Govt moves CLB to sack boards of two Maytas companies

NEW DELHI: A day after handing over Satyam probe to CBI, the government today moved Company Law Board (CLB) to supercede the boards of Maytas Infra
Maytas Properties, the two firms promoted by the kin of disgraced promoter of Satyam Computer B Ramalinga Raju. "In order to prevent further acts of fraud against the said companies (two Maytas companies) and to safeguard operations
of these companies in public interest, the government has moved the CLB to remove the existing directors of these companies," Corporate Affairs Minister Prem Chand Gupta told reporters this evening. The government, he said, has also requested the CLB to bar the existing board members of the two companies from becoming directors in any other company. In addition, Gupta said, the government is also seeking to restrain the present directors from disposing of properties. Pending the petition, which will come up for hearing on February 24, he said, CLB has been requested to "nominate government directors on boards of each company".
The government has already handed over the probe of the Rs 7,800-crore Satyam fraud case to the Central Bureau of Investigation (CBI). The government, Gupta said, has prayed to CLB to immediately restrain all the current directors from "alienating, mortgaging, creating charges or liens or interest in the properties, assets owned and/or controlled by them without the leave of CLB". According to a filing by Maytas Infra in the Bombay Stock Exchange, B Narasimha Rao has been appointed the additional director with effect from January 30.
The other directors, according to the company website, are R P Raju and B Teja Raju. The government, Gupta said, has moved CLB as there is a "strong possibility of the affairs of Maytas Infra and Maytas Properties having been conducted by its present management with fraudulent intent, causing breach of trust to stake holders of the company". The Minister added there was a persistent negligence by the boards in discharging the functions, which was proving detrimental to the business and operations of the companies.
Also ReadFollowing disclosure of fraud by former Satyam Chairman Raju, the government ordered probe by Serious Fraud Investigation Office in Satyam Computer and related companies including Maytas Infra and Maytas Properties. Before disclosure of fraud, Satyam wanted to acquire Maytas Infra and Maytas Properties for USD 1.6 billion, but the deal was aborted following protest by some shareholders.

