The Tribune, Chandigarh, India

India arms of Japanese auto firms defer plans
Maruti cancels celebrations for rolling out 1 crore cars

New Delhi, March 14
Indian arms of Japanese automakers such as Maruti Suzuki, Toyota Kirloskar and Honda Siel have decided to either cancel or postpone some of their big events here. These auto majors, which are controlled by managements from the island nation, are still assessing the possible impact on sourcing of parts from the supplier base of their parents.

Indian car market leader Maruti Suzuki has cancelled the celebrations for rolling out its 1,00,00,000th car tomorrow in view of the devastating earthquake and tsunami on March 11.

"This is a big tragedy on mankind. That is why we are not doing anything on our one crore production mark. We have cancelled everything, this is not the time to celebrate," Maruti Suzuki India (MSI) Chairman R C Bhargava said.

Some of MSI employees, working with Suzuki in its plant in Hamamatsu, are safe, he added.

Likewise, Japanese auto major Honda said it has postponed the preview of its small car Brio in India that was scheduled for March 17.

Last week, compatriot Toyota had said it postponed the official inauguration of its second Indian manufacturing facility at Bangalore in view of the 8.9-magnitude quake, the most powerful since the 1923 tremor in Great Kanto in Tokyo.

These auto majors, alongwith their other compatriots, source a large chunk of critical components from Japan.

Although, there has been no clear picture so far about affect on imports, it seems that companies will face tough time to continue production once the current buffer stocks end.

“There will not be any immediate affect on production. We are at present trying to assess if there will be any impact on long-term,” MSI Managing Executive Officer (Marketing and Sales) Mayank Pareek said.

Earlier in the day, Japanese auto major Honda had said it postponed the preview of its small car Brio in India scheduled for March 17 due to the natural disaster that hit the island nation last week.

Last week, compatriot Toyota had said it postponed the official inauguration of its second Indian manufacturing facility at Bangalore in view of the earthquake and tsunami.

On March 11, an earthquake measuring 8.9 on Richter's scale hit Japan that was followed by a devastating tsunami. — PTI

Corruption is induced by private sector too: KPMG
Sanjeev Sharma/TNS

New Delhi, March 14
A KPMG survey on bribery and corruption conducted among corporates has revealed that 68 per cent of respondents believe that in many cases corruption is induced by the private sector.

68% of survey respondents believe that India can achieve more than projected 9 per cent GDP growth if corruption is controlled.

90% of respondents felt that corruption negatively impacts the performance of stock markets by increasing volatility

This is among the several findings of the survey which KMPG says was conducted as a series of high-level corruption and scams over the past two years were threatening to derail the country’s credibility, especially in the international arena and the economic boom.

The KPMG Forensics conducted an extensive survey among leading Indian corporates to an insight into the challenges faced by them due to corruption. Commenting on the findings of the survey, Deepankar Sanwalka, head , risk & compliance group, KPMG India said, “We realised that there was an uneasy sentiment among the corporates in India about the recent developments”.

The survey reveals how the Indian corporate sector is battling corruption and at the same time looking for ways to play a greater role in improving the system to ensure a thriving business environment in India.

Among the key findings of the survey are that 68% of survey respondents believe that India can achieve more than projected 9 per cent GDP growth if corruption is controlled. 51% of the survey respondents fear that rising corruption will make India less attractive for foreign investment.

Almost 90% of respondents felt that corruption negatively impacts the performance of stock markets by increasing volatility and prevents institutional investors from making long term investments.

Nearly 99% respondents felt that the biggest impact of corruption on business was its tendency to skew the level playing field and attract organisations with lesser capability to execute projects.

Majority of the respondents feel that the corruption level in India will remain at the same level irrespective of the legislation. 84% of the respondents believe that Indian government has not been very effective in enforcing anti-bribery and corruption laws.

Respondents firmly believe that a solid, foolproof mechanism should be put in place by the government to check and arrest the rising cases of corruption and bribery. Strict enforcement of existing provisions under law, for both the taker and giver, is believed to be need of the hour to prevent further erosion of trust.

SEBI clears Cairn-Vedanta deal

New Delhi, March 14
Market regulator Securities and Exchange Board of India(SEBI) has cleared the acquisition of Cairn India by NRI billionaire Anil Agarwal-led Vedanta Resources, removing a major hurdle for the $9.6-billion dollar deal announced about seven months ago.

The deal was announced in August 2010 and has since then been awaiting approvals from Sebi and the government.

The government is yet to approve the deal, wherein British energy giant Cairn Energy agreed to sell its majority stake in Cairn India to Vedanta group.

After seeking numerous clarifications on the deal from acquirer over the past seven months, Sebi has issued its final observations on the mandatory open offer to be made to the public shareholders as part of the deal.

Any deal involving acquisition of 15 per cent or more stake in a listed company requires the acquirer to make an open offer for 20 per cent stake purchase from public shareholders and this offer needs to be approved by Sebi.

Soon after announcing the deal to acquire up to 51 per cent stake in Cairn India, Vedanta group had sought Sebi's approval for the mandatory open offer to be made to the public shareholders of the target company.

In the public offer announced on August 17, Vedanta group had offered to acquire up to 20 per cent stake from public shareholders for a price of Rs 355 per share.

The Rs 13,631 crore open offer was first scheduled to open on October 11 and close on October 30, but got affected due to delay in Sebi approval for the same.

The company will now have to announce a fresh schedule for the open offer, where it may have to incorporate various clarifications sought by Sebi during the course of its due diligence.

Cairn India shares today closed 1.5 per cent higher at Rs 346.20 at the BSE. The deal is currently awaiting an approval from the Cabinet Committee on Economic Affairs (CCEA). The oil ministry last month circulated a draft note for the CCEA approval, but comments on the same have not been received from all the ministries.

