The Tribune, Chandigarh, India

	Vodafone to pay $400 million more to buy 33% in Essar The deal value is now $5.46 bn; transfer of shares to be completed by February 2012 New Delhi, July 1 Revising the deal, UK-based Vodafone today agreed to pay over $400 million more to its Indian partner Essar for buying its 33 per cent stake in the joint venture Vodafone-Essar. With this, Essar closed the deal to sell its 33 per cent stake at as against $5 billion decided earlier. Essar had held 22 per cent stake in the joint venture through its Mauritian arm and the remaining 11 per cent through Indian subsidiary. This means that Vodafone would take a further hit of over $400 million to buy out Essar’s stake. “Under the agreements signed in Port Louis, Mauritius, Vodaofone has made a net payment of $3.32 billion, after deduction of withholding tax of $0.88 billion,” Essar said. With this the 22 per cent stake works out to be $4.2 billion as against $3.8 billion decided earlier. The shares have been transfered to Vodafone. The value for the 11 per cent stake held by Essar through Essar Communications Holdings Ltd has now been revised to $1.26 billion compared to $1.20 billion decided earlier. The transfer of shares would be completed by February 15, 2012. Commenting on the deal, Essar Group Chairman Shashi Ruia said: “We were one of the early entrants in the telecom space in 1995 and we are really pleased that Vodafone-Essar has grown to become one of the premier telecom companies in the country.” “We have also enjoyed an extremely successful relationship with Vodafone and wish them success.” Both parties had recently witnesses a prolonged legal battle as Vodafone was against Essar going for reverse listing of its stake, while Ruias had said that it was necessary to arrive at true value of its holdings in the JV. — Agencies India to get withholding tax of $880 mn India is likely to get a withholding tax of $880 million on the deal as the companies have deducted this tax.Vodafone and Essar have paid the tax even as both the parties continue to believe that no tax is due on this transfer. It was viewed as prudent to deduct and pay withholding tax on a without prejudice basis and they would claim a refund after following due process Vodafone also withdrew its tax dispute petition in the Authority for Advanced Ruling (AAR). “Vodafone Mauritius (subsidiary of Vodafone) withdrew tax dispute petition from Authority for Advance Rulings (AAR),” CDBT Chairman Prakash Chandra said here.— PTI
	CBI files case against former oil sector regulator New Delhi, July 1 The Central Bureau of Investigation (CBI) today registered a case against former chief of Directorate General of Hydrocarbons, VK Sibal and seven others for allegedly favouring a US-based firm in carrying out seismic exploration of oil and gas along Indian coasts. The agency has also named the then Directorate officials— Chief Geologist D K Rawat, Manager Finance and Accounts TSLN Reddy, Advisor Geophysics S K Jain, HoD Accounts K A Murli, Chief Chemist Savinder Gupta and Advisor Contract Ms Anurit Sahi — in the FIR. The CBI had registered a Preliminary Enquiry in November, 2009 following complaint by the CVC that certain companies were allegedly being favoured by Sibal. The agency has also booked private company GX Technologies and its Manager (Exploration), Sujata Subramaniam. “It is alleged that officials of DGH had given undue favours to a private company in speculative seismic survey in lieu of personal favours obtained from representatives of a private company,” spokesperson Dharini Mishra said. CBI sleuths carried out searches at nearly 15 residential and official premises of all the accused in Delhi, Noida, Dehra Dun and Mumbai, agency sources said.Sibal did not respond to repeated attempts to contact him.— PTI
	Trade deficit at $14.5 billion as exports, imports grow 50% in May New Delhi, July 1 Exports witnessed huge annualised growth of 56.9 per cent to $25.9 billion in May in a bright spot for the Indian economy, which is battling high inflation amid signs of a slowdown. In the April-May period, exports grew by 45 per cent to $ 49.7 billion vis-a-vis the same period last year. Imports, too, increased by 54 per cent to $40.9 billion in May -- the highest growth rate in the last four years -- leaving a trade deficit of $14.9 billion. In the first two months of the 2011-12 fiscal, imports were up 33.3 per cent to $73.7 billion and the trade gap for the period stood at $23.9 billion, as per data released today. In fact, the trend of healthy exports even in the previous months helped the country moderate its current account deficit to 2.6 per cent of the GDP in the last fiscal. "This is a sign of robust scenario... coupled with effective government initiative," exporters' body Federation of Indian Exporters Organisation President Ramu S Deora said. While the government has not formally set an export target for the current fiscal, $300 billion can be achieved, according to industry estimates. Exports grew by 37.5 per cent to $246 billion. While there are signs of a slowdown in overall industrial growth of 6.3 per cent and high inflation of over 9 per cent in May, exporters have put out a sterling performance despite financial woes in several European economies.— PTI
