Andhranews

New Delhi, Sept. 12: Union finance minister P. Chidambaram on Tuesday said that oil bonds worth Rs 14,150 crores, meant for oil marketing companies, will be issued within this month. The finance minister also has said that the oil bonds will not get the statutory liquidity ratio (SLR) status. The decision for the government to issue oil bonds to oil marketing companies is to make up for the losses of these companies on retail sales of petrol and diesel. The government had in early June taken the decision to issue oil bonds to the oil marketing companies.

Not giving the SLR status to oil bonds means that banks will not be mandatorily required to subscribe to the bonds, as part of the requirement that they invest 25 per cent of their liabilities in approved securities among other things. “The oil bonds will be issued within this month and they will not get the SLR status,” Mr Chidambaram told newspersons. Analysts also say that the reason for not granting SLR status to oil bonds is that if they are given them, then there is a chance that banks will invest in these bonds to fulfil their SLR requirements, thereby buying less government securities.

The government has approved the issue of the first tranche of oil bonds worth of Rs 14,150 crores. This is out of a total of Rs 28,300 crores to state-owned oil marketing companies. Last month, the finance minister had indicated that the bonds to be issued by the governments to compensate oil firms for losses will not get the SLR status. It may be pointed out here that last year, the oil marketing companies were issued bonds worth Rs 11,500 crores. These had the maturity of three, six and nine years and “coupon rates” of 7.33 per cent, 7.47 per cent and 7.61 per cent respectively. The oil marketing companies have to bear losses at the retail sales even when the global prices of crude oil surges.

New Delhi, Sept. 12: Talking tough on the dumping of cheap foreign goods, the Supreme Court has ruled that once dumping of specific goods is established, the dumping duty can be imposed on all export of those goods, irrespective of the exporter. This is necessary to protect the Indian industries from unhealthy competition from foreign companies which sells goods at very low prices for some time, so that domestic industries can’t compete and then later such prices are raised, said the apex court.

A bench of Justice Ashok Bhan and Justice Markandey Katju said, “Once dumping of specific goods from a country is established, dumping duty can be imposed on all exports of those goods from that country to India, irrespective of the exporter.” “Once dumping and injury is established, the existence of an unfair trade practices by the exporters is undisputed. Taking a restrictive view in computing an unduly low non-injury price (NIP) would lead to granting a premium to the erring exporters at the cost of domestic industries which are suffering injury,” said the bench.

However, the rate of duty may vary from exporter to exporter depending upon the export price, held the bench. In simple words, it means that if a specific good is declared as a dumping article coming to India from a foreign country, the same if imported from other countries should also be bracketed within the same category. Giving reason for the need to have anti-dumping laws, the bench said that its purpose is to prevent unfair trade practices. It is also to maintain a level-playing field and prevent dumping while allowing for a healthy competition.

Setting aside an order of the designated authority (DA) in the ministry of commerce, the bench said that it was required to carry out the determination of injury and computation of non-injurious price for the domestic industries as a whole and not in respect of any particular company or enterprise.

Mumbai, Sept. 12: The Reserve Bank of India on Tuesday issued the draft scheme of amalgamation of the United Western Bank Limited (UWB) with the IDBI Bank Limited. Both the banks have been given two weeks’ time up to September 27, to consider the draft scheme. The RBI’s move has put a halt to the political manoeuvrings of the Maharashstra state government with Sicom and the management of the sick bank to keep the bank in their clutches. IDBI is offering Rs 28 per share to the shareholders of the bank as on September 2. Tuesday’s price of UWB was Rs 21.5. IDBI will have to pay upto Rs 150.5 crores to the shareholders.

According to the scheme of amalgamation, the assets and liabilities, business and properties of UWB will be transferred to IDBI and the books, balance sheets will be prepared as on September 2. IDBI, in consultation with UWB, will evaluate the assets and reckon the liabilities of the UWB. The UWB was put under a moratorium by the RBI on September 2, after the bank incurred net losses of Rs 98.64 crores and Rs 106.48 crores during the years 2004-05 and 2005-06, respectively. Its net NPAs were 5.66 per cent as on March 31, 2006, as compared to the peer group figure of 1.97 per cent.

The bank’s assessed capital to risk weighted asset ratio (CRAR) turned negative at 0.3 per cent as on June 30, 2006. The RBI said that this has jeopardised depositors’ interest and since the bank was also unable to come up with any credible plan to raise fresh capital to bring its CRAR to the prescribed level the RBI put it under a moratorium. As on March 31, 2006, the bank’s deposits were at Rs 6,480.19 crores and advances were Rs 4006.27 crores. The RBI had received expression of interest from 17 entities for taking over/restructuring UWB.

IOB acquires BhOB

New Delhi, Sept. 12: Indian Overseas Bank (IOB) has acquired Bharat Overseas Bank by buying out other shareholders of BhOB. Four banks — Bank of Rajasthan (16 per cent), ING Vysya Bank (14.66 per cent), South Indian Bank (10 per cent) and Karnataka Bank (8.67 per cent) — have sold their stakes aggregating 49.33 per cent in BhOB to IOB at a price of Rs 155 per share.

IOB, which was the single largest shareholder in BhOB, had proposed in February to acquire BhOB by increasing its stake from 30 per cent to 100 per cent and had offered an exit price of Rs 155 to the other shareholders.

Hyderabad, Sept. 12: TSI Ventures — a joint venture by Tishman Speyer Properties, one of the largest owners, developers, fund managers and operators of real estate in the world, and ICICI Ventures — has cast its net wide in India, and will be developing real estate in seven major cities and several so-called Tier II towns, even as the firm expects to invest Rs 1,000 crores in Hyderabad alone, where it has started work on its first property in India.

“Our Hyderabad property, which will comprise two office blocks of 25 storeys each, will be the first enterprise of TSI Ventures in India. We expect to invest Rs 450 crores in developing the real estate in Hyderabad, and are scouting for land in Bangalore, Pune, Mumbai and Chennai,” Mr Prakash Gurbaxani, CEO of TSI Ventures, said here on Tuesday.

In an exclusive interview with this newspaper, Mr Gurbaxani, who founded 24/7 Customer, a BPO company, and TransWorks, another BPO firm which was acquired by the Aditya Birla group, said TSI Ventures expects to set up “world-class infrastructure for corporations looking to begin operations in India”.

“This is good time to be in the real estate market in India, because a lot of foreign companies have begun operations in the country, and are looking for quality office space,” he said. Tishman Speyer’s model is to rent out the office space it develops, and eventually sell it to give its investors and exit route. TSI Ventures acquired 12 acres of land from the State government at Rs 4.27 crore per acre.

“We have commissioned Pei Cobb Freed and Partners to design the Hyderabad property, which we expect to commission in three years’ time. We will be building 1.5 million sq. feet of office space,” Mr Gurbaxani said. Pei Cobb Freed and Partners designed the John Hancock Tower in Boston and the Bank of China tower in Hong Kong.

Mr Gurbaxani said TSI Ventures was in the process of finalising two other projects in Hyderabad. “We expect to identify land in Bangalore, Mumbai and other major cities soon. Apart from the large cities, TSI Ventures is also looking to invest in real estate development projects in smaller towns like Indore, Chandigarh and Coimbatore,” he said.

Tishman Speyer Properties, which is also known for its contemporary art collection, manages a portfolio of assets of more than 77 million square feet in the U.S., Europe, Latin America and Asia, including the Chrysler Center and the Rockefeller Center in New York City. The real estate division of ICICI Ventures has been on an aggressive buying spree in recent months, snapping up a six-acre plot of land in Hyderabad for Rs 360 crore in February.

Microsoft Corp., which is not usually associated with business software given its overwhelming presence in the operating systems space, appears to have joined the battle for the enterprise segment in India. The software giant expects to take the battle to the likes of SAP, the German biggest heavy-hitter in the enterprise segment, and Oracle, the second biggest heavy-hitter (Oracle may have a thing to say about that, but in India, SAP is the Big Kahuna in the enterprise solutions).

Microsoft got into the enterprise space with the acquisition of Navision, and the Microsoft Dynamics NAV is its ERP product from Microsoft. The product is part of the Microsoft Dynamics family. According to Sushant Dwivedy, business group lead of Microsoft Business Solutions, the Microsoft Dynamics NAV and the Dynamics AAX product families are targeted at different segments, or verticals.

“We have signed on 480 clients in India, since the Microsoft Dynamics Nav was launched nearly two years ago,” Mr Dwivedy said. Interestingly, much of the heavy-lifting for Dynamics was done by the Microsoft India Development Centre in Hyderabad. “Right now, information in an enterprise is available in bits and pieces. So, if the CEO wants an update on the financials, he may still have to speak to his CFO. Ditto for the shop floor. This despite the fact that the larger corporations have an ERP package. Incidentally, it is estimated that only 15 per cent of an enterprise is network even after an ERP package is implemented,” he said.

The boffins at Microsoft have decided to go local to spread the Gospel of Dynamics, partnering with companies in various cities around the country. “Our model is to go with a local partner, who has the expertise to develop solutions for specific verticals,” he says. The company has tied up with Praxis i-Technologies in Hyderabad to develop solutions that will run on Microsoft Dynamics. Says Hari Krishna J., managing director of Praxis, “We are focusing on developing solutions for the construction industry.” Mr Dwivedy says that each partner is certified by Microsoft, while the partner is involved in customising and implementing the Dynamics solution.

How does Microsoft plan to handle the aggro from the Big Boys in ERP-SAP and Oracle? “We have the advantage that most people are familiar with Microsoft Office, and Dynamics runs on Office,” says Mr Dwivedy. He has a point. The Microsoft Windows family, from the OS to the servers and everything in between and beyond, is like the M1 Abrams Main Battle Tank used by the U.S. Army. The M1 Abrams’ 120 mm cannon can blow away the enemy sitting several km away. It’s the ultimate unfair advantage.

The RBI must be congratulated for coming out with a proposal for the amalgamation of the United Western Bank or UWB with IDBI within 11 days of putting the UWB under a moratorium. Just as well because as the days progressed there was hectic political lobbying to keep the bank within the political clutches of the politicians of western Maharashtra. The Maharashtra state government is so debt ridden that it has no money to even pay the electric bills of the chief minister’s residence in Nagpur and had to face the humiliation of the power in his house being disconnected. Yet it was going to shell out Rs 200 crores to keep the UWB within the clutches of its political masters. There was a section of bureaucrats in Mantralaya, who were very unhappy at this move, and felt that there were so many banks that are languishing and the government is interested only in UWB.

HDFC’s role

What is surprising is that the government and Sicom managed to convince Deepak Parekh of HDFC and IDFC to put in Rs 70 crores. Even though Parkeh clarified that he would have nothing to do with the management of the bank it is surprising that he was going to invest Rs 70 crores. One does not know whether he questioned the UWB or the government about the bad debts and how the bank got sick etc. It is the largest bank in western Maharashtra, which is one of the richest areas in the state.

A political move

According to sources familiar with Maharashtra politics, the HDFC one of the most successful development institutions which spurred housing development by enabling middle class people to buy houses in the 70s and 80s has had close ties with the Maharashtra government almost since its inception. It is said that one of chief secretaries at that time had asked all the zilla parishad’s to invest in the HDFC bonds. He would personally call them and find out if they had subscribed to the bonds, this source said. There are several such stories showing the relationship between HDFC and the State and it is obvious that the government was trying to cash in on this relationship.

Country ranking blues

Though India is in the forefront in Asia in undertaking economic reforms, it is still 134th in the ranking among countries. One does not know how much importance these rankings should be given because if one looks at globalisation round the world the US and Europe have a long way to go before they reform tariffs in the agriculture sector.

Labour pangs

But the business and industry are worried mostly about labour reforms as the Ficc president put it. Saroj Poddar said the problems are expressly labour regulations and backlog in speedy adjudication of judicial matters.One supports Poddar as far as judicial matters are concerned. To say that reforms are needed is an understatement. Poddar would be doing the people of India a huge favour if he can start a campaign for this.

Adjournments main hurdles

Maybe Ficci could begin with a campaign against the practice of adjournments that is leading to delays and prolonging of cases, not to mention the huge expenses that litigants have to bear. Poddar has suggested that the government should encourage an alternate dispute resolution mechanism. One does not know how successful this will be because cases are piling up even in fast track courts and places like the motor accident tribunals, family courts etc. Even if these and his other suggestions are implemented, as long as adjournments are given dozens of times and no time frame is given within which cases must be heard and judgements delivered things are hardly likely to improve on the judicial front.

