The Tribune, Chandigarh, India

WB blacklists Videocon

New Delhi, May 4
Accusing Venugopal Dhoot-led Videocon of indulging in fraud and corrupt practices in dealings with it, the World Bank has blacklisted the company for three years, ending January 11, 2013.

Videocon Industries has been barred from doing any business with the World Bank for violating "procurement guidelines" for a period of three years, beginning January 11, 2010, a notification on the bank's website said.

The World Bank had taken a similar tough line with Satyam Computer months before the IT company's founder chairman confessed to an accounting fraud.

Either Dhoot or his spokesperson could not be reached for comments, despite several phone calls and messages.

Videocon was sent a "letter of reprimand subsequent to an administrative process", permitting the company to respond to the allegations, the World Bank said in its latest update of companies blacklisted for doing business due to fraud and corruption charges.

Videocon's name has been listed among firms and individuals ineligible to be awarded a World Bank-financed contract, as it has violated fraud and corruption provisions of the procurement guidelines.

"The period of ineligibility of Videocon Industries extends to any firm directly or indirectly controlled by the sanctioned firm," World Bank said.

It further said the ineligibility might be reduced by up to one year, if after two years of ineligibility, the bank's Sanctions Board found Videocon of having taken "satisfactory" remedial actions.

No biz for 3 years

Videocon has been barred from doing any business with the World Bank for violating "procurement guidelines" for three years, beginning January 11, 2010.

Govt prefers imported LNG to Reliance’s cheaper gas
Asks RIL to cut gas output for Petronet sake; firm says no

New Delhi, May 4
The government has asked Reliance Industries to cut gas output from its eastern offshore KG-D6 fields so that imported fuel stocks can be cleared, a demand that the Mukesh Ambani-run company has rejected.

The Petroleum Ministry had, at a meeting on April 30, asked Reliance to explore cutting down output so that the imported LNG, accumulating at Petronet LNG's Dahej terminal in Gujarat, could be sold to customers.

"Reliance may examine whether it would be possible to cut back the production from KG-D6 fields by some amount for a short period," according to the minutes of the meeting.

"Reliance has not agreed to or planned to cut down on the production of gas from KG basin," a company spokesperson said.

Petronet LNG, which imports gas in its liquid form (liquefied natural gas) from Qatar on a long-term contract, is facing a glut after three fertiliser plants that used LNG as feedstock shut down for maintenance and a power plant owned by NTPC tripped.

Also, NTPC's Dadri plant is to undergo a shutdown from tomorrow.

According to the minutes of a meeting held in the Oil Ministry last week to decide how to clear the stocks, the ministry is understood to have favoured a cut in domestic gas production to accommodate the expensive LNG.

The schedule for outgo of gas from Petronet's Dahej import terminal in Gujarat was less than the inflow, creating a backlog of 75 million cubic metres or 96 per cent of inventory limit.

The problem has been complicated by Petronet's decision to lease out Dahej terminal to Gujarat State Petroleum Corp (GSPC) for import of 9 cargos or shipload of LNG even though GAIL India did not have capacity in pipeline to evacuate any gas beyond the domestic production and already contracted long-term LNG.

The ministry, however, did not ask Petronet to defer import of LNG- Petronet's contract with RasGas of Qatar has provisions to defer any cargo(s) and take their deliveries later during the year.

By asking Reliance to cut output, the ministry hopes it can push the imported gas to customers using KG-D6 gas.

Industry observers expressed surprise at the decision, saying imported expensive gas was being prioritised over cheaper domestic gas. "The priority should be to use cheaper fuel first and use expensive gas later," an official said.

Petronet's imports from Qatar cost $ 5.42 per million British thermal unit (ex-Dahej), while KG-D6 gas is priced at $ 4.20 per mmBtu.

The April 30 meeting in the ministry also decided to set up "a coordination mechanism" between the domestic producers and Petronet so that commitment to buy overseas LNG is met.

Power and fertiliser plants prefer using KG-D6 gas as feedstock as it is not only cheaper but Reliance offers better commercial terms.

Sources said just before Reliance was to begin gas output from KG-D6 a year ago, the ministry made key power and fertiliser plants to enter into a 10-year agreement to buy expensive LNG from Petronet on a take-or-pay commitment (take gas or pay for it). — PTI

Docomo in Fatehabad, Sirsa
Tribune News Service

Hisar, May 4
Tata Docomo today announced the commercial launch of its operations in Fatehabad and Sirsa, marking the successful completion of the roll-out of its services in the Haryana telecom circle.

Aditya Gupta, Tata Docomo’s chief operating officer for Haryana, Punjab and Himachal Pradesh, said here the company’s industry-changing “Pay-for-what-you-use” model in Fatehabad and Sirsa, included the per-second pulse and a plethora of innovative applications and services.

Having received a good response from subscribers in all of the 17 circles that Tata Docomo had gone live in, the company’s pan-India service rollout, which was kicked off in end-June, 2009, would be completed shortly, he added.

The company has earmarked an investment of $2 billion on its pan-India GSM network rollout.

Essar Energy lists below IPO price on LSE

London, May 4
Essar Energy, part of the Ruias-led Indian conglomerate Essar Group, today listed its shares on the London Stock Exchange, after its 1.2 billion pound IPO -- the biggest here since December, 2007.

Shares of the company were trading at 398.25 pence in the afternoon session on the LSE after touching an intra-day high of 419.62 pence.

The IPO was priced at 420 pence per share, whereas the earlier proposed price range was 450-550 pence a piece.

