Need to Know | Icra suspends ratings given to Maytas Infra

Need to Know | Icra suspends ratings given to Maytas Infra
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First Published: Mon, Jan 12 2009. 11 08 PM IST
Updated: Mon, Jan 12 2009. 11 08 PM IST
Mumbai: Rating agency Icra has suspended the ratings assigned to the Raju-family promoted company, Maytas Infra Ltd, following the “recent developments at Satyam Computers”.
Icra has suspended the ratings of “LBBB” and “A3 outstanding” against the bank facilities and various debt programmes of Maytas, a press release said here on Monday.
The government scrapped the board of Satyam Computer Services Ltd and appointed three new members, after Satyam’s former-chairman, B. Ramalinga Raju admitted to financial bungling in the company’s accounts.
—PTI
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CII sets up task force on corporate governance
New Delhi: In a quick response to save corporate India’s image from the ripple effects of the Satyam fraud, industry body Confederation of Indian Industry (CII) on Monday set up a special task force on corporate governance to be headed by former cabinet secretary and India’s ambassador to the US, Naresh Chandra.
The decision to set up the task force was taken by the National Council of CII which met in Ahmedabad.
“The issue of corporate governance was discussed in great detail in the context of the events at Satyam,” the chamber said in a statement here.
It said the task force would look at the issues emerging out of the Satyam episode and make its recommendations.
—PTI
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FIR filed against Raje in land allotment case
Jaipur: Complying with a court directive, police on Monday registered a case against former Rajasthan chief minister Vasundhara Raje in a case of land allotment to a trust headed by her, accusing her of cheating, criminal conspiracy and breach of trust.
Besides Raje, the police registered a first information report, or FIR, against former state urban development and housing minister Pratap Singh Singhvi, former city mayor Ashok Parnami, former housing board chairman Ajay Pal Singh , former state BJP president Lalit Kishore Chaturvedi and Jaipur development authority commissioner, officials said.
The case has been registered under section 420 (cheating), 409 (criminal breach of trust by a public servant or a banker or merchant agent) and 120B (criminal conspiracy) of the Indian Penal Code against Raje and others, they said.
—PTI
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Nath: govt working on steps to boost growth
New Delhi: The Union government is working on further measures to boost growth in some industries, trade minister Kamal Nath said in New Delhi on Monday.
Industry representatives will meet government officials on 21 January to discuss further stimulus measures, the minister said.
There’s always a case for further monetary easing, the minister said, without elaborating.
Nath said he hoped November’s unexpected industrial expansion, when production at the country’s factories grew 2.4%, having shrunk by a revised 0.3% in the previous month, was evidence of a trend.
—Bloomberg
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Tirumangalam by-poll: impressive win for DMK
Madurai: The Dravida Munnetra Kazhagam (DMK) on Monday won the Tirumangalam by-election by a comfortable margin, with its candidate Latha Athiyaman, trouncing her nearest All India Anna Dravida Munnetra Kazhagam (AIADMK) rival, M. Muthuramalingam by 39,266 votes.
With the win, DMK added one more seat to its tally in the 234-member state assembly as its strength rose to 97 including speaker R. Avudiappan.
In the 2006 assembly poll, DMK lost the seat to the Marumalarchi Dravida Munnetra Kazhagam (MDMK), when its nominee, Veera Ilavarasan won the seat by a margin of at least 3,500 votes.
The seat was vacant after Ilavarasan died following a cardiac arrest last year.
Reacting to the DMK’s victory, party leader and chief minister M. Karunanidhi in Chennai described the result as a “reward for the achievements” of his government.
It was also an indicator of the party’s future in the Lok Sabha polls. If the DMK had lost, the opposition might have interpreted it negatively, he said.
—PTI
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Power generation data disparity to be reviewed
New Delhi: While the Index of Industrial Production (IIP) showed that electricity generation grew by 3.1% in November, the figures on the six core infrastructure industries listed power expansion at 2.6%.
“We are looking into the discrepancy,” a commerce ministry official said.
The government on Monday simultaneously released figures on the IIP along with disaggregate data on the six core infrastructure industries.
—PTI
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IOC seeks Rs10,000 cr loan for Paradip refinery
New Delhi: State-run oil refiner Indian Oil Corp. Ltd (IOC) has tied up at least Rs10,000 crore debt for its 15 million tonnes Paradip refinery, which is scheduled for commissioning in the first quarter of 2012.
IOC had mandated SBI Caps for arranging Rs14,700 crore debt for the project. Till now, we have received commitments for at least Rs10,000 crore from a clutch of public sector banks, a company official said.
