New Delhi, September 4
Looking to secure the company from foreign exchange fluctuations, the country’s largest car-maker, Maruti Suzuki India Ltd (MSIL), today said it will now pay royalty to its parent company Suzuki Motor Corp (SMC) in Indian rupees instead of Japanese yen.

“On all future models the royalty will be expressed in rupees and not in yen so that we are not exposed to the variation in the exchange rate which has been happening in the past”, MSIL chairman RC Bhargava informed shareholders at the company’s annual general meeting.

SMC holds 56.2% stake in its Indian arm and currently receives royalties in yen for the use of technical knowhow and the Japanese parent brand name. MSIL had paid royalty of 6% of its net sales at Rs 2,486 crore in royalty to SMC in the last financial year.

Royalty payment made by MSIL in 2012-13 was more than parent Suzuki Motor Corporation’s standalone profit.

This had led to seven major mutual funds earlier this year writing to Bhargava raising concerns about the amount of royalty the Indian subsidiary paid to the parent company. Similar complaints regarding high royalty payments have also been made by minority investors in the past.

The MSIL chairman said with the company enhancing its research and development capabilities and playing greater role in joint product development with Suzuki, the royalty payout will also decrease.

“More and more R&D work will be done in India and royalty calculation will be based on work done here and our expenditures on R&D will be rewarded in the form of reduced royalty,” he added.

In the first quarter ended June 30, 2014, MSIL had paid royalty of Rs 689 crore, which was 6.2% of net sales.

The company, which is investing Rs 2,000 crore on a research and development facility, including a test track at Rohtak in Haryana, will enter the SUV segment early next year.

“Maruti has not been present in the SUV segment and Suzuki Japan has been aware of it. Early next year we will launch our SUV and a compact SUV will follow a year later. With these we will have a sizeable presence in the SUV segment and fill non-utilised capacity at Gurgaon and Manesar plants,” Bhargava said.

On the Gujarat plant, Bhargava urged the shareholders to vote favourably in the voting that is to take place sometime next month to let Suzuki own and invest at the facility.

Bangalore, September 4
UB group chairman and debt-ridden Kingfisher Airlines promoter Vijay Mallya, declared a wilful defaulter by the United Bank of India, today said he disagreed with its action and would pursue all legal remedies available.

“In response to the United Bank of India action, I have already issued a media statement which says that we strongly deny the allegations made, that we disagree with the findings of their Grievance Redressal Committee before which we have had no opportunity to appear,” Mallya said.

Speaking to reporters on the sidelines of 15th AGM of United Breweries Limited here, he said, “We shall pursue all available legal remedies. I have great faith in judicial system in our country and I shall certainly pursue the legal remedies that are available to me.” “Frankly, whatever the news reports may be subsequently concerning other banks, there is no point in indulging in speculation. We will take each one as it comes,” he added.

On Monday, United Bank of India declared Mallya and three directors of debt-ridden Kingfisher Airlines, wilful defaulters due to the company allegedly indulging in diversion of funds by opening multiple accounts.

Asked about UBI Executive Director’s statement that UB group was given time to present their case, Mallya said “I cannot get into media debate on what the United Bank of India executive director has said; ....we were not given hearing, we have not appeared before them, we disagree with their action, and we shall pursue with legal remedies.” — PTI

New Delhi, September 4
In the first-ever public scrutiny of a merger and acquisition (M&A) deal in India, the Competition Commission of India (CCI) has invited comments from all stakeholders, including general public, on the details of the $4-billion merger of Ranbaxy Laboratories into rival drugmaker Sun Pharmaceuticals.

The comments need to be submitted to the CCI within 15 days, along with supporting documents on how the merger can adversely impact the person concerned or entity, the regulator said, while adding that it would not consider ‘unsubstantiated objections’ to the deal.

The Commission said the public consultation process has been launched “in order to determine whether the combination has or is likely to have an appreciable adverse effect on competition in the relevant market in India”.

Widening its scrutiny of the multi-billion dollar deal, the Competition Commission of India had asked the two pharma majors on August 27 to make public-specific details of their proposed merger.

This is the first instance where the CCI has ordered a public scrutiny of a proposed merger and acquisition (M&A) deal to ensure compliance to fair trade regulations.

New Delhi, September 4
Skill Development Minister Sarbananda Sonowal has emphasised the need to revisit the Minimum Wages Act to align wages to the levels defined in the National Skills Qualification Framework (NSQF).

Speaking at FICCI’s Global Skills Summit 2014, Sonwal, Minister of State for Skill Development, Entrepreneurship, Youth Affairs and Sports (Independent Charge), said it was important, through both macro and micro policies to create a pull factor which attracts and also enforces the people to get skilled to get into employment or self-employment.

Skill development has been identified as a priority of the government and Prime Minister Narendra Modi spelled it out in detail in his Independence Day address.

He also suggested minimum certified skilled workforce in tendering of manpower intensive projects. “One such example could be to include a minimum percentage of certified skilled work force in the tendering process of every manpower intensive project and increase the minimum percentage every year by a reasonable margin based on the life of the project”, he said, adding that at the local level, the industry could enforce it by ensuring that their ancillary services like drivers, housekeeping and security and people at the shop floor are certified skilled.

Dubai, September 4
Mobile phones will outnumber human population by the end of 2014, reaching a staggering 7.3 billion, a new study has said.

The study by International Telecommunications Union says the number of mobiles will rise from 6 billion now to 7.3 billion in 2014, compared to the global population of 7 billion, Silicon India reported.

Over 100 countries have the number of cell phone accounts exceeding their population. Russia, with almost 250m mobiles, has 1.8 times as many cell phones as people, and Brazil, with 240 million accounts has 1.2 times as many cell phones as people, the study said. — PTI

BRIEFLY

Microsoft launches three new smartphones
Berlin: Microsoft on Thursday launched three new Lumia smartphones, including one designed for “selfie” enthusiasts, in a bid to expand its portfolio as it battles the likes of Samsung and Apple in the smartphone market. Microsoft has launched the Lumia 830, 735 and 730, priced at Rs 26,190, Rs 17,370 and Rs 15,800, respectively. — PTI

Samsung unveils world’s largest curved TV
Berlin: Samsung on Thursday launched the world’s largest bendable curved ultra high definition television with screen size measuring 105 inches. The company has tripled its curved television portfolio in the last few months and now offers about 17 different models. — PTI

DLF shares plunge 9%; m-cap down Rs 2,803 cr
Mumbai: Shares of DLF on Thursday ended nearly 9% lower after the Punjab and Haryana High Court set aside the state government’s decision to allot 350 acres of land in Gurgaon to the realty major in 2010. After falling 11.66% to Rs 167.30 in intra-day trade, shares of DLF finally ended at Rs 167.30, down 8.60% on the BSE. At the NSE, the stock plunged 8.15% to settle at Rs 168. — PTI