New Delhi, Sept. 12: Domestic liquor company Radico Khaitan Limited (RKL) is set to go in for two to three new joint ventures overseas, in the UAE and European markets, as part of its export drive. The company, which clocked Rs 40 crores export turnover last fiscal, has set for itself a Rs 150-crore export turnover target by the end of this fiscal.

Mr Abhishekh Khaitan, MD, RKL, said that the company has already entered into JVs in UK and Africa to own “production lines overseas” and is looking at setting up 2-3 more production lines by the end of this fiscal year. The investments for the joint ventures will come from the FCCB (foreign currency convertible bonds) and CCCPs (cumulative compulsorily convertible preference shares), amounting to about Rs 276 crores in total.

The FCCBs and the CCPs were issued by the company in the last two months. The JVs that have already been set up are in Western Africa and Essex to cater to the growing markets in those parts. Like these JVs, the ensuing JVs will also be with “bottling partners” from these regions. The brands that are being sought to be sold by Radico through this overseas joint ventures include Contessa and 8 PM Bermuda Rum, Whytehall Whisky as also the Magic moments Vodka brand, said the company. These overseas plants will be responsible for bottling and marketing of these brands.

Radico was in the news recently when it entered into a JV with international liquor major, Diageo, to develop new brands in the IMFL segment for the Indian market. The company had said that new brands will be developed under this JV for the market. However, the company said that the details for that has not yet been worked out. To begin with, a “brown spirit” brand will be developed with Diageo for the domestic market, said a senior company official.
Radico also said that there is a big market that can be tapped by Indian liquor brands in some of the overseas markets, especially UAE and Africa.

Mumbai, Sept. 12: The Bangalore based Flightraja on Tuesday introduced the technology by which the customers can now access flight information and book flights by an SMS. “SMS technology is redefining speed and convenience in the aviation industry. In the world today, India is the first country in which this service is being offered,” said Mr Vinay Gupta, chief executive officer, Flightraja. According to Mr Gupta, comparative flight information like airline, flight timings and price will be available within 60 seconds on your cell phone, bringing travel to your fingertips.

This service is available to both GSM and CDMA subscribers in India. The company had experienced 200 bookings through SMS per day is expecting the number to increase to 20,000 to 25,000 bookings per day. The company also aims to expand m-services for a multitude of products and services in India at present and later internationally.

With approximately 117 million mobile users, India is one of the largest and the fastest-growing wireless service market in the world, with seven million SMSs sent everyday. Moreover, the mobile customer base is expected to reach 350 million by 2010.

Hyderabad, Sept. 12: Kenexa Inc, a provider of talent acquisition and retention solutions, is set to expand in India in terms of manpower and new geographies even as it readies an Enterprise Human Capital Management Product (EHCMP), which senior company executives claim is equipped with “disruptive technology”.

Addressing a press conference here on Tuesday, Mr Raghuveer Sakuru, MD, Kenexa, said, “A new campus will be set up at Visakhapatnam which will be positioned as the primary hub for Kenexa’s India and Asia-Pacific operations.” The company has acquired 25 acres of
land at Vizag for the campus and work on the project would begin on October 2. Asked to quantify the investments for the campus, Mr Sakuru said, “About $2-3 million will be invested in Phase I of the project and further investments would be made thereafter.”

With an employee headcount of 270 in Hyderabad which is expected to increase by 100 this fiscal, Kenexa also plans to set up sales representative offices in Mumbai, Chennai and Noida.
Talking about the EHCMP product, Mr Rama Velpuri, chief technology officer of the company explained, “The idea is to launch a product that is easy to use and is equipped with technology that is disruptive. The beta version of the product will be launched by the second quarter of FY 07.”

With the EHCMP product, Kenexa expects to establish a firm foothold in the global employee performance management applications space that is expected to be a $1.1 billion strong market by 2009, growing at 14.5 per cent compound annual growth rate, according to IDC.

Chennai, Sept. 12: Hyundai Motor India Ltd, a subsidiary of Korean automobile giant Hyundai Motors, is planning to set up a global R&D centre in Chennai. The facility will come up in the next two years and will absorb over 1,000 engineers. Speaking on the sidelines of the Autotech 2006, organised by Confederation of Indian Industry, Mr Jung Kook Paeng, a senior executive of Hyundai-Kia Motors, said the R&D facility would do engineering development and embedded software development.

