New Delhi, October 8
The second round of review of the under-developed coal blocks allocated to various companies will begin tomorrow. The inter-ministerial group (IMG) has sought explanation from the public sector undertakings (PSUs) that have not carried out any work on the coal blocks allotted to them.

Sources in the Coal Ministry said a total of 31 notices have been issued to various PSUs to give presentations before the IMG which is scheduled to meet in next over two days from Tuesday.

The move to seek explanation from the PSUs comes after the IMG, earlier this month, went ahead with the review of 29 blocks with the private sector. The IMG had recommended the de-allocation of 13 blocks while penalising another 14 with the deduction of their bank guarantee.

Bhaskarpara coal block allotted to Grasim Industries and Electrotherm; Dahegaon Markardhokra IV given to IST Steel & Power; North Dhadu allotted to Electrosteel Castings; Choritand Telaiya allotted to Rungta Mines and Gondkhari block allotted to Maharashtra Seamless are among the 13 blocks whose de-allocation has been approved. The government also approved the deduction of the BG with regard to the coal mines of some of the firms including ArcelorMittal, GVK Power, Jayaswal Neco, Neelachal Iron & Steel and DB Power among others.

Sources said while on October 9, the public sector firms with the possession of 15 coal blocks would make their presentations, and on October 10, 16 coal block holders will make their presentations before the IMG.

The public sector firms which will make presentations would include Chhattisgarh Mineral Development Corporation, MMTC and TVNL among others.

Sources said that the IMG is likely to finalise its recommendations with regard to the PSU mines by October 20.

Sources said that Coal Secretary S K Srivastava had recently conveyed it to Public Accounts Committee that the recommendations of the IMG as far as coal blocks allocated to the public sector firms would be finalised by October 20.

Of the recommendations for de-allocation which the IMG had made earlier this month, the Coal Ministry has so far de-allocated seven coal blocks. It is still to take a call on the rest of the recommendations made by the IMG.

A total of 58 mines were given show cause notices for failure to develop the blocks within stipulated timeline. The government had formed the IMG in July to review the progress of coal blocks allocated to companies for captive use.

New Delhi, October 8
Next on the UPA government's list of economic reforms could be transparency in the pricing of air turbine fuel (ATF)-a move that would benefit the private airlines more than the recently announced policy of 49 per cent FDI in the sector.

Jet fuel is responsible for 40 per cent of operational cost of any airline and the Civil Aviation Ministry has written to the Petroleum and Natural Gas Ministry for transparency in its pricing to help the cash-strapped sector to bring down its operational costs which can be further translated into greater benefits for passengers in terms of prices of air tickets.

Civil Aviation Secretary K N Srivastava said the ministry had written to the Petroleum Ministry for regulating the prices of the ATF, marketed by oil PSUs through the Petroleum and Natural Gas Regulatory Board, and was quite hopeful of a sector-favourable decision.

The ministry has also urged for open access to oil infrastructure at airports for private and foreign players to store imported ATF which is less expensive than domestic jet fuel.

Apart from the wage bill, ATF constitutes 40 to 50 per cent of an airline's operational costs followed by airport charges.

India has the most expensive aviation turbine fuel and operating costs and experts say that unless policy changes are made in this area, India will remain incapable of supporting large-scale growth

Unless costs of ATF are rationalised to bring down the operating costs, there can be no cost advantage to even well-heeled foreign investors so just allowing foreign carriers to invest in India would not solve the problems of high cost that plague the sector, they add. 

New Delhi, October 8
The government has amended the rules governing Indian Depository Receipts (IDRs) issued here by foreign companies, after financial regulators RBI and SEBI allowed part-conversion of securities into equity shares by investors.

The amendment, notified by the Ministry of Corporate Affairs (MCA) in the Companies (Issue of Indian Depository Receipts) Rules, has come into effect from October 1, as per a ministry notification.

As per the MCA notification, "A holder of IDRs may transfer the IDRs, may ask the domestic depository to redeem them or, any person may seek re-issuance of IDRs by conversion of underlying equity shares," subject to the provisions of Foreign Exchange Management Act and SEBI rules at the time.

Banking regulator RBI and capital markets watchdog SEBI had approved partial conversion of IDRs into equity shares late in August, while capping the funds to be raised through IDRs at USD 5 billion.

The move is expected to help in attracting foreign entities to list their IDRs on domestic bourses.

"... to retain the domestic liquidity, it is decided to allow partial fungibility of IDRs (i.e. redemption/ conversion of IDRs into underlying equity shares) in a financial year to the extent of 25 per cent of the IDRs originally issued," Sebi had said in its circular on August 28.

In 2012-13 Budget, the government had proposed to allow two-way fungibility of IDRs to encourage greater foreign participation in the Indian capital market.

In a separate circular, the Reserve Bank also said on August 28 that there would be an overall cap of USD 5 billion for raising of capital through IDRs by foreign companies in Indian markets.

"This cap would be akin to the caps imposed for FII investment in debt securities and would be monitored by SEBI," it said.

The two-way fungibility allowed for IDRs is similar to the limited two-way flexibility allowed for ADRs and GDRs issued by domestic companies in foreign markets.

This would enable Indian shareholders to convert their depository receipts into equity shares of the issuer company and vice versa.

The restrictions on fungibility were seen as one of the major factors for foreign entities keeping away from listing their IDRs. So far, only foreign company, UK-based banking major Standard Chartered, has listed its IDRs in India.

SEBI had said it decided to prescribe a frame work for two-way fungibility of IDRs to improve the attractiveness and long-term sustainability of such instruments. —PTI

New Delhi, October 8
Raising its concerns over visa problems being faced by IT professionals in the UK, India today said the proposed visa measures by Britain may affect profitability and competitiveness of Indian companies.

