New Delhi, December 9
Oil and Natural Gas Corp (ONGC) today secured the government's nod that was crucial for it going ahead with the acquisition of Imperial Energy for £1.4 billion, as it sees returns from the deal plummeting because of the steep fall in global stocks and crude prices.

The Cabinet Committee on Economic Affairs specially met this morning after ONGC Videsh Ltd, the overseas arm of state-run explorer, said it might face court proceedings for breaching a "binding" agreement if it were to default on a commitment to make a formal offer to Imperial shareholders by midnight tonight (London time).

The CCEA had only one agenda listed and after one-and-half hours of deliberations, OVL was given the nod, a source said. Petroleum minister Murli Deora, however, refused to comment.

The source said the CCEA had in August given OVL a go-ahead for Imperial acquisition based on its projection of 10 per cent return on investment - taking crude oil price of $121 per barrel. But since then rupee has depreciated 20 per cent and crude has fallen to around $43 a barrel, sending the rate of return down to 3-4 per cent.

With parameters changing, a revised approval was sought from the CCEA at its regular meeting on December 4, but the matter did not come up for discussion because of the Mumbai terror attacks.

Thereafter, OVL sought a small extension from UK Takeover Panel for the Cabinet to consider its application at its next meeting scheduled on December 11.

Imperial explores oil in Russia's Siberia region and had the equivalent of 920 million barrels of proven and probable oil reserves as on December 2007, according to an audit by DeGolyer & MacNaughton. '2P' tag means a 50 per cent likelihood of recovery of the reserves.

OVL has time till today to make an offer to acquire all outstanding shares of Imperial. The offer will remain open for 21 days and OVL will take another 14 days thereafter to make payments to shareholders tendering their shares, the officials said.

New Delhi, December 9
Under fire for its previous policies while allocating spectrum to telecom operators in the country, the telecom ministry has now decided to play it safe in the auctioning of the limited number of slots in the next generation 3G spectrum.

Reports emerging from the industry suggest that the ministry has now decided to take the opinion of the finance ministry in the matter of number of 3G spectrum slots in each circle. This has been done with a view to get a wider view on the issue.

Telecom minister A Raja has sought a consultation with the ministry of finance before taking a decision on the number of slots that should be there in each circle for the 3G spectrum. The response from the finance ministry is expected soon, the reports said.

The government has kept a reserve price for pan-India 3G auction at Rs 2,020 crore. However, it has been receiving flak from various quarters over the pricing mechanism that has been adopted for the 3G spectrum.

Currently, 60 Mhz of the 3G spectrum is available. Off late there are indications from the DoT that the number of players could be restricted up to five per circle, including BSNL and MTNL. This leaves out three private players in a circle.

If this happens, it would be a drift from a decision announced by Raja in August, which allows five to 10 operators per circle or service area for 3G services, that enable faster data downloads via mobile phones.

Operators fear of high bidding price for lesser number of slots. Telecom regulator TRAI had suggested that five 3G licences of five Mhz each be given through the auctioning route.

Incidentally, the state-run BSNL and MTNL have already been given a slot each in Chennai and Delhi, respectively and as a result of the head start the latter is all set to launch its 3G service from Thursday.

London, December 9
Two Indian engineers, who missed chances twice to buy Google nearly 10 years ago, have now raked in funds for their own site to rival the search engine giant.

The Indian duo have received funds worth $20 million from media and entertainment conglomerate Time Warner for their search site — Kosmix.

"Anand Rajarman and Venky Harinarayan, the Indian Internet entrepreneurs, have received $20 million of funding from Time Warner for their site," The Telegraph reported today.

Way back in 1998, Google founder Sergey Brin offered fellow Stanford University PhD students Anand Rajarman and Venky Harinarayan the chance to buy the now search engine giant for about $1 billion.

"They said no," the report published online said.

The very next year, the Indian pair with Amazon backing offered about $443 million. But Brin and Google co-founder Larry Page had refused to accept less than $1 billion, the publication noted.