	Interest rates, fuel hike dampens June auto sales Maruti sales dipped 9% due to the strike; exports dropped by 33% New Delhi/Chennai, July 1 Production losses at industry leader Maruti Suzuki and a slump in sales because of high interest rates and rising fuel prices have resulted in a grim sales picture for the auto industry in June. Crippled by a 13-day strike at its manufacturing facility in Manesar, and a planned shutdown at all its manufacturing facilities, Indian passenger car market leader Maruti Suzuki reported a drop of 8.8 per cent in its sales for June. The sales stood at 80,298 vehicles as against 88,091 vehicles sold in June 2010. Segment-wise, sales of the company's bestselling hatchback cars, including Alto, Wagon-R, Zen, Swift, Ritz and A-Star, grew by 2.3 percent in June and stood at 52,599 units as compared to 51,418 units in June, 2010. However, there was a drastic drop in two other segments, pulling down the overall figures. Exports dropped sharply by 32.7 per cent in June and stood at 10,278 units from 15,279 units in June last year. The 13-day strike, which started on June 4, cost Maruti Suzuki a production loss of around 12,600 cars pegged at a value of Rs.380 crore. The cumulative sales for the first quarter in the current fiscal which were effected by high interest and fuel cost, grew at a meager pace of 0.6 per cent at 281,526 units from 283,324 units in the corresponding quarter of 2010-11. Sales of Tata Motors reported a marginal decline of one percent at 66,358 units as compared to June 2010. Segment-wise, commercial vehicles sales did well in the domestic market and grew by 13 per cent at 39,271 units compared to 34,791 units sold in June 2010. But the dampener came from a drop of 22 percent in the sales of the passenger car segment. The three Chennai-based automobile manufactures including Hyundai, TVS and Ford too came out with good sales number for June.— IANS
	Home, auto loans to cost more as ICICI, 2 others raise rates Mumbai, July 1 Three major lenders, including country's biggest private sector bank ICICI Bank, today announced an increase of 25 basis points, or 0.25 per cent, in lending rates, making auto, home and corporate loans more expensive for borrowers. The rate hike will increase the cost for those who had taken advances on floating rate of interest. Besides ICICI Bank, state-owned Indian Overseas Bank and Dena Bank have also announced increase in their lending rates by similar margin. The decision to hike lending comes within weeks of the Reserve Bank of India (RBI) increasing in key lending (repo) and borrowing (reverse repo) rates by 25 basis points to tame rising inflation. The ICICI Bank has decided to increase its base rate (I-base) by 25 basis points to 9.50 per cent with effect from Monday, the lender said, adding the interest rates on all new loans are being determined with reference to the I-base rate. The bank also announced to increase the benchmark prime lending rate by 25 basis points. The decision would impact the customers who had taken loans from the ICICI Bank on floating rate of interest. "The fixed rate customers will not be impacted by the ...increase and their contracted rates will remain unchanged", ICICI Bank said. Since base rate came into effect last year, lenders like HDFC Bank and Axis Bank have increased their rates by 200 bps. With today's increase, ICICI has also raised its rates by 200 bps. The benchmark prime lending rate of the Chennai-based IOB will go up from 14.25 per cent to 14.50 per cent with immediate effect. IOB in a filing to the Bombay Stock Exchange (BSE) said "The Board of Directors has approved the increase of the Benchmark Prime Lending Rate (BPLR) of the bank by 25 basis points from existing 14.25 per cent to 14.50 per cent." Dena Bank decided to raise its base rate by 25 basis points to 10.20 per cent and its benchmark lending rate by a similar margin to 15.25 per cent. — PTI
	Voluntary surrender of Rs 85 cr by Gurgaon realtor Anuja Jaiswal Tribune News Service Chandigarh, July 1 A leading Gurgaon-based infrastructure developer, M3M India, today surrendered Rs 85 crore during search and seizure operations conducted by the Income tax department. Director General (Investigation), North West Region, Jaswant Singh said that investigation was still in progress and the group was liable to pay 35% tax on this unaccounted income. The search and survey operations, conducted under the supervision of director general of Income tax (Investigation) and director, YR Saini began yesterday and over 100 department personnel were involved in it.

