RNRL moves SC, wants gas supply from RIL as binding

Anil Ambani group company RNRL today moved the Supreme Court seeking modification in the Bombay High Court order to make binding the gas

supply from Mukesh Ambani-led Reliance Industries.

RNRL moved the Supreme Court two days after RIL said it would move the apex court on the Bombay High Court order that upheld Anil Ambani group's plea for 28 mmscmd of gas at a rate of USD 2.34 mmbtu but asked the two sides to negotiate an agreement for this.

"After categorically ruling in our favour, court cannot ask us again to sit down with a party which is not willing to sit across...not now, or even in the past," Reliance Natural Resources lawyer Mukul Rohatgi told reporters her.

He said a special leave petition has been filed challenging the last part of the high court order asking RNRL to "again negotiate" after "ruling in our favour in terms of price of gas, tenure and quantity"

Premji sends legal notice to board and former directors of Subhiksha

The Azim Premji-owned Zash Investments has upped the ante in its dispute with the board of troubled retail firm Subhiksha by

sending a legal notice to all its current and former directors over their alleged failure to perform their duties.

Zash, which owns 10% of Subhiksha, has said that the directors, including those belonging to ICICI Venture, another leading shareholder, did not fully probe the retail firm's financials and did not provide proper numbers when Zash bought a stake in the company last year.

The move threatens to further derail Subhiksha's attempts to extricate itself from an overdose of debt and unwise investments. At the heart of the dispute is Zash's purchase of 10% in Subhiksha from ICICI Venture in 2008 for Rs 230 crore. A few months after the deal, Subhiksha ran out of cash and asked its banks to moderate its debt obligations. It also shuttered all its 1600 shops across the country and could not pay its salaries. Zash is now demanding answers, saying that it was misled on the true financial position of Subhiksha.

Zash's move could also complicate matters for Subhiksha in another respect. A dispute between its shareholders (Zash and ICICI Venture) is the last thing the beleaguered retail company wants. Attempts to restructure its loans through a corporate debt restructuring programme is proceeding slowly after bankers rejected a set of proposals put forward by the company.

It is not known if Zash will follow through and actually take the directors to court. A courtroom battle is in the offing if Zash, ICICI Venture and Subhiksha don't resolve the issue soon. The notices have been sent to Rajeev Bakshi, joint managing director of ICICI Venture, Renuka Ramnath, former managing director of ICICI Venture who quit the firm a few months ago, independent consultant Rama Bijapurkar, former LIC chairman SB Mathur and Kannan Srinivasan, professor at Carnegie Mellon University. Bijapurkar, Srinivasan and Mathur have quit the Subhiksha board.

An official of Zash, the personal investment vehicle of Wipro chairman Azim Premji, confirmed that legal notices have been sent; a director of ICICI Venture, the country's largest domestic private equity firm, confirmed the receipt of a notice but declined to elaborate further.


Mr Subramanian, the promoter of Subhiksha, has not received the notice while Mr Mathur refused to discuss the subject. "Premji Invest feels that the liabilities of every board member be fixed for the collapse of the retail chain. No member, either ICICI venture nominee or independent directors, can actually plead innocence, as they were in the control of the company before it collapsed," an official of Zash said. "Premji Invest will go after everyone, who mislead it in buying a stake in the company," he added.

Zash, which bought a 10% stake in Subhiksha Trading Services for a consideration of Rs 230 crore from ICICI Venture last year, alleges that ICICI Venture kept them in the dark over the retail firm's financial problems.

Even in its petition opposing Subhiksha's merger with Blue Green Constructions and Investments (filed in February), Zash alleges that being a minority stakeholder it did not have any board representation and depended entirely on the representation made by the Subhiksha Board when it consented to the scheme of amalgamation of the two entities in July 2008.

It goes on to add that it was as late as December 2008 when it first came to know of the financial position of Subhiksha resulting in non-payment of salaries and PF dues to employees. It was in December only that it was made aware of the loans ICICI Venture had "provided the transferor company (Subhiksha) loans in September to tide over the financial crisis of the transferor company".

In a media update on Thursday though, Mr Subramaniam claimed the CDR process was on track. "Twelve of the 13 bank lenders together with the 3 major shareholders are presently thrashing out the contours of the debt restructuring as well as the funds infusion into the company to revive operations... It has been agreed between the various stakeholders that considering the existing debt levels the entire revival will be equity financed so as to put the company on a sound footing." He went on to add that out of the 13 bank lenders, only Kotak Mahindra Bank had chosen to go legal. The six banks participating in the CDR as well as the remaining six have all been working together on the revival package.

Subhiksha owes Rs 750 crore to 13 banks and has said that it needs another Rs 300 crore to get it operations back on track. Subhiksha is also facing a spate of litigations at the Madras High Court — a winding up petition filed by Kotak Mahindra Bank and HCL Infosystems, petitions against the merger of Subhiksha and Blue Green filed by a clutch of investors including ICICI Venture, ICICI Bank and Kotak Mahindra Bank.