Oil ministry will move Cabinet Committee on Economic Affairs (CCEA) once comments from ministries of finance, law, home, environment and corporate affairs are received. — PTI

Nippon to buy 26% in Reliance Life for Rs 3,062 crore

Mumbai, March 14
In the largest FDI in the financial services sector, Japanese insurance firm Nippon Life Insurance Company will acquire 26 per cent stake in Reliance Life Insurance for $680 million (approximately Rs 3,062 crore). “Nippon Life Insurance will invest an aggregate value of Rs 3,062 crore ($680 million) to acquire 26 per cent strategic stake in Reliance Life Insurance. This is the largest FDI in Indian financial services sector as well as insurance,” Reliance Capital CEO Sam Ghosh said today.

The transaction pegs the total valuation of Reliance Life Insurance at approximately Rs 11,500 crore ($2.6 billion). Reliance Capital currently holds 100 per cent stake in Reliance Life.

The holding company has till now invested Rs 3,000 crore in its life insurance venture. However, the deal is subjected to approval by insurance regulator IRDA and the Japanese regulator, Ghosh added. When asked about the time frame to get approvals, he said, "We hope it happens as quickly as possible". Nippon is the 6th largest life insurer in the world and the largest private life insurance company in Japan and Asia.

Commenting on the development, Reliance Capital Chairman Anil Ambani said, "At this time, our thoughts are with the people of Japan, bravely facing an unprecedented natural catastrophe. "We pray for strength to the country, its people and our new partners and the entire Nippon Life family, to overcome the trauma of the tragic loss of life and devastation caused by this calamity". Answering queries on Reliance Life's initial public offer plans, Ghosh said, "We will, I think, discuss IPO at a later date.

At this point, if you notice 26 per cent, IPO is not a possible option". According to the current rules, a foreign entity can hold up to 26 per cent stake in an Indian insurance firm.

Reliance Capital wholly owns Reliance Life, a business it acquired from AMP Sanmar in 2005. Nippon Life Insurance President Kunie Okamoto said,"We both share the same passion and philosophy and, together, we believe we can develop a strategic partnership to help Reliance Life Insurance become a world-class insurance company in India". — PTI

Indian economy likely to slow down: OECD

London, March 14
India, one of the world's fastest growing nations, is likely to see a slowdown even as most of the advanced economies are expected to grow at a good pace in coming months, according to the Paris-based OECD. An analysis by the Organisation for Economic Cooperation and Development (OECD) showed that economic activities are "showing some signs of slowing in India".

The observations are based on the grouping's latest Composite Leading Indicators (CLIs) released today, that provide early signals of turning points with regard to economic expansion and slowdown. India's CLI slipped to 99.3 in January from 99.7 in the previous month. During the same period, neighouring China's reading dipped to 101.6 from 101.7. "Inflationary pressures are also mounting in China and India stemming from different sources: soaring real estate prices in China and food prices in India," OECD said. India's economic growth rate was 7.4 per cent in 2009-10 and is projected to be over 8.5 per cent for the year ending March 31, 2011.

After clocking over 9 per cent growth for three years till 2007-08, the country's economic expansion slipped to 6.7 per cent in 2008-09, due to the global financial meltdown. Last week, Finance Minister Pranab Mukherjee exuded confidence that the economy would return to nine per cent growth in 2011-12. Going by the CSO data, the national economy is estimated to grow by 8.6 per cent in the current fiscal. Meanwhile, CLIs for Germany, Japan, and the US continue pointing to robust expansion relative to trend. — PTI

Buffett to meet policyholders on March 25

New Delhi, March 14
Famed American investor Warren Buffett will meet with individuals that have bought insurance policies through his Indian venture Berkshireinsurance.com.

Buffett, who is the chairman and CEO of US conglomerate Berkshire Hathaway, will meet with the policy holders in New Delhi on March 25.

The group earlier this month announced plans to enter the Indian non-life insurance sector as a corporate agent of leading player Bajaj Allianz General.

Customers across India that buy a policy from Berkshireinsurance.com would receive an exclusive invite to meet and interact with Buffett on March 25, Berkshire India said .

Berkshire India has been incorporated to sell and distribute general insurance products in India. The entity would directly sell insurance to consumers through the portal 'www.Berkshireinsurance.com' and by way of telemarketing.

Honda to raise prices from April 1

Mumbai, March 14
Honda Siel Cars India today said that it would up its prices 2-3 per cent from April 1. The Japanese multi-national said it would hike the prices of all its products, except the luxury sedan Accord on account of rising input costs.

Other car-makers, also impacted by the continuous rise in raw material prices, said they were mulling a price hike but would take a call on the matter the month end.

Ford India said that increasing input costs in recent months is worrying the company.

"Surging raw material costs is worrying us and it is now the biggest concern for almost all auto-majors in the country," Ford India's President and Managing Director, Michael Boneham, told PTI here.

"We have not decided anything yet (on hiking its car prices)...we will review the situation by end-this month," he said. — PTI

Leelaventure aims to raise Rs 600 crore

New Delhi, March 14
Hotel Leelaventure today said it was in talks with four private equity players to sell 14.9 per cent equity in order to raise Rs 600 crore.

"We are currently in talks with four private equity players and will finalise deal with one of them in the next 3 -4 months to raise Rs 600 crore," Hotel Leelaventure VC & MD Vivek Nair told reporters here. Post equity sale, promoters holding in the firm will come down to 50.5 per cent from 55 per cent at the moment.

The company said that its board decided to offer 14.95 per cent of its enhanced capital to prospective investors by issue of fresh equity shares. It is also expecting to raise about Rs 950 crore from sale of office commercial space. — PTI

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