Need to Know | WPP arm named India consultancy of the year

Need to Know | WPP arm named India consultancy of the year

New Delhi:‘The Holmes Report’, a well regarded, global public relations industry newsletter, has named Genesis Burson-Marsteller, part of the WPP Group Plc., as the “India Consultancy of the Year" in its first Asia-Pacific Agencies of the Year survey. The report, edited by Paul Holmes, noted that the firm has “significant corporate expertise and strengths in health care and technology, as well as a public affairs capability." It added that Genesis principals “Prema Sagar and Ashwani Singla are among the most respected practitioners...playing a leadership role in the Indian public relations industry and helping it build bridges to the rest of the world." Ogilvy Public Relations Worldwide was named Asia-Pacific Consultancy of the Year. Holmes, based in London and New York, also publishes the annual PR Agency Report Card, which profiles 150 leading PR firms."

—Staff Writer


Corus to cut crude steel output on slow demand

Mumbai: Corus, the UK unit of India’s Tata Steel Ltd, will reduce production by as much as 20% over the next three months as demand weakens.

Output will be lowered by 1 million tonnes (mt), Tata said on Thursday in a statement. Corus produces about 20mt annually. “The decision is aimed at aligning steel production with demand, which is now affected by the consequences of the global financial crisis," Tata said. “No change in production from current levels is planned for the operations" outside Europe.



Companies Bill may get priority in Parliament

New Delhi:The government has put two key Bills—the Companies (Amendment) Bill, 2008, and the Limited Liability Partnership Bill, or LLP Bill, 2008—on the priority list for introduction in Parliament.

These Bills have been put in ’A’ category Bills empanelled for introduction, consideration and passing in the Parliament session resuming on Friday. The new companies Bill, which is leaner with the number of provisions—norms related to different aspects of doing business—being halved to 400, was cleared by the Union cabinet in August. It also calls for stricter disclosure norms, speedier incorporation of a company and more powers to shareholders.

The LLP Bill, which was introduced in the Rajya Sabha in 2006, is awaiting parliamentary clearance after changes suggested by a parliamentary standing committee were incorporated.

An LLP firm is an alternative business structure falling between a partnership firm and a corporate body, combining the limited liability benefits of a company with the flexibility of a partnership firm. A chartered accountancy firm or a law firm can expand through LLP structure.

—Sangeeta Singh


Bengal signs MoU for 10,000MW power plant

Kolkata: The West Bengal government on Thursday signed a memorandum of understanding (MoU) with Universal Success for setting up a 10,000MW power plant and a port.

The company will initially start the project with a 2,000MW power unit and will put in Rs16,000 crore in the first phase. Its chief Prasoon Mukherjee said he was looking at an investment of Rs60,000 crore for the power project and the port.

At a press conference, held after the signing of MoU, chief secretary Amit Kiran Deb said that the company has sought 3,500 acres of land.

—Staff Writer


BPCL denies report of liquidity problems

New Delhi:Bharat Petroleum Corp. Ltd (BPCL) has denied a report about it being on the verge of defaulting on servicing its external commercial borrowings due to a credit crunch. Denying a report that appeared in ‘The Financial Express’, the company in a press statement said: “There has been a news report indicating that BPCL may default on its obligations in respect of its external commercial borrowings (ECB)... BPCL has adequate borrowing limits / credit lines for meeting all its fund requirements. Also the fall in the international crude oil prices and the recent announcement by the Reserve Bank of India of its plans to recommence the special market operations for public sector oil marketing companies for the oil bonds would provide ample liquidity to meet any financial obligation."

Meanwhile, petroleum secretary R.S. Pandey said on Thursday: “BPCL and in fact all the public sector oil companies are not facing any liquidity problem."

—Staff Writer


Global IT spend ‘to grow by 3-4% in 2009’

Bangalore: Technology researcher Forrester Inc. has predicted that global IT spend in 2009 would grow by 3-4% and 2-3% in the US, the world’s largest market for technology.

“This is just a scenario as an acute financial crisis has hit not only the US but also countries in Europe and Asia," said Andrew Bartels, principal analyst of Forrester in a report on what the financial crisis means to the tech market. “A prolonged recession would mean several quarters of declines in IT purchases, not just two or three quarters with little or no growth in late 2008 and first half 2009," said the report, released on Thursday.

—Staff Writer


Court questions Centre’s role in RIL gas dispute

Mumbai: The Bombay high court on Thursday questioned the Union government’s interest in the legal dispute between Reliance Natural Resources Ltd (RNRL) and Reliance Industries Ltd (RIL) over the supply of gas from the Krishna-Godavari basin.

The two-judge bench of the court asked why the government was intervening in the dispute and how it was entitled to be included in an appeal filed by one of the companies.

“We are not going to vacate the stay because the government wants so. First establish your right to intervene in the matter," justice J.N. Patel told government counsel T.S. Doabia.

Doabia argued that the country’s gas reserves intrinsically belonged to the government, and the intervention was merely to ensure it was allocated as per the gas utilization policy.

Justice Patel replied: “This is not about supply of gas to the government. It is about supplying to third parties. How does it affect the government?"

Doabia will continue his arguments on Thursday.

