The Tribune, Chandigarh, India

	CEO quits over sexual abuse charges Indian staff of HP unsure about future Shubhadeep Choudhury Tribune News Service Bangalore, August 7 Bangalore-based employees of multinational Hewlett-Packard (HP), world’s top personal computer maker, woke up to a rude shock this morning when they received an e-mail from Cathie Lesjack, CFO, informing them that Mark Hurd, the company’s CEO and chairman since April 2005, had resigned following sexual harassment charges slapped on him by a woman contractor. In a confidential e-mail, Lesjack, who has taken over as the interim CEO following Hurd’s resignation, wrote investigations had revealed that there was no violation by Hurd with regard to HP’s sexual harassment policy. However, he was found to have a close personal relationship with the contractor which he did not disclose to the Board. Lesjack wrote the personal relationship of the CEO with the woman contractor represented a “conflict of interest” and showed “a profound lack of judgment” on the part of Hurd. “We are shocked and confused. During Hurd’s tenure as the CEO a lot of work was given to HP’s India offices. This has ensured our professional growth. If these works are diverted to HP offices outside India or retained in US itself, then we will have tough time in India,” an HP employee said reacting to the development. “We shall wait for the new CEO to take over and reveal his policies. Then only we will know where we stand,” another senior HP executive said. HP initiated investigation against the California-based Hurd, a 53-year-old married man with two children, on June 29 after the contractor made a claim of sexual harassment. The woman, whom HP declined to identify, worked on marketing tasks of the company for two years. Gloria Allred, a Los Angeles-based attorney who has represented numerous high-profile clients, including golfer Tiger Woods' alleged mistresses, is representing the woman who made the sexual harassment claim. Hurd is not the first CEO to resign after a relationship surfaced. In 2005, aviation major Boeing ousted CEO Harry Stonecipher for having an affair with an employee, 15 months after he returned from retirement to lead the company’s recovery from a purchasing scandal. In June this year, Mark McInnes resigned as CEO of David Jones Ltd., Australia’s second-largest department store chain, apologising for “unbecoming” behaviour towards a female colleague. The employee, Kristy Fraser-Kirk, sued him and the company, alleging that McInnes made unwelcome sexual advances towards her. HP has one software development centre, one laboratory and one e-business centre in Bangalore, besides a corporate office in the city. It has sales offices in 13 other locations in India, including Chandigarh and Delhi.
	Aviation Notes DGCA needs more autonomy by KR Wadhwaney A chowkidar over a chowkidar has never been a healthy concept in this country. A study reveals that too many agencies entrusted with the arduous responsibility of security, for example, has resulted in virtually no safety. The study further says that there have been more breaches from within organisations than outside. It is a case of too many cooks spoiling the broth. The Director-General of Civil Aviation (DGCA) has been in existence prior to India’s Independence in 1947. It is an apex body to regulate and promote civil aviation, which is expanding at jet speed. It is an outfit blended with technical and civil officers. Its achievements have been ‘mixed’. Of late, it is usually headed by a bureaucrat. The DGCA’s utility cannot be over-emphasised. It requires an enlarged scope and space to expand and exercise control. It needs teeth. Free it from the interference of politicians and bureaucrats. Grant it autonomy. Allow it to formulate rules, regulations, and do’s and don’ts and also give it freedom to implement them. The induction of the Civil Aviation Authority (CAA) at this crucial juncture will cause more problems than solve them. Two bodies - DGCA and CAA - in one cage will be counter-productive instead of being complimentary to each other. The Airports Authority of India (AAI) was launched with a lot of pomp and show. But with the passage of time and undue interference, it has been reduced to a subsidiary to the private operators, who are ruling the roost. When all capital expenditure is expected to be borne by the central government, as per the news, then where is the need to charge Rs 12 per passenger per flight as ‘departure tax’. In this country, flyers appear to be destined to pay taxes and fees like users fee and development fee apart from several other taxes. Soon, there will be ‘arrival tax’. According to a study, lakhs of people fly from different airports daily. The revenue to the CAA will be enormous. One day’s collection may be in the range of about Rs 1 crore. When so much revenue comes to the kitty of the CAA, why should capital expenditure be borne by the government? What safety to passengers will be provided by the CAA? The accidents occur owing to failure of judicious functioning of the men (commanders and air traffic controllers) and machinery (technical snags, although rarely because present-day four-engine aircraft are safer than home). According to reports, the ‘accident investigation unit’ will be delinked from the DGCA. It will be an independent outfit. The analysts are of the firm view that the accident probe should be entrusted to judiciary. Only such a probe will reveal facts. The introduction of the CAA is said to be a move to transfer civil aviation to private outfits instead of its being in the grasp of the government. This is not a happy sign because worldwide civil aviation belongs to the government.