The issue came up for discussion during a meeting of Commerce and Industry Minister Anand Sharma and visiting Lord Mayor of London David Wootton here.

"The new measures that the UK government has proposed for are likely to affect the profitability and competitiveness of Indian companies," it said.

Sharma said Indian companies are using the UK as a base to service their investment in Europe. "While we appreciate that UK may have reasons for introducing a cap on non-EU economic immigrants, our concern is to ensure that these measures do not adversely affect the growing trade and economic partnership between our two countries," the statement quoting Sharma said. —PTI

New Delhi, October 8
Vijay Mallya-promoted private carrier Kingfisher Airlines seems to be headed towards the point of no return. The cash-strapped airline, which has to respond to the DGCA show-cause notice till October 20, has reached a stage from where recovery appears doubtful unless massive funds are pumped in, a top official told the Tribune today.

The airline has been suffering from severe financial crisis for months now and anger is now building up against Vijay Mallya, the owner of the UB Group. Despite the brewing crisis in KFA, he has remained conspicuous by absence, raising questions about his moral and ethical responsibility towards his employees. He is said to be in talks with foreign airlines for picking up stake in KFA but there is no confirmation.

Civil Aviation Minister Ajit Singh has already made it clear that the aviation regulator had the option to cancel Kingfisher's licence if it was not satisfied with its plans on operations. "Unless Kingfisher satisfies the DGCA, its licence can be cancelled or suspended." Singh said.

Adding to its troubles is the fact that if KFA fails to resume operations in full swing by mid-October, it could lose prime slots on important metro routes to rival carriers. With peak holidays season around the corner, Jet Airways, Indigo and SpiceJet are vying to build up capacity and intensify operations on these high density routes, sources say.

But if these slots are taken away now, Kingfisher may not be able to retrieve them when it does manage to resume operations. To retain the slots KFA has to start flying but with plausible plans, otherwise it could be in for more trouble. Perhaps to avoid that eventuality, the airline also tried opening bookings from October 13, much against the rules of the DGCA.

On Friday, the DGCA had served a notice to KFA, asking it to give reasons why its licence should not be cancelled. It made it clear that the airline could not take off without convincing the government with a sustainable recovery plan, including the payment of salaries to its employees.

Anger of the employees is multiplied by the fact that even though junior employees have not been paid for months, some top executives received substantial pay hikes. According to reports CEO of the carrier is the second-highest paid among peers at the UB Group. 

Mumbai, October 8
Emkay Global Financial Services today admitted an error on its part for the 900-point flash crash of the NSE index Nifty on Friday morning, and said it would help the stock exchange in probe into the matter.

The shares of the company fell by 10% this morning. They had seen a similar plunge on Friday as well.

In a clarification to the stock exchanges, Emkay Global said, "On October 5, while executing an order to transact a Nifty cash basket, in Nifty-50, a dealer committed a bonafide error. The error was in entering the value of the order to be transacted. The order got transmitted to the NSE trading server as a single large Nifty basket order comprising of Nifty 50 stocks. On realising the error, we promptly got in touch with the NSE and kept in touch with them to co-ordinate the future course of action until the entire erroneous outstanding position was closed out."

Soon after the opening trade, shares of the company plunged 9.97% to touch the lower circuit limit of Rs 28 on the BSE. At NSE, the stock plummeted 9.98%.The Nifty on Friday morning fell by about 900 points within seconds in a flash crash like situation, which led to a halt in trading at NSE for about 15 minutes.

NSE had said there was no technical glitch in its system and blamed the crash on erroneous orders worth over Rs 650 crore for multiple trades by Emkay Global in various stocks at low prices for an "institutional client".

Emkay Global further said, "All our remaining clients' outstanding positions are intact and we will continue to service all obligations. We are hopeful that this obvious and apparent error would justify the annulment of these trades, and we believe in NSE's professional management to see the merits for annulment."

NSE has disabled trading for us to facilitate investigations and primarily to prevent any further exposure until this settlement is completed, the company said. "We are actively working with the NSE to facilitate this process. Our membership has not been suspended ," Emkay said.—PTI

As part of their surveillance mechanism and to safeguard the interest of investors, leading bourses BSE and NSE have suggested extra due diligence in trading of illiquid stocks. As per directions from market regulator SEBI, the BSE has listed out 2,135 such stocks, while NSE has also named 300 illiquid stocks where additional due diligence is required. Illiquid stocks are those where trading activities are limited and are said to pose higher risks to the investors, as compared to the frequently traded shares.

Mumbai, October 8
Indian gold futures are likely to extend losses for a fifth week, breaking their lowest level in more than a month, weighed by a stronger dollar.

The most-active gold for December delivery on the Multi Commodity Exchange was 0.34% higher at Rs 31,272 per 10 grams, after hitting a low of Rs 31,081 rupees earlier in the day, nearing a level last seen on August 31.

Selling is advised on rallies in gold at Rs 31,350 rupees, with a stop loss at Rs 31,500, targeting Rs 31,000, said Commtrendz Research director Gnanasekar Thiagarajan, in Mumbai, adding the firm dollar could weigh on prices.

The dollar rose on concerns about the outlook for the global economy and company earnings, recouping losses from the previous session that followed strong U.S. jobs data. Gold and dollar often move in opposite direction as the two compete for funds globally.

"Once it goes close to a support of Rs 30,800, then some bargain hunting could begin," said Thiagarajan. Falling crude oil prices are also likely to weigh on prices of the yellow metal, which is also considered as a hedge against inflation.— Reuters