B U S I N E S S

Banks under lens for pre-payment penalty
New Delhi, November 2
Several banks and housing finance companies have come under the scanner of the competition watchdog for imposing penalty on pre-payment of loans.

Models walk the ramp to promote khadi during a fashion show in Kochi on Sunday. — PTI

CIT goes bust;fifth largest bankruptcy in US
New York, November 2
The century-old American lender CIT Group has filed for bankruptcy, the fifth largest in the country's corporate history by assets at $71 billion.

CAG auditing of RIL to begin soon
New Delhi, November 2
The nation's premier audit body, Comptroller and Auditor General (CAG), has constituted a high-level team for auditing Reliance Industries' (RIL) expenses on eastern offshore KG D-6 fields. 

Auto sales rev up in October; Honda leads the charge
New Delhi, November 2
The turnaround in the economy has started to show in the auto sector with almost all the auto manufacturers showing a growth in sales.

Ratan Tata, chairman, Tata Sons and Tata motors, presents keys of a new Range Rover 2010 to actor Shahid Kapoor in Mumbai on Monday. — PTI

Sensex cos’ log growth in profit
New Delhi, November 2
India Inc seems to be back on its profitable ways in the second quarter with the 30 bluechip companies logging an average 27 per cent rise in net profit, even as sales volume lagged due to weak demand scenario.

Shell to cut 5,000 jobs
Houston, November 2
Global oil major Royal Dutch Shell, which posted a steep slump in third quarter earning owing to weak economic conditions, will cut 5,000 jobs.

MTNL to offer 3G connections for Rs 109
New Delhi, November 2
State-run telecom operator Mahanagar Telephone Nigam Ltd (MTNL) today said it would offer new 3G prepaid connections for Rs 109 in its Mumbai circle.

Google most attractive employer
Stockholm/New Delhi, November 2
Internet search giant Google has emerged as the most sought after company for business as well as engineering graduates, according to two surveys that term the company as the world's “most attractive employer” followed closely by rival Microsoft.

In this photo made with fisheye lens, a performance Mustang is displayed at a Ford dealership. The company made nearly $1 billion in the third quarter, fuelled by US market share gains, cost cuts and government rebates, it reported on Monday. —AP/PTI

Banks under lens for pre-payment penalty

New Delhi, November 2
Several banks and housing finance companies have come under the scanner of the competition watchdog for imposing penalty on pre-payment of loans.

The Competition Commission of India (CCI), according to an official, is scrutinising a complaint concerning pre-payment penalty from a customer against major home loan players like HDFC, LIC Housing Finance and Deutsche Postbank.

“The customer has said he should have the choice of repaying the loan before the scheduled period as and when interest rates are low,” the official said.

The complaint has been filed under Section 3 of the CCI Act that deals with abuse of dominant position by companies.

Although the commission has yet to take a view on the matter, the official said, if the lenders were found guilty of abusing their dominant position, the practice could be banned across the industry.

The CCI, he added, could also penalise the lenders for adopting such practices to discourage customers from pre-paying home loans.

Market leader HDFC, for example, currently levies prepayment charges ranging between zero to two per cent of the amount prepaid by a borrower.

During the pendency of an enquiry, the commission can also provide interim relief by restraining the parties from carrying on the act that constitutes abuse of dominance, the official said.

The pre-payment penalties are imposed to discourage customers from retiring their debts before the scheduled date.

Some lenders charge only if the customer seeks refinancing the loan by taking money at a lower rate from some other entity.

Housing Loan outstanding at the end of March 2009 increased to Rs 2,63,235 crore as compared to Rs 2,52,932 crore at the end of 2007-08. — PTI 

CIT goes bust;fifth largest bankruptcy in US

New York, November 2
The century-old American lender CIT Group has filed for bankruptcy, the fifth largest in the country's corporate history by assets at $71 billion.

CIT, which finances small and middle market businesses, has sought bankruptcy protection after the failure of its planned debt-exchange offer with bond holders.

The bankruptcy, which reflects the continuing credit woes in the US economy, is the largest following that of Lehman Brothers, Washington Mutual, Worldcom and General Motors.

Going by estimates, only four entities had more assets than CIT, when they went bankrupt.

According to the court filing, CIT had total assets worth $71 billion while the liabilities stood at $64.9 billion, as on June 30.

At the time of bankruptcy, Lehman had assets to the tune of $691 billion, Washington Mutual ($328 billion), World Com ($104 billion) and General Motors ($91 billion).

Interestingly, four of the five bankruptcies — Lehman, Washington Mutual, General Motors and CIT — have happened in the wake of the financial meltdown.

