• Satyam investors urge merger
• 9 new SEZ proposals despite slowdown
• SEBI to review FIIs’ KYC norms
• Winding up of companies for not paying interest
• Cheque bounce case only if payment is to discharge liability
• Karnataka decision on CST set aside
• Tax exemption on charity under scanner
• Exports may fall further in next six weeks: Ficci
• Ceiling on insurance cos’ management expenses may go
• SEBI questions SSNL action
• According to sources, Satyam Computer Services’ management and some of its institutional investors are exploring a merger with another software company and are reportedly in talks with Delhi-based HCL Technologies and Bangalore-based MindTree as the co. is facing threat of a hostile takeover by a domestic or overseas company, including PE firms. Satyam promoters’ stake has come down to little over 5%, after some institutional investors sold promoters’ shares pledged with them. Investors feel the co. is vulnerable because it has cash reserves of over Rs 5,500 crore. (BS)
• Govt is learnt to have received 9 fresh proposals for setting up SEZs despite the industry losing appetite for investment in the tax-free enclaves on lack of business confidence in these difficult times. The Board of Approval (BoA) will consider the new proposals, including those of infrastructure major Larsen & Toubro (L&T) and JSW Group on January 15. L&T proposes to set up another zone for information technology (IT) and information technology enabled services (ITeS) in Maharashtra. While JSW Group has proposed to set up an SEZ for aluminium in Andhra Pradesh. (BS)
• SEBI has decided to review its know your client (KYC) norms for FIIs. The move comes after Goldman Sachs got a clean chit last week in the May 17, 2004 stock market crash case while the other accused in the case, UBS Securities, was let off earlier. The clean chit to Goldman Sachs has put the spotlight back on the flaws in SEBI’s FII regulations, which were pointed out by the Securities and Appellate Tribunal (SAT) some time ago. (BS)
• Supreme Court has recently held in the case of Vijay Industries vs NATL Technologies Ltd, that interest payable on sum due would be a ‘debt’ and a winding up petition can be filed against the defaulting company. The judgment, settling difference of views expressed by various high courts on this question, explained that Section 433 of the Companies Act (winding up of companies unable to repay debt) does not state that the debt must be a definite sum. Failure to pay agreed interest or the statutory interest would come within the purview of the word ‘debt’. (BS)
• Supreme Court has recently held in the case Kumar Exports vs Sharma Carpets that a drawer of the cheque would be guilty of issuing it without sufficient funds in the bank only if he had to discharge a financial liability or debt, not otherwise. (BS)
• Supreme Court has set aside the judgment of Karnataka high court and granted central sales tax relief to A & G Projects & Technologies Ltd. The company was awarded three independent contracts by the Karnataka Power Transmissions Corporation Ltd.and the co in turn entered into four contracts with manufacturers and suppliers in Tamil Nadu. The Karnataka government imposed sales tax on goods coming from outside the state. The company claimed exemption under Section 3(a) of the Central Sales Tax Act (inter-state movement of goods), which was rejected by the state authorities. The high court held that the state could impose tax. On appeal by the company, the Supreme Court ruled that it was Tamil Nadu, not Karnataka, which could collect tax. (BS)
• Govt is closely scrutinizing accounts of large entities including non-governmental organizations and trade bodies, in order to curb the misuse of tax exemption given to charitable organizations, after it was found that some of them were allegedly indulging in commercial activities. The accounts of such entities will be closely scrutinized to check revenue loss. (Mint)
• According to a FICCI Survey, India’s exports are likely to further dip in the next six months with customers in the US and the UK looking for Indian goods with prices at par with those from Chinese players. The survey conducted on 367 exporters states that Indian exports are facing ‘meet the China price’ demand from across the market and there is fear that this would intensify in the months ahead,”. The country’s exports, which posted a robust 30.9% growth in the first half of 2008-09, contracted by 12.1% in October, the first such drop in the last five years. (Mint)
• SEBI has directed Sardar Sarovar Narmada Nigam to disclose the method for arriving at the redemption price to the holders of its deep discount bonds and “the justification of the said price in relation to prices at which investors have been transacting in the said bonds in the secondary market”, after the co decided to redeem the bonds prematurely following the state government legislation making redemption mandatory for all bonds by January 2009 at a deemed face value of Rs 50,000 per bond. Sardar Sarovar Narmada Nigam had issued these bonds in a prospectus dated September 29, 1993, without any mention of a call option and the bonds were issued at a discounted price of Rs 3,600 at an interest of 17 per cent payable in slots of 7, 11, 15 and 20 years. Thus, a bondholder could expect Rs 1,11,000 per bond after 20 years (in January 2014). (BS)