Pak signs pact with Taliban, enforces Sharia law in Swat

ISLAMABAD: The Pakistan government and Islamic hardliners on Monday signed an agreement to enforce Sharia law in the northwestern Swat valley, a provincial minister told reporters.
Militants in the Swat Valley declared a 10-day ceasefire as a goodwill gesture ahead of the expected formal announcement of the agreement on Monday. Several past deals with militants have failed, but Pakistan says force alone cannot defeat al-Qaida and Taliban fighters wreaking havoc in its northwest and attacking US troops in neighbouring Afghanistan.
The United States has said the deals merely give insurgents time to regroup. Regaining the Swat Valley from militants is a major test for Pakistan's shaky civilian leadership. Unlike the semiautonomous tribal regions where al-Qaida and Taliban have long thrived, the former tourist haven is supposed to be under full government control. But militants have gained power since a peace deal last year collapsed within months, and violence has increased.
Provincial government leaders confirmed they were talking to a pro-Taliban group about ways to impose Islamic judicial practices in the Malakand division, which includes Swat. The Swat Taliban's version of Islamic law is especially harsh. They have declared a ban on female education, forced women to stay mostly indoors and clamped down on many forms of entertainment.
Also ReadTaliban spokesman Muslim Khan said the militants would adhere to any deal reached with the group if Islamic law is implemented in the region. He also announced the 10-day ceasefire. "We reserve the right to retaliate if we are fired upon," he said. "Once Islamic law is imposed, there will be no problems in Swat.
The Taliban will lay down their arms." Khan also said the militants had freed a Chinese engineer held captive for nearly six months. Long Xiaowei was freed on Saturday, days before a planned visit to China by Pakistani President Asif Ali Zardari. Provincial law minister Arshad Abdullah said the deal would require the pro-Taliban group to convince the militants to first give up violence. Then existing laws governing the justice system can be amended or enforced, he said.
"They have to succumb to law," Abdullah said. "They have to put down their arms." Past deals required militants to stop fighting but eventually unravelled amid militant complaints that the government was not meeting their demands.
The pro-Taliban group - known as the Tehrik Nifaz-e-Shariat Mohammedi, or the Movement for the Enforcement of Islamic Law - is led by Sufi
Muhammad, who Pakistan freed from custody last year after he renounced violence. Muhammad is the father-in-law of Maulana Fazlullah, the leader of the Swat Taliban. Muhammad, who has long agitated for Islamic law in the region, said that after the formal announcement he will go to Swat and ask Fazlullah and his men to lay down their arms.
A broad peace deal reached last year with Fazlullah's militants effectively collapsed within a few months, and Pakistani security officials blame that agreement for the militants' gains in Swat since then. The deal was supposed to let religious scholars advise judges in the courts, but the agreement encountered obstacles, said Mian Iftikhar Hussain, information minister for North West Frontier Province.
An Islamic judicial system is a concession to the insurgents, but it is also a long-standing demand of many civilians in the conservative region who are dissatisfied with the inefficient secular justice system.
Hussain noted that the Swat Taliban had responded well to the talks, but he warned that if "someone does not agree and does not adopt the way of dialogue, the government would be compelled to use force to establish its authority."
Pakistan has tried to avoid negotiating directly with militants, often using tribal elders as intermediaries.
Also ReadPakistan foreign minister Shah Mahmood Qureshi deflected concerns about a negative US reaction to the talks, insisting the country was reaching out to peaceful groups.
"We are not compromising with militants, instead trying to isolate the militants, and for that I do not think America will have any objection," he said.
Deteriorating security in the nuclear-armed country has included a string of attacks on foreigners.
UN officials said on Sunday they were still trying to establish contact with the kidnappers of an American employee seized Feb. 2 in the southwest city of Quetta. On Friday, John Solecki's kidnappers threatened to kill him within 72 hours and issued a 20-second video of the blindfolded captive.
It was unclear exactly when the deadline would expire, and UN officials said Sunday they were still trying to establish contact with the kidnappers, who identify themselves as the previously unknown Baluchistan Liberation United Front. The name indicates the group is more likely linked to separatists than to Islamists.

Market falls 3.4% as budget dashes stimulus hopes

MUMBAI: Indian equities ended with sharp losses Monday as traders unwinded long positions after the UPA government washed away expectations of a stimulus package in the form of interim budget. All the sectoral indices ended lower with metals, realty and banks being the worst hit.
Terming the budget as populist and aimed to woo voters ahead of general elections due by May, analysts said it had nothing in store for corporate India.
“It was a disappointing session for the market as nothing emerged from interim budget. Traders were expecting seven year tax holiday for gas producers but it didn’t happen. Reduction in corporate tax also didn’t materialise. These were the major setbacks. There is a possibility of weakness in energy stocks Reliance Industries, Cairn and ONGC and GAIL but broad based weakness is not expected. We expect the market to be subdued for next two-three sessions and then it will start following global markets,” said Satish Kannav, senior analyst, Arihant Capital Markets.
What emerged as a worry from acting Finance Minister Pranab Mukherjee’s budget was the expected rise in fiscal deficit to 6 percent of GDP in 2008-09 from a planned 2.5 per cent. This could keep away foreign investors, already wary of emerging markets.
Mukherjee projected a fiscal deficit of 5.5 per cent in 2009-10 but hinted at a rise as government spending may jump later this year to shield the economy from a global slump and stem job losses.
The Bombay Stock Exchange’s Sensex ended at 9,305.45, down 329.29 points or 3.42 points. The index fell to a low of 9,279.10 from a high of 9,637.04.
National Stock Exchange’s Nifty lost 3.39 per cent or 99.85 points to 2848.50, falling from a high of 2953.20. The low was 2839.10.
Secondline stocks were equally affected, with the BSE Midcap Index ending 2.93 per cent lower and BSE Smallcap Index losing 2.1 per cent.
“As long as the market holds support at 2850/9300-9400 (Nifty/Sensex), strong hands will absorb the selling and will help to remain aligned with global markets. Weak hands created shorts at higher levels on temptations but it will be wise to wait for the next two sessions to ascertain whether the market has actually entered a downturn,” Kannav added.
Sectorwise, BSE Metal Index, down 4.75 per cent, was the worst hit, followed by BSE Realty down 4.58 per cent, BSE Bankex down 4.58 per cent and BSE Capital Goods down 4.55 per cent. Jaiprakash Associates (-7.88%), Reliance Infrastructure (-6.35%), ICICI Bank (-5.79%), Reliance Communications (-5.78%) and Larsen & Toubro (-4.96%) were the major Sensex losers.
I T C, up 0.95 per cent, was the only Sensex gainer.
Elsewhere, European stocks were in the red tracking Asian peers while US stock markets are shut for President’s Day.