State Bank of India has committed to lend Rs4,200 crore, the maximum by any bank in the loan syndication.
Other banks which would lend to the firm include Bank of Baroda, Bank of India, Canara Bank and State Bank of Hyderabad.
“We are targeting to close the financing by next month, the official said. Even if we don’t get commitments for the remaining amount, we will close the syndication and proceed with the project. The remaining amount may be tied-up as the project progresses,” he said.
IOC is financing the Rs29,777 crore project in 1.5:1 debt-equity ratio, he said, adding the refinery is being targeted for commissioning in the first quarter of 2012.
—PTI
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ONGC lends Rs4,000 cr to unit for Imperial buy
New Delhi: Oil and Natural Gas Corp. Ltd has lent Rs4,000 crore to ONGC Videsh Ltd (OVL), chairman R.S. Sharma has said.
The loan, which will attract 6% interest, will help fund OVL’s purchase of the UK-based Imperial Energy Plc, Sharma told reporters in New Delhi. The amount is in addition to the $1 billion (Rs4,860 crore today) borrowed last week by OVL, he said.
ONGC will also invest $600 million to develop assets of Imperial in the next two-three years, an ONGC official told reporters on Monday.
He did not give details of the planned investment.
Bloomberg & Reuters
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Suzlon, Gujarat sign pact on wind plants
Mumbai: Suzlon Energy Ltd, the world’s fifth-largest wind turbine maker, said on Monday it has entered into a preliminary agreement with Gujarat to set up wind power projects of up to 1,500MW.
—Reuters
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KG-D6 may resume oil production by Jan-end
New Delhi: Reliance Industries Ltd is likely to restart crude oil production from its eastern offshore KG-D6 block by the month-end, while natural gas will start flowing next month, oil regulator Directorate General of Hydrocarbons (DGH) said on Monday.
Reliance, which had started crude oil production from the predominantly gas-rich KG-D6 block in September, had on 9 December shut the oil field following equipment failure.
“In our assessment, crude oil productions should start in next 15-20 days. You can say it will start flowing by month end,” DGH director general V.K. Sibal told reporters on sidelines of the Petrotech Conference here.
—PTI
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Reliance arm sells Rs2,000 cr of bonds
Mumbai: Reliance Gas Transportation Infrastructure Ltd, owned by the Reliance Group, raised Rs2,000 crore selling two bonds to fund its projects, according to documents received from Axis Bank Ltd, the sole manager.
The company, part of Reliance Utilities Pvt Ltd, sold two bonds, maturing in five years and 10 years, on 6 January, according to the documents.
Investors will get 10.95% each year for the 10-year bonds and 10.90% for the five-year bonds, it said. The benchmark 10-year government bond yielded 5.79% on Monday, according to data compiled by Bloomberg.
—Bloomberg
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CBI affidavit: Mayawati gets 4 weeks to respond
New Delhi: The Supreme Court on Monday gave Bahujan Samajwadi Party president Mayawati four weeks to respond to the affidavit of the Central Bureau of Investigation, or CBI, stating that it had ample evidence to prove that her assets were disproportionate to her income.
The affidavit was filed in July after a writ petition filed by Mayawati on 5 May challenging the so-called first information report, or FIR, that was filed after an examination of the assets of the chief minister. The FIR, filed in October 2003, is a step preceding the filing of a chargesheet.
The investigation was initiated after the apex court, while hearing the so-called Taj Corridor case, asked the CBI to investigate the assets of people associated with the project, including Mayawati. The affidavit carries a detailed account of the assets owned by the chief minister and her immediate family, as on 18 September 2003.
Mayawati had in July alleged, through an affidavit filed in court, that the CBI was acting at the behest of the Congress-led United Progressive Alliance. A Bench headed by Chief Justice K.G. Balakrishnan on Monday permitted her to file an affidavit in four weeks.
—Malathi Nayak
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HC says no to stay on allotment of DDA flats
New Delhi: The Delhi High Court on Monday refused to impose an immediate stay on allotment of flats by the Delhi Development Authority, or DDA, while hearing a petition which sought quashing of the process due to alleged irregularities committed by the housing body.
The court, however, sought the housing body’s response by 16 March on a petition which stated that the DDA had illegally allowed applicants under the Scheduled Tribe (ST) category from other states to participate in the draw.
Issuing a notice to DDA, the court directed DDA to file its response by 16 March. Last month, DDA held a draw for allotment of 5,000 flats under its housing scheme. Acting on a complaint on the alleged irregularities in the draw, the police have arrested two persons, including a former bank employee Laxmi Narayan Meena.
