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Satyam Fiasco
RCom launches GSM services
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M&M exits Swaraj Mazda
Suzlon raises stake in REpower to 73.71 pc
IMF calls for timely fiscal stimulus
Stimulus Plan
MFN status for Pak to continue: Pranab
JetLite cuts fares by up to 40 pc
Assocham revises GDP forecast to 7.1%
Fixed line telecom user base on the decline
Rs 150-cr order for Punj Lloyd
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Satyam Fiasco
Hyderabad, December 30 In an e-mail communication to his 50,000-odd employees, Raju sought to project an optimistic outlook for the company despite the current turbulence over the failed bid to acquire his family-owned companies — Maytas Properties and Maytas Infra. Focusing on corporate governance and business strategy, the twin issues over which the company took the beating recently, he said “ Satyam did not and does not now intend to retreat from IT and BPO services in any way, and going forward, we will focus exclusively on these markets.” Outlining measures to regain investors’ confidence, Raju said the company’s Board would be strengthened by “changing its size and composition” and the services of DSP Merrill Lynch would be taken to provide “strategic advice and options”. “The Board will meet on January 10 to consider these options and to chart a course of action that would boost stakeholders’ confidence further,” he said. The letter came against the backdrop of an unprecedented crisis in the country’s fourth largest IT company over its aborted Maytas deal culminating in the resignation of four independent members from the nine-member Board. The independent directors M Rammohan Rao, who is Dean of Indian School of Business here, Vinod Dham, a US-based technocrat widely regarded as “Father of Pentium”, Krishna G Palepu, professor of business administration at Harvard Business School, and Mangalam Srinivasan, a US-based academician, had resigned from the Board. ”The events of the past two weeks have raised many questions, but these can be distilled into two basic issues: the viability of our business strategy to diversify and the effectiveness of our corporate governance,” Raju said. He went on to assure his staff that Satyam was “completely committed” to the IT services and BPO business, as it has been since inception 21 years ago. The rescheduled Board meeting will discuss a share buyback proposal to restore investor confidence. The changes in management, possible shake-out in promoters group and measures to improve corporate governance policies will also be discussed. |
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Mumbai, December 30 To begin with, RCom's GSM services would be available in 11,000 towns to be extended to 22,000 in the next few months, ADAG Group chairman Anil Ambani told reporters here. RCom was the first company to be awarded dual spectrum ahead of others and it has invested over Rs 10,000 crore to roll out the GSM network in the past 15 months. Prior to this, RCom was offering GSM-based mobile services in eight circles of eastern states, while its CDMA services were available throughout the country. Ambani said RCom would look forward to participating in 3G auctions for both GSM and CDMA services, and the company has earmarked up to Rs 4,000 crore as capital expenditure for the high-end mobile services. The company has also bagged licences to launch GSM services in Sri Lanka and Uganda. — PTI
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New Delhi, December 30 After the acquisition, Sumitomo, which had 39.39 per cent stake in Swaraj Mazda, will gain control of the firm with 53.52 per cent stake. The proposed date of acquisition is January 6, it added. M&M had acquired 64.64 per cent stake in Punjab Tractors in March last year for over Rs 1,400 crore. It bought off private equity firm Actis' 43.3 per cent stake in the company and followed it up with an open offer for 20 per cent. In October M&M got shareholders' approval to amalgamate PTL with itself. — PTI
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Suzlon raises stake in REpower to 73.71 pc
Mumbai, December 30 In September, Suzlon had signed an agreement with Portugal-based Martifer for acquisition of the latter's entire 22.48 per cent stake in REpower Systems for 270 million euros. With the completion of the acquisition, Suzlon's total holding in REpower would go up to 90 per cent. In a filing to the Bombay Stock Exchange, Suzlon said it has acquired the first tranche of Martifer Group's stake in REpower Systems, Germany for a payment of about 65 million Euro. "Suzlon already holds 91 per cent voting rights in REpower through an existing agreement with Martifer," the company said. Earlier this month, the company revised its payment schedule to acquire a 22.4 per cent stake in REpower Systems, after its plans to raise Rs 1,800 crore by way of a rights issue was suspended. As per the reworked schedule, Suzlon would pay 270 million euros in three tranches as acquisition cost. With the first tranche being paid, the wind power major would pay 30 million euros in April 2009 and final tranche of 175 million euros in May 2009, which takes the total consideration to 270 million euros. In June, Suzlon had acquired 30 per cent stake of REpower from France-based Areva, taking its total holding to 66 per cent. REpower is Germany's biggest wind turbine maker. — PTI
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IMF calls for timely fiscal stimulus
Washington, December 30 Pointing out that action should be immediate, IMF said there should be a collective effort and that each country that has fiscal space should contribute. "The optimal fiscal package should be timely, large, lasting, diversified, contingent, collective, and sustainable: timely, because the need for action is immediate; large, because the current and expected decrease in private demand is exceptionally large ... collective, since each country that has fiscal space should contribute; and sustainable, so as not to lead to a debt explosion and adverse reactions of financial markets," IMF said. According to the agency, as the current crisis would last at least for several more quarters, the fiscal stimulus can rely, more than is usual, on spending measures. "Looking at the content of the fiscal package, in the current circumstances, spending increases, and targeted tax cuts and transfers, are likely to have the highest multipliers. General tax cuts or subsidies, either for consumers or for firms, are likely to have lower multipliers," IMF said in its latest research paper titled 'Fiscal Policy for the Crisis'. IMF has also mooted the idea of governments providing insurance against extreme recessions by offering contracts with payment. The agency has pointed out that for instance, such an insurance could be made available, contingent on GDP growth declining below some "threshold level." "Banks could condition loan approvals on firms having purchased such insurance from the government. While such contracts would most likely be attractive to firms, which suffer disproportionately during large recessions, they could be open to individuals as well," the research paper said. IMF has asserted that to fight the current credit turmoil, there needs to be policy measures to repair the financial system and steps to increase demand. "The current crisis calls for two main sets of policy measures. First, measures to repair the financial system. Second, measures to increase demand and restore confidence," the agency noted. — PTI
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Stimulus Plan
New Delhi, December 30 Finance secretary Arun Ramanathan, expenditure secretary Sushma Nath and revenue secretary P V Bhide are understood to have called on Manmohan Singh, who is also holding the finance portfolio, at his residence. Ahluwalia is understood to have deliberated on the package at a meeting with the Prime Minister separately.
