Andhranews

New Delhi, Aug. 11: The Indian government is trying to put in new provisions in the India-Mauritius double taxation avoidance treaty to put an end to “treaty shopping”. “The government is discussing with the Mauritius government the possibilities of strengthening the mechanism for exchange of information on tax matters and also incorporate provisions in the double taxation avoidance treaty for prevention of ‘treaty shopping’,” the minister of state for finance S.S. Palanimanickam told the Lok Sabha in a written reply on Friday. Finance minister P. Chidambaram, when asked about the issue outside the Parliament, said the move will be meant for those companies that are not genuine but have been taking unfair advantage of the treaty.

He said, “We have strong and historic relations with Mauritius. They are sensitive, so must proceed carefully. But we are confident that we can move forward and ensure that taking unfair advantage of the treaty is stopped.”

“We are not against the genuine companies,” the finance minister said and added that the effort was not to review the entire pact but to strengthen parts of it. Experts point out that the India-Singapore Comprehensive Economic Cooperation Agreement (CECA) also has many tax exemption provisions, but there is an important clause which says only bonafide companies that have a bonafide existence in Singapore can claim tax exemption.

The government now wants to bring in similar provisions in the Indo-Mauritius tax pact to prevent misuse. As per the double taxation avoidance treaty, business profits of a Mauritius company are taxable in India only if the company has a permanent establishment in India or vice-versa.

Also, capital gains on sale of shares of a company are taxable in the country of residence of the investor. Many foreign institutional investors, to take advantage of the loopholes in the law, register themselves in Mauritius, using dubious methods, to take advantage of the treaty.

Mr Palanimanickam also said, “The Central board of direct taxes has made consistent efforts over a period of time to revisit the India-Mauritius double taxation avoidance convention.” Finance ministry officials said that the move will be basically aimed at preventing non-genuine companies from registering themselves in Mauritius just to misuse the provisions of taxation, including exemption in the capital gains tax.

Keeping the Singapore agreement in mind, the government is expected to bring in several clauses governing “investments” to prevent the misuse of the India-Mauritius tax pact, said experts.

Hyderabad, Aug. 11: Reliance Petroleum Ltd, a subsidiary of Reliance Industries Ltd, said on Friday it has mandated a group of lead arrangers to arrange a $1,500-million syndicated term loan facility.

The funds will be used to build a 580,000 barrels-a-day refinery and a unit to make 0.9 million tonnes of polypropylene a year in Gujarat. The loan consists of $950 million for seven-and-a-half-years and $550 million for 10 years and the syndication is expected to be closed in October, the company said in a statement.

The new refinery is expected to take about two-and-half-years to begin operations and will be located adjacent to RIL’s existing refinery at Jamnagar, Gujarat. The company informed that this landmark fund raised by RPL represents the largest offshore syndicated loan financing ever from India, and the final maturity of ten years represents the longest maturity for any corporate term debt issuance out of India.

“The facility’s door-to-door tenor of 10 years will open a new window for Indian corporates, since the maturity profile for the offshore syndicated loans has been largely restricted to 5-7 years,” Reliance Petroleum, which had an IPO in April, said.

“Syndication will be launched today (Friday). The original mandated lead arranger group will invite banks around the globe to participate in this fund raising by the borrower. General syndication is expected to be closed in early October.”

Bangalore, Aug. 11: Market regulator Securities and Exchange Board of India (Sebi) would soon make public the names of those people who have joined the board of some companies as ‘professional directors’ without meeting the stipulated guidelines to occupy those posts, a top official said on Friday.

“The so called professional directors on the boards... not professional directors in terms of a Director (Finance) or Director (Materials) or Director (Human Resources) but men and women who have made it their profession to be directors on boards,” Sebi Chairman, Mr M. Damodaran said.

He said that these people have joined the boards without owning a single share and making any effective contribution to the company. “I don’t mind if they are on a number of boards provided they read the papers...think about the issues and contribute effectively rather than get into a large number of boards,” he said at a programme.

“But I certainly mind when these people get on boards and become permanent entities...more permanent than the furniture in the boardrooms,” Mr Damodaran said. The Sebi chief was speaking at the inaugural address of an orientation programme for company directors and other professionals on ‘New Frontiers of Corporate Governance’, organised by the National Law School of India University in collaboration with the National Foundation for Corporate Governance.

New Delhi, Aug. 11: The Centre for Science and Environment (CSE) refuted the claims of Coke that its soft drinks are safe as measured by stringent standards of the Central Science Laboratories (CSL) — the government lab in the UK.

