Should you take that insurance policy?

A couple of weeks ago, an old friend of mine wanted help regarding his investments. While he was comfortable with a wide range of products, insurance was a strict no for him. His argument was “why should I make my widow richer than wife?”. It’s an argument I come across often particularly from those who have built wealth through aggressive stock picking or mutual funds. Their argument is: why bother about insurance when the same money can be used to earn 25-30% returns!
Much of the criticism against insurance is also due to the fact that it has been sold rather than the investor asking for it. The fact that every investor ends up getting at least one call a month from an agent doesn’t help matters much. As a result, most insurance policyholders have been sold a policy according to the selling techniques of the agent and needless to say, most policyholders are not aware of their policy details. However, the time has come for investors to change a few things about their thoughts on insurance and here is why.
To start with, most of us have been steadily increasing the balance on our liability account. Unlike our parents or grandparents who believed in spending out of their income, the current generation has been partly funding its spending. As a result, an average Indian middle class family will have a combination of loans in its portfolio ranging from home loans to car loans to personal loans. Even if some one manages to keep away from these loans, he is sure to carry a small liability on his credit card. While the individual may have the regular source of income to clear his dues over the long term, an unexpected event such as death could change the picture and the family could end up with a loan bag of a few lakhs of rupees.
Many argue that they have enough in the kitty to take care of the family over the long term in the form of property and bank balance and hence don’t need to set aside cash for an insurance policy. However, many don’t realize that a few thousands of rupees can help the individual’s family from using up long term assets. Take the case of a 45-year old individual who is sitting on a loan of Rs 30 lakhs borrowed to invest in a property which at present costs around Rs 45 lakhs. Let us assume that the individual has invested in the property only a couple of years ago and hence there is not much change in the loan figure. As you are aware, the principal amount comes down in a small way during the first few years of the loan tenure.
Now, let us assume that the individual has not made an effort to go in for the required insurance cover and on the other hand, is happy with the Rs 5 lakh cover (which was forced upon by him during the early part of his career by his insurance agent uncle). He had kept away from insurance on the pretext that there wasn’t much liquidity after paying home loan EMIs. Because of the property investment, even his investment portfolio was not impressive and he could manage to build a liquid asset portfolio of only a couple of lakhs.
Consider an event where the above individual meets up with an accident and suffers untimely death. Now the burden of loan repayment falls on the spouse who does not have a regular source of income. Property being the only asset, she is forced to sell it to cover up the dues. In addition, she has to worry about the future of two children who would take at least a decade to provide regular source of income to the family. From a situation of comfortable living with own property and a healthy bank balance, the family is forced to worry about debts and future living due to lack of planning.
The individual could have saved the trouble of sale of property for his family if he had set aside around Rs 25,000-30,000 towards a term insurance plan. If you break that into monthly component, the cost works out to around Rs 2,500 per month. Surely, it is not a big sum to protect a property which is worth Rs 45 lakhs and ensure a peaceful future for the dependants?

Telecom outsourcing deals under Trai lens

New Delhi: The Telecom Regulatory Authority of India (Trai) has started monitoring changes in the contractual agreements of operators to ensure that they do not adversely impact the annual licence fee earned by the government and follow licence conditions.
The government gets part of the revenue earned by operators as licence fee under the revenue-sharing agreement with operators.
The regulator is currently monitoring the restructuring deals of at least three key companies — Bharti Airtel's outsourcing agreements, Reliance Communications' dual company structure, and Tata Teleservices' contract with Virgin Mobile.
The regulator is also planning to closely look at the new trend of operators spinning off their tower businesses and assets into separate companies. Trai Chairman Nripendra Misra said: "These are not probes or investigations but we are definitely monitoring.
We are not distrusting companies but we must monitor changes." Misra added, "New companies for the tower business are being formed, the assets are being transferred to them, a sharing formulation will come up and we want to understand what is the relationship that will develop (between the parent company and the tower company).
We want to ensure that it does not affect the annual licence fee as various issues on transfer pricing come up." Taking the example of the structure of the Reliance Anil Dhirubhai Ambani Group telecom business, Misra said it has two companies, one that owns the network assets and the other that is responsible for all the recovery receipts and billing."We are looking at who owns the subscriber, whether the billing was going in the name of the parent company or the contracted company with whom they have a relationship, what is the compensation being paid by the parent company to the second company and is that compensation realistic," Misra explained. Misra said they have already had three preliminary meetings with the company and there is nothing that the regulator has been able to pinpoint.
Giving another example, Misra said that they are also looking into the structure of the Bharti Airtel outsourcing dealwith Ericsson, which maintains their networks. "Networks are being maintained by others now and we don't even know whether the import of the equipment has come through the outsourced company or come through the parent company. That is what we want to know," he said.

IPOs unpopular with firms

Mumbai: Infrastructure construction company Rithwik recently opted for a private equity investor (Baring Asia) as against an initial public offer (IPO) for its fund requirements.
Though the Hyderabad-based company had filed its draft red herