London, November 24
Questioning Jet Airways' failure to acquire it, Air Sahara has filed a claim of Rs 3,020 crore in an arbitration tribunal here and sought honouring of the share purchase agreement (SPA) reached by the two parties in January.

In its prayer before the tribunal headed by British Judge Lord Stein on November 20, Air Sahara sought Rs 3,020 crore from Jet toward execution of the SPA along with the recovery of inter-line business revenue that the latter accrued for nearly three months.

As part of its prayer, Sahara sought a direction from the tribunal that Naresh Goyal-promoted Jet should execute the SPA and close the transaction as per directions of the tribunal.

Justice S.P. Bharucha and Justice B.P.Jeevan Reddy, both retired judges of the Supreme Court, are on the panel as nominees of Jet and Air Sahara, respectively.

Alternatively, Sahara claimed if "Jet Airways is unwilling to buy Air Sahara, then Jet is liable to pay over Rs 1,931 crore as damage, compensation and inter-line revenue etc.

Jet, on the other hand, filed its claim a day after the deadline set by the tribunal, seeking refund of Rs 500 crore paid by it as an advance to Air Sahara along with interest.

The tribunal had directed both parties vide its procedural order on October 11, 2006, to file claims by November 20. However, Jet filed its claim only on November 20, sources said.

In its prayer, the Sahara group contended that the SPA between the two parties was still valid -- a position it had taken before a Lucknow court after Jet let the June 21 deadline for completing the deal pass.

Meanwhile, sources said the Bombay High Court accepted Jet's plea for replacing ICICI Bank as the Rs 1,500-crore escrow account agent. With the consent of Air Sahara, the High Court allowed Jet to replace ICICI Bank with the SBI for the guarantee given to the Sahara group.

The absence of regulatory clearances had played spoilsport in the deal, which was billed as India's first and largest takeover deal.

Jet had announced in January it would buy Sahara for $500 million, much less than the $750 million-$1 billion enterprise value quoted by Sahara's consultants, Ernst & Young.

In March, Jet Airways had extended the deadline for completing the transaction by three months as it did not have a regulatory clearance for the acquisition.

Under the agreement, Sahara was entitled to claim Rs 1,500 crore from the escrow account only on completion of the takeover exercise on June 21 and Jet was eligible for full repayment within seven days of termination of the pact without any dispute.

But on a petition from Sahara, the Lucknow District Sessions Judge had barred Jet from operating the escrow account on the grounds that the deal had collapsed due to a dispute.

"As there is a dispute and there is an arbitration clause, hence the petition is maintainable under section 9 of the Arbitration and Conciliation Act, 1996," the District Sessions Judge had said.

There were at least four cases filed by the two parties in various courts, which were later transferred to the Bombay High Court.

The High Court, in turn, had directed the two parties to settle the dispute through arbitration. — PTI

London, November 24
Global financial services firms UBS AG and Goldman Sachs Group Inc have acquired over 11 per cent stake in Corus.

These two firms also happen to be the banking advisers to Brazilian steelmaker CSN, which is competing with India's Tata Steel for acquiring Corus.

UBS AG, acting through its business group and legal entities, has picked up 66.12 million shares of Corus Group, representing 7.36 per cent, as per information available on the Corus website. Goldman Sachs Group Inc acquired 36.06 million shares of Corus, aggregating to a 4 per cent stake.

CSN has already acquired a 3.8 per cent stake in Corus through open market transactions.

Although their combined holding adds up to 15.16 per cent in Corus, the takeover clause on launching an open offer may not apply to them as they have picked up stakes separately.

Meanwhile, investment banking sources said that the Tata Steel Board had decided to "match" CSN as and when it made a formal bid for Corus after due diligence. CSN started the due diligence early this week and is expected to make a formal bid at 475 pence per Corus share.

In Mumbai, however, Tata Steel said in a statement that it had not taken any decision in the manner speculated (about raising its offer for Corus) in the media.

The Tatas had in October made a $8.1 billion takeover offer, but Brazil's Companhia Siderurgica Nacional SA trumped the Tatas with a slightly higher offer of $8.3 billion for Corus.

Meanwhile, Corus announced it would list 46.8 million additional equity shares for trading on the LSE, but analysts said it would not have any implication on the proposed takeover move. — PTI

New Delhi, November 24
German-US carmaker DaimlerChrysler said today it would set up a second plant in India in or around Pune as the company expects the market for high-end products to grow as also launch new products, DaimlerChrysler India Managing Director and CEO Wilfried Aulbur told PTI here.

"We plan to manufacture products from our existing offerings in India in the proposed new plant. Also, it will give us possibility to expand in the future," Mr Aulbur said

He said the location for the new facility would be finalised "very soon", though refusing to divulge details on the proposed investments that could flow in.

DaimlerChrysler, which started local manufacturing of cars at its existing facility in Pune in 1995, has been making profits in India. "We have been making profits in India for a long time now... for around six or seven years," he said.

DaimlerChrysler sells the Mercedes Benz brand in India, apart from tippers in the off-highway commercial vehicle range, sold 1,915 cars in 2005 which included 829 units of 'C Class', 825 units of 'E Class', 140 units of the top-end 'S Class' while the rest were CBU models. — PTI

New Delhi, November 24
Tax holidays to SEZs are estimated to lead to a revenue loss of over Rs 1,00,000 crore by 2009-10, Parliament was informed today.

Of the estimated revenue loss of Rs 1,02,621 crore from 2006-07 to 2009-10, the loss on account of direct taxes is estimated to be Rs 53,740 crore and on account of indirect taxes Rs 48,881 crore, Minister of State for Finance S.S. Palanimanickam told the Lok Sabha in a written reply.

To the extent that tax concessions to units in SEZs eroded the legally defined tax base, the revenue loss was permanent, he said.

To another question, he said the reported increase in the prices of cement could not be attributed to excise duty as there had been no change in the rate of the levy since March 1, 2003, except for the imposition of an education cess.

As many as 4,12,278 tax returns had been received through the post offices in the country up to October 31, he said.

Environmental nod must for SEZs

The government had made environmental clearance mandatory before SEZs are set up. No study has, however, been undertaken so far about the impact of SEZs on environment, Minister of State for Forests and Environment Namo Narain Meena said in the Rajya Sabha.

Establishing SEZs now requires prior environmental clearances as per the provisions of the Environment Impact Assessment Notification, 2006,

The minister said in a written reply.

"Accordingly, the project authorities are required to undertake an Environment Impact Assessment (EIA) study based on which the proposal is considered for environment clearance," he said. — PTI

New Delhi, November 24
The government said today three banks from Pakistan had shown interest in starting operations in India and a decision in this regard would be taken on a reciprocal and simultaneous basis.

Habib Bank Ltd, National Bank of Pakistan and United Bank Ltd have evinced interest in opening branches or offices in India, Minister of State for Finance Pawan Kumar Bansal told the Lok Sabha.

At a meeting held on September 26 between the RBI Governor and the Governor of the State Bank of Pakistan, it was agreed that licences to these banks for opening branches would be given on a reciprocal and simultaneous basis, he said.

To another question, Mr Bansal said the government had not received any proposal on the merger of Corporation Bank, Oriental Bank of Commerce and Indian Bank, which recently entered into a strategic tie-up. These banks entered into a memorandum of intent (MoI) on September 15 to form a strategic alliance. — PTI

Chandigarh, November 24
India and China are slowly losing their share in textiles and garment exports in the US market to other South Asian players like Indonesia, Bangladesh, Vietnam and Pakistan.

Since these new entrants in the US market are getting benefits of least developed countries (LDC), their exports to the USA are now between 18 and 26 per cent. Bangladesh has recorded a growth of 24.7 per cent while Cambodia and Vietnam have recorded 26.28 per cent and 23.8 per cent growth, respectively, from January to September this year. Comparatively, India's exports have fallen drastically from 30 per cent last year to 13 per cent this year. China, too, has suffered a setback in its exports — from 77. 9 per cent in 2005 to 7.8 per cent in January to September this year.

Doyens of the textile industry and representatives of China Cotton Textile Information Centre, who are here to participate in the two-day 62nd All-India Textile Association Conference that began today, expressed concern over the slackening textile and garment exports.

Talking to TNS on the sidelines of the conference, Mr Fu Enfu, President, China Cotton Textile Information Centre, said import curbs imposed by the US on certain categories of exports from China till 2008, under special WTO dispensation, had led to the decline in exports.

"Though the Chinese textile exports are growing, the growth has been much less than last year," he said. China's textile exports to the US were $12.2 billion till September 2005, and rose marginally to $13.13 billion till September 2006.

The slump in export growth for India, however, is because of the stiff competition from smaller regional players like Bangladesh, Vietnam, Pakistan, Cambodia and Indonesia, and the Indian textile sector's inability to maintain its growth levels.

Mr D.K. Nair, Secretary-General, Confederation of Indian Textile Industry, said Indian garment exports to the US grew by 30.56 per cent from January to October 2005. "However, growth has slowed down to 10.75 per cent till October, 2006," he said.

Dr P.R. Roy, National President of the Textile Association of India, said, "China is a formidable competition, but other South Asian players, too, are rising. India will have to take necessary steps if it was to maintain its growth rate, by having a more industry-friendly policies. The government is already taking necessary steps in this regard by massive investments in this sector under Technology Upgradation Fund Schemes. From Rs 15,032 crore in the last fiscal, investment under this scheme is expected to double to Rs 30,000 crore by the end of this financial year". 

Thiruvananthapuram, November 24
Two months after a state-wide ban on Coca Cola and Pepsi was quashed by the Kerala High Court, authorities have filed cases against the soft drink giants alleging that some of their products contain traces of pesticides.

The separate petitions filed yesterday in a court here by a food inspector of the state health department said laboratory tests of samples seized from distributors in this city had found that they contained pesticide elements.

The case was filed on the basis of tests of samples collected three months ago.

The Left Democratic Front government in Kerala banned production and sale of Coca Cola and Pepsi products in August but this was quashed by the high court in September. — PTI

Mandi, November 24
With the state government setting up the Himachal Power Corporation (HPC), the stage has been set for the merger of the Pabbar Valley Power Corporation (PVPC) and the Jal Vidyut Nigam (JVN) with the HPC.

The HPC has been created not only to run the state power projects with equity participation but also to inject professionalism in the HP State Electricity Board (HPSEB).

Efforts are on to merge the HPSEB's subsidiaries, JVN and the PVPC.

The creation of the HPC has been hailed by the Power and Project Engineers' Associations in the state, saying that it would bring about efficiency and professionalism in the board as the HPC has been allotted seven projects worth 1878 MW in the state.

New Delhi, November 24
Petroleum Minister Murli Deora said the country's import dependence was on the rise to touch 90 per cent from the current 75 per cent and cautioned that the government insulating the consumers from the impact of high prices was not sustainable for a longer period.

''The continuance of such a measure for a longer period is not sustainable as it places an enormous burden on the government finances and severely limits its capacity to allocate adequate funds for social welfare projects,'' the minister said while inaugurating the 5th Petro India 2006 here.

He said the government had sought to insulate the consumers forming the impact of high prices through an equitable burden sharing among oil companies, government and the consumers

The minister said although the government was trying to speed up its alternative fuel production programmes, commercialisation of bio-fuels, hydrogen fuel cells and gas hydrates appeaedr far off unless quick technologies breakthroughs were achieved.

Member (Energy) Planning Commission Kirit Parekh said India would have to seriously address fuel efficiency issues by focussing on public transport, diesel-based rail transport, inter-city freight transport by rail and higher fuel-efficient automobiles. — UNI

Mumbai, November 24
Siemens Ltd has posted a net profit after tax of Rs 136.75 crore for the fourth quarter ended September 30 as against Rs 104.45 crore in the previous year.

The company said the total income (net of excise) was Rs 1563.33 crore for the latest quarter while the same was Rs 1000.76 crore for the same quarter last year. — PTI