In a statement on Sunday, CIT said the company and one of its subsidiary, had filed for “prepackaged” reorganisation with support of its debt holders and Board's approval.

Following the reorganisation, the company expects to lower its debt by about $10 billion.To tide over the financial meltdown, the US had pumped in billions of dollars into CIT.

“None of CIT’s operating subsidiaries, including CIT Bank, will be included in the filings. As a result, all operating entities are expected to continue normal operations during the pendency of the cases,” CIT noted.. — PTI 

CAG auditing of RIL to begin soon

New Delhi, November 2
The nation's premier audit body, Comptroller and Auditor General (CAG), has constituted a high-level team for auditing Reliance Industries' (RIL) expenses on eastern offshore KG D-6 fields. The exercise will begin this month.

The CAG, which has been asked to do special audit of not only RIL but also Cairn India's Rajasthan block and British energy firm BG Group- operated Panna/Mukta and Tapti fields, has constituted various teams for undertaking the audit, sources said.

It is understood that CAG is thinking of deploying a high profile team comprising Principal Director PK Mishra, Additional Deputy Director AK Awasthi, and Director Dharamendra Kumar, besides many auditors.

It is also understood that scope of this audit will far exceed the normal course of audit by CAG and the prime objective may be to detect fraud, if any, by the operator (RIL) allegedly in collusion with oil regulator DGH and Ministry of Petroleum and Natural Gas.

CAG was asked by the Oil Ministry to audit the accounts of RIL, which is facing allegations of gold-plating gas field costs that has increased four-fold to $8.8 billion. RIL had on August 17 agreed to an audit by the country’s premier audit body.

While the ministry wanted special audit of accounts from 2003.

As per CAG's regulations on audit and accounts for special audit, the request made by the Oil Ministry for KG D-6 did not fall under the relevant rules, the sources said. To overcome this, they further said the request had now been covered under the terms of reference framed in consultation with the CAG. — PTI

Auto sales rev up in October; Honda leads the charge
Tribune News Service

New Delhi, November 2
The turnaround in the economy has started to show in the auto sector with almost all the auto manufacturers showing a growth in sales.

While, country’s largest manufacturer Maruti Suzuki India Ltd (MSIL) posted a 32.45-per cent jump in total sales at 85,415 units in October compared to the same period last year, second largest car-maker Hyundai Motor India's (HMI) total sales for the month stood at 51,736 units as against 46,596 units in October 2008, a cumulative growth of 11 per cent.

Premium car-maker Honda Siel Cars India also clocked its highest-ever sales growth with a phenomenal 346.9 per cent jump in October over the same month in 2008.

MSIL today said it sold 85,415 vehicles in October as against 64,490 units in the corresponding month last year. While its domestic sales grew 21 per cent to 71,551 units last month from 59,127 units sold in October last year.

The company's passenger car sales rose 22 per cent to 71,383 units last month compared to 58,515 units in October 2008. Sales of its A2 segment models - Alto, Wagon-R, Estilo, Zen, Ritz, Swift and A-Star - grew 18.4 per cent to 51,437 units.

However, its oldest brand Maruti 800 saw sales declining six per cent with 3,124 vehicle units sold last month, compared to 3,307 in October 2008 and sales of multi-utility vehicles Grand Vitara and Gypsy fell by more than 72 per cent this October to 168 units sold as against 612 a year ago.

Sales of Maruti's premier models SX4 and Dzire grew 63 per cent to 8,804 units.

HMI said its domestic sales grew by 41.4 per cent and accounted for 28,301 units as against 20,009 units in October.

Commenting on the company's performance in October, Arvind Saxena, senior vice president (marketing and sales), HMIL, said: “The festive period of the last two months generated strong sales. Now it looks that this would propel the industry into a positive double-digit growth for the remainder of the year. This might be the turning point the industry has been waiting for.”

Honda Siel Cars India said it sold 6,909 units in October 2009 as against 1,546 units in the corresponding month last year.

Total cumulative sales for April-October also recorded a remarkable growth of 37.7 per cent, as compared with corresponding period in 2008. The company achieved cumulative sales of 34,430 units during the period as compared with 25,007 units sold during April-October 2008.

The company’s phenomenal performance for the month has come from its best-selling sedan - Honda City. City was in the run out phase last October due to the launch of the new Honda City.

SkodaAuto India has reported a 98 per cent jump in its October sales at 1,753 units as against 887 in the same month last year, the company said in a release. SkodaAuto India is a wholly owned subsidiary of SkodaAuto of the Czech Republic and is part of the Volkswagen Group. The company sells premium sedans such as Octavia and Superb along with the high-end hatchback Fabia in India.

