New Delhi, June 12
Country’s largest carmaker Maruti Suzuki India Ltd’s (MSIL) Board of Directors today gave a nod for merging its subsidiary Suzuki Powertrain India Ltd into the parent company.

This would increase Suzuki Motor Corporation’s (SMC), the Japanese automobile major which holds the majority share in MSIL, stake in domestic car market leader by 2 per cent to 56.2 per cent.

“The Board of Directors of Maruti Suzuki India Ltd today approved a proposal to merge Suzuki Powertrain India Ltd (SPIL) with MSIL,” the company said. SPIL supplies diesel engines and transmissions to MSIL. The regulatory approvals and legal requirements for the merger is likely to be completed by December.

“Once the merger is approved, the books of accounts of Suzuki Powertrain will be merged with Maruti Suzuki with effect from April 1, 2012,” the statement said.

SMC holds 70 per cent share in SPIL, while the remaining 30 per cent is held by MSIL. The petrol engines are made by Maruti in-house.

“Consequent to the merger, SMC's holding in MSIL will go up from 54.2 per cent to 56.2 per cent. MSIL proposes to make a fresh issue of 13.17 million shares to SMC in lieu of SMC's 70 per cent holding in SPIL,” MSIL said.

“There will be no cash outflow from Maruti Suzuki. The swap ratio has been fixed at 1:70. As such, Suzuki Motor will receive one share of Maruti Suzuki (of Rs 5 each) for every 70 shares (of Rs 10 each) it holds in Suzuki Powertrain,” it said. This move will enable MSIL to bring its entire diesel engine capacity under its own control. Initiatives to increase efficiency, such as sourcing, localisation, production planning, and manufacturing flexibility will be under the MSIL management.

“The proposed merger also promises benefits for the combined entity through synergies in areas like finance, capital structuring and administration and consequent reduction of transaction costs,” the company said. "There are no plans to reduce jobs following this merger," it added. 

Mumbai, June 12
Interest rate sensitive banks and realty stocks surged today, pushing up benchmark Sensex by 195 points to a fresh one-month high after weak IIP April data boosted hopes that RBI will cut lending rates soon.

After S&P's threat to downgrade India's sovereign rating to junk status shaved off 51 points yesterday, Sensex opened nearly 100 points down and touched the day's low of 16,553.47.

However, investors bought banks, realty and capital goods scrips as the 0.1 per cent growth in IIP for April reinforced rate cut expectations that RBI will shift gears to support growth in its June 18 mid-quarter monetary policy review.

"Today's weak industrial production reading increases the likelihood of a 50 bps rate cut" said Sonal Varma of Nomura.

SBI, HDFC Bank and ICICI Bank gained in the 1.5-2 per cent range and lifted the key index by 194.79 points or 1.17 per cent to 16,862.80 at close, the highest level since May 7. In the 30-share index, 25 closed higher while five ended lower. Gainers were led by Maruti Suzuki which jumped 3.48 per cent as investors cheered auto major's decision to merge engine and transmission maker Suzuki Powertrain with itself.

Tata Motors (3.14 pc), L&T (2.53 pc) and Sterlite (2.51 pc) were other notable gainers.

Brokers also said the rally today was supported by Finance Minister Pranab Mukherjee's statement that government would take steps to give positive signals to the industry.

The market also ignored weakness in rupee as the currency breached the 56-level a dollar today and was trading at 55.8. — PTI

New Delhi, June 12
The country's largest bank SBI has said it plans to hire 9,500 employees this fiscal and its main thrust will be on retail banking in the coming years.

Noting that the current economic environment warrants greater prudence, State Bank of India (SBI) Chairman Pratip Choudhuri has said the bank would remain vigilant to new opportunities and challenges.

"In the coming years, your bank's main thrust will be on retail, and, as shown by our achievements, we are well positioned to meet the competition," he said in his letter to shareholders, published in SBI's Annual Report 2011-12.

The state-owned bank also disclosed in the report that its overall staff strength declined by 7,452 employees during the last fiscal, but it has decided to recruit 9,500 clerical staff during 2012-13 to meet the growing needs of the bank.

