SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI



THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Hero Group to take control of Hero Honda for Rs 3,842 crore
New Delhi, March 8
The $4-billion BML Munjal-led Hero Group is acquiring the entire 26 per cent stake of Honda Motor Company, Japan in their joint-venture Hero Honda Motors Ltd (HHML) for Rs 3,841.83 crore. Most of the money for the transaction has been arranged.

'State must deal strongly with duping of investors’
New Delhi, March 8
The Supreme Court today ruled that the government is responsible for protecting the interests of small and gullible investors from financial swindlers, particularly non-banking financial companies.

Shawl, blanket industry stops stock dispatch
Amritsar MP Navjot Singh Sidhu has said he would raise the issue in Parliament. Amritsar, March 8
With the Budget imposing 10 per cent Excise duty, the shawl and blanket industry in the city has stopped dispatching stock since February 28.

Amritsar MP Navjot Singh Sidhu has said he would raise the issue in Parliament.



EARLIER STORIES



Kapil Sibal meets telecom executives
New Delhi, March 8
Spectrum allocation for 2G services was in focus today as Telecom Minister Kapil Sibal met the representatives of the sector. The meeting was held in the backdrop of the Department of Telecommunications’ (DoT’s) acceptance of de-linking Spectrum allocation from the grant of licences. The meeting was part of Sibal’s 100-day plan for reforms in the telecom sector.

613 families to be displaced for Posco project: Government
Bhubaneswar, March 8
Seeking cooperation from the locals for establishment of the Rs 52,000-crore government today said only 613 families would be displaced for the mega steel plant.

Per capita income last fiscal grow 14.5% to Rs 46,492
New Delhi, March 8
The country's per capita income, often used to measure a country's standard of living, increased 14.5 per cent during 2009-10 to Rs 46,492, Parliament was informed today. In 2008-09, the per capita income, which measures the income per person in a population, was Rs 40,605, Statistics and Programme Implementation Minister M S Gill said in a written reply in the Lok Sabha.

SMEs not getting collateral-free loans
Chandigarh, March 8
Small and medium businesses can get loans up to Rs 10 lakh without a collateral. However, most banks in Punjab have failed to abide by this guideline. The issue came up for discussion during a recent meeting of the steering panel of state level bankers committee. RBI officials said that a sample survey conducted revealed that these guidelines regarding grant of collateral free loans to SMEs were not being implemented. Officials added most SMEs were also not aware of these guidelines.

Rs 1,723.24 crore lying unclaimed in banks
New Delhi, March 8
The government today said that more than Rs 1,700 crore is lying unclaimed with various banks in the country.

India, China auto sector CEOs discuss market avenues
Beijing, March 8
A delegation of 20 CEOs of top Indian auto component manufacturing companies today met with their Chinese counterparts to explore possibilities of exporting their products, and setting up joint ventures and strategic alliances.

I-T arrears decline
New Delhi, March 8
The amount of money locked up in income tax disputes decreased in 2010 compared to the previous year despite increase in number of cases, Parliament was informed today.

 

 





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Hero Group to take control of Hero Honda for Rs 3,842 crore
Sanjeev Sharma
Tribune News Service

New Delhi, March 8
The $4-billion BML Munjal-led Hero Group is acquiring the entire 26 per cent stake of Honda Motor Company, Japan in their joint-venture Hero Honda Motors Ltd (HHML) for Rs 3,841.83 crore. Most of the money for the transaction has been arranged.

In December 2010, the Hero group of India and Honda Motor Co, Japan - the two promoter groups in the joint venture HHML- had announced a restructuring of their respective equity positions in HHML. The joint venture was the world’s largest two-wheeler manufacturer. The groups parted way after 26 years.

PARTING WAYS

  • Hero Investments Private Ltd is buying 26 per cent stake in HHML at Rs 739.97 a share.
  • The transaction is taking place at almost 50% discount to Hero Honda share’s market price of Rs 1,518
Hero Honda also announced that it has become the new team sponsor for the Mumbai Indians. The agreement between Hero Honda and Mumbai Indians is the largest sponsorship agreement in the history of IPL for any franchisee.

In a statement today, Hero Investments Private Ltd (HIPL), an investment company of the Hero Group, stated that it was acquiring 26 per cent stake in HHML at Rs 739.97 per share.