General Motors (India) reported 15 per cent increase in sales during October at 7,413 units, against 6,465 units in the same month last year.

The company said the increase in sales was driven by its Chevrolet brand and there are pending orders which could not be delivered due to supply constraints of some of the parts.

During the month, the company sold 4,231 units of the Chevrolet Spark, 1,161 units of the Chevrolet Tavera, 599 units of Aveo U-Va, 337 units of Aveo, 163 units of Chevrolet Optra, 110 units of the Chevrolet Captiva and 812 units of Chevrolet Cruze.

Meanwhile the country's second largest two-wheeler maker, Bajaj, also reported a 52.38 per cent increase in its motorcycle sales at 2,49,681 units in October 2009 as against 1,63,850 units sold in October last year.

Its exports went up by 11.88 per cent to 84,012 units in October from 75,092 units a year ago. This was the highest-ever monthly export reported by the company.

Sensex cos’ log growth in profit

New Delhi, November 2
India Inc seems to be back on its profitable ways in the second quarter with the 30 bluechip companies logging an average 27 per cent rise in net profit, even as sales volume lagged due to weak demand scenario. An analysis of the financials of the 30-Sensex companies for the June-September quarter showed that while their bottom-lines on an average rose by 27 per cent, net sales increased by a paltry four per cent over the year-ago period.

Analysts said increase in profit was propelled by the cost cutting measures, other income and various stimulus from the government in the form of subsidies, although the demand situation remained largely unchanged.

“The trend signals that it is more of a non-core business growth for India Inc and performance of frontline companies indicate that India is not completely immune from slowdown,” SMC Capitals Equity head Jagannadham Thunuguntla said.

The companies that have reported a significant surge in the second quarter profit include Jaiprakash Associates (384 per cent), Mahindra & Mahindra (184 per cent), Hero Honda Motor (95 per cent) and cement firm ACC Ltd (54 per cent).

“The profit margins were down during Q2. Although sectors like auto and auto ancillary, pharma and FMCG reported a significant spurt in sales and profit volumes, telecom and consumer goods counter disappointed," Bonanza Portfolio assistant vice-president Avinash Gupta said. Among the Sensex companies which reported degrowth in sales during the second quarter are DLF (71 per cent), Sterlite (55 per cent), Sun Pharma (32 per cent), ICICI Bank (15 per cent), Hindalco (13 per cent), Tata Steel (16 per cent), Tata Power (13 per cent) and ONGC (13 per cent). — PTI 

Shell to cut 5,000 jobs

Houston, November 2
Global oil major Royal Dutch Shell, which posted a steep slump in third quarter earning owing to weak economic conditions, will cut 5,000 jobs. Shell's third quarter earnings on a current cost of supplies (CCS) basis were $3 billion compared with $10.9 billion during the same period last year.

Peter Voser, chief executive of Shell, said third quarter results “were affected by the weak global economy”. The jobs would be cut from the Anglo-Dutch oil and gas group as part of a restructuring programme called Transition 2009 that began earlier this year. The cutbacks represent some 4.9 per cent of the corporation’s 1,02,000-member staff, and almost 10 per cent in those divisions Shell is merging.

Voser said the corporation had to take "stringent measures to further improve our performance" and its "competitive cost position". Although the corporation had "some indications that energy demand and pricing are improving," he said, "the outlook remains very uncertain.” — PTI

MTNL to offer 3G connections for Rs 109

New Delhi, November 2
State-run telecom operator Mahanagar Telephone Nigam Ltd (MTNL) today said it would offer new 3G prepaid connections for Rs 109 in its Mumbai circle.

New subscribers can avail new '3G Tariff', with local voice and video call charges at 20 paise per minute on own local network and 50 paise per minute for other local networks across Mumbai telecom circle with lifetime validity, MTNL said in a statement.

Third generation or 3G technology offers high speed internet access and download of contents like songs, movie clips and data.

MTNL, which operates in Delhi and Mumbai, offers 3G service under 'Jadoo' brand. —PTI

Google most attractive employer

Stockholm/New Delhi, November 2
Internet search giant Google has emerged as the most sought after company for business as well as engineering graduates, according to two surveys that term the company as the world's “most attractive employer” followed closely by rival Microsoft.

According to the surveys compiled by global employer branding firm Universum, Google has been ranked at the top spot in the list of top 50 global businesses and engineering companies.

