The Tribune, Chandigarh, India

	RIL calls family MoU worthless Legal Correspondent & PTI New Delhi, October 22 Reliance Industries Ltd (RIL) today contended before the Supreme Court that the Ambani brothers, Mukesh and Anil, had signed the family MoU in 2005 on division of property at the back of the shareholders and as such it was not binding on the companies or the stakeholders. Continuing his submission for the third day before a Bench headed by Chief Justice KG Balakrishnan, senior counsel Harish Salve said the MoU “is not worth the paper it is signed on” as it did not have any legal sanctity. However, Justice RV Raveendran, who is part of the Bench along with Justice P Sathasivam, said the Bombay High Court had ruled that the demerger of RIL was an outcome of the MoU and since the RIL had challenged the verdict it should produce evidence to prove otherwise. At this, Salve said the demerger did contain some elements of the MoU but this was just incidental as the RIL Board was never apprised of the MoU. RIL also came down heavily on the government for snatching away its marketing and pricing freedom, saying: “We had assumed marketing freedom when we divided gas in 60:40 ratio between the two groups (in the GSMA signed in 2006)”. Referring to the government, in 2007, giving itself the power to approve price and fix consumers for gas, Salve said: “Government approval of price is an unreasonable clause.” He said RIL had vehemently protested against the government taking away its freedom, whereas Anil Ambani group had sought regulation of fuel sale through a gas utilisation policy in 2007. When the bench asked if the Gas Utilisation Policy was notified like the Industrial Policy, Salve said it was not and customers/sector identified in the same were passed on to RIL in form of instructions. Salve said it was strange that the Reliance Natural Resources Ltd (RNRL) headed by Anil was now opposing the gas utilisation policy. On the third day of hearing, Salve told the apex court that RIL would take longer to recover investments it has made in the gas field if it is forced to sell fuel at lower rates. RIL will take 5-5.5 years to recover the $5.8 billion investment made in the KG-D6 gas field if it sells the fuel at government-approved price of $4.205 per mmBtu. However, if it were forced to sell gas at lower rate of $2.34 per mmBtu, which RNRL contends that RIL had committed in the 2005 MoU, the cost recovery would be over seven years. Further, it would result in huge revenue loss to the government. The government was entitled to less than 10 per cent of the revenue till the recovery of the investment (fixed at 2.5 times of $5.8 billion which works out to $14.5 billion) and to 85 per cent after this. RIL, he said, was being forced to buy liquefied natural gas from spot market at price of over $9 per mmBtu as the government has not yet allocated any gas from KG-D6 for its own captive use. Salve said it was not possible for RIL to supply 28 mmscmd gas to RNRL for 17 years as the peak output from the field will not last for more than seven years. He said the company could not accelerate or decelerate the rate of production as such practices damage the reservoir and the ultimate recovery. RIL would continue its arguments on October 27 and 28.
	Exports scam unearthed in Phagwara Ruchika M. Khanna Tribune News Service Chandigarh, October 22 An investigation into a case of infringement of patent rights has led to the unearthing of a major scam regarding over-invoicing of goods meant for exports. Sources in the Customs department informed TNS that a Phagwara-based diesel engine parts manufacturing company has been found to be over-invoicing goods meant for exports by over 200 per cent. In the process, the company used to claim huge benefits in the name of duty drawback, duty entitlement passbook (DEPB) and CENVAT from the government - which is much more than what it is entitled to claim. A diesel parts conglomerate had complained against this company on charges of infringement of patents. It alleged that the latter was using the conglomerate’s trade name on its products being exported to Egypt. A subsequent investigation revealed that the company had made an invoice of each item being exported at a rate two to three times higher than the rates being quoted for the same goods by the conglomerate. “This company’s invoice quoted the price of a nozzle as $10 per piece, while the conglomerate exports it at $3.90 per piece. Most of the other items were also over-priced. This was being done so as maximise the realisation as duty drawback, DEPB and CENVAT,” sources said. Officials are looking into the possibility of money laundering by over-invoicing in earlier consignments being exported by this company.
	2G Allocation CBI raids DoT offices Tribune News Service New Delhi, October 22 The CBI today raided the offices of the Department of Telecom (DoT), in connection with alleged irregularities in 2G spectrum allocation to some new players. A CBI team conducted searches at the Sanchar Bhawan here after registering a case in this connection last evening. Sources said all records pertaining to the allocation of spectrum to new players in January 2008 had been taken to check on any irregularities in the process. In 2008, eight new players were given licences along with bundled 4.4 MHz spectrum to start mobile services. The telecom ministry had come under fire for allocating 2G spectrum at much cheaper rates compared to its actual market value. There were allegations that the 2G spectrum allocation to the mobile operators resulted in a loss of Rs 60,000 crore to the exchequer and the difference in the valuation of spectrum awarded and the value realised in each case had been at least Rs 6,000-7,000 crore. The DoT had defended its decision for allocation of the spectrum at the given rate but the allegations got a fresh lease of life with the Central Vigilance Commission deciding to initiate action against top officials of the DoT. The anti-corruption watchdog, CVC had recommended a CBI probe into the procedures followed for selecting companies for giving 2G spectrum. Eyebrows were raised when two of the new players — Unitech Wireless Services and Swan Telecom — sold part of their stake at huge premium within days of getting the licences. The government had allotted the 2G spectrum to the given telecom companies at Rs 1,651 crore for pan-Indian services. Defending its decision, the DoT had written to the CVC pointing out that promoters of Swan Telecom and Unitech Wireless had not sold their shareholdings, but made strategic partnerships for investment in their companies.