As on March 31, 2012, the bank had a total permanent staff strength of 2,15,481 - which included 80,404 officers, 95,715 clerical staff and the remaining 39,362 were sub-staff.

SBI said it already enjoys leadership positions in the retail car loan financing and home loan businesses and its retail advances grew 10.9 per cent to Rs 1,82,427 crore in the year ended March 31, 2012. — PTI

Chandigarh, June 12
Games are no longer the most downloaded apps on your smartphone. It’s the local applications that are catching the fancy of the smartphone users. Little wonder that mobile operating systems in India are now gearing up to introduce more and more local applications for their users, be it the search for nearest restaurants, navigation in a new place, local weather, or booking a movie show.

Windows Phone OS, one of the top three players in the mobile operating system space, too, is now focused on introducing more of these applications. As it expands its horizons through an exclusive tie-up with Nokia, besides tie-ups with Samsung and HTC, Windows Phone OS claims that it is adding almost 300 new applications everyday across the world.

Talking to The Tribune here today, Vineet Durani, Director, Windows Phone Business Group, said they now offer their customers a choice from 88,000 applications. “Though games is a big draw with users, it is now the local applications and assessment-based applications that have the largest demand. India has one of the largest application developers in the world, and most of these developers are now focusing on developing these local and assesment-based applications,” he said. Durani said as the smartphone industry goes on a growth trajectory, with the smartphone market set to touch 33 million units in 2013, consumers increasingly prefer to connect online using their smartphones rather than PCs.

Durani said about 95 per cent of smartphone users in India are now using their handsets beyond SMS and voice calls. “In order to tap the mass smartphone users, we are planning to introduce more localised applications, including local information and education-based and assessment-based application to the Window mobile users," he said.

New York, June 12
Having decided not to take the witness stand at his insider-trading trial, former Goldman Sachs Group Inc board member Rajat Gupta on Monday called longtime friends and his eldest daughter to testify on his behalf.

Gupta's daughter, Geetanjali Gupta, 33, had barely begun answering questions from a defence lawyer in US District Court in New York when a prosecutor's objection led to a long conference at the judge's bench, one of many that have punctuated and prolonged a trial now in its fourth week.

Gupta, 63, is charged with securities fraud and conspiracy over allegations he illegally breached his fiduciary duties by passing corporate secrets to former Galleon Group hedge fund manager Raj Rajaratnam, his one-time friend. Gupta denies the charges and his lawyers argue that the government has a weak, circumstantial and speculative case.

Her testimony is expected to resume on Tuesday.

The delay pushes back closing arguments in the case to Wednesday from Tuesday because the defence has other witnesses to call and evidence to submit to the jury on its side of the case.

Earlier on Monday, two longtime friends of Gupta's testified as character witnesses.

If convicted, Gupta faces a possible maximum of 25 years in prison. Rajaratnam was convicted at trial 13 months ago and is serving an 11-year prison sentence. — Reuters 

New Delhi, June 12
Industry body Assocham has called for a big dose of political courage to halt the negativity being spread by vested global agencies and reverse the ongoing decline in investor confidence.

At a meeting with Prime Minister Dr Manmohan Singh today, Assocham president Rajkumar Dhoot submitted a memorandum suggesting measures to tackle issues like high fiscal deficit and inflation on a war footing.

Dhoot in a statement also dismissed the Standard and Poor’s assessment of the Indian economy and said there is nothing in the report which is revealing or new. He said some of the comments in the report about the political and government leadership were uncalled for, to say the least.

Strangely, he said, these comments came from an agency which had given AAA ratings to some of the junk financial products in the run-up to the global financial crisis of 2008-09.

“Let India and other emerging countries not become whipping boys for these global agencies. They do more harm than good to us in terms of building a worldwide negative perception,” said Dhoot.

He emphasised the need for reversing the negative perception build by some global organisations, including the multinational rating agencies. The Assocham delegation urged the Prime Minister to clear big infrastructure projects in the next three months.

While the recent GDP data suggests deceleration in the investment to GDP ratio at 29 per cent, this is an issue which requires medium to long-term solution. The immediate solution would be to generate demand since the industry has unutilised capacity. Once that is achieved, the consumer confidence will automatically boost investor confidence. — TNS