New Delhi: Gurgaon-based airline firm SpiceJet Ltd’s chief financial officer Parth Sarathi Basu has quit the airline after serving it for over a year and half.
Low-fare carrier SpiceJet holds nearly 10% of the domestic market by passenger share and raised nearly $80 million (Rs404 crore today) from US-based private equity fund WL Ross and Co. Llc. in July.
The CFO’s exit comes amid a challenging environment for the airline, given that it posted a loss of nearly Rs198 crore in the second quarter of the fiscal and has already seen its chief executive officer (CEO) Sidhantha Sharma quit in July. Basu is likely to rejoin Whirlpool of India Ltd, where he worked before joining SpiceJet. The firm has appointed US-based Sanjay Aggarwal as the new CEO who took over his new role on Monday.
Zero commission: Left backs agents’ cause
New Delhi: Almost three weeks after 15 airlines including National Aviation Co. of India Ltd, Jet Airways (India) Ltd and Kingfisher Airlines Ltd abolished the 5% commission they paid to travel agents for selling their air tickets for decades, the Iata agents association of India, or IAAI, are roping in the support of politicians such as Brinda Karat, a politbureau member of the Communist Party of India (Marxist) and M.K. Pandhe, president, Centre of Indian Trade Unions to take their cause to Parliament. Iata stands for International Air Transport Association, a global travel industry grouping.
“Since 1 November, (our) international business has dropped by 15% and domestic by 25%,” said Biji Eapen, president of IAAI, which says it has membership of some 780 among over 2,800-Iata accredited agents.
At a meeting held by the travel agents, Karat, while strongly protesting the lack of concern showed by the government to the plight of the agents, said, “We demand that the government put a stay on the circular of 1 November and take into account different aspects of the issue, ensuring the percentage of commission is protected if not enhanced.”
Vedanta arm to stop mining in Kolli Hills
Mumbai: Madras Aluminium Co. Ltd, or Malco, a subsidiary of UK-based Vedanta Resources Plc. on Thursday took an undertaking before the Madras high court that it would stop with immediate effect its bauxite mining operations in the Kolli Hills in Salem district in Tamil Nadu, said Piyush Sethia, who heads a local voluntary organization called ‘Speak Out Salem’, in a statement on Thursday. Sethia had earlier this year filed a petition in the court alleging violation of environment norms by Malco since 2002.
“The company has been mining even after its consent to operate issued by the Tamil Nadu Pollution Control Board under the Air and Water Act has expired in 2002,” claimed V. Nagasaila, Sethia’s lawyer, adding that Malco’s mines did not have permission from the Hill Area Conservation Authority, or environmental or forest clearance from the ministry of environment and forests (MoEF). In an email response to Mint, Malco said, “We have already applied for environmental clearance for mining operations at Kolli and the same was recommended by the expert committee of the MoEF and the formal communication of clearance is awaited.
In another development, Malco cut production of aluminium by 60% due to falling prices and high raw material costs. The reduction will be “temporary”, the firm told BSE.
—Khushboo Narayan & Bloomberg
Economy may have grown 7.16% in Q2: CARE
New Delhi: Credit rating agency CARE Ratings expects the Indian economy to have grown at 7.16% during the second quarter (July-September) of the current fiscal year 2008-09, the agency said in a statement on Thursday.
During the second quarter, the agency expects manufacture and mining to have slowed down significantly. “As per our analysis, manufacturing as well as mining sector have shown a declining trend vis-a-vis last quarter posting a growth of 5% and 7%, respectively. Construction sector remains only marginally affected in the second quarter hovering around 10% growth, while the banking sector has posted a growth of 10.9%,” said Soumendra Dash, chief economist, CARE Ratings.
CARE Ratings also projected that the economy will grow at around 7% during the current fiscal. “In the third and fourth quarters, economic growth will come down to slightly above 6% which will bring down overall growth to around 7%.,” Dash added.
Oil secretary says no case for fuel price cut
New Delhi: The country has no case to cut prices of fuels including diesel, petrol and cooking gas because state- run refiners continue to lose revenue from selling some products, R.S. Pandey, oil secretary, said in New Delhi on Thursday.
The government has said it won’t consider reducing retail prices until refiners stop losing revenue on the fuels they sell below cost.
Future Group to expand FMCG operations
Mumbai: The Future Group on Thursday announced that it is expanding its fast moving consumer goods (FMCG ) operation to include other retail outlets across the country.
“FMCG is doing well in the country and this is the right time to get into the product category. This is a major thrust for the group into the consumption space,” said Future Group’s CEO Kishore Biyani at a press conference in Mumbai, adding that the group was targeting a turnover of Rs10,000 crore by 2012 from categories such as FMCG, household consumer durables, electronics and apparel, on a marketing investment of Rs200 crore.