Infosys to bid for unique identification card project

Infosys Technologies will bid for the ambitious unique identification card project, which a state-run authority would initiate under

the chairmanship of its former co-chairman Nandan M. Nilekani, a top official of the IT bellwether said on Friday.

"We do bid for e-governance projects and continue to bid. We will bid for this project too," Infosys chief executive and managing director S. Gopalakrishnan told IANS here.

"We have done a couple of e-governance projects, including one for the income tax department. We have three such ongoing projects. We will bid for many," he added.

Ruling out conflict of interest as Nilekani heads the project with a cabinet rank, Gopalakrishnan said the company and its former co-chair would make sure everything was handled with the highest level of integrity and transparency.

"Infosys will make sure we participate in the project by maintaining a high level of integrity. I am sure Nilekani will ensure the (bidding) process is transparent," Gopalakrishnan said on the margins of a Confederation of Indian Industry (CII) southern region conference.

Though the global software major had no estimate of the project cost, it said it was aware of the project's benefits to the government as well as the people.

"We don't have any estimate of the project. It is a humungous project. We know that it is a project when implemented will help make many of the government programmes much better," Gopalakrishnan said.

"It will also make sure the government grants reach the right people. It will also make sure the security of the country is in safe hands."

The project, to be implemented by the Unique Identification Authority of India (UIDAI) as an entity of the Planning Commission, will create unique identification cards to all citizens by 2011.

Initially, the cards will be assigned to all voters by building on current electoral roll data.

The novel smart card will eliminate the need for multiple identifications such as an electoral card, ration card, driving license and PAN (permanent account number) card.

Elated over Nilekani's new role, Gopalakrishnan said the company and its employees were glad that its co-chairman was given the opportunity to take up such an onerous responsibility.

"We are quite confident that given Nilekani's breadth of knowledge and capabilities, he will do a wonderful job as he has a vision and can conceptiualise in what needs to be done. He is a consensus man. He knows how to bring people together," Gopalkrishnan said.

As deputy chairman of CII's southern region, Gopalakrishnan hoped the union Budget for 2009-10 would allocate more funds for e-governance projects.

"My request has been to increase state spending on e-governance as it will improve the citizen services and help the domestic IT industry in these times of downturn. I have been pitching for more allocation and spending on e-governance," he added.

Cautious but few willing to go short before Budget

At least seven out of 10 people on Dalal Street are bearish/neutral on the market. The general perception is that valuations have become
pricey, and those with high expectations from the Budget will be in for a major disappointment. And though bears clearly outnumber bulls at this stage, a steep correction in stock prices before Budget seems unlikely, say market watchers. That is because bears are unwilling to back their words with actions this time around, having suffered heavy losses in the week, following the election results.

An immediate fallout of this approach is that bulls are finding it difficult to rollover their long positions in the futures segment, to the July series. In a rollover, traders square-off their current month positions, and take up an equivalent position in the next month series. "Liquidity is tight in the July series (of futures); clearly there aren't enough traders willing to go short on the market," said a dealer at an institutional brokerage.

In the run-up to the elections, most traders had sold short in anticipation of a hung Parliament. Their bet was that stock prices would crash after the election results were announced, allowing them to make a neat profit by buying back their positions at lower levels. But with the verdict clearly in favour of the UPA, markets surged in the following weeks. Bears suffered bruising losses, as they were forced to cover their positions at prices way above they had sold at.

"Bears are very cautious this time after last month's experience," says Birla Sunlife Insurance chief investment officer Vikram Kotak. Mr Kotak expects the market to find support in the 12000-13000 band, but does not expect it to cross 16000 anytime soon.

Brokers said some of the leading market operators have unwound their long positions over the past one week, but are not going short on the market. And it is not just traders who are treading carefully. Brokers say fund managers too are wary of booking profits before the Budget, unless a stock is hopelessly overpriced.

Most fund houses had to book profits in the run-up to the election results, and ended up severely underperforming their benchmark indices when share prices soared later. But while they are not selling actively, they are not loading up on shares either because of concerns over valuations. "Rising momentum has been picking up since the May 18 general election, but we think the recent high marks the entry of the index into a near-term peak zone. We think the near-term rising wave will hit a wall at 15830 or at 16620 at best, and the transition to a correction phase will take place again through July-August or November," says a note by brokerage house Citi.

Swine flu toll leaps past 52,000, 231 dead: WHO

wine flu has infected more than 52,000 people in 100 countries and territories and killed 231 people since late March, the World Health Organisation (WHO) reported today, a sharp rise in the toll.

There have been an extra 7,873 cases and 51 more deaths since the last toll released by the UN health agency on Friday.

The United States led a group of countries that have seen dramatic increases in cases of the A (H1N1) virus.

There were an extra 3,594 cases to a total of 21,449, 87 deaths, in the United States, 1,190 more cases in Chile (4,315), where there have been four deaths and 805 extra cases in Canada, with 5,710 infections, including 13 deaths.

Britain remains the worst-hit country in Europe. It has recorded 754 extra cases taking its total to 2,506, including one death.

In Australia, there are 237 extra cases at 2,436, with one death. In Japan, there are 160 more cases at 850.