This is almost at 50 per cent discount to the Hero Honda’s market price on Tuesday at Rs 1,518, which fell almost 3 per cent. Analysts had been concerned that the compensation will be done through a higher royalty to Honda.

The Hero Group has also signed definitive agreements with private equity firms, Bain Capital and Lathe Investment, a wholly-owned subsidiary of Government of Singapore Investment Corporation (Ventures). The PE firms will invest in HIPL to raise funds for this acquisition. It is estimated to raise around Rs 4,500 crore from these firms.

FIPB has recommended Hero Group’s application for investment by the PE firms to Cabinet Committee of Economic Affairs (CCEA). The funds received as investment made in the holding company by the PE firms will be used to retire a significant portion of the debt that has been raised by HIPL recently for financing the acquisition.

The company and brand name will be changed. Hero Honda announced that the existing products will continue and a new licensing agreement has been signed with Honda to provide new models.

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'State must deal strongly with duping of investors’
R Sedhuraman
Legal Correspondent

New Delhi, March 8
The Supreme Court today ruled that the government is responsible for protecting the interests of small and gullible investors from financial swindlers, particularly non-banking financial companies.

“The State being the custodian of the welfare of the citizens as parens patriae (parent of the country) cannot be a silent spectator without finding a solution for this malady.

“The financial swindlers, who are nothing but cheats and charlatans (persons pretending to have better skills) having no social responsibility, but only a lust for easy money by making false promise of attractive returns for the gullible investors had to be dealt with strongly,” a Bench comprising Justices Markandey Katju and Gyan Sudha Misra observed in a judgment on a case in Tamil Nadu.

Challenging their conviction by the Madras High Court, the petitioners had also questioned the state Act for protecting the depositors’ interest. Upholding the Act, the SC said the conventional legal proceedings involved huge expenses of court fees and advocates’ fees, besides inconveniences arising from delays. Even then there was no guarantee that the depositors would get “their money, leave alone the interest thereon.”

The court said the present case “...illustrates what has been going on in India for quite some time. Non-banking financial companies have duped thousands of innocent and gullible depositors of their hard-earned money by promising high rates of interest on these deposits, and then done the moonlight flit, often disappearing into another State or even foreign countries leaving the depositors as well as the State police high and dry.”

The TN Protection of Interests of Depositors (in Financial Establishments) Act, 1997 had helped depositors recover money along with interest. “Hence, in our opinion the impugned Act has rightly been enacted to enable the depositors to recover their money speedily by taking strong steps in this connection,” the Bench noted.

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Shawl, blanket industry stops stock dispatch
Perneet Singh
Tribune News Service

Amritsar, March 8
With the Budget imposing 10 per cent Excise duty, the shawl and blanket industry in the city has stopped dispatching stock since February 28. Mahinder Singh Kochhar, general secretary, All India Mink Blanket Association, said, “The government has imposed 10 per cent tax on the retail price of blankets. We already face the threat from Chinese imports. These fresh taxes have added to our woes.”

He said Chinese blankets were being sold in the local market at $2.5 each, while the yarn alone costs the local industry $3.25.

Kochhar added the government, instead of supporting the domestic market, was pushing it into deeper trouble. “We somehow managed to brave the onslaught of Chinese import. Now, it is really difficult to survive and that’s why we have completely stopped the dispatch since February 28.” He added the blanket industry in Punjab was worth Rs 400 crore. Pyaralal Seth, general secretary, Shawl Club (India), said apart from the 10 per cent Excise, the government has also imposed .3 per cent education cess.

“We are already paying 5.5 per cent VAT on yarn. The nex taxes will take the total burden to almost 16 per cent. This will ruin the Rs 1,000-crore shawl industry in Amritsar,” he added.

Punjab Beopar Mandal Chief Amritlal Jain said there were 1,000 shawl and blanket units in Amritsar and Ludhiana. The units provided indirect employment to 1 lakh people.

“Around 50,000 families are engaged in art-work on shawls in rural areas of Amritsar and Gurdaspur. The move will ruin these industrial units in the border area,” he added.

Meanwhile, holding a protest rally over the issue, Amritsar MP Navjot Singh Sidhu said he would raise the issue in parliament. “I have also sought time from Finance Minister Pranab Mukherjee to discuss the matter.”

