By Nicholas Larkin - Nov 26, 2011 2:45 AM GMT+0530
Tweet
inShare24
More
Print
Email
Enlarge image Record Gold Hoard Spurs Bullish Bets
Bullion rose 19 percent to $1,685.50 an ounce this year on the Comex exchange in New York, and reached a record $1,923.70 in September. Photographer: Adrian Moser/Bloomberg
First Asset's Stephenson on Gold, European Crisis
Play Video
Nov. 22 (Bloomberg) -- John Stephenson, portfolio manager for First Asset Investment Management Inc., talks about the outlook for gold prices and the European sovereign-debt crisis. He talks with Michael McKee on Bloomberg Television's "Taking Stock." (Source: Bloomberg)
Enlarge image Gold Traders More Bullish
Gold climbed 24 percent to $1,756 this year, heading for an 11th consecutive annual advance. Photographer: SeongJoon Cho/Bloomberg
Gold traders are more bullish after investors accumulated the biggest-ever hoard of the metal, with Europe’s deepening debt crisis driving them to protect their wealth with this year’s second-best performing commodity.
Eighteen of 26 surveyed by Bloomberg expect bullion to rise next week. Holdings in exchange-traded products backed by gold reached a record 2,350.8 metric tons on Nov. 23, now valued at $127.6 billion, according to data compiled by Bloomberg. Hedge funds and other speculators increased their net-long position, or bets on higher prices, for four weeks, the longest stretch since March, Commodity Futures Trading Commission data show.
Almost $12 trillion was wiped off the value of global equities since May on mounting concern about slower global growth, driving investors to what are perceived as the safest assets. Yields on Treasuries fell to a near-record low and gold is heading for an 11th consecutive annual gain. Bullion beat every other member of the Standard & Poor’s GSCI gauge of 24 commodities this year except for gasoil.
“There’s absolutely no doubt that people are still worried,” said Carole Ferguson, an analyst at Fairfax IS in London. “The market’s being constantly confronted with the flow of bad news. Gold’s still an asset that people will look at.”
Bullion rose 19 percent to $1,688.50 an ounce this year on the Comex exchange in New York, and reached a record $1,923.70 in September. The S&P GSCI gained 0.7 percent and the MSCI All- Country World Index of equities retreated 16 percent. Treasuries returned 9.7 percent, a Bank of America Corp. index shows.
Declines in Copper
The traders surveyed by Bloomberg are less bullish on other commodities, anticipating declines in copper, raw sugar and corn next week. Soybeans may advance, the surveys showed.
Investors added 79.5 tons of gold to their ETP holdings since the start of November, on track for the best month since July, data compiled by Bloomberg show. The combined tonnage is greater than the reserves of all but four of the world’s central banks and equal to more than 10 months of global mine supply.
Speculators raised their combined net-long position by 34 percent to 171,632 futures and options contracts since mid- October, the most bullish they’ve been in two months, CFTC data show. Wagers were a record 253,653 contracts in August, a month before prices climbed to an all-time high.
European services and manufacturing output contracted for a third month in November, and the region’s industrial orders declined the most in almost three years in September, reports on Nov. 23 showed. Growth in the euro region will drop to 1.1 percent next year, from 1.6 percent this year, the International Monetary Fund forecasts.
Credit Rating
Portugal’s credit rating was cut to below investment grade by Fitch Ratings yesterday because of the nation’s rising debt and weakening economy. Germany sold 35 percent fewer bonds than its maximum target at an auction on Nov. 23 and the yield on Greek two-year notes was at 121.2 percent today. U.S. debt of the same maturity yields less than 0.28.
Declines in equity markets and commodities may oblige some investors to sell their bullion to cover losses. Gold slipped 3.5 percent last week as raw materials and stocks slumped the most since September.
“The need to raise cash and cover margins will likely overhang the market,” said James Moore, an analyst at TheBullionDesk.com in London.
Stronger Dollar
Gold’s gains also may be curbed by a stronger dollar, said Jesper Dannesboe, an analyst at Societe Generale SA in London. The currency climbed to the highest in seven weeks against the euro today. The 30-week correlation coefficient between the greenback and bullion is now at -0.46, data compiled by Bloomberg show, with a figure of -1 meaning the two always move in opposite directions.
Gold investment jumped 33 percent to 468.1 tons in the third quarter from a year earlier as bar and coin demand in Europe more than doubled to the most since the fourth quarter of 2008, according to the London-based World Gold Council.
Purchases by central banks, which are adding to reserves for the first time in a generation, may reach 450 tons this year, according to Marcus Grubb, managing director of investment research at the council. Central banks and government institutions bought 142 tons last year, IMF data show.
The purchases may also be a warning. Prices rose to a then- record $850 in 1980 as central banks bought gold, only to drop for most of the next 20 years. Bullion tripled from 1999 through the beginning of 2008 as the banks sold more than 4,000 tons.
Annual Performance
Commodities are headed for the weakest annual performance since 2008. JPMorgan Chase & Co. cut its recommendation on raw materials to “underweight” on Nov. 22 and said it expects negative total returns for the S&P GSCI index in the next three to six months. Goldman Sachs Group Inc. is forecasting a 15 percent gain for commodities in the next 12 months.
Ten of 21 traders and analysts surveyed by Bloomberg expect copper to drop next week. The metal for delivery in three months, the London Metal Exchange’s benchmark contract, declined 25 percent to $7,230 a ton this year.
Raw sugar retreated 29 percent this year to 22.9 cents a pound on ICE Futures U.S. in New York. Seven of 11 people surveyed expect prices to decline next week.
Eleven of 20 anticipate a drop in corn, the most bearish outlook in a year, while 10 of 20 said soybeans will advance. Corn slipped 6.2 percent to $5.90 a bushel in Chicago this year, and soybeans slid 21 percent to $11.065 a bushel.
“I don’t think people are going to buy commodities very aggressively at the moment,” Societe Generale’s Dannesboe said. “We’re negative in the very near term, but if we don’t get a global recession, then we’ll be approaching possible good buying levels over the next couple of months.”
Gold survey results: Bullish: 18 Bearish: 6 Hold: 2
Copper survey results: Bullish: 7 Bearish: 10 Hold: 4
Corn survey results: Bullish: 8 Bearish: 11 Hold: 1
Soybean survey results: Bullish: 10 Bearish: 9 Hold: 1
Raw sugar survey results: Bullish: 3 Bearish: 7 Hold: 1
White sugar survey results: Bullish: 2 Bearish: 8 Hold: 1
White sugar premium results: Widen: 2 Narrow: 6 Neutral: 3
To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net.
