The week in review for 27 November 2009

The week in review for 27 November 2009

On Tuesday the CBI alleged the existence of yet another, separate, fraud at Satyam Computer worth nearly Rs5,000 crore. The CBI said Satyam’s founder R. Ramalinga Raju and other accused in the Satyam fraud case pledged their shares at inflated values…raised loans by forging board resolutions...and offloaded stocks at higher values. The new fraud charges are separate from the Rs7,000 crore fraud that Raju admitted to in January this year. The CBI has indicated that trials for the Satyam accounting fraud case will start in three to four weeks.

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India’s Company Law Board, which has probed the Satyam case, was in the spotlight this week. On Tuesday the CBI arrested its acting chairman, R Vasudevan for allegedly taking a bribe. The corporate affairs ministry later said Vasudevan’s arrest would not have any impact on the investigation into the Satyam accounting fraud. A new chairman, Dilip Deshmukh, took over the Company Law Board on Friday.

India’s stock market regulator Sebi has issued a show-cause notice to RIL on several alleged violations. The show-cause notice asks RIL why it should not be prohibited from buying and selling listed securities and not be prohibited from accessing capital markets. RIL has denied the allegations and says it has submitted a detailed reply to Sebi, which had not replied. A show cause notice is not an indictment and only requires RIL to provide a reply.

Mumbai’s airport has asked all airlines flying there to maintain a bank guarantee worth six months of payments. The move comes after several loss-making airlines defaulted on their payments. Delhi’s airport already has a similar bank guarantee policy in place.

A new government survey has concluded that the number of fake drugs in India is greatly exaggerated. After a one-year long survey, the health ministry has says just 0.046% of all medicines available in retail outlets are spurious. And while the low figure comes as a relief for the government, some members of India’s pharmaceutical industry have criticized the survey for not involving them in spotting fake drugs.

The week started with an uproar in Parliament on Monday. Politicians from the opposition BJP were upset over a leaked report that indicts top party leaders for playing a part in the demolition of the Babri Masjid in 1992. The leaked Liberhan commission report mentions current opposition leader L.K. Advani as one of those responsible. But Advani has called the accusation ridiculous.

India’s food price index went up 15.6% in the week ending the 14 November. This is the highest level of food inflation in India since 1998.

Weak performance from its European unit Corus sent Tata Steel quarterly numbers downwards. It’s consolidated net loss for the quarter ending September reached $585 million.

Tata Motors has done better. India’s biggest auto maker posted a consolidated net profit of $4.7 million for the quarter ending September. The company said some of its vehicles from Jaguar Land Rover were received well by customers.

A consortium of banks that lent money to Subhiksha Trading Services is trying to figure out a way to revive the now defunct company. The banks have hired the rating agency ICRA to carry out a feasibility study.