“The new facility will become the hub of some areas such as engine, body design or transmission,” Mr Paeng added. He said the company is already doing some developmental work in Chennai. “We will be shifting these engineers to our new R&D centre,” he said. The new facility will have CAD, CAS and testing simulation facility. He declined to reveal the investment in the proposed centre.

Pointing out that IT has strengthened the operational efficiency of the automobiles by 30 per cent, he said the large application of the IT in industry would further improve the operational efficiency. Hyundai and Kia together have R&D centres in the United Sates, Europe, and Japan apart from its global R&D headquarters at Ulsan in Korea. Globally, the Hyundai group has a budget of over $2 billion for its R&D.

Hyderabad, Sept. 12: IDG Ventures, a global family of venture capital funds affiliated with the International Data Group (IDG), said on Tuesday it has launched a $150 million venture capital fund for early stage investment in India. The fund will be managed by IDG Ventures India. “We believe the rapid increase in the market for technology products and services in India, combined with the entrepreneurial spirit and talent of its people will create an extremely bright future for venture capital investing in India,” said Mr Patrick J. McGovern, founder and chairman of IDG, in a statement.

“This is the reason that we decided to establish the IDG Ventures India Fund as the newest member of our global family of funds, which together manage $1.4 billion of venture capital in the US, China, Vietnam, and now India.” IDG has appointed Mr Sudhir Sethi, former executive director of Infotech Enterprises Ltd, as managing general partner of the team that will manage the IDG Ventures India Fund.

“India provides a unique opportunity for investors in early-stage and growth-stage companies with a technology focus. The IDG Ventures India Fund will primarily invest between $0.5 and $5 million in early-stage technology companies and opportunistically up to $10 million in compelling growth-stage companies. These companies will be in IT and BPO services, design engineering, electronics and hi-tech manufacturing, consumer Internet and the digital media areas,” Mr Sethi said.

San Jose, Sept. 12: Hewlett-Packard Co. said on Tuesday that Patricia Dunn will step down as chairwoman of the computer and printer maker in January amid a widening scandal involving a possibly illegal probe into media leaks. She will be succeeded by CEO Mark Hurd. Mr Hurd will retain his existing positions as chief executive and president and Ms Dunn will remain as a director. “I am taking action to ensure that inappropriate investigative techniques will not be employed again. They have no place in HP,” Mr Hurd said in a statement.

Ms Dunn apologised for the techniques used in the company’s probe, which included “pretexting” in which private investigators impersonated board members and journalists to acquire their phone records. “Unfortunately, the investigation, which was conducted with third parties, included certain inappropriate techniques. These went beyond what we understood them to be, and I apologise that they were employed,” Ms Dunn said in a statement.

The pressure on Ms Dunn to step down began rising sharply on Monday when Congress and federal investigators entered the fray surrounding HP’s possibly illegal probe of media leaks. The FBI, the US Attorney for Northern California and the House Energy and Commerce Committee all joined the probe of the scandal swirling around HP’s Board of Directors.
HP shares rose 41 cents to $36.77 in Tuesday morning trading on the New York Stock Exchange.

Ms Dunn was angry about the media leaks and commissioned an unnamed outside firm to identify their source. They used Social Security numbers and other personal information to get phone companies to turn over detailed logs of home phone calls of reporters and board members.

Although frequently used by private investigators, pretexting tests the bounds of State and federal law. On Tuesday, Ms Dunn defended the need for the investigation. “These leaks had the potential to affect not only the stock price of HP but also that of other publicly traded companies.” HP’s board met on Monday night to discuss whether Ms Dunn should remain chairwoman of the Silicon Valley giant.

Richard Hackborn, who has served on the board since 1992, will become lead independent director in January. Ms Dunn’s entanglement in the pretexting scandal marks a rare stumble for one of the most powerful women in corporate America. The child of a vaudeville actor and a showgirl in Las Vegas, Ms Dunn, 52, worked as a freelance journalist after college before taking a temporary secretarial job at Wells Fargo & Co.

She was CEO of Barclays Global Investors before she resigned from that post in 2002 to battle breast cancer and melanoma. Ms Dunn joined HP’s board in 1998 and became chairwoman in 2005, taking an active role in running the 11th largest company on the Fortune 500. Ms Dunn oversaw the ouster of former CEO of HP Carleton Fiorina in mid-February 2005, and two months later introduced Mr Hurd as Ms Fiorina’s successor.