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.
Want to save this for later? Add it to your Queue!
Tweet
inShare24
More
Print
Email
Disqus
Login
Add New Comment
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.
Showing 5 comments on Record Gold Hoard Spurs Bullish Bets
Heavenly Voice 8 minutes ago
The fourth wave in the cycle of price revolutions is peaking and the price of gold will be relative to what? As
everything declines in price so will gold. As time series goes there will be more than one period of price declines before equilibrium is reached. Yes, exactly mirrored in the collapse of the housing industry here in America and so shall the prices for all measures of stuff go into decline including gold.
Like
Reply
Eirisalplir 7 hours ago
I stay with the forecast, which is of 15% gain.
Like
Reply
Brahmankar Rakesh 23 hours ago
I THINK GOLD WILL DRASTICALLY DROP PROBABLY IN THE NEXT MONTH ..THE REASON CAN BE 1. RAISING OF INTEREST RATES BY EUROPEAN CENTRAL BANKS
2. RISING OF DOLLAR AGAINST OTHER CURRENCIES
3. NON PURCHASE OF BONDS BY THE INVESTORS OR RETAILERS FOR EUROPEAN BONDS
Like
Reply
shaurya mishra in reply to Brahmankar Rakesh 4 hours ago
first reason is highly unlikely
second reason is correct that is why you are supposed to buy gold in euro terms or maybe rupee terms
third reason may actually lead to rise in gold prices
Like
Reply
ejhickey 23 hours ago
Any gold or silver that was held by MF global customers in their accounts in the form of warehouse receipts, is off the market for a while. the trustee has stated he is not liquidating those assets but holding them until there is a determination whether these assets should be returned to the owners. this could take several months or longer. Is there a possibility of a PM shortage?
Like
Reply
1 Like
Sponsored links
Videos You May Like
Gold Price to Fall $150-$200 by Year-End, Hall Says
Gold Price May Increase to $5000 in Future
Bauer Recommends Investors `Sell Gold, Buy Silver'
by Taboola
Related News
Africa ·
Canada ·
China ·
Eastern Europe ·
Europe ·
India & Pakistan ·
Middle East ·
U.K. & Ireland ·
U.S. ·
Commodities ·
Funds ·
Municipal Bonds ·
Retail
Want to save this for later? Add it to your Queue!
Sponsored Links
Forex Trading - GFT
Free $50,000 Demo Account. Try it Now With GFT.
GFTforex.com
Mutual Funds at Fidelity
Fidelity Offers Years of Mutual Fund Management Experience.
www.fidelity.com
Press Release Distribution Service
Send your news to top sites, media, blogs and more. Proof of distribution. SEO.
www.24-7pressrelease.com
Buy a link »
More Stories
Spain’s PP Is Preparing More Austerity Measures, Economista Says
U.S. Federal Reserve AIG, JPMorgan Portfolio Holdings
Iceland Rejects Chinese Billionaire’s Land Plan
Belgium Reaches 2012 Budget Deal After Credit Rating Lowered to AA by S
[Rate These Stories] Rate These StoriesMore News »
Advertisement
Click here to find out more!
Most Popular Stories
Black Friday Sales Rise 6.6% to Record: ShopperTrak
Q
Pakistan Cuts NATO Supply Lines After Attack
Q
S&P 500 Has Worst Thanksgiving Week Since ’32
Q
EU Rescue Fund May Ease Bond Provision
Q
More Most Popular Stories »
Key Rates
Mortgage
Home Equity
Savings
Auto
Credit Cards
See today's average mortgage rates across the country. Source: Bankrate.com Type Today 1 Mo
30-Year Fixed 4.02% 4.16%
15-Year Fixed 3.38% 3.45%
5/1-Year ARM 2.97% 3.00%
3/1 Year ARM 2.95% 2.99%
1-Year ARM 2.78% 2.95%
30 Year Jumbo 4.68% 4.83%
15-Year Fixed Jumbo 3.96% 4.13%
5/1-Year ARM Jumbo 3.20% 3.17%
Rates may include points.
View rates in your area »
Sponsored Links
Job Search
Post a Job »
Senior Financial Analyst
Senior Financial Analyst - Mount Laurel, NJ
Associate Accountant / Financial Analyst
Allison Transmission, Inc. - Indianapolis, IN
Financial Analyst/Cost Accountant
Cooper Industries - Denver, CO
Financial Analyst/Accountant
Hanover Research - Washington, DC
Financial Analyst/Staff Accountant
Tara Cares - Orchard Park, NY
Search All Jobs jobs by Indeed job search
Advertisement
Advertisements
Click here to find out more!
Sponsored Links
Subscribe Now & Get Your Free Issue of Bloomberg Markets Magazine
Bloomberg
Bloomberg on
Facebook
Follow Bloomberg
on Twitter
Follow Bloomberg
on LinkedIn
More from Bloomberg
Bloomberg Businessweek
Business Exchange
Bloomberg Briefs
Bloomberg Government
Bloomberg HT
Bloomberg Institute
ブルームバーグ(日本語)
Bloomberg Law
Bloomberg Link
Bloomberg Markets Magazine
Bloomberg Mart
Bloomberg New Energy Finance
Bloomberg Open Symbology
Bloomberg Press
Bloomberg Sports
Jobs by Indeed
Company
About Bloomberg
Careers
Press Room
Advertising
Contact Us
关于彭博中国
会社概要(日本語)
Help
Sitemap
Trademarks
Feedback
Terms of Service
Privacy Policy
[Rate this Page] Rate this Page
©2011 BLOOMBERG L.P. ALL RIGHTS RESERVED. Made in NYC
Saturday, November 26, 2011
Friday, November 25, 2011
India Paves Way for Wal-Mart, Tesco to Enter Market; Retailer Shares Rise By Bibhudatta Pradhan and Malavika Sharma - Nov 25, 2011
India approved allowing overseas companies to own as much as 51 percent of retailers selling more than one brand, paving the way for global companies such as Wal- Mart Stores Inc. (WMT) and Tesco Plc to own stores.
Overseas companies must invest at least $100 million, half of which has to be spent on developing back-end infrastructure, Commerce Minister Anand Sharma said in a statement presented to parliament today. India’s cabinet yesterday eased retail ownership rules, including permitting 100 percent foreign holding in single brand stores.
India’s decision to allow overseas ownership in retail will create up to 10 million jobs and give farmers better prices, Sharma said. Wal-Mart, Carrefour SA (CA) and Tesco (TSCO) seek to step up their presence in the world’s second-most populous nation to tap a market estimated by Business Monitor International to double to $785 billion by 2015 from $396 billion this year.
“This is possibly the most exciting thing that has happened in retail in India,” said Hemant Kalbag, who heads the consumer and retail practice for Asia at A.T. Kearney in Mumbai. “This is probably the next big wave of change in organized retail in India.”
Overseas retailers will be required to purchase at least 30 percent of goods sold in the ventures from small industries, Sharma said. Stores will be permitted only in 53 cities with a population of 1 million or more, and the government will retain the first right to buy farm products, he said.
‘Important First Step’
The government’s move is “an important first step,” Wal- Mart Asia President Scott Price said in a statement. The retailer looks forward to “playing a key role” in India.
Asia’s third-biggest economy permitted foreign retailers to own wholesale stores in 1997. Policy makers have been debating ownership rules in retail for at least seven years.
Wal-Mart has set up 14 such stores through a joint venture with billionaire Sunil Bharti Mittal’s Bharti Enterprises to gain a foothold in India, while Metro AG operates six wholesale stores. Carrefour opened its first outlet in December.
“This legal evolution should contribute to modernize Indian food supply chain and to fight against food inflation for the benefit of Indian customers,” Carrefour said in an e-mailed statement. The Boulogne-Billancourt, France-based retailer will wait for final regulations, it said.
India’s decision may prompt expansion of existing joint ventures and trigger acquisitions, said Bryan Roberts, director of retail research at Kantar Retail in London. Still, the size of the opportunity may be “overstated,” he said.
“A lot of retailers have already expanded and found that there’s not enough middle-class shoppers around at the moment,” said Roberts.
‘Win for Consumers’
India’s retail industry will get $8 billion to $10 billion in fresh investments over the next five to 10 years, Kishore Biyani, managing director of Pantaloon Retail India Ltd. (PF), said in an e-mailed statement yesterday. Pantaloon, which operates more than 150 Big Bazaar supermarkets across 90 cities and towns, also has apparel and consumer-electronics outlets.
“It is a big win for consumers as they will have more choices,” said Biyani. “It’s a win for small industries as they will have more retailers creating markets for their products” and farmers will benefit from better prices, he said.
Pantaloon climbed 16 percent, the biggest gain since May 2009, to 233.95 rupees at the close in Mumbai trading. Shoppers Stop Ltd. (SHOP) rose 6.2 percent, and Trent Ltd. (TRENT), Tesco’s India partner, advanced 8.6 percent, the most since August 2010.
The decision to permit foreign retailers came as Prime Minister Manmohan Singh’s parliamentary ally the Trinamool Congress opposed the proposal. The main federal opposition Bharatiya Janata Party was also against the move.
Political Opposition
“Small and medium retailers, which employ a large number of people, will be affected,” Arun Jaitley, a BJP leader, said in New Delhi yesterday. “We oppose it completely.”
Overseas investment in the retail industry may help slow the pace of price gains, Reserve Bank of India Governor Duvvuri Subbarao said in the northern city of Chandigarh today. “Its important not only for raising overall growth but also important for containing inflation,” said Subbarao.
India’s food inflation accelerated 9.01 percent in the week ended Nov. 12 from a year earlier, the commerce ministry said yesterday. The rate has stayed above 9 percent for 16 weeks.
‘Licking Their Lips’
Raj Jain, president of Wal-Mart India, said in April 2010 the company can help reduce prices by improving supply chain and infrastructure to cut waste. About 40 percent of fruit and vegetables in the country rot before they are sold because of a lack of cold-storage facilities and poor transport infrastructure, according to government estimates.
Bharti-Walmart, the local venture, buys fresh produce directly from about 1,200 farmers in Punjab, in northern India, Jain said in May.
“Foreign retailers must be licking their lips at this opportunity,” said Narayanan Ramaswamy, executive director at KPMG India, which advises retail companies. “It has to be one of the biggest opportunities in the world right now.”
To contact the reporters on this story: Bibhudatta Pradhan in New Delhi at bpradhan@bloomberg.net; Malavika Sharma in New Delhi at msharma52@bloomberg.net
To contact the editor responsible for this story: Frank Longid at flongid@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Overseas companies must invest at least $100 million, half of which has to be spent on developing back-end infrastructure, Commerce Minister Anand Sharma said in a statement presented to parliament today. India’s cabinet yesterday eased retail ownership rules, including permitting 100 percent foreign holding in single brand stores.
India’s decision to allow overseas ownership in retail will create up to 10 million jobs and give farmers better prices, Sharma said. Wal-Mart, Carrefour SA (CA) and Tesco (TSCO) seek to step up their presence in the world’s second-most populous nation to tap a market estimated by Business Monitor International to double to $785 billion by 2015 from $396 billion this year.
“This is possibly the most exciting thing that has happened in retail in India,” said Hemant Kalbag, who heads the consumer and retail practice for Asia at A.T. Kearney in Mumbai. “This is probably the next big wave of change in organized retail in India.”
Overseas retailers will be required to purchase at least 30 percent of goods sold in the ventures from small industries, Sharma said. Stores will be permitted only in 53 cities with a population of 1 million or more, and the government will retain the first right to buy farm products, he said.
‘Important First Step’
The government’s move is “an important first step,” Wal- Mart Asia President Scott Price said in a statement. The retailer looks forward to “playing a key role” in India.
Asia’s third-biggest economy permitted foreign retailers to own wholesale stores in 1997. Policy makers have been debating ownership rules in retail for at least seven years.
Wal-Mart has set up 14 such stores through a joint venture with billionaire Sunil Bharti Mittal’s Bharti Enterprises to gain a foothold in India, while Metro AG operates six wholesale stores. Carrefour opened its first outlet in December.
“This legal evolution should contribute to modernize Indian food supply chain and to fight against food inflation for the benefit of Indian customers,” Carrefour said in an e-mailed statement. The Boulogne-Billancourt, France-based retailer will wait for final regulations, it said.
India’s decision may prompt expansion of existing joint ventures and trigger acquisitions, said Bryan Roberts, director of retail research at Kantar Retail in London. Still, the size of the opportunity may be “overstated,” he said.
“A lot of retailers have already expanded and found that there’s not enough middle-class shoppers around at the moment,” said Roberts.
‘Win for Consumers’
India’s retail industry will get $8 billion to $10 billion in fresh investments over the next five to 10 years, Kishore Biyani, managing director of Pantaloon Retail India Ltd. (PF), said in an e-mailed statement yesterday. Pantaloon, which operates more than 150 Big Bazaar supermarkets across 90 cities and towns, also has apparel and consumer-electronics outlets.
“It is a big win for consumers as they will have more choices,” said Biyani. “It’s a win for small industries as they will have more retailers creating markets for their products” and farmers will benefit from better prices, he said.
Pantaloon climbed 16 percent, the biggest gain since May 2009, to 233.95 rupees at the close in Mumbai trading. Shoppers Stop Ltd. (SHOP) rose 6.2 percent, and Trent Ltd. (TRENT), Tesco’s India partner, advanced 8.6 percent, the most since August 2010.
The decision to permit foreign retailers came as Prime Minister Manmohan Singh’s parliamentary ally the Trinamool Congress opposed the proposal. The main federal opposition Bharatiya Janata Party was also against the move.
Political Opposition
“Small and medium retailers, which employ a large number of people, will be affected,” Arun Jaitley, a BJP leader, said in New Delhi yesterday. “We oppose it completely.”
Overseas investment in the retail industry may help slow the pace of price gains, Reserve Bank of India Governor Duvvuri Subbarao said in the northern city of Chandigarh today. “Its important not only for raising overall growth but also important for containing inflation,” said Subbarao.
India’s food inflation accelerated 9.01 percent in the week ended Nov. 12 from a year earlier, the commerce ministry said yesterday. The rate has stayed above 9 percent for 16 weeks.
‘Licking Their Lips’
Raj Jain, president of Wal-Mart India, said in April 2010 the company can help reduce prices by improving supply chain and infrastructure to cut waste. About 40 percent of fruit and vegetables in the country rot before they are sold because of a lack of cold-storage facilities and poor transport infrastructure, according to government estimates.
Bharti-Walmart, the local venture, buys fresh produce directly from about 1,200 farmers in Punjab, in northern India, Jain said in May.
“Foreign retailers must be licking their lips at this opportunity,” said Narayanan Ramaswamy, executive director at KPMG India, which advises retail companies. “It has to be one of the biggest opportunities in the world right now.”
To contact the reporters on this story: Bibhudatta Pradhan in New Delhi at bpradhan@bloomberg.net; Malavika Sharma in New Delhi at msharma52@bloomberg.net
To contact the editor responsible for this story: Frank Longid at flongid@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Thursday, November 24, 2011
Wal-Mart Allowed to Own 51% of India Ventures By Bibhudatta Pradhan and Malavika Sharma - Nov 24, 2011
India approved allowing overseas companies to own as much as 51 percent of retailers selling more than one brand, paving the way for global companies such as Wal- Mart Stores Inc. (WMT) and Tesco Plc (TSCO) to own stores.
Trade Minister Anand Sharma told reporters after a cabinet meeting yesterday that he will make a statement on the government’s rationale for opening multibrand retail to foreign investment in parliament today. Specific conditions linked to the approval weren’t immediately known.
Wal-Mart and Carrefour SA (CA) have been seeking to enter the world’s second-most populous nation to tap a market expected to double to $785 billion by 2015 from $396 billion this year, according to Business Monitor International. Organized stores account for about 5 percent of India’s retail market, according to the Associated Chambers of Commerce and Industry of India.
“Foreign retailers must be licking their lips at this opportunity,” said Narayanan Ramaswamy, executive director at KPMG India, which advises retail companies. “It has to be one of the biggest opportunities in the world right now.”
Overseas retailers such as Wal-Mart and Carrefour, the world’s two biggest, may be required to invest a minimum of $100 million in India, according to a government official familiar with the talks. At least half of the investment must be in back- end infrastructure and stores will be allowed only in cities with a population of 1 million or more, the official, who declined to be identified citing departmental policy, said on Nov. 23.
Retailers Gain
Indian retailers gained in Mumbai trading yesterday before the cabinet meeting as overseas companies will need local partners to set up operations in the South Asian nation. Pantaloon Retail India Ltd. (PF), the country’s largest chain by market value, jumped 13 percent to 201.20 rupees, the most in more than two years. Shoppers Stop Ltd. (SHOP) advanced 5.5 percent and Trent Ltd. (TRENT), which has a franchise agreement with Tesco, rose 1.1 percent.
“It can be a game changer for us,” Kishore Biyani, the founder and managing director of Pantaloon, said in a Nov. 18 phone interview when asked about the possibility of the rules being relaxed. “We’ll get opportunities to align with various businesses with stronger partners.”
India also allowed companies that sell a single brand to own 100 percent of their operations from 51 percent earlier, Food Minister K.V. Thomas said yesterday.
‘Important First Step’
India permitted foreign retailers to own wholesale stores in 1997. Wal-Mart has set up 14 such stores in India through a joint venture with billionaire Sunil Bharti Mittal’s Bharti Enterprises to gain a foothold in the country, while Metro AG operates six wholesale stores. Carrefour opened its first outlet in December.
The government’s latest move is “an important first step,” Wal-Mart Asia President Scott Price said in a statement. The retailer looks forward to “playing a key role” in India, he said.
Carrefour said in a statement that it will monitor for the completion of the regulations, which may help India’s fight against food inflation.
The decision to permit foreign retailers came as Prime Minister Manmohan Singh’s parliamentary ally the Trinamool Congress opposed the move. The main federal opposition Bharatiya Janata Party was also against the decision.
Cutting Waste
“Small and medium retailers, which employ a large number people, will be affected,” Arun Jaitley, a BJP leader, said in New Delhi yesterday. “We oppose it completely.”
Policy makers have been debating approving the idea for at least the past seven years.
Raj Jain, president of Wal-Mart India, said in April 2010 the company can help reduce prices by improving supply chain and infrastructure to cut waste. About 40 percent of India’s fruit and vegetables rot before they are sold because of a lack of cold-storage facilities and poor transport infrastructure, according to government estimates.
Bharti-Walmart, the local joint venture, buys fresh produce directly from about 1,200 farmers in Punjab and helps them improve their yield through better farming practices, Jain said in May.
To contact the reporters on this story: Bibhudatta Pradhan in New Delhi at bpradhan@bloomberg.net; Malavika Sharma in New Delhi at msharma52@bloomberg.net
To contact the editor responsible for this story: Frank Longid at flongid@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Trade Minister Anand Sharma told reporters after a cabinet meeting yesterday that he will make a statement on the government’s rationale for opening multibrand retail to foreign investment in parliament today. Specific conditions linked to the approval weren’t immediately known.