It said that all tests in this prestigious lab show that Coca Cola soft drinks are below the European Union (EU) criteria for pesticide residues in even bottled water. The CSE said, “We assert that the products tested by our lab (CSE lab) do not meet the norms as claimed and are unsafe.” CSE has said that despite all its claims, Coke has “failed to disclose any test results to prove the safety of its products”.

Ms Sunita Narain, director of the Centre of Science and Environment, which came out with the pesticide allegations against the Cola majors said it would only be believable if Coke puts out such data for all to see. Ms Narain has further said, “Our demand to the government is that it should notify the finalised standards of the Bureau of Indian Standards (BIS) for carbonated beverages and make the regulation for this product mandatory.”

Coca-Cola India has also said it supported a move by the government to adopt a clear criteria for pesticide residues in soft drinks, which are based on scientifically-validated testing methods. “We are working with relevant government bodies in India to develop and finalise the criteria along with their associated testing protocols for pesticide residues in soft drinks,” it said.

New Delhi, Aug. 11: Disappointed with dismal sales of its top-end premium sedan Sonata, Hyundai Motor India Ltd (HMIL) will launch a diesel variant of the model this October, while it is readying to introduce a CNG-driven small car by early next year.

“Currently, we sell about 50 units of the Sonata and I am quite disappointed with it. Our target is to sell about 2,000 units a year,” HMIL managing director, Mr Lheem told reporters here. “By early October this year, we will be launching a diesel variant of the Sonata and expect to boost sales,” he added.

He said the company has not yet worked out as to how much will be the price difference between the existing Sonata and the diesel variant, but said the company expected to sell about 200 units a month. With rivals Maruti coming out with LPG WagonR, Hyundai is also working on alternative fuel small cars.

“We have our plans to introduce CNG powered small cars by early January next year. The process of development is on at the moment,” Mr Lheem said. The company is also on track to launch the “twin small car” by October next year, he said. “The pilot production and testing is on. We have shipped about 100 units produced from the Chennai plant to Korea for further testing,” he added.

Hyundai is also working to give its premium hatchback Getz a facelift, but no timeframe has been fixed for its introduction. “Getz needs a makeover as it has been almost three years that it has been around. We are in the process of giving it a makeover,” he said, adding a diesel variant of the model has also not been ruled out.

New Delhi, Aug. 11: Slowdown in manufacturing sector and electricity generation pulled down India’s industrial growth during June 2006 to 9.6 per cent, as against 12.2 per cent in the same month of last fiscal.

Growth in the mining sector also remained stagnant at just 4.8 per cent during the month, according to the data released by Central Statistical Organisation on Friday.
Manufacturing growth declined to 10.5 per cent as against 13.2 per cent in June 2005, while power generation rose by a mere 4.5 per cent from a strong 9.6 per cent in June 2005.

During April-June, however, manufacturing sector growth was at the same level of 11.2 per cent, helping arrest the slide in the overall Index of Industrial Production to 10.1 per cent as compared to 10.4 per cent in the corresponding period of 2005-06.

Electricity growth was lower at 5.1 per cent during the first quarter this fiscal compared to 7.7 per cent and mining production rose by only 3.5 per cent as against 4.3 per cent in the same period of last fiscal. In terms of industries, as many as 13 out of the 17 industry groups have shown positive growth during June 2006, as compared to the corresponding month of the previous year.

The sectoral group ‘Other Manufacturing Industries’ recorded the highest growth of 25.8 per cent, followed by 22.9 per cent in ‘Transport Equipment and Parts’ and 19.5 per cent in ‘Basic Metal and Alloy Industries’. However, ‘Wood and Wood Product; Furniture and Fixtures’ posted a negative growth of 25.5 per cent, followed by 7.7 per cent in ‘Leather and Leather Products’ and 2.1 per cent in ‘Food Products’.

New Delhi, Aug. 11: The rising trend in the number of new telecom subscribers continued to be maintained in the month of July 2006 with a net addition of about 5.14 million phones — an average daily addition of 1.66 lakh lines. The Northeast, Madhya Pradesh and Maharashtra ranked high in the growth rate.

The total number of telephones in the country crossed 158.32 million, as against a total of 153.18 million as on June 30, 2006, a growth of 3.3 per cent. The growth in July 2006 was 49 per cent over that of July 2005. Almost the entire growth registered was in the wireless segment — with GSM contributing 3.6 million and CDMA contributing 1.46 million respectively. The additions in the fixed line segment during the month was about 0.08 million.