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MFN status for Pak to continue: Pranab
New Delhi, December 30 "There is no question of withdrawing it (MFN status) despite provocations, bad relationship," External Affairs Minister Pranab Mukherjee told PTI. MFN implies treating a trade partner at par with others. While Mukherjee favoured continuation of economic ties with Pakistan, he said "what we have suggested, what we have indicated is that it cannot be business as usual". Mukherjee said India should make Pakistan fulfil its commitment of not allowing use of its territory by terrorists by building diplomatic pressure and not through economic blockade. In any case, the bilateral trade is negligible, mostly taking place via Dubai. Against India's global trade of about $400 billion, trade with Pakistan was $2.23 billion in 2007-08. Mukherjee rejected outright blockade of trade with the neighbouring country. After the terror attack in Mumbai on November 26, initiatives to improve bilateral trade as a part of the overall political composite dialogue suffered a setback. The commerce secretary level talks which were to take place in Islamabad in December or January have been put off indefinitely. While India granted the MFN status to Pakistan long ago, Islamabad has so far not reciprocated. It has also not implemented its trade-opening commitments under the South Asia Free Trade Area Agreement. Mukherjee said despite "height of tension, we maintained relationship...MFN is one such (area)". — PTI
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JetLite cuts fares by up to 40 pc
New Delhi, December 30 Another low-cost airline SpiceJet announced fares starting Rs 99 across its network. The scheme is applicable for tickets booked at least 21 days prior to the date of travel and is valid till the June 30 2009. — PTI
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Assocham revises GDP forecast to 7.1%
New Delhi, December 30 According to the Assocham Business Barometer (ABB) survey of 250 CEOs, about 80 per cent projected GDP growth for 2008-09 at 7.1 per cent from the earlier 7.6 per cent, with strong waves of negative economic sentiment. A two per cent decline in the growth rate for 2008-09 from the previous year can trigger a further slump in the economic activity that could pose serious threats of a slowdown in the forthcoming fiscal, it said. "The outlook for the fiscal 2009-10 is seen as even worse with the growth projections made at 6.5 per cent as the effect of job cuts, negative production growth rate and stagnant US and EU economies would be felt on the Indian economy," Assocham secretary-general D S Rawat said. The survey added that on account of a slowdown in agricultural growth in the first half of the fiscal at 2.9 per cent, compared with 4.5 per cent in the same period last year, the growth has been revised at 3.9 per cent. Over 80 per cent of CEOs said manufacturing sector, which has witnessed a negative growth of 1.2 per cent in October, would take double hit from the rapid slackening of domestic demand and heavy shrinkage in new export orders. Services sector, which recorded an average growth rate of 10.7 per cent in past three years, is expected to deteriorate to below 9 per cent growth rate mark, it said. However, about 64 per cent of the respondents said the interest rate cuts by the RBI will help in lifting the GDP growth. — PTI
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Fixed line telecom user base on the decline
New Delhi, December 30 According to the latest data released by the telecom regulator, Telecom Regulatory Authority of India (TRAI), the telecom sector, which had showed signs of overcoming the current recession in the market, saw a 1.08 per cent dip in new telephone connections in the month of November. While a total of 10.18 million telephone connections (wireline and wireless) were added in November, there was a decline of another 1.7 lakh customers in the wireline segment, which saw the numbers decline to 38.05 million customers in November from 38.22 million customers in October last. This has been a major problem sector for the telecom authorities which are also trying to dole out benefits in a bid to hold customers in the wireline segment. However, there has been a constant decline in the numbers mainly due to customers preferring wireless segment to the wireline segment. India is one of the fastest-growing telecom market which has been adding over nine million new subscribers each month. It added 10.29 million connections in October. Incidentally, the last time when the sector had witnessed a fall in subscriber base was in April last, following which there had been a major revival and even the recession had no effect on it. According to statistics, the total number of telephone connections reached 374.13 million at the end of November 2008 as compared to 363.95 million in October 2008. The latest numbers show that the overall teledensity improved to 32.34 per cent at the end of November 2008 as against 31.50 per cent in October 2008. The total wireless subscribers (GSM, CDMA & WLL(F)) base stood at 336.08 million at the end of November 2008.
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Rs 150-cr order for Punj Lloyd
Mumbai, December 30 |
RCom buys back FCCBs worth Rs 121 cr JSPL investment plan SBBJ cuts interest rates Stake in GMR Infra Religare Technova buyout
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Mumbai, December 30
Washington, December 30