Budget Highlights

Rs 11,842 cr allocated to Jawahar Nehru Urban Renewal Mission
Food, fertiliser, petroleum subsidies to go up
Allocation of Rs 14,1703 cr for defence sector
Rs 4,900 cr allocated to Bharat Nirman Scheme
Rs 8,300 cr for mid-day meal scheme
Rs 1,200 crore for Total Sanitation Programme
Rs 6705 cr allocated for child development schemes
Tax collections in 2008-09 to exceed that of 2007-08
FY09 fiscal deficit seen at 6% of GDP vs 2.5 %
Tax collections down by Rs 60,000 crore over estimates
Plan expenditure revised to 3 lakh crore
Revenue deficit revisied at 4.4% of GDP
Custom duties rates steadily reduced in UPA rule
Tax collection to increase in 2008-09
Govt expenditure estimate revised to over 9 lakh crores
Pranab Mukherjee resumes Interim Budget speech
Kerala MP falls ill; session adjourned for 10 minutes
Part of NIF proceeds also to be used for capital investment
PSU turnover up 84%
Centre has pumped in Rs 652 cr into Regional Rural Banks
Personal Income tax structure has been rationalised
Tax rates must fall during the time of crisis
Turnover of PSUs rose by 84% in 2003-08
Young widows to get priority in ITI admissions
The RIDA corpus was hiked from Rs 5,500 to Rs 14,000 cr
Indira Gandhi National Widow Pension Scheme for widows
Govt to provide subsidy to farmers in 2009-10
Six new IITs started in 2008-09
Educational loan schemes revised
2 new IITs in MP and Rajasthan in 2009-10
Rs 65,300 crore in loans loans waived off for farmers
Industrial production fell by 2 pct in 2008 on a YoY basis
Govt took prompt stimulus packages to curb slowdown
Allocation to agriculture increased by 300%
Outlay for higher education increased 900 per cent
Govt took prompt stimulus packages to curb slowdown
Govt approved 37 infrastructure projects
Tax to GDP ration risen by 12.5%
60.12 lakh houses built under Indira Awaas Yojna
Highest priority to rural development
Per Capita income grew by 7.4% in UPA regimen
Agri revival package implemented in 25 states
Employment generation schemes to be expanded
Economic growth has to be sustainable and inclusive
Manufacturing and agriculture sector are the growth drivers
FRPM targets being relaxed
Export growth for the first 9 months of the current year down to 17.1%
Export growth slowed down to 17.1% for the last 9 months
Export growth at 26.4% annually in the last 4 years
Government has approved 37 new infrastructure projects
Serious chocking of credit due to global downturn
Export growth at 26.4% annually in the last 4 years
India second fastest growing economy at 7.1% growth
Agriculture annual growth rate 3.7%
Savings rate up to 30.7% in 2008
Farmers real heroes of our success story
Investment rate has grown to 39%
Fiscal deficit down by 2.7%
Focus to maintain growth rate of 7-8%
After a popular Railway Budget by Rail Minister Lalu Prasad Yadav, the government is all set to present the Interim Budget. Ahead of the general elections, UPA government's interim Budget is likely to provide more focus on sectors like rural development and infrastructure facilities like roads and ports.
Highlights of Railway Budget - 22% more capacity in passenger trains. Two per cent fare cut across the board. 43 new trains to be introduced in FY-2010.
With the government focusing on ways to battle slowdown by providing stimulus to the industry, some of the sectors like the higher education and the health are likely to be pushed to the back-burner in the interim Budget.