The overall teledensity improved further to 14.12 per cent in July 2006 from 13.68 per cent in June 2006 and from 9.60 per cent as on July 31, 2005. The Northeast and Madhya Pradesh telecom circles recorded the highest growth rate (8.4 per cent) in the GSM segment, followed by the WB and Andaman & Nicobar telecom circle (6.8 per cent).

In the CDMA segment, the total subscriber base registered a growth of 4.75 per cent with a net addition of 1.46 million subscribers. Maharashtra and Andhra Pradesh telecom circles contributed the maximum to this addition. Maharashtra alone added five lakh subscribers during the month. Public sector service providers has reached 388 cities.

Under Bharat Nirman Programme, of the targeted 66,822 villages remaining to be covered in November 2004, a total of 27,481 villages have been provided with public telephones. However, the remaining 39,341 villages having more than 100 population and not lying in thick forest area are yet to be provided with a public telephone.

Kolkata, Aug. 11: Mittal Steel on Friday said it was serious about setting up greenfield projects both in Orissa as well as Jharkhand and has shortlisted three probable sites for its 12 million tonne plant in Jharkhand.

“We are seriously pursuing the projects both in Jharkhand and Orissa, and will begin work in whichever State (that) fulfils our requirement first,” Mittal Steel India Chief Executive Officer (Jharkhand project), Mr Sanak Mishra said here. Out of six probable sites in Jharkhand, the company has shortlisted three — Saraikela, Galudi and Torpa — and a final decision on this would be taken in four weeks, he said.

Asked about how much land the company required for the project, Mr Mishra said: “We are assessing the land requirement. Roughly, we need about 10,000 acres. We are planning to create a green belt around the plant and put up residences.”

Hyderabad, Aug. 11: Wanbury, a pharmaceutical firm, on Friday filed a criminal case against pharma giant, Novartis, alleging that they had cheated and violated a marketing and distribution agreement. Mr Daniel Vasella, chairman and CEO, Novartis International AG and Mr Erwin Schllinger, chairman, Novartis India Ltd, are among other directors and executives of the company named in the suit, Wanbury said in a statement.

Wanbury, a producer of Metformin, an anti-diabetic drug, alleged that Novartis had entered into an exclusive eight-year agreement with it to market and distribute its product, Triaminic, but had deliberately not honoured the agreement due to which Wanbury had suffered a loss of Rs 70 crores.

The dispute, revolving around three brands of the product Triaminic, already involves a court case. Wanbury had entered the agreement with Novartis to market and develop the Triaminic brand and in lieu has given some rights and assets to Novartis including Wanbury’s brand “Numenic” and its leased commercial premise at Worli, a prime location in Mumbai.

Wanbury then filed a merger petition in the Bombay HC in 2004 to effect a merger of Wander with Pearl Organics Ltd finally changing the name to Wanbury. Novartis then sent Wanbury a notice terminating the eight-year contract, citing non-compliance to the agreement.

While the case was still sub-judice, the release said, Novartis allegedly repackaged Triaminic as T-minic, claiming it was the same as Triaminic. Novartis circulated literature among doctors and clinics mentioned that T-minic would be marketed under the Novartis name “till such time some legal points on Triaminic are clarified.”

Hyderabad, Aug. 11: Zensar Technologies Ltd, a software services and BPO firm, will be increasing its headcount by 800 people in 2006-07, even as it launches its development centre in Hyderabad, Mr Ganesh Natarajan, the company’s deputy chairman and managing director, said here on Friday.

Mr Natarajan said the Hyderabad centre will have about 200 people initially, but its headcount will be ramped up to 500. Zensar, which has been focusing on the BFSI and telecom verticals, would be entering the utilities and manufacturing verticals, he said. Zensar currently has 3,220 employees. Mr Natarajan said the company planned a capex of Rs 43 crores in 2006-07, including Rs 23 crores for its expansion plan.

Meanwhile, Zensar has launched its Global Delivery Platform in Hyderabad to support academic institutions in Hyderabad and Andhra Pradesh. The Hyderabad centre will serve as a hub to set up technology development centres in participating academic institutions linked to it. Students from each TDC will be linked to Zensar experts and will be able to access Zensar’s technology.

“This will create hubs of intellect engaging over 100 engineering colleges across 25 towns in Andhra Pradesh, where there colleges would function as virtual training and development hubs of Zensar’s own software development campus,” a company release said.