Wal-Mart and Carrefour SA (CA) have been seeking to enter the world’s second-most populous nation to tap a market expected to double to $785 billion by 2015 from $396 billion this year, according to Business Monitor International. Organized stores account for about 5 percent of India’s retail market, according to the Associated Chambers of Commerce and Industry of India.
“Foreign retailers must be licking their lips at this opportunity,” said Narayanan Ramaswamy, executive director at KPMG India, which advises retail companies. “It has to be one of the biggest opportunities in the world right now.”
Overseas retailers such as Wal-Mart and Carrefour, the world’s two biggest, may be required to invest a minimum of $100 million in India, according to a government official familiar with the talks. At least half of the investment must be in back- end infrastructure and stores will be allowed only in cities with a population of 1 million or more, the official, who declined to be identified citing departmental policy, said on Nov. 23.
Retailers Gain
Indian retailers gained in Mumbai trading yesterday before the cabinet meeting as overseas companies will need local partners to set up operations in the South Asian nation. Pantaloon Retail India Ltd. (PF), the country’s largest chain by market value, jumped 13 percent to 201.20 rupees, the most in more than two years. Shoppers Stop Ltd. (SHOP) advanced 5.5 percent and Trent Ltd. (TRENT), which has a franchise agreement with Tesco, rose 1.1 percent.
“It can be a game changer for us,” Kishore Biyani, the founder and managing director of Pantaloon, said in a Nov. 18 phone interview when asked about the possibility of the rules being relaxed. “We’ll get opportunities to align with various businesses with stronger partners.”
India also allowed companies that sell a single brand to own 100 percent of their operations from 51 percent earlier, Food Minister K.V. Thomas said yesterday.
‘Important First Step’
India permitted foreign retailers to own wholesale stores in 1997. Wal-Mart has set up 14 such stores in India through a joint venture with billionaire Sunil Bharti Mittal’s Bharti Enterprises to gain a foothold in the country, while Metro AG operates six wholesale stores. Carrefour opened its first outlet in December.
The government’s latest move is “an important first step,” Wal-Mart Asia President Scott Price said in a statement. The retailer looks forward to “playing a key role” in India, he said.
Carrefour said in a statement that it will monitor for the completion of the regulations, which may help India’s fight against food inflation.
The decision to permit foreign retailers came as Prime Minister Manmohan Singh’s parliamentary ally the Trinamool Congress opposed the move. The main federal opposition Bharatiya Janata Party was also against the decision.
Cutting Waste
“Small and medium retailers, which employ a large number people, will be affected,” Arun Jaitley, a BJP leader, said in New Delhi yesterday. “We oppose it completely.”
Policy makers have been debating approving the idea for at least the past seven years.
Raj Jain, president of Wal-Mart India, said in April 2010 the company can help reduce prices by improving supply chain and infrastructure to cut waste. About 40 percent of India’s fruit and vegetables rot before they are sold because of a lack of cold-storage facilities and poor transport infrastructure, according to government estimates.
Bharti-Walmart, the local joint venture, buys fresh produce directly from about 1,200 farmers in Punjab and helps them improve their yield through better farming practices, Jain said in May.
To contact the reporters on this story: Bibhudatta Pradhan in New Delhi at bpradhan@bloomberg.net; Malavika Sharma in New Delhi at msharma52@bloomberg.net
To contact the editor responsible for this story: Frank Longid at flongid@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Wednesday, November 23, 2011
Mistry Will Replace Ratan Tata as Head of India’s Biggest Business Group By Rajhkumar K Shaaw and Siddharth Philip - Nov 23, 2011
Tata Sons Ltd. named Cyrus P. Mistry, the son of its biggest shareholder, as successor to Chairman Ratan Tata, ending more than a year of speculation over who would run India’s biggest business group.
Mistry, 43, who will assume the role of deputy chairman immediately, will take over as head of the group in December 2012, according to an e-mailed statement from the company yesterday. Tata in August 2010 set up a five-member panel to find a successor to Ratan, who will retire after two decades running the Mumbai-based company.
In Mistry, Tata has picked an insider who has sat on the board since 2006 and whose family owns 18 percent of the group holding company. He may struggle to stamp his identity on the group after Ratan Tata’s acquisitions of Corus Group, Jaguar Land Rover (TTMT) and Tetley Group Plc charted India’s emergence as a global economic power.
“He has phenomenally big shoes to fill,” said U.R. Bhat, managing director of Dalton Capital Advisors India Pvt. in Mumbai. “He’s sort of an enigma. We don’t know whether he has the right credentials.”
Mistry, who was part of the search panel, withdrew himself when he became a candidate, said group spokesman Debasis Ray.
Billionaire Father
Mistry, an engineer from the Imperial College of Science, Technology and Medicine in London, began working for the group controlled by his father, billionaire Shapoorji Pallonji Mistry, in 1991. Cyrus did his masters in management from the London Business School.
“I am aware that an enormous responsibility, with a great legacy, has been entrusted to me,” Mistry said in an e-mailed statement yesterday. Mistry declined to comment for this report, according to spokesman Ray.
Tata makes cars from the $73,700 Jaguar XJ to the $2,800 Nano, produces steel, salt and grows tea served at the Tata- owned Boston Ritz Carlton. The group accounts for almost 5 percent of India’s gross domestic product.
Tata Steel Ltd. (TATA), which acquired Corus Steel for $12.8 billion in India’s biggest overseas acquisition in 2007, fell 2.3 percent to 382.65 rupees in Mumbai yesterday. Tata Consultancy Services Ltd. (TCS), the group’s biggest unit by market value, dropped 1.8 percent to 1,062.30 rupees, while Tata Motors Ltd., which owns the Jaguar and Land Rover brands, lost 2.4 percent.
‘End to Uncertainty’
“The markets will like the decision,” said Samir Arora, founder of Singapore-based hedge fund Helios Capital Management Pte “It’s great to have an insider who knows the group and has tracked it for some years. It will put to rest the uncertainty.”
The Tata group has more than 100 operating companies with 31 listed on the Indian stock exchanges with total revenue of $83.3 billion in the year ended March 31, 2011, according to its website. Overseas revenue accounted for 58 percent of total, or $48.3 billion. The group companies together employ more than 425,000 people.
“I have been impressed with the quality and caliber of his participation, his astute observations and his humility,” Ratan Tata said in the statement. “I will be committed to working with him over the next year to give him the exposure, the involvement and the operating experience to equip him to undertake the full responsibility of the group on my retirement.”
Ratan Tata’s half-brother Noel was among the likely candidates to take over as chairman, the Economic Times reported on Nov. 11.
