The Week That Was

L&T hikes stake in Satyam
LARSEN & Toubro (L&T) tripled its stake in Satyam Computer Services to 12% on Friday. This comes on the back of chairman AM Naik's lobbying with the government to facilitate a buyout. An L&T spokesman said the move to buy additional stake in Satyam was aimed at reducing the average cost of acquiring shares and strengthening its position to influence the Satyam board. Earlier, Andhra Pradesh public prosecutor charged that Satyam had inflated employee numbers by about 13,000 and its founder B Ramalinga Raju forged bank statements to dupe auditors and diverted funds from his firm to buy large tracts of land in benami names. The Company Law Board (CLB) had restrained Mr Raju, his brother B Rama Raju and other key Satyam officials from selling or mortgaging their assets without the court's permission.
VODAFONE'S PLEA ON TAX REJECTED
In a decision that could have implications for business deals struck outside the country involving Indian companies, the Supreme Court on Friday refused to entertain a plea by Vodafone, the world's top mobile operator by sales, challenging a tax claim on its $11-billion acquisition of Hutchison Essar. The Apex court has asked the assessing authority of the income-tax department to decide if it had the jurisdiction to claim a $4-billion payout—$1.7 billion tax plus penalty of equal amount and interest—on the deal, the largest by a foreign firm in India, that was executed abroad. In a press statement, Vodafone said that the Supreme Court had permitted it to approach the high court if it was aggrieved by the tax authorities' decision on the matter of jurisdiction.
BIC BUYS 40% IN CELLO PENS
French pen and stationery manufacturer BIC has bought a 40% stake in Mumbai-based stationery products maker Cello Pens for Rs 800 crore ($160 million). As part of the deal, BIC also has the option to increase its stake to 55% in the privately-held Indian firm in 2013. The deal will enable Cello Pens to expand its existing global distribution network and give BIC a foothold in the Rs 2,000-crore Indian stationery market, which is growing at 20% annually.
    economy
    Inflation inches
    up to 5.6%
THE hardening of food prices on back of the recent truckers' strike brought a halt to the 10-week downward trend in inflation. Wholesale prices for the week ended January 10 inflated by 5.6%. Economists say this is a temporary blip and expect the rate of inflation to fall to near zero in a couple of months. They also expect the Reserve Bank of India (RBI) to cut repo and reverse repo rates to shore up the slowing economy when the central bank reviews its monetary policy on January 27. Inflation in food items touched a 10-year high of 11.64% for the week ended January 10, as more than 5 million Indian truckers went on strike from January 5 for a week, creating a short-age.Vegetables became costlier by almost 19% over the week while prices of fruit and cereals moved up. The fuel price index remained unchanged at negative 1.31%. The manufactured items index also moved up 20 basis points on back of costlier food items.
PC TO FOCUS ON INFRASTRUCTURE
The Planning Commission will focus on infrastructure development for remaining three years of the 11th Plan to fight the economic crisis. It feels such a move will also create new employment opportunities for skilled and semi-skilled workers, many of whom have lost their jobs due to export
slowdown, Planning Commission secretary Subhash Pani said. The Planning Commission's future focus on infrastructure will be in education, irrigation, power and health. It also plans to press ahead to look for newer ways to fund infrastructure for state governments and the Centre.
CERC RAISES RETURN ON EQUITY TO 15.5%
The Central Electricity Regulatory Commission (CERC) has raised return on equity from 14% to 15.5%. As per the new electricity tariff regulation for 2009-2014, RoE will now be pre-tax, for which the base rate would be grossed up via the applicable tax rate for the company. This will, in turn, translate into nearly 23.5% post-tax return on equity against the earlier 21%. CERC has also allowed additional RoE of 0.5%, to those projects which are commissioned on time. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. The new tariff regulations will be implemented from April 1.
technology
AMD to break Intel monopoly
CALIFORNIA-based Advanced Micro Devices (AMD) is poised to break arch rival Intel's virtual monopoly over all major government computer purchases in India that add up to more than Rs 1,900 crore annually, a senior company official said. Till now Centre and state governments have only bought computers loaded with Intel chips. For the first time, governments in Karnataka, Andhra Pradesh and Tamil Nadu have said they are willing to buy computers loaded with either Intel or AMD chips, said AMD India vice president of sales and marketing Ramkumar Subramanian. This would create a level playing field between two of the world's top chip-makers in future IT hardware tenders at a time when governments are expected to buy computers worth nearly Rs 8000 crore in the next four years according to estimates by consultancy IDC.