About Google, the surveys said: “Google's number one position is no surprise. Due to its remarkable brand image, students worldwide see it as a company they would like to work for”. The search giant is followed by Pricewaterhouse where most B-Schools students want to work, while engineering graduates preferred Microsoft as their second choice.

For business students, Microsoft is the 3rd choice, financial services major Goldman Sachs Group is 4th, Ernst & Young (5th), Procter & Gamble (6th), JP Morgan (7th), KPMG (8th), McKinsey & Company (9th) and Deloitte (10th).

Soft drink major Coca-Cola has been placed at the 13th position, while Citigroup has cornered the 21st place for itself among the list for business students.

Meanwhile, in the list of top 50 employers for engineering students Microsoft is followed by IBM at the 3rd spot, BMW (4th), Intel (5th), General Electric (6th), Sony (7th), Siemens (8th), Shell (9th) and Procter & Gamble (10th).

However, despite it being one of the toughest years for car manufactures, BMW and Daimler appear in the global top 50 ranking in both lists.

The global rankings based on the survey of about 1,20,000 students highlights the world's most powerful employer brands and those companies that are “the most successful in talent attraction and retention”. Students from the US, Japan, China, Germany, France, the UK, Italy, Russia, Spain, Canada and India's top academic institutions took part in the survey. — PTI 

BRIEFLY

SHIMLA
Consumer price inflation at 11.64%: Even as the prices of food items, including food grain and vegetables, continued to rise, the Consumer Price Index-based inflation fell to 11.64 per cent in September. The point-to-point rate of inflation for the month of September stood at 11.64 per cent, against 11.72 per cent in August, Labour Bureau sources said. The All India Consumer price index for industrial workers CPI (IW) rose by 1 point at 163 points in September.

RIYADH
India, S Arabia to issue multiple-entry visas: India and Saudi Arabia would now issue multiple-entry visas to businessmen in an effort to overcome regulatory hurdles blocking the growth of two-way trade. A decision to this effect was taken at the Indo-Saudi Joint Commission meeting attended by Finance Minister Pranab Mukherjee and the Saudi minister of Commerce and Industry, Abdullah Zainal Alireza, here at the weekend.

NEW YORK
Gold prices surge: Gold prices advanced to the highest in a week in New York as the dollar declined against the euro, increasing demand for a hedge against inflation. Gold futures for December delivery shot up by $15.40 to $1,055.80 an ounce on the New York Mercantile Exchange, after touching $1,059.20, the highest since October 26. The metal in London climbed $8.42 dollar to $1,053.82 an ounce.

NEW DELHI
Hyundai transfers top brass: Korean car giant Hyundai on Monday announced a rejig at top management level in its Indian operations, with incumbent managing director and chief executive officer HS Lheem being replaced by HW Park. Lheem, who has been heading the India operations since 2005, will be transferred to its global headquarters in Seoul with effect from November 5, HMIL said in a statement.

RCom may join price war: RCom is likely to join the per second tariff war engaged in by rival mobile operators to grab more subscribers. “Per second billing is another option that we have evaluated internally. While ‘Simply Reliance’ is delivering positive traction for us at present, we are keeping all our options open," Satish Seth, group managing director at Reliance Communications told analysts in a conference call on Monday.

JK Lakshmi expansion plans: JK Lakshmi Cement will invest about Rs 1,600 crore over the next three years on expansion, which includes setting up of a 2.7 million tonnes greenfield manufacturing plant in Chhattisgarh. “We are expanding our cement capacity. By 2012, our capacity will reach to eight million tonnes per annum,” JK Lakshmi Cement MD Vinita Singhania said, adding the 2.7-million tonnes greenfield cement plant in Durg (Chhattisgarh) will be set up at an investment of Rs 1,100-1,200 crore.

MUMBAI
AI-Aerostar tie-up: Air India has entered into a strategic alliance with Sharjah-based Aerostar Asset Management to provide engine repair and management solutions to airline operators across West Asia. The alliance for engine MRO (maintenance, repair and overhaul) would work under the brand ‘The A Team’. A marketing agreement was recently executed between the two companies and the brand will be formally launched at the Dubai Air show to be held during November 15-19, a company press release said.

Alfa Laval India bags project: Alfa Laval India, the Indian arm of Swedish Alfa Laval Group, has secured a Rs 70-crore project from Vietnam-based PetroVietnam Group for supplying equipment and engineering solutions for the latter's ethanol process plant. The delivery is scheduled for 2010 and the plant, which will produce fuel ethanol, is expected to go on stream during 2011, Alfa Laval India said on Monday.