The company already has its own brands in apparel, FMCG, and general merchandise. It now plans to launch its own toothpastes, soaps and health-and-beauty products in the next few months, Biyani said.
The strategy of building strong Indian consumer brands will also help the group further improve its margins, he said.
IGate sees customer base doubling in ’08
New York: IGate Corp., the provider of outsourced technology services to General Electric Co., expects to add twice as many customers in 2008 as in the previous year and to begin looking for companies to acquire.
“We’ll end up the year with 25-26 new customers, which is a dramatic improvement from 2006 and 2007, when we added 11 and 12,” Phaneesh Murthy, chief executive officer of Fremont, California-based iGate, said on Thursday in an interview in New York.
Offshore services, or work done at overseas locations, are growing as US companies seek to reduce costs in the face of a global economic downturn.
IGate, with operations centred in India, expects to have 30 customers contributing at least $1 million (Rs5.05 crore) in revenue each by the end of this year and 45 by the end of 2009, Murthy said.
“Our metric is how many become million-dollar customers by the second year,” he said. “Our goal is to make sure that at least 50% of new customers turn out to be long-term strategic customers, which is over $1 million.”
IGate is ready “to start looking” for acquisitions, particularly in health care and telecom services, Murthy said. About half of the company’s revenue now comes from financial services. Acquisitions may be as large as $100 million, he said. IGate has about $62 million in cash and no debt, Murthy said.
India Infoline has biggest gain in a week
Mumbai: A local stock brokerage and financial services company, India Infoline Ltd, rose the most in more than a week in Mumbai after saying it may buy-back shares.
The Mumbai-based company climbed as much as 8.7%, the most since 10 November, and closed at Rs40.35, up 3.99%, in Mumbai trading. The stock earlier fell as much as 10.9%. India Infoline has shed 90% this year, compared with a 58% drop in the benchmark sensitive index, or Sensex.
The company will consider on 28 November a proposal to buy back shares, it said in a statement sent to the Bombay Stock Exchange.
No manipulative trading in ICICI stock, says Sebi
Mumbai: There was no manipulative trading associated with the slump of ICICI Bank Ltd’s shares between 8 September and 10 October, the Securities and Exchange Board of India, or Sebi, said on Thursday.
In that period, the share prices of the bank fell Rs720.45 to Rs363.65 per share, down 49.52%, prompting the bank to register a complaint with Sebi on 17 September alleging that “a malicious rumour is being spread to the effect that some of the top management have been selling ICICI Bank shares for the last few days”.
The company’s stock also fell a day after it publicly disclosed the $80 million (Rs404 crore) exposure of its UK subsidiary to failed US investment bank Lehman Brothers Holdings Inc. on 16 September. The bank’s stock fell 12.5% between 15-17 September, from Rs640 to Rs560.30.
However, the markets regulator on Thursday said in a statement “There was no pattern regarding placement of successive orders at lower price by sellers to hammer down the price,”
According to Sebi, there was no irregularity in the intraday profits booked by the major clients and brokers of ICICI Bank during the period under investigation. Most of the 20 top investors that bought and sold shares of ICICI Bank during the said period were foreign institutional investors, or FIIs.
Sebi has found trading patterns in the shares of ICICI Bank during the period to be “consistent with the shareholding pattern of ICICI with predominant holdings by FIIs, the general buying and selling behaviour by FIIs and the broad movements of the market…”
ICICI Bank had a market capitalization of Rs35,649.25 crore at end of trading on Thursday. The share price, which closed at Rs320.35, has fallen 42.83% since 17 September.
Olympics 2012: search begins for new sponsors
Beijing: The International Olympic Committee (IOC) has lost another sponsor and is struggling to find replacements because of the financial crisis.
Johnson and Johnson (J&J), the world’s largest health care company, this week dropped out of the so-called TOP sponsorship programme that included 12 companies for the Beijing Olympics. For the next cycle through London 2012, nine companies are signed up.
“We are working with possible new sponsors for this programme,” Gerhard Heiberg, chairman of the IOC’s marketing commission, said in an email.
Lenovo Group Ltd, Manulife Financial Corp. and Eastman Kodak Co. also ended their contracts after the Beijing Games. Acer Inc., the world’s third largest computer supplier, signed up to replace Lenovo in December 2007.
The TOP sponsors, which include the Coca-Cola Co. and General Electric Co., paid an average $72 million (Rs363.6 crore) for the rights to associate their brands globally with the five-ringed Olympic logo over a four year period including the 2006 Torino and 2008 Beijing Olympics. J&J ended its sponsorship because of the slowdown and the expiration of key patents in coming years, the ‘Sports Business Journal’ reported.