Now Kosmix has also got the backing of Motorola chairman and chief executive Ed Zander and Amazon founder Jeff Bezos.

"Google works if you know exactly what you're looking... But if you have only got a vague idea, it can be quite hard to find the answer," Rajarman was quoted as saying.

"Kosmix allows you to browse a whole topic and suggests areas that it thinks you might be interested in," he added. — PTI

New Delhi, December 9
The Department of Telecom’s (DoT) spectrum allocation policy has again come under scrutiny, this time, with the Parliamentary Standing Committee on IT seeking explanation from the department on its various decisions, including spectrum allocation to new players, merger and acquisition guidelines and auction of the 3G spectrum.

According to reports, the Parliamentary Committee has sent a list of questions to DoT seeking explanation on the procedures followed while taking the decisions on these important issues.

The government, which is already under fire for its spectrum allocation policy from the Central Vigilance Commission (CVC) and the telecom regulatory body TRAI, has been asked to explain whether the suggestions of the telecom regulator were adhered to when the allocation was made, especially to the new operators.

The committee has pointed out that the telecom regulator had suggested that the current policy should be reviewed in regard to allocation of spectrum. The committee has sought to know whether it had followed the suggestion of the TRAI in allocation, since it was not following an efficient way of using a scarce resource like spectrum.

The committee has also sought to clear the air on the standoff between the DoT and TRAI over the spectrum issue.

The committee has sought a clarification on the investigations carried out by the CVC on the decision to allocate spectrum. While the government said that it had carried out the allocation on a ‘first come-first served’ basis on the recommendations of the TRAI, the regulator has denied it.

The Committee has also sought an explanation on whether excess spectrum had been given to existing cellular players, and if so, why it was taken back.

The Committee said while the TRAI has suggested that any proposal of merger and acquisition should not be entertained till the rollout obligation is met, the DoT went ahead to delete the word ‘acquisition’ from the final policy.

On the reserve price for 3G auction, the Committee has asked the DoT to explain why it has fixed an amount that was decided two years ago.

New Delhi, December 9
There appears to be some more turbulence in store for aviation companies around the world in 2009.

The International Air Transport Association (IATA) has announced its forecast for next year, showing an industry loss of $2.5 billion. All regions, except the US, are expected to report larger losses in 2009 than in 2008, it says.

Indian carriers, already struggling with high taxes and insufficient infrastructure, can expect a drop in demand following tragic terror incidents in November, it also forewarns.

According to IATA, Asia-Pacific carriers will see losses more than double from the $500 million in 2008 to $1.1 billion in 2009.

“With 45 per cent of the global cargo market, the region’s carriers will be disproportionately impacted by the expected 5 per cent drop in global cargo markets next year. The region’s largest market — Japan — is already in recession. And its two main growth markets — China and India — are expected to deliver a major shift in performance. Chinese growth will slow as a result of the drop-off in exports. India’s carriers, which are already struggling with high taxes and insufficient infrastructure, can expect a drop in demand following on from the tragic terror incidents in November,” IATA forecasts.

Some of the forecast highlights for the industry across the world are that industry revenue is expected to decline to $501 billion. This is a fall of $35 billion from the $536 billion in revenue forecast for 2008. This drop in revenue is the first since the two consecutive years of decline in 2001 and 2002.

Yields will decline by 3 percent (5.3 per cent when adjusted for exchange rates and inflation).

Passenger traffic is expected to decline by 3 per cent following growth of 2 per cent in 2008. This is the first decline in passenger traffic since the 2.7 per cent drop in 2001.

Cargo traffic is expected to decline by 5 per cent following a drop of 1.5 per cent in 2008. Prior to 2008, the last time that cargo declined was in 2001, when a 6 per cent drop was recorded.

The 2009 oil price is expected to average $60 per barrel for a total bill of $142 billion. This is $32 billion lower than in 2008 when oil averaged $100 per barrel.

“The outlook is bleak. The chronic industry crisis will continue into 2009 with $2.5 billion in losses. We face the worst revenue environment in 50 years,” says Giovanni Bisignani, IATA’s director-general.