Ludhiana cycle industry doubles production to meet demand
Neighbouring states order to supply under various welfare schemes
Manav Mander
Tribune News Service

Ludhiana, July 1
After a period of slowdown, Ludhiana'’ cycle industry has received orders from neighbouring states. These states would distribute these cycles to students under various schemes.

Cycle units have double production to meet the rising demand. Hero Cycles, Avon, Atlas, EI Cycles and SK Bikes have received orders. The units were supplying cycles to Karnataka and Chhattisgarh. Now Tamil Nadu, Madhya Pradesh, Rajasthan are the new states to place orders.

The Bihar government has decided to give cash to students so that they can buy cycles on their own, cycle manufacturers are gearing to flood the Bihar market with the cycles.

“We have doubled our production capacity and have decided to send the product to the Bihar market by August where the school students will be buying cycles on their own,” said a city-based small cycle manufacturer.

An official spokesperson of the Hero Cycles said. "Our company has been given orders by different states and we are speed up our production unit to deliver the order on time," he said.

KK Seth, Managing Director of Neelam Cycles said: "Cycle companies from the city are gearing up for the orders and have increased their production capacity to meet the demand," he said.

He lamented that some of the state governments had kept difficult conditions for filing tenders. As a result small companies were unable to file tenders. Punjab government has asked for the applications but the tenders are ye to open, he added.

"These orders have once again led to a boom in the market. Whenever any such tenders are received by the cycle industry it indirectly benefits the units engaged in the making of cycle parts," said Charanjit Singh Vishivkarma, MD of Vishivkarma Industries Private Ltd.

Not only cycle units, but the allied industry such as cycle parts has also benfited by the orders. Nearly 25 lakh cycles will be manufacturer by various units.

BRIEFLY

Wockhardt receives nod for eye drops
New Delhi: Wockhardt on Friday said it has received tentative approval from the US health regulator to market Olopatadine hydrochloride eye drops in the American market.

The company can now market 0.1 per cent solution of Olopatadine hydrochloride eye drops, used in treating allergic conjunctivitis, the company said.— PTI

Govt warns 7 cos over coal, lignite blocks
New Delhi: Taking forward its crusade against firms sitting idle on coal and lignite blocks, the Coal Ministry has issued warnings to another seven firms, asking them to either develop the blocks or get them cancelled.

"The allocatee(s) is (are) warned and directed to develop the block(s) immediately. Any failure in development of the block(s) would lead to necessary actions , including de-allocation," it said.— PTI

New ICAI appointment
Chandigarh: Devinder Kumar Singla, a senior chartered accountant , and Ex-Chairman of the Chandigarh Branch of ICAI, has been appointed a member of the Ethical Standards Board of the The Institute of Chartetred Accountants of India. This is the first time a person from the region has been appointed to
the Board. — TNS

New disclosure norms for banks unveiled
Geneva: The Basel Committee on Banking Supervision, which is overseeing global reforms in the sector, on Wednesday unveiled new guidelines that require lenders to publish all details on their pay policies, particularly bonuses and incentives.— PTI