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Kapil Sibal meets telecom executives
Girja Shankar Kaura
Tribune News Service

New Delhi, March 8
Spectrum allocation for 2G services was in focus today as Telecom Minister Kapil Sibal met the representatives of the sector. The meeting was held in the backdrop of the Department of Telecommunications’ (DoT’s) acceptance of de-linking Spectrum allocation from the grant of licences. The meeting was part of Sibal’s 100-day plan for reforms in the telecom sector.

Sibal wanted to evolve a “clear and transparent regime” for licencing, Spectrum allocation, tariffs/pricing, linkage with roll-out performance, Spectrum sharing, trading and, mergers and acquisitions, an official said.

“A range of issues were discussed. There were about 15 points that were on the table,” Sibal told reporters after the meeting while adding, “Our effort is to take the stakeholders on board.”

In January, the government has announced the formulation of a new and comprehensive National Telecom Policy 2011.

One or two more rounds of discussions are expected before the proposed National Telecom Policy 2011 is finalised.

Finding Spectrum on the 800-900 MHz band on licence expiry and sharing of Spectrum among licensees was also discussed.

DoT also plans to limit the maximum Spectrum allocated to an operator. DoT is not in favour of lowering licence fee to 6 per cent.

The department had earlier suggested a uniform licence fee of 8.5 per cent of Adjusted Gross Revenue (AGR). The DoT team has stuck to its proposal, while declining TRAI’s recommendations of uniform licence fee of 6 per cent to avoid any revenue loss to the government.

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613 families to be displaced for Posco project: Government

Bhubaneswar, March 8
Seeking cooperation from the locals for establishment of the Rs 52,000-crore government today said only 613 families would be displaced for the mega steel plant.

While the number of families facing displacement due to the project was initially put at 803, it came down to 613 after the state government decided not to acquire private land at Dhinkia village, steel minister Raghunath Mohanty said.

"As the people of Dhinkia are opposed to the project and unwilling to vacate their land, the government has decided not to acquire land from the village," he said.

With exclusion of private land from Dhinkia village, number of families to be displaced dropped from 803 to 613, he said, adding, 190 families would benefit from the decision.

Posco project, which initially required 4004 acre land, would now be set up over 3719.22 acre of land. "The South Korean steel major has also accepted the state government's decision of excluding Dhinkia village from its original plan," said Priyabrat Patnaik, nodal officer for the project.

Of the 3719.22 acre of land for Posco project, private land was only 152.69 acre while 3566 acre was government land, the minister said, adding, he was hopeful that the local people would not oppose the project, billed as the biggest foreign direct investment in the country.

Of the 3566 acre government land, 2958.79 acre were categorised as forest land and 607.74 acre non-forest revenue land. "We need diversification of forest land before handing it over to the company for starting work," Mohanty said.

On renewal of MoU with Posco-India, the minister said, "We have been processing the file in this matter. IPICOL had already prepared a draft for the renewal of MoU." The state government would ask Posco to reserve certain jobs for the local youths in its proposed 12 MTPA steel mill, he said. — PTI

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Per capita income last fiscal grow 14.5% to Rs 46,492

New Delhi, March 8
The country's per capita income, often used to measure a country's standard of living, increased 14.5 per cent during 2009-10 to Rs 46,492, Parliament was informed today. In 2008-09, the per capita income, which measures the income per person in a population, was Rs 40,605, Statistics and Programme Implementation Minister M S Gill said in a written reply in the Lok Sabha.

"The per capita income at factor cost during 2008-09 and 2009-10 are estimated as Rs 40,605 and Rs 46,492, respectively, at current prices," said Gill.

In response to a query, he said, the separate per capita income figures for rural and urban areas are available till the base year 2004-05, as the data is compiled only in the base year of the National Accounts Statistics.

As per the base year 2004-05, the per capita income in rural areas was Rs 16,327, while in the urban areas it stood at Rs 44,223.

"The major disparity in the urban and rural per capita income is high income in urban areas and high population concentration in rural areas," said Gill.