	26 FDI proposals cleared New Delhi, October 22 The government has approved 26 foreign direct investment (FDI) proposals that would help bring investments of Rs 1,360.52 crore in the country. The government, however, deferred 14 proposals, including that of Jet Airways, and rejected four others, including that of ByCell Telecommunication, an official release said today. The biggest chunk of foreign direct investment would come in the health and power sectors. Delhi-based Capricorn Hospitality Services is likely to bring FDI of Rs 576 crore as overseas equity investment of up to 49 per cent in the company, the statement said. The other large FDI proposal that has been approved is from Hyderabad-based Indus Renewable Energy India. It plans to make downstream investments in operating and/or operating cum investing companies engaged in the hydroelectric power sector with an FDI of Rs 500 crore. — PTI
	China economy grows 8.9 per cent in Q3 Beijing/New Delhi, October 22 The Chinese economy expanded at a rapid rate of 8.9 per cent in the third quarter of 2009 as compared to the year-ago period, mainly boosted by increased infrastructure investment and stimulus measures. The world's fastest-growing economy, which has been less affected by the global financial meltdown, grew 7.9 per cent in the June quarter. "In terms of growth by quarters, it (the Chinese GDP) was up 6.1 per cent for the first quarter, 7.9 per cent for the second, and 8.9 per cent for the third quarter," the National Bureau of Statistics of China said today. To boost the nation's economy, China had come up with a massive stimulus package worth about $585 billion. According to the National Bureau of Statistics of China's spokesman Li Xiaochao, the investment in infrastructures was increased by a large margin. "In the first three quarters, the investment in infrastructure (excluding electricity) went up by 52.6 per cent," Xiaochao said. In the first nine months of this year, the Chinese economy rose 7.7 per cent as compared to the year-ago period. "We have attained obvious achievements, and further strengthened the steady upturn trend of the economy. The overall situation of national economy was good," Xiaochao said. The amount of outstanding loans of all financial institutions in the third quarter stood at 39 trillion yuan, an increase of 8.7 trillion yuan as compared to the beginning of this year. The rise is 5.2 trillion yuan in comparison with the same period a year earlier. Noting that at present, the country's economy is at a crucial stage to realise growth, Xiaochao said the basis of the economic recovery still needs to be consolidated. "... the insufficient external demand is still severe, with the arduous task of expanding domestic demand and adjusting the structures," he added. — PTI
	HAL to produce crucial parts for Boeing 777 Tribune News Service Bangalore, October 22 State-owned Hindustan Aeronautics Limited (HAL) has bagged two lucrative overseas contracts in successive months. HAL and US company Boeing today signed an agreement to work together for the production of “flaperons” for the Boeing’s 777 series commercial jetliner. HAL will make the delivery in phases. Boeing will get the first set of flaperons in the next couple of years. The 777 flaperon is a complex composite assembly that is instrumental in controlling the airplane’s maneuverability in flight. Referred to as a “control surface”, flaperons work both as an aileron to control roll and as a flap to control lift. “HAL and Boeing share a very special relationship and we are delighted that our strengths in composites are getting more international recognition,” Soundara Rajan, director, corporate planning & marketing, HAL, said. “The agreement represents yet another work package Boeing has placed in India and HAL since we first began our relationship with HAL in 1991, and after having received the first production part from HAL in 1995,” said Boeing India president Dinesh Keskar. Indian carriers have ordered a total of 36 777s from Boeing. This consisted of 23 aircraft ordered by Air India and 13 by the Jet Airways. Last month, HAL bagged an order worth $80 million for supplying passenger doors to the Embraer, an aircraft manufacturer from Brazil, for their latest programme to build Legacy 400 and Legacy 500 business jets. The door is common to both versions of the jets being developed by the company. As per the contract the first door will be delivered by HAL to Embraer in December 2010.
	Corporate Results L&T profit rises to Rs 580 cr Mumbai, October 22 Engineering company Larsen & Toubro (L&T) today reported a profit after tax (PAT) of Rs 580.40 crore for the second quarter ended September, whereas the same was at Rs 460.26 crore during the corresponding period a year earlier. The company’s total income stood at Rs 7,918.84 crore for the three month period ended September 30, 2009, while it was at Rs 7,725.07 crore during the same quarter last fiscal. Biocon net jumps three-fold Biotechnology major Biocon today posted consolidated net profit at Rs 74.19 crore in the second quarter, a nearly three-fold jump over the same period last year on robust results posted mainly by its clinical research organisations - Syngene and Clinigene. The total income increased to Rs 312.44 crore from Rs 268.27 crore a year ago. Info Edge Internet firm Info Edge, which owns leading job portal naukri.com, today reported a nearly 6 per cent decline in its PAT at Rs 14.73 crore in the second quarter ended September, 2009. Total income went down to Rs 64.51 crore in the quarter under review from Rs 72.31 crore in the corresponding period last year. Bhushan Steel Bhushan Steel today posted a rise of 32 per cent in net profit to Rs 189.16 crore for the second quarter ended September over the corresponding period a year earlier. However, the steel producer’s net sales fell to Rs 1,298.48 crore in the latest quarter of the current financial year from Rs 1,515.49 crore of the same quarter last year. Allahabad Bank Public sector lender Allahabad Bank today reported an eight-fold rise in net profit to Rs 333.59 crore for the second quarter ended September 30, 2009. Total income of the bank rose to Rs 2,451.51 crore in the latest quarter of the current fiscal from Rs 1,977.19 crore of the corresponding period last year. — PTI