‘Jury Still Out’
“Obviously the jury is still very much out,” on Mistry’s abilities, said Andrea Goldstein, who studied the Tata Group as a senior economist at the Organization of Economic Cooperation and Development in Paris. “He’s very young, which could be very good - so he’s being groomed to take this position. Let’s see if he’s ready to do that.”
Mistry and the Tatas belong to the Parsi religion, a small, Zoroastrian community, which originated in Persia and found sanctuary centuries ago in India. The Tata group was founded by Ratan’s great grandfather Jamsetji Nusserwanji Tata, who started a textile-trading business in 1868 and then built the country’s first steel mill and hydroelectric plant. He also built The Taj Mahal Palace & Tower hotel in Mumbai, which was damaged in the November 2008 terrorist attacks.
Ratan made his first purchase overseas in February 2000 when he paid $407 million for U.K.-based Tetley Group -- the biggest by an Indian company at that time. He followed with 65 more mergers or purchases in India and abroad, totaling over $20 billion, the most by any Indian group, according to the group’s website.
Mistry will be the second person outside the Tatas to lead the group, according to the company’s website.
“I have known him since he was a baby,” Parmeshwar Godrej, a board member of Godrej Properties Ltd. and wife of billionaire Adi Godrej, said in a phone interview yesterday. “The whole family is very shy and reserved. I’m sure he will do a great job.”
To contact the reporters on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net; Siddharth Philip in Mumbai at sphilip3@bloomberg.net
To contact the editor responsible for this story: Arijit Ghosh at aghosh@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Mistry, 43, who will assume the role of deputy chairman immediately, will take over as head of the group in December 2012, according to an e-mailed statement from the company yesterday. Tata in August 2010 set up a five-member panel to find a successor to Ratan, who will retire after two decades running the Mumbai-based company.
In Mistry, Tata has picked an insider who has sat on the board since 2006 and whose family owns 18 percent of the group holding company. He may struggle to stamp his identity on the group after Ratan Tata’s acquisitions of Corus Group, Jaguar Land Rover (TTMT) and Tetley Group Plc charted India’s emergence as a global economic power.
“He has phenomenally big shoes to fill,” said U.R. Bhat, managing director of Dalton Capital Advisors India Pvt. in Mumbai. “He’s sort of an enigma. We don’t know whether he has the right credentials.”
Mistry, who was part of the search panel, withdrew himself when he became a candidate, said group spokesman Debasis Ray.
Billionaire Father
Mistry, an engineer from the Imperial College of Science, Technology and Medicine in London, began working for the group controlled by his father, billionaire Shapoorji Pallonji Mistry, in 1991. Cyrus did his masters in management from the London Business School.
“I am aware that an enormous responsibility, with a great legacy, has been entrusted to me,” Mistry said in an e-mailed statement yesterday. Mistry declined to comment for this report, according to spokesman Ray.
Tata makes cars from the $73,700 Jaguar XJ to the $2,800 Nano, produces steel, salt and grows tea served at the Tata- owned Boston Ritz Carlton. The group accounts for almost 5 percent of India’s gross domestic product.
Tata Steel Ltd. (TATA), which acquired Corus Steel for $12.8 billion in India’s biggest overseas acquisition in 2007, fell 2.3 percent to 382.65 rupees in Mumbai yesterday. Tata Consultancy Services Ltd. (TCS), the group’s biggest unit by market value, dropped 1.8 percent to 1,062.30 rupees, while Tata Motors Ltd., which owns the Jaguar and Land Rover brands, lost 2.4 percent.
‘End to Uncertainty’
“The markets will like the decision,” said Samir Arora, founder of Singapore-based hedge fund Helios Capital Management Pte “It’s great to have an insider who knows the group and has tracked it for some years. It will put to rest the uncertainty.”
The Tata group has more than 100 operating companies with 31 listed on the Indian stock exchanges with total revenue of $83.3 billion in the year ended March 31, 2011, according to its website. Overseas revenue accounted for 58 percent of total, or $48.3 billion. The group companies together employ more than 425,000 people.
“I have been impressed with the quality and caliber of his participation, his astute observations and his humility,” Ratan Tata said in the statement. “I will be committed to working with him over the next year to give him the exposure, the involvement and the operating experience to equip him to undertake the full responsibility of the group on my retirement.”
Ratan Tata’s half-brother Noel was among the likely candidates to take over as chairman, the Economic Times reported on Nov. 11.
‘Jury Still Out’
“Obviously the jury is still very much out,” on Mistry’s abilities, said Andrea Goldstein, who studied the Tata Group as a senior economist at the Organization of Economic Cooperation and Development in Paris. “He’s very young, which could be very good - so he’s being groomed to take this position. Let’s see if he’s ready to do that.”
Mistry and the Tatas belong to the Parsi religion, a small, Zoroastrian community, which originated in Persia and found sanctuary centuries ago in India. The Tata group was founded by Ratan’s great grandfather Jamsetji Nusserwanji Tata, who started a textile-trading business in 1868 and then built the country’s first steel mill and hydroelectric plant. He also built The Taj Mahal Palace & Tower hotel in Mumbai, which was damaged in the November 2008 terrorist attacks.
Ratan made his first purchase overseas in February 2000 when he paid $407 million for U.K.-based Tetley Group -- the biggest by an Indian company at that time. He followed with 65 more mergers or purchases in India and abroad, totaling over $20 billion, the most by any Indian group, according to the group’s website.
Mistry will be the second person outside the Tatas to lead the group, according to the company’s website.
“I have known him since he was a baby,” Parmeshwar Godrej, a board member of Godrej Properties Ltd. and wife of billionaire Adi Godrej, said in a phone interview yesterday. “The whole family is very shy and reserved. I’m sure he will do a great job.”
To contact the reporters on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net; Siddharth Philip in Mumbai at sphilip3@bloomberg.net
To contact the editor responsible for this story: Arijit Ghosh at aghosh@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Tuesday, November 22, 2011
Asian Stocks Decline on U.S. Economy By Jonathan Burgos - Nov 22, 2011
Asian stocks fell, with a regional gauge heading for its lowest close in a month, after a mining tax was approved in Australia’s lower house of parliament and a report showed slower-than-expected economic growth in the U.S.
Samsung Electronics Co. (005930), South Korea’s biggest exporter of consumer electronics, slid 2.4 percent in Seoul on speculation exports will drop as growth in the world’s biggest economy slows. BHP Billiton Ltd. (BHP), the world’s biggest mining company, declined 1.9 percent in Sydney after Australia’s House of Representatives passed a law taxing mining profits. AirAsia Bhd. (AIRA) slipped 4.9 percent in Kuala Lumpur after the budget carrier reported a 53 percent decline in profit.