MILLIONS OF COMPUTERS HIT BY VIRUS
More than nine million computers around the world have been infected by a digital virus in what experts believe is a multi-staged attack. The world leading security experts paint a scary scenario, stressing that they are yet to identify who programmed it and what the next stage will be. Known as Conficker or Downadup, it is spread by a recently discovered Microsoft Windows vulnerability, by guessing network passwords and by hand-carried consumer gadgets like USB keys, the New York Times said on Friday. This could be the worst infection since the Slammer worm exploded through the Internet in January 2003.
IBM, INFY VIE FOR FIDELITY'S IT UNIT
Infosys Technologies and IBM are locked in a battle to acquire the Indian IT captive unit of the world's largest mutual fund company, Fidelity Investments. The deal may involve $150-180 million upfront transaction in return for an assured multi-year outsourcing contract, at least two people involved with the matter said. A senior official at one of the companies bidding for Fidelity's back-office business said, "IBM has offered to pay around $150 million for the unit while Infosys has indicated that it could pay up to $180 million," he said.
    markets
    Sensex ends week
    on a weak note
THE Bombay Stock Exchange 30-share bellwether fell to close at its nine-week low of 8,674.35 at the week-end, as global negative developments and disappointing quarterly earnings by some key corporates cast a shadow over the market sentiment. The weekly slide was extended to third straight week as the bourses remained under pressure even as investors pinned hopes on Barack Obama, who took over as the 44th US President on Tuesday, January 20. In the week to January 24, the BSE barometer registered a net loss of 649.24 points or 6.96 per cent from last weekend's close, on heavy selling triggered by worries that the global banking sector was in deep trouble after Royal Bank of Scotland on Monday forecast a staggering USD 40 billion losses -- the biggest in the UK corporate history. On the domestic front, India's largest housing finance company HDFC and its third largest software exporter Wipro disappointed the market with their lowerthan-expected third quarter results. The market sentiment was dampened by Planning Commission Deputy Chairman Montek Singh Ahluwalia's statement ruling out out any more stimulus packages for the industry. Quarterly results announced by Reliance Communications, Ranbaxy Laboratories and Reliance Infra also fell short of market expectations. The country's
largest private sector firm Reliance Industries, which has highest weight in the Sensex, recovered part of its initial losses after the company announced nearly 10 per cent fall in its Q3 net profit, as the fall was lower than the analysts forecast. RIL dropped by 5.36 per cent over the week. All thirty shares from the Sensex pack showed marked falls in the week under review. The broader 50-share Nifty of the National Stock Exchange tumbled by 149.90 points or 5.30 per cent to end the week at seven-week low of 2,678.55 from its last weekend's close. The consistent capital outflow and negative activity by domestic institutional investors also were the major cause of concerns for the market. The foreign Institutional Investors pulled out more than 2,268 crore (including Friday's provisional number of Rs 523 crore) from equity during the week. As per the Sebi data, they sold shares worth Rs 3,961.80 crore so far in the month.Realty, Bank and Metal sectors witnessed large-scale sell-off during the week. Losses in these stocks could be gauged by the slide in their indices. politics
PM undergoes surgery,
    Pranab takes finance
PRIME Minister Manmohan Singh underwent a heart bypass surgery on Saturday following blockages in his arteries. Mr Singh, who had undergone a coronary artery bypass surgery in the UK in 1990 and angioplasty, a few years back, had complained of chest pain on Friday morning and was advised surgery by the team of doctors treating him.During his absence, external affairs minister Pranab Mukherjee will be in charge of the finance ministry. The Congress leadership, which is anxious to de-emphasise the perception of a 'leadership crisis' is avoiding describing the external minister as a 'stand in' for the prime minister. The instruction issued has merely said that Mr Mukherjee will be handling the finance ministry in the prime minister's absence.
PRANAB KEEPS UP PRESSURE ON PAK
India on Wednesday pointed the accusing finger at Pakistan for sponsoring cross border terrorism and asked the international community to take measures for disciplining the "recalcitrant state". "Terrorism is not just an act of misguided individuals. Since 9/11 the magnitude, depth and audacity of terror acts, as once again manifested in Mumbai attacks, demonstrate that this is no longer a problem of a state or of a region but of the whole world. This problem becomes more acute when it becomes state sponsored. Recalcitrant states must be brought to discipline by various international measures," external affairs minister Pranab Mukherjee said. His comments come after fresh pressure on Pakistan from the US to act against al-Qaeda and its franchisees.