Mukesh Ambani’s RIL is restrained by an earlier Bombay high court order from selling gas from its Krishna-Godavari basin find till the legal dispute with Anil Ambani’s RNRL is settled.

The government impleaded itself in the case early this year citing public interest, and filed a request in the Bombay high court to lift the stay.

RNRL is staking claim to 28 million standard cubic meters per day (mscmd) of gas for 17 years at $2.34 (Rs114 now) per million British thermal unit (mBtu), while RIL wants to sell at the higher government-approved prices.

RIL is also locked in litigation with state-owned utility NTPC Ltd over supply of 12mscmd of gas at the same price.

RNRL’s lawyer Ram Jethmalani said in the court that the government had not become a party in the lawsuit with NTPC, which is a state-owned firm.

—Bhuma Shrivastava


RIL drops to 18-month low in intraday trading

Mumbai: India’s most valuable company by market capitalization Reliance Industries Ltd (RIL) dropped to an 18-month low in intraday trading on Thursday, mainly on heavy redemptions by mutual funds.

RIL, which has the maximum weight in the benchmark Sensex index at 13.64%, fell 12.65% on the Bombay Stock Exchange to Rs1,327 before closing at Rs1397.25, down 8%. The Sensex fell about 2%, or 227.63 points, to 10,581.49.

“There is so much redemption pressure on the mutual funds, and RIL is a widely held stock that is also very liquid," said Maulik Patel, sector analyst with domestic brokerage KR Choksey Shares and Securities Pvt. Ltd. “The fall in the share price is not related to the fundamentals of the company."

Patel, who has a “buy" rating on the stock, didn’t give his target price on RIL saying it was “under review".

A number of brokerages have slashed their target prices on RIL in the past few weeks because of delays in gas production from the Krishna-Godavari basin and pressure on gross refining margins. India’s largest petrochemical manufacturer and second largest oil refiner has lost half its share value this year, while the Sensex has dropped 47.84%.

—Bhuma Shrivastava


Tata firm picks up 33% in Italian jet maker Piaggio

Hyderabad: Tata group company Tata Sons Ltd has picked up a 33% stake in Italian business jet maker and repair firm Piaggio Aero Industries SpA for an undisclosed amount while another Tata group company Taj Air has agreed to become the exclusive distributor of Piaggio planes in India.

Piaggio makes the P.180 Avanti II, an executive and multi utility turboprop plane. Taj Air operates business jets both for internal Tata company requirements as well as for charter and owns a Piaggio made plane.

TajAir will also become the first Piaggio Aero authorized service centre in India (in Mumbai). The authorization allows Taj Air service centre to perform maintenance, repair and overhaul services to P.180 Avanti II aircraft.

—Staff Writer


Debt allocation norms for FIIs scrapped

Mumbai: Capital markets regulator Securities and Exchange Board of India (Sebi) on Thursday scrapped a regulation that required foreign institutional investors (FII) to allocate 70% of their investments in India in equity and the remaining 30% in debt.

The decision came after the Union government enhanced the cap on FII investments in corporate debt in India to $6 billion from $3 billion.

In a separate circular to FIIs through their designated custodian of securities, Sebi has demanded information on the quantity of securities lent overseas for shorting, on a daily basis.

—Nesil Staney


Sebi rejects Ranbaxy block deal with Daiichi

Mumbai: The country’s stock market regulator, the Securities and Exchange Board of India, or Sebi, had rejected the sale on the country’s stock exchanges of some 34% equity in Ranbaxy Laboratories Ltd by the promoters to Japan’s Daiichi Sankyo Co. Ltd, according to news reports.

The seller, the Singh promoter family of Ranbaxy, had sought to sell shares through what is called a block deal on the bourses.

“Sebi has rejected the stake sale on stock exchanges. Earlier, Ranbaxy had sought NSE, BSE nod for executing sale via stock exchange," news portal reported after its affiliate television channel, CNBC-TV18, first flashed the news. NSE and BSE are short for National Stock Exchange and Bombay Stock Exchange respectively.

Mint could not independently confirm the development. A Sebi spokesman said he did not want to comment on the news. A Ranbaxy spokesman said the news report was untrue.

If true, the impact of the Sebi rejection, an analyst said, would be an higher tax outgo in the transaction, which would now be levied long-term capital gains tax of 10%, equivalent to more than Rs900 crore.

If the deal went through as a block deal on the stock markets, the tax paid would have been what is securities transaction tax of 0.15%, the analyst, who did want his or his employer’s name taken, said, adding there would be no impact on the stock, since the tax liability will be between the Ranbaxy promoter family and Daiichi to settle.

Shares of Ranbaxy fell 0.89% to Rs266.35 each on Thursday, compared to a 2.11% weaker Sensex, the Bombay Stock Exchange’s benchmark index.

—Staff Writer


Apr-Sep customs, excise collections rise 9.8%

New Delhi: India’s collection of indirect taxes from customs and excise duties rose 9.8% in the first six months of the fiscal year, to Rs1.13 trillion, the finance ministry said on Thursday.

India raised Rs57,360 crore from customs duties in the six-month period, 18% more than a year earlier. It collected Rs55,920 crore from excise taxes, or 2.3% more, the ministry said.