“Europe is probably already in recession and that’s going to hurt demand for U.S. exports and put downward pressure on U.S. growth,” Alan Gayle, a senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $44 billion, said in a Bloomberg Television interview. “The Federal Reserve is going to continue to do all that it can to support the economy. The more important question to the market is how effective would they be.”
The MSCI Asia Pacific excluding Japan Index fell 1.2 percent to 383.98 as of 9:41 a.m. in Hong Kong, poised for its lowest close since Oct. 7. Stocks retreated this month as surging bond yields in Italy and Spain added to evidence Europe’s sovereign debt crisis is spreading to major economies.
Australia’s S&P/ASX 200 slid 1.1 percent, while South Korea’s Kospi Index declined 1.6 percent. Hong Kong’s Hang Seng Index dropped 1.7 percent and China’s Shanghai Composite Index added 0.2 percent. Japanese markets are closed today for a holiday.
U.S. Futures
Futures on the Standard & Poor’s 500 Index (SPX) fell 0.9 percent today. The measure dropped 0.4 percent in New York yesterday, extending its longest slump in almost four months, as slower- than-estimated economic growth overshadowed signs the Federal Reserve may provide more stimulus.
Exporters fell after a revised Commerce Department report showed that U.S. gross domestic product climbed at a 2 percent annual rate from July through September, less than projected and down from a 2.5 percent prior estimate. Fed officials said the central bank should consider easing policy further, according to minutes of their Nov. 1-2 meeting.
Raw material producers dropped as BHP Billiton, Rio Tinto Group and other iron-ore and coal suppliers and producers face paying about A$11 billion ($10.8 billion) in extra charges in the first three years of the mining tax passed by the lower house of Australia’s parliament yesterday.
The MSCI Asia Pacific excluding Japan Index declined 18 percent this year through yesterday, compared with a 5.5 percent loss by the S&P 500 and a 19 percent drop by the Stoxx Europe 600 Index. Stocks (MXAPJ) in the Asian benchmark are valued at 11.2 times estimated earnings on average, compared with 12 times for the S&P 500 and 9.8 times for the Stoxx 600.
To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net.
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Samsung Electronics Co. (005930), South Korea’s biggest exporter of consumer electronics, slid 2.4 percent in Seoul on speculation exports will drop as growth in the world’s biggest economy slows. BHP Billiton Ltd. (BHP), the world’s biggest mining company, declined 1.9 percent in Sydney after Australia’s House of Representatives passed a law taxing mining profits. AirAsia Bhd. (AIRA) slipped 4.9 percent in Kuala Lumpur after the budget carrier reported a 53 percent decline in profit.
“Europe is probably already in recession and that’s going to hurt demand for U.S. exports and put downward pressure on U.S. growth,” Alan Gayle, a senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $44 billion, said in a Bloomberg Television interview. “The Federal Reserve is going to continue to do all that it can to support the economy. The more important question to the market is how effective would they be.”
The MSCI Asia Pacific excluding Japan Index fell 1.2 percent to 383.98 as of 9:41 a.m. in Hong Kong, poised for its lowest close since Oct. 7. Stocks retreated this month as surging bond yields in Italy and Spain added to evidence Europe’s sovereign debt crisis is spreading to major economies.
Australia’s S&P/ASX 200 slid 1.1 percent, while South Korea’s Kospi Index declined 1.6 percent. Hong Kong’s Hang Seng Index dropped 1.7 percent and China’s Shanghai Composite Index added 0.2 percent. Japanese markets are closed today for a holiday.
U.S. Futures
Futures on the Standard & Poor’s 500 Index (SPX) fell 0.9 percent today. The measure dropped 0.4 percent in New York yesterday, extending its longest slump in almost four months, as slower- than-estimated economic growth overshadowed signs the Federal Reserve may provide more stimulus.
Exporters fell after a revised Commerce Department report showed that U.S. gross domestic product climbed at a 2 percent annual rate from July through September, less than projected and down from a 2.5 percent prior estimate. Fed officials said the central bank should consider easing policy further, according to minutes of their Nov. 1-2 meeting.
Raw material producers dropped as BHP Billiton, Rio Tinto Group and other iron-ore and coal suppliers and producers face paying about A$11 billion ($10.8 billion) in extra charges in the first three years of the mining tax passed by the lower house of Australia’s parliament yesterday.
The MSCI Asia Pacific excluding Japan Index declined 18 percent this year through yesterday, compared with a 5.5 percent loss by the S&P 500 and a 19 percent drop by the Stoxx Europe 600 Index. Stocks (MXAPJ) in the Asian benchmark are valued at 11.2 times estimated earnings on average, compared with 12 times for the S&P 500 and 9.8 times for the Stoxx 600.
To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net.
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Monday, November 21, 2011
Most Asian Stocks Fall on Failure of U.S. Debt Committee; Topix Pares Loss By Yoshiaki Nohara - Nov 21, 2011
Most Asian stocks retreated after the congressional committee charged with reducing the U.S. deficit failed to agree on cuts. Japan’s stocks pared losses after the yen fell against the euro and the dollar.
Toyota Motor Corp. (7203), the world’s biggest carmaker by market value, rose 0.4 percent, rebounding after touching its lowest intraday level since 1996 today. Santos Ltd. (STO), an Australian oil and gas producer, lost 0.9 percent after oil fell. OneSteel Ltd. slumped 9.1 percent in Australia after the firm’s chief executive officer said he won’t rule out shutting the steelmaker’s main plant.
The MSCI Asia Pacific Index rose less than 0.1 percent to 112.39 as of 11:21 a.m. in Tokyo after falling as much as 0.7 percent and rising as much as 0.2 percent.
“The U.S. deficit and its ratio to economic output won’t worsen much because $1.2 trillion will be cut automatically with or without an agreement,” said Masaru Hamasaki, who helps oversee the equivalent of $24 billion as chief strategist at Toyota Asset Management Co. in Tokyo. “In terms of market sentiment, it’s a different story. It’s not good they couldn’t make a decision”
To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Toyota Motor Corp. (7203), the world’s biggest carmaker by market value, rose 0.4 percent, rebounding after touching its lowest intraday level since 1996 today. Santos Ltd. (STO), an Australian oil and gas producer, lost 0.9 percent after oil fell. OneSteel Ltd. slumped 9.1 percent in Australia after the firm’s chief executive officer said he won’t rule out shutting the steelmaker’s main plant.