—PTI
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Bond yields up as firms put new issues on hold
Mumbai: Many Indian companies have put on hold plans to issue bonds, and bankers expect a lull in fresh fund-raising as corporate bond yields jumped after the government announced a higher-than-expected borrowing schedule.
“Bond yields will have to soften quite a bit before corporate bond issues pick up,” Nirav Dalal, head of debt capital markets at YES Bank Ltd, said, referring to government bond yields.
Bankers said they expect borrowers to wait for the yield on the 10-year bond to stabilize around 5.5% before deciding to launch bond issues.
On Monday, the 10-year bond yield plunged as low as 5.72% as the government did not announce a date for an auction of bonds later this week, but later rose to 5.94% after data showed industrial output for November rose versus an widely expected contraction.
The 10-year bond yield had closed at 6.20% on Friday.
—Reuters
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Hiranandani merger: Hirco needs more time
Bangalore: Hirco Plc., an India-focused property firm, said on Monday it needed more time to decide about its proposed merger with Hirco Developments and Hiranandani Investment Co., citing “a variety of views” among its shareholders.
The investment vehicle for India’s largest residential builder Hiranandani said it postponed its extraordinary general meeting (EGM) scheduled for 16 January until further written notice.
“The board feels it essential that sufficient time is allowed for all views to be considered and discussions to be held with shareholders,” the company said in a statement. The company said over the past week it had talked to a number of shareholders, including hedge fund Laxey Partners Ltd, which holds a 10.1% stake in Hirco.
Laxey, in a letter to Hirco shareholder on 7 January, had described the proposed merger as “shocking and ill-conceived” and advised them to vote against the move at the now postponed EGM.
Laxey said by agreeing to the merger Hirco would be handing de-facto control to Hiranandani and its shareholders would incur a substantial dilution to their current net asset value.
—Reuters
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Jharkhand?chief?minister Shibu Soren resigns
Ranchi: Jharkhand chief minister Shibu Soren submitted his resignation to governor Syed Sibte Razi on Monday, ending speculation on his continuance in the post after his defeat in the Tamar assembly byelections. “As per democratic tradition, I have put in the papers,” the 65-year-old tribal leader later told reporters.
The governor accepted Soren’s resignation but asked him to discharge his duties till alternative arrangements were made. In a communique, the governor said that, keeping constitutional and legal norms in mind, he will decide on the possibilities of an alternative government.
Shortly before Soren met the governor, deputy chief minister Stephen Marandi met Razi and submitted his resignation. “The chief minister should have resigned soon after his defeat in the bypoll. Since that has not happened, I have put in my papers,” Marandi said .
—PTI
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SP says alliance with Congress still on
New Delhi: The Samajwadi Party on Monday released the names of five more candidates for the Lok Sabha elections even as party leaders maintained that the alliance with the Congress party will happen despite the differences over sharing of seats.
Addressing a press conference here, party general secretary Amar Singh said the constituencies for which candidates had been decided were Riyaz Ahmed (Pilibhit), Shahidar Manzoor (Meerut) Kirtivardhan Singh (Gonda), Ramkishen Yadav (Chandauli) and Raj Kishore Singh (Basti).
The SP has so far announced 51 candidates in Uttar Pradesh, which has 80 Lok Sabha seats.
Staff Writer
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South Indian Bank third quarter profit up 33%
Coimbatore: Thrissur-based South Indian Bank (SIB) on Monday said it net profit for the third quarter ended 31 December grew 33.10% to Rs54.20 crore compared with Rs40.72 crore in the year-ago period.
Stating that the bank has fixed a profit target of only Rs190 crore, V.A. Joseph, managing director and chief executive officer of the bank, said the aggregate business of the bank rose to Rs27,778 crore as of December.
The bank’s net profit stood at Rs144.50 crore in the first nine months of the fiscal, a 35.32% growth, compared with Rs106.78 crore in the year-ago period. This is the highest-ever profit in the 80-year history of the bank, as it could achieve Rs144.50 crore net profit in just three quarters of a fiscal year, Joseph said.
—PTI
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Five ships a day being sold for demolition
London: Five merchant ships are sold for demolition every day, helping curtail fleet supply at a time when record numbers of vessels are being built and shipping costs have fallen from a peak last year, a buyer of the transporters said.
The level of ships being scrapped is unlike anything we’ve seen in the last 20 years, Cumberland, Maryland-based Global Marketing Systems Inc., the largest cash buyer of vessels for demolition, said in a report emailed on Sunday.
An oversupply of vessels for demolition has led to the reopening of yards in India that were left dormant for years, Global Marketing said.
Operators of the country’s facilities now face a shortage of trained workers, it said.
—Bloomberg
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Tata Tele has least congested network
New Delhi:Telecom operator Tata Teleservices Ltd has the least congested network in the country, according to a report by the Telecom Regulatory Authority of India (Trai).
Trai, in its report on network congestion for the July- September quarter, said that Tata’s network recorded only 1 congested point of interconnection (PoI), against 41 PoIs of Airtel, 22 PoIs of Vodafone and 19 PoIs of Reliance, the firm said in a statement on Monday. This is the third time in a row that the CDMA operator has been ranked as having the least congested network, it added.
—PTI
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TDSAT dismisses RCom plea on GSM spectrum
New Delhi: Telecom tribunal Telecom Disputes and Settlement and Appellate Tribunal (TDSAT) on Monday dismissed Anil Ambani-led Reliance Communication Ltd’s (RCom) petition seeking start-up spectrum in six circles where its subsidiary company Reliance Telecom Ltd was already providing GSM services.
The TDSAT bench headed by Justice Arun Kumar dismissed RCom’s plea after observing that the company had already accepted the money refunded by the government ‘without demur´ (any objection). Commenting on RCom’s petition the tribunal observed, “You (RCom) seem to be greedy. Your acceptance of money returned by the government means you have lost the ground... The issue is closed. You have accepted the money.”
—PTI
Bharti Airtel starts Sri Lanka operations
Singapore:Bharti Airtel Ltd, India’s largest mobile-phone operator, is offering customers in Sri Lanka free incoming calls as it starts operations on the South Asian island on Monday.
Bharti plans to spend $200 million in Sri Lanka, the New Delhi-based company said in an emailed statement. The firm postponed its Sri Lanka operations from April 2008 due to delays in setting up the network.
—Bloomberg
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Unitech receives GSM spectrum in Bengal
New Delhi: Unitech Wireless, the telecom arm of real estate company Unitech Ltd, on Monday said it has received GSM spectrum in West Bengal.
The department of telecommunications has issued a letter to the company’s telecom subsidiary for allotment of 4.4 MHz of spectrum in 1,800 MHz GSM band in West Bengal service areas, Unitech said in a statement.
With this, the company has been allotted initial spectrum in 21 of the 22 service areas in the country. The company had earlier announced its plans to sell a 60% stake in the telecom business to Norway’s telecom firm Telenor for Rs6,120 crore.
Shares of Unitech ended the day at Rs34.05, down 5.15% on the Bombay Stock Exchange.
—PTI
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Vodafone moves SC against tax bill ruling
New Delhi: Vodafone Group Plc. appealed to the Supreme Court against a ruling on a $2 billion tax bill relating to its 2007 acquisition of Hutchison Essar Ltd.
The Bombay high court had directed Vodafone to pay the amount as capital gains tax for the acquisition of shares of Hutchison Essar for $10.7 billion, upholding the Indian income tax department’s notice. The court had ruled that assets located in India were transferred and the company (Vodafone) is liable for the payment of the taxes.
Vodafone has expanded in emerging markets in the past few years with acquisitions in Turkey, India, South Africa and Ghana to make up for slower growth in Europe. Vodafone Essar is the third-biggest Indian mobile-phone operator after market leader Bharti Airtel Ltd and Reliance Communications Ltd.
The Indian tax authorities had argued before the Bombay high court that the majority of the acquired assets are based in India and that Vodafone therefore had to pay taxes on capital gains from the transaction.
The Newbury, England-based carrier said in its plea filed with the Supreme Court that the Indian Income Tax Act didn’t apply as both Vodafone and Hutchison Telecommunications International Ltd were based overseas.
The share acquisition didn’t amount to a transfer of capital assets which could be taxed, according to the petition filed by Vodafone before the Supreme Court.
—Bloomberg
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India adds 8.12 mn more GSM mobile users
New Delhi: Mobile operators in the country added 8.12 million subscribers to their GSM-based networks in December to take total users to 257.85 million, data from the Cellular Operators’ Association of India (COAI) showed on Monday.
Bharti Airtel Ltd added 2.73 million subsribers taking its total to 85.65 million subcribers, followed by Vodafone Essar which added 2.17 million subscribers taking its total to 60.93 million subscribers.
—Reuters
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First Published: Mon, Jan 12 2009. 11 08 PM IST
More Topics: Satyam | Icra | Maytas Infra | Raju | LBBB |