He said the government is providing employment in villages through the Mahatma Gandhi National Rural Employment Scheme and the Bharat Nirman programmes, with an aim to increase the per capita income in the rural areas. — PTI

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SMEs not getting collateral-free loans
Ruchika M Khanna
Tribune News Service

Chandigarh, March 8
Small and medium businesses can get loans up to Rs 10 lakh without a collateral. However, most banks in Punjab have failed to abide by this guideline. The issue came up for discussion during a recent meeting of the steering panel of state level bankers committee. RBI officials said that a sample survey conducted revealed that these guidelines regarding grant of collateral free loans to SMEs were not being implemented. Officials added most SMEs were also not aware of these guidelines.

RBI governor D Subbarao emphasised this issue during his visit to Chandigarh in October last year. He had also asked the Director, Industries, Punjab to get feedback on this issue from various industrial associations in the state.

Following this, Industries Director was asked to get feedback on the implementation of collateral-free loans to MSEs. The findings were to conveyed to the SLBC. Another meeting was held in December. Now, the SLBC has asked all banks to reiterate the instructions of grant of collateral free loans up to Rs 10 lakh to the SME sector. The Industries Department has been asked to get regular feedback on the matter.

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Rs 1,723.24 crore lying unclaimed in banks

New Delhi, March 8
The government today said that more than Rs 1,700 crore is lying unclaimed with various banks in the country.

The amount of unclaimed deposits was Rs 1,723.24 crore in 1.03 crore non-operational accounts in banks as on December 31, 2010, Finance Minister Pranab Mukherjee said in a written reply to the Rajya Sabha.

The amount of unclaimed deposits lies with the respective banks and is utilised by them for their general business like any other deposits, he said.

However, he said the government has conceived a proposal, in consultation with RBI, which involves amendment of the Banking Regulation Act, 1949, providing that the deposit accounts which have not been operated upon for a period of 10 years or any amount remaining unclaimed with any bank for more than 10 years will be credited to a Depositors Education and Awareness Fund.

The fund will be utilised for promotion of depositors' interest and for such other purposes may be specified by RBI from time to time, he said. — PTI

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India, China auto sector CEOs discuss market avenues

Beijing, March 8
A delegation of 20 CEOs of top Indian auto component manufacturing companies today met with their Chinese counterparts to explore possibilities of exporting their products, and setting up joint ventures and strategic alliances.

The CEOs delegation is here to understand the status of China's auto supply chain relating to existing levels of technology, quality, productivity and research and development initiatives, said Automotive Components Manufacturers Association of India President Srivats Ram.

The delegation also wanted to explore opportunities of possible engagement and enhancing business linkages with the Chinese automotive industry including partnership, potential JVs, he added. — PTI

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I-T arrears decline

New Delhi, March 8
The amount of money locked up in income tax disputes decreased in 2010 compared to the previous year despite increase in number of cases, Parliament was informed today.

The amount stuck in I-T cases actually declined to Rs 2,42,377 crore as on December 31, 2010 as compared to Rs 2,88,336 crore at the end of 2009, Minister of State for Finance S S Palanimanickam said in a written reply in the Rajya Sabha. — PTI

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BRIEFLY

Dodsal Group acquires new firm
New Delhi:
UAE-based Dodsal Group has announced the acquisition of Chennai based AE&E I.D.E.A (India) Private Ltd. Rajen A Kilachand, chairman and president of Dodsal Group, said, “The acquisition is a strategic fit and further strengthens our existing business footprint in energy, industrial and infrastructure sectors. With huge investments expected in the energy and power sector, we are confident that the synergies with this acquisition will help us to achieve our core mission of serving customers globally.” — TNS

SBI’s programme
Chandigarh:
State Bank of India has launched ‘SBI Youth for India’ a one-year rural Fellowship Programme for young professionals & graduates as a step towards bridging India’s growing urban-rural divide. The programme is a Corporate Social Responsibility initiative of the bank. — TNS

ICAI appointment
Chandigarh:
Devinder Kumar Singla, Senior Chartered Accountant has been appointed a Member of “Ethical Standards Board” of The Institute of Chartered Accountants of India. — TNS

BoI raises deposit rates
New Delhi:
State-owned Bank of India today raised fixed deposit rates by up to 75 basis points on select maturities. — PTI

Reliance Capital
New Delhi:
Reliance Capital, the financial services arm of Anil Dhirubhai Ambani Group, plans to expand its operations in West Asia, Chief Executive Sam Ghosh has said. — PTI

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