However, the company decided to price the IPO at a lower price of 420 pence "in order to ensure a successful listing and leave more on the table for investors," a source had said.

Following the IPO, wherein 23.24 per cent of the total shares in the company were sold, Essar Energy decided to list 1,303 million shares.

Essar Energy will also be considered for inclusion in the FTSE 100 Index.

Earlier, Essar Group chairman Shashi Ruia and Essar Energy chairman Ravi Ruia had said they "were delighted to have successfully priced this landmark international debut offer by Essar Energy, the largest primary offering in London since December, 2007." Unconditional trading of Essar Energy is expected to take place from May 7.

In addition, an over-allotment option of up to 30.3 million shares, representing about 10 per cent of the offer, will be granted and will be exercisable till June 4.

Once the listing is complete, it is expected that Essar Global Limited will continue to hold approximately 76.74 per cent of the issued share capital of Essar Energy, assuming the over-allotment option is not exercised, and approximately 75 per cent assuming the over-allotment option is exercised in full.

Essar Energy plans to increase power generation from 1,220 MW to 11,470 MW and has interests around the world in 14 prospective oil, gas and coal seam gas exploration blocks. — PTI

Yamaha plans Bike Corners in villages
Ruchika M. Khanna
Tribune News Service

Chandigarh, May 4
Having clocked an excellent growth of 60 per cent (in volumes) in sale of its deluxe and premium mobikes in last fiscal, Yamaha Motors is now looking at improving its sales in the basic and executive segments of its bikes.

The company is all set to reach out to the mass consumers in rural and semi-urban areas across the country by making its presence at most of these places. For this, the company is now all set to roll out a new shorter format of dealerships in the rural and semi-urban locations. During this year, the company proposes to open 250 such dealerships, which will be called the ‘Yamaha Bike Corner’.

Talking to TNS here today, Pankaj Dubey, national business head, India Yamaha Motor, said the company would start rolling out these dealerships by July. “By the end of this fiscal, we will have 250 Yamaha Bike Corners, which will enable us to reach out to customers in rural and semi-urban areas. These will not just be our sale points, but will also have small service centres and spare parts centres. The move is aimed at increasing the volumes growth in our basic (100 cc bikes) and executive (125 cc bikes) segment, which had remained flat in the last fiscal,” he said.

Dubey said the company already had a dealership network of 400 dealers across India. “This year, we are looking at adding 50 new dealerships, mainly in the Cat C cities and towns. The idea is to penetrate deeper in these areas so as to attain a higher market share than our present share of over 15 per cent,” he said.

He said during the first month of this fiscal, the company had done well by attaining a growth of 70 per cent over the same period last year. “This growth is mainly in our deluxe and premium bikes (150 cc) and our super bikes (1000 cc and above). We will also be strengthening our growth in these two segments. Our target is to increase our market share from 12 per cent to 20 per cent in these segments this year,” he said.

HCL signs $500 m deal with MSD

Mumbai, May 4
HCL Technologies today said it had signed a five-year IT management deal worth $500 million with pharma giant MSD. HCL will extend its relationship with MSD, dating back to 2004, to become an integral business and technology services partner, HCL Technologies said.

Under the agreement, HCL will provide a multitude of services, including software-led IT solutions, remote infrastructure management, engineering and business and knowledge process services.

"For five years, MSD has leveraged HCL's extensive expertise in life sciences and healthcare to streamline operational efficiencies and consolidate its IT portfolio," MSD vice-chief G Branton said.

MSD will leverage HCL's near-shore delivery network in the US. As a result of this engagement, HCL will expand its US team in North Carolina, relying on local hires to staff projects, it said. — PTI

New ULIP norms from July 1

New Delhi, May 4
IRDA, locked in a turf war with Sebi over regulation of unit-linked policies, has reemphasised that insurers should offer assured life insurance cover with ULIPs.

Reiterating its December, 2005, order on ULIPs, IRDA in an order late last night said: "All ULIPs, including pension/annuity products, must have a minimum assured sum payable on death." IRDA's assertion that ULIPs must provide assured insurance cover is one among the several it has passed recently following a row with Sebi over who should regulate ULIPs.

Sebi claims that it was best suited to regulate ULIPs as they were investment products like mutual funds.

In yesterday's order, IRDA, however, clarified that the provision of death benefit would not be mandatory in case of unit-linked products providing health insurance cover.

ULIPs, it further said, could not be used to obtain loans. "No loan will be granted under ULIPs."

IRDA further said that minimum policy term would be five years in the case of individual products, while the group products would continue to be renewed annually.

Partial withdrawal from the policies, IRDA said, would be allowed only after the fifth policy anniversary for all unit-linked products, except pension or annuity products.

In the case of unit-linked pension or annuity products, no partial withdrawal would be permitted and the insurer be allowed to convert the accumulated fund value into an annuity only at maturity.

Every top-up premium will have a lock-in period of three years from the date of payment of that top-up premium, it said, adding that they would not be allowed during the last three years of the contract. The revised norms, IRDA said, would come into effect from July 1, 2010.

IRDA is locked in a turf war with Sebi over control of ULIPs. The problem came to fore after the insurance regulator advised 14 insurance companies to ignore the SEBI's order banning ULIP schemes. Both the agencies were later advised by the Finance Ministry to seek a legally binding order from a court over control of ULIPs.

Meanwhile, Sebi had moved the Supreme Court to transfer all cases pertaining to the ULIP issue to the apex court, following which notices were sent to the Centre, IRDA and 14 insurance companies. The next date for hearing has been fixed on July 8. — PTI