New Delhi, March 24
Amid a raging controversy over disinvestment of the erstwhile Videsh Sanchar Nigam Limited (VSNL), Tatas today hit back at the government, saying the company made several attempts since 2005 onward for the demerger of surplus land but the Telecom Ministry's response is still awaited.

Tata Communications chairman Subodh Bhargave has written a letter to Telecom Minister Kapil Sibal where he has given details of the sequence of events since 2005. The details furnished by Tata Communications also have concurrence of two directors nominated by the government.

The letter comes in the backdrop of Sibal seeking a probe into the disinvestment of VSNL in 2002, which seems to be an apparent attempt to put the BJP, which led the NDA government during which the deal was signed, on the backfoot.

Bhargave said the company had participated in a few discussions and received some correspondence on surplus land, but those have been mostly in nature of seeking clarifications and the “DoT response to the draft scheme of demerger is still awaited.”

While ordering the probe Sibal said, “It has come to my notice that the disinvestment of Videsh Sanchar Nigam Limited (VSNL) in 2002 does not seem to be fair and transparent.”

“Prima facie, the way issue of demerger of 773.13 acres of surplus land of VSNL was handled in 2002 and thereafter, not only the interests of investors but also the interests of the government seems to have been adversely affected,” Sibal said in an internal note asking Telecom Secretary R Chandrashekhar to constitute a high-level committee to examine the issue in detail.

In their response, Tatas have said that the surplus land was secure and was unused by the company as it was waiting for a resolution of the demerger issue.

“The company continues to bear the expenses toward the surplus land’s upkeep and security as well as associated property taxes,” it said.

Tatas have pointed out that the company had been unable to raise any non-debt funding during the last few years to support its investment and growth aspirations as the issue of demerger was still to be resolved.

Incidentally, defending the disinvestment, the Disinvestment Minister in the NDA government Arun Shourie has also said if there was any delay in the demerger of the land and if a probe has to be ordered, “it should be against P Chidambaram and Pranab Mukherjee , the past and present Finance Ministers in the UPA government in the past seven years.”

He had defended the disinvestment and said stringent conditions had been put in place that prohibited the sale of surplus land by winning bidders.

Tata Communications would be “more than willing to share all the facts with you or any officer deputed by you to look into the matter. More importantly, we welcome a speedy resolution of the demerger issue in the best interests of the company and all its shareholders,” Bhargava said in the letter. 

New Delhi, March 24
Food inflation was back in double digits at 10.05 per cent for the week ended March 12 after a fortnight long gap on costlier vegetables, fruits and protein-based items.

Food inflation, which has been showing a declining trend for the last three weeks, stood at 9.42 per cent in the week ended March 5. In the corresponding week of the previous year, food inflation was more than double, at 20.62 per cent, official data released here showed.

During the week under review, prices of vegetables went up by 11.20 per cent year-on-year. Fruits became costlier by 23.60 per cent and eggs, meat and fish by 13.21 per cent.

Experts said demand-supply mismatches were responsible for the sudden spurt in prices of food items.

“Being perishable, prices of fruits and vegetables tend to display considerable volatility, reflecting prevailing demand-supply dynamics. Broadly, food prices are expected to ease subsequent to the rabi harvest,” ICRA Economist Aditi Nayar said.

HDFC Bank chief economist Abheek Barua said, “It is alarming that food inflation has risen to double digits. We are again seeing a reversal on the part of food inflation, which is a cause of concern. The surge in prices could be because of supply side disruptions,” Barua said.

The rate of price rise in food items, which accounts for over 14 per cent of overall inflation, may prompt the Reserve Bank to hike key policy rates. Headline inflation has been above 8 per cent since March, 2010, and in February, 2011, it was 8.31 per cent.

“The Reserve Bank is expected to hike short term monetary policy rates (repo and reverse repo) again by 25 basis points in its next review in May to balance the trade-off between growth and inflation,” Barua said.

The RBI has already hiked its key policy rates eight times since March, 2010. The last hike was taken at its mid-quarterly review on March 17 this year.

“There is a strong possibility of another 25 basis points hike in repo and reverse repo rates in the next RBI short-term monetary policy review which is due in May,” Crisil Chief Economist D K Joshi said.

The RBI had also revised the March-end inflation forecast upward to 8 per cent from the earlier projection of 7 per cent in its mid-quarterly review last week.

Barua also cautioned against inflationary pressure from oil prices. — PTI 

New York, March 24
Indian American Rajat Gupta, a former director at Goldman Sachs, had violated the firm’s code of conduct by disclosing details from a 2008 board meeting to hedge fund manager Raj Rajaratnam, the main accused in the largest hedge fund insider trading case to hit US courts, the company CEO Lloyd Blankfein has testified.

Gupta, who is accused by the Securities and Exchange Commission (SEC) of passing insider information to Rajaratnam, denies wrongdoing and has sued the US regulator.

The SEC has alleged that Gupta tipped off Rajaratnam about an imminent $5 billion dollar investment in Goldman by Warren Buffett in 2008, and that he also provided the quarterly earnings of Goldman and Proctor and Gamble, where he also served as a director.

Last week, prosecutors played a secretly recorded phone conversation on July 25, 2008 in which Gupta tells the Galleon Group founder that the firm is discussing buying Wachovia or American International Group (AIG).

“This was a big discussion at the board meeting,” Gupta said during the call. It was a divided discussion.” Blankfein replied “yes” when he was asked by the prosecution whether Gupta violated confidentiality policy in the call about the possible acquisition.

He read out guidelines, which the directors were required to adhere to, including, “directors must maintain the confidentiality of all information so entrusted to them.” Blankfein said that besides the confidentiality policy, directors also had the duty of putting the interest of the firm first.

When asked if Gupta had violated this duty, he responded, “my sense of it… yes.” During cross-examination, Blankfein said that the Galleon’s relationship with Goldman Sachs was an important one. “I know it was a prominent client for Goldman Sachs,” he said. When asked whether Gupta was viewed as “highly esteemed individual” in the business world, Blankfein said “yes”. — PTI

BRIEFLY

Pandit Birju Maharaj to endorse Zandu products
New Delhi: Kolkata-based FMCG firm Emami on Thursday said it had signed up noted Kathak dancer Pandit Birju Maharaj to endorse its Zandu healthcare range of products. Zandu Healthcare that was acquired by Emami in 2008 for Rs 700 crore has completed 100 years of existence. “We have roped in Pandit Birju Maharaj to endorse the mother brand Zandu for a period of over one year,” Emami Director Harsh Agarwal said. — PTI

Govt tables factoring Bill
New Delhi: The government on Thursday tabled in Parliament a Bill that would address delays in payment and liquidity problems of micro and small enterprises, and empower the Reserve Bank to regulate factor business in the country. The Regulation of Factors (Assignment of Receivables) Bill 2011, was tabled in Lok Sabha by Pranab Mukherjee. The bill seeks to provide for and regulate the assignment of receivables by making provision for registration and rights and obligations of parties. — PTI

Mahle Fiters to start unit II today
Shimla: Country’s leading manufacturer and exporter of automotive filters, Mahle Filter Systems, will start manufacturing a new product range utilising enhanced technology with the inauguration of its second unit at Parwanu on March 25. The facility will manufacture the poly-urethane moulded filter elements, ecological plastic embedded filter elements, lube oil spin-on filters with new crimping design and high technology air management products. — TNS