our mother during her life time, and now when the refund voucher, if sent, will be in her
name. What should the family do so that this money can be claimed and utilised by
us? Four family members have signed the Family Agreement. A: Normally, the bank account of a deceased person is continued for some time to enable handling of money received after the death. Yes, it is not strictly proper to do so for obvious reasons.
The alternative is a little complicated. You can open a new bank account in the style — “Estate of Mrs xxxx (your mother’s name)”, that can be operated by a person authorised by the other family members. You can thereafter operate this account for collecting funds into the account and distributing funds to the family members. Fringe Benefit Tax
Q: My company reimburses my local conveyance, travel and other related expenses; boarding, client entertainment expenses, etc. I submit the original bills to the company for claiming this reimbursement. Can I know: 1) If the reimbursed amt. is taxable or exempt A: None of these items as specified by you are taxable for you. It is your company that is supposed to pay Fringe Benefit Tax (FBT). As far as you are concerned, nothing is taxable. NSCs
Q: I have a query related to National Savings Certificates (NSC). As far as I know, an investor does not need to pay tax on the NSC interest on an yearly basis since its deemed to be reinvested but at the time of maturity the tax is payable. In which case will PPF not be a better investment to take deduction under Sec. 80C as the interest on PPF is completely tax-free? A: NSC being a cumulative interest paying instrument, the interest thereon for the first five years is deemed to be reinvested and hence the deduction under Sec. 80C is available thereon. Only the last year’s interest becomes fully taxable. However, for reinvestment you have to receive it first (as accrual). In the last year, tax is payable only on the sixth year’s interest. Sometimes, it so happens that for the investor, his sec. 80C limit of Rs. 1 lakh has been reached before the NSC interest. In that case the NSC interest will be taxable per year. The authors may be contacted at
wonderlandconsultants@yahoo.com |
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