The MSCI Asia Pacific Index rose less than 0.1 percent to 112.39 as of 11:21 a.m. in Tokyo after falling as much as 0.7 percent and rising as much as 0.2 percent.
“The U.S. deficit and its ratio to economic output won’t worsen much because $1.2 trillion will be cut automatically with or without an agreement,” said Masaru Hamasaki, who helps oversee the equivalent of $24 billion as chief strategist at Toyota Asset Management Co. in Tokyo. “In terms of market sentiment, it’s a different story. It’s not good they couldn’t make a decision”
To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Sunday, November 20, 2011
India Searches Vodafone, Airtel Offices in Probe By Abhishek Shanker - Nov 20, 2011
India’s federal investigators indicted telecommunications carriers Vodafone India Ltd. and Bharti Airtel Ltd. (BHARTI) and conducted searches in a probe into alleged irregularities in allocations of mobile-phone airwaves.
Central Bureau of Investigation registered a case against three private cellular companies and two government officials for alleged irregularities in the grant of additional second- generation spectrum, causing a loss of about 5.1 billion rupees ($100 million) during 2001-2007, it said on its website.
Spokesmen at Bharti Airtel, India’s biggest mobile-phone company, and Vodafone India, unit of Vodafone Group Plc (VOD), confirmed the searches. The bureau also searched residences of Shyamal Ghosh, the telecom secretary in the federal government during 2001-02, and J.R. Gupta, then director at state-owned telecom company Bharat Sanchar Nigam Ltd., according to Dharini Mishra, a spokeswoman at the bureau.
The probe seeks information about possible malpractice in allocating spectrum during 2001-02 when Pramod Mahajan was the telecom minister under the National Democratic Alliance government led by Bhartiya Janta Party, the main opposition in the current government, Mishra said. Mahajan has been excluded from the case since he died, the bureau said.
“All our documents are in complete compliance with the governing laws and regulations,” Suresh Rangarajan, spokesman at Vodafone, said in an e-mailed statement on Nov. 19. “Vodafone India is completely co-operating with the officials and will provide them all the required details as part of their checks.”
‘Criminal Conspiracy’
Bharti Airtel’s spokesman Prem Subedi said the company secured all spectrum blocks as per the government policy.
“It has been alleged that the then-secretary in the ministry and another official entered into a criminal conspiracy with three beneficiary private companies and abused their official positions as public servants,” the agency’s statement said. “The public servants, with approval of the then minister of telecom took an alleged hurried decision on Jan. 31, 2002 to allocate additional spectrum beyond 6.2 megahertz in violation of the report of a technical committee.”
In a separate probe, India’s chief auditor said last year that former minister Andimuthu Raja in the Congress-led government and others conspired to grant licenses to unqualified companies for personal benefit, reducing state revenues by as much as $31 billion. The CBI put the loss at 220 billion rupees ($4.3 billion)
Investor Confidence
The scandal has weakened Prime Minister Manmohan Singh’s government, lowered investor confidence in the economy, paralyzed legislation in parliament and sparked nationwide street protests.
The government is cracking down on corruption as it’s under pressure from social activists and opposition parties to curb official graft and make a stronger anti-corruption law. The government may seek lawmakers’ approval for such a law in its winter session from Nov. 22 to Dec. 21.
“The government is only trying to use its powers to find answers for some tough questioning on corruption issues in the upcoming parliament session,” said N. Bhaskara Rao, chairman of the Centre for Media Studies. “It has no inkling in solving the issue and regaining investors’ confidence.”
To contact the reporter on this story: Abhishek Shanker in Mumbai at ashanker1@bloomberg.net
To contact the editor responsible for this story: Jim McDonald at jmcdonald8@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Central Bureau of Investigation registered a case against three private cellular companies and two government officials for alleged irregularities in the grant of additional second- generation spectrum, causing a loss of about 5.1 billion rupees ($100 million) during 2001-2007, it said on its website.
Spokesmen at Bharti Airtel, India’s biggest mobile-phone company, and Vodafone India, unit of Vodafone Group Plc (VOD), confirmed the searches. The bureau also searched residences of Shyamal Ghosh, the telecom secretary in the federal government during 2001-02, and J.R. Gupta, then director at state-owned telecom company Bharat Sanchar Nigam Ltd., according to Dharini Mishra, a spokeswoman at the bureau.
The probe seeks information about possible malpractice in allocating spectrum during 2001-02 when Pramod Mahajan was the telecom minister under the National Democratic Alliance government led by Bhartiya Janta Party, the main opposition in the current government, Mishra said. Mahajan has been excluded from the case since he died, the bureau said.
“All our documents are in complete compliance with the governing laws and regulations,” Suresh Rangarajan, spokesman at Vodafone, said in an e-mailed statement on Nov. 19. “Vodafone India is completely co-operating with the officials and will provide them all the required details as part of their checks.”
‘Criminal Conspiracy’
Bharti Airtel’s spokesman Prem Subedi said the company secured all spectrum blocks as per the government policy.
“It has been alleged that the then-secretary in the ministry and another official entered into a criminal conspiracy with three beneficiary private companies and abused their official positions as public servants,” the agency’s statement said. “The public servants, with approval of the then minister of telecom took an alleged hurried decision on Jan. 31, 2002 to allocate additional spectrum beyond 6.2 megahertz in violation of the report of a technical committee.”
In a separate probe, India’s chief auditor said last year that former minister Andimuthu Raja in the Congress-led government and others conspired to grant licenses to unqualified companies for personal benefit, reducing state revenues by as much as $31 billion. The CBI put the loss at 220 billion rupees ($4.3 billion)
Investor Confidence
The scandal has weakened Prime Minister Manmohan Singh’s government, lowered investor confidence in the economy, paralyzed legislation in parliament and sparked nationwide street protests.
The government is cracking down on corruption as it’s under pressure from social activists and opposition parties to curb official graft and make a stronger anti-corruption law. The government may seek lawmakers’ approval for such a law in its winter session from Nov. 22 to Dec. 21.
“The government is only trying to use its powers to find answers for some tough questioning on corruption issues in the upcoming parliament session,” said N. Bhaskara Rao, chairman of the Centre for Media Studies. “It has no inkling in solving the issue and regaining investors’ confidence.”
To contact the reporter on this story: Abhishek Shanker in Mumbai at ashanker1@bloomberg.net
To contact the editor responsible for this story: Jim McDonald at jmcdonald8@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Subscribe to:
Posts (Atom)
Posts