New Delhi, December 9
After three months, mutual funds saw money flows, with investors putting in about Rs 14,000 crore in November.

At the end of November, investors made a net purchase of funds worth Rs 13,790 crore, with the maximum investment taking place in the money market plans, according to data compiled in the monthly report by the Association of Mutual Funds of India.

After withdrawing Rs 92,457 crore in the past three months, investors in November showed confidence in money markets, ELSS-Equity and balanced funds.

While inflows into the three categories of funds totalled about Rs 15,301 crore, investors pulled out Rs 1,511 crore from the remaining categories.

Liquid or money market schemes, with higher liquidity and short maturities, were a favourite with investors for the second consecutive month.

While investors put in Rs 15,143 crore in the liquid or money market scheme stocks last month, in October it witnessed repurchases worth Rs 3,256 crore.

Gilt funds and gold-exchange traded funds saw a maximum pullout, of Rs 827 crore, in November, beating last month's trend of inflow.

Fixed-income plans, with assured returns annually, witnessed a redemption of Rs 370 crore, followed by other exchange-traded funds, which pulled out Rs 170 crore from stocks.

Amid volatility in the stock markets, the combined average assets under management (AUM) of the country's mutual fund industry saw an erosion of over Rs 29,831 crore and dropped to Rs 4,02,030 crore at the end of November. — PTI 

New York, December 9
Arun Sarin, who recently retired as the Vodafone group CEO, is being considered for the post of chief executive of Internet major Yahoo Inc, the Wall Street Journal says.

Quoting people familiar with the situation, the daily said the board of directors of Yahoo are searching for a new chief executive and have checked few references and a decision is likely to be taken in a few weeks.

"Among those being considered is Arun Sarin, who retired as chief executive of Vodafone Group PLC in July, according to people familiar with the matter," the WSJ said.

The report further added that "Yahoo Inc directors steering the search for its new chief executive are moving closer to a recommendation and have authorised checking references on a few key candidates, say people familiar with the matter, although a decision is likely to be weeks away at the earliest".

After heading the world's largest mobile firm Vodafone for five years, Arun Sarin retired in July this year.

Last month, Yahoo Inc had said that Jerry Yang, the co-founder of Yahoo! will step down as the chief executive of the Internet giant, ending a 17-month long turbulent tenure which saw him rejecting a takeover bid from Microsoft.— PTI

BRIEFLY

New Delhi
Sony to slash 16,000 jobs: Japanese electronics major Sony Corporation will cut 8,000 full time jobs, representing five per cent of its global workforce, besides laying off another estimated 8,000 temporary workers. "Sony plans to reduce the headcount in the electronics business worldwide by about 8,000 out of total strength of around 1,60,000 as of September 30, 2008," Sony said on Tuesday.
— PTI

Essar to reopen petrol pumps: Essar Oil will reopen all its 1,250 outlets by next month. "The company would reopen all its 1,250 retail outlets by January. We have already made operational 830 petrol pumps so far," an Essar Oil spokesperson said.— PTI

Unitech to invest Rs 2,500 cr: Realty major Unitech Ltd plans to invest about Rs 2,500 crore to develop 35 hotels across the country over the next seven years. "We will be developing 35 hotels in the next 6-7 years. We already have land in many cities at prime locations," Unitech managing director Sanjay Chandra said. 
— PTI

Rewari
RCom’s office: Reliance Communications (RCom) opened its cluster office here on Tuesday. The office was inaugurated by company’s vice-president, sales and marketing, Haryana, Anupender Singh. On the occasion, cluster head Rakesh Abrol said the office has been set up to provide prompt and better services to the customers and to roll out new products as the company was soon going to launch its GSM service here. — OC

London
Vodafone acquisition: UK-based leading telecom firm Vodafone on Tuesday said it would acquire Swedish firm Wayfinder Systems AB for about $30 million in an all-cash deal. Wayfinder provides mobile location-based services and related products.— PTI