	Investor Guidance NRI’s foreign income tax-free in India by AN Shanbhag Q: I am an Indian citizen by birth and have been living in the US for 11 years, visited India a few times but never more than 30 days during any visit. Recently, I got my US citizenship, applied for OCI card and I am planning to go back to India forever and join my father in his business. Could you please let me know that once I start living in India (as a US citizen), do I have to pay taxes in India for the income I generate in India or I have to pay my taxes in the US as I will be a US citizen living in India on a permanent basis. Also, will it matter for the tax purposes, if I move to India after or before completing 182 days in the US (after or before October 2nd 2010) for the Indian fiscal year 2010-2011? — Hitesh A: If you are in India for 182 days or more in any financial year (Apr-Mar), you become a tax resident of India, irrespective of your citizenship. Therefore, once you start living in India and generating income in India as stated in your query, you will be liable for paying tax in India. Legally, we can answer queries pertaining only to Indian laws, generally citizens of a country are liable to pay tax on their global income. As such, you would be liable to pay tax on your Indian income in the US too, though it would be best if you get this confirmed by a local tax attorney. If you find you are paying taxes on the same income in both the countries, you can take shelter under the Double Tax Avoidance Agreement (DTAA) between the US and India. If you come to India anytime after 1st of October, you would continue to be an NRI in India even in financial year (FY) 10-11 by virtue of being in India for less than 182 days in that FY, however, this would help only in the case of your foreign income (which remains tax-free for an NRI). Your Indian income, on the other hand is taxable irrespective of your status. In other words, Indian income is equally taxable both for an NRI as well as for a Resident Indian. FIFO method Q: My question is regarding FIFO (First-In-First-Out) method of selling shares in a demat account. If a person transfers part of holding from one demat account to his another account (without selling) then how FIFO works? I had purchased 100 shares of Wipro in 2003. I received 200 shares as bonus in 2004. Both were credited to the same demat account with ICICI. I transferred 100 shares from ICICI account to my demat account with HDFC in 2007 (without selling it). I sold 100 shares in April 2010 and gave delivery from ICICI account. I want to know whether I sold original or bonus share as per FIFO. — Yogesh Vansia A: As per FIFO, the shares you transferred to your HDFC demat account in 2007 will be the 100 shares of Wipro you purchased in 2003. The delivery given by you for sale of 100 shares in April 2010 from ICICI demat account will be from the bonus 200 shares. This is irrespective of the fact that some of the shares acquired by you earlier are lying in the HDFC demat account. This strategy can be used by you to pick up the shares acquired on certain date/s for selling and thereby adjusting your capital gains for tax optimality. The authors may be contacted at wonderlandconsultants@yahoo.com
	M&M to bid for SsangYong New Delhi, August 7 Mahindra & Mahindra's board today gave nod to bid for acquiring a majority stake in beleaguered South Korea's SsangYong Motor, which is estimated to be valued around $500 million, ahead of the August 10 deadline. "The Board of Directors of the company at its meeting held today, have authorised submission of a binding bid to acquire majority stake in SsangYong Motor Co Ltd, South Korea," the company said in a filing to the Bombay Stock Exchange. Company officials were tight-lipped on the sum that the firm could shell out to make its bid successful, although it has been speculated that SsangYong could be worth up to $500 million. The Board's decision came after it had postponed taking a decision twice in July, as the company sought more information and wanted to take a final call to a date closer to the August 10 deadline of submission of bids. SsangYong Motor (SM), which is into mainly manufacturing of sports utility vehicles (SUV) and recreational vehicles (RV), had extended the deadline for submission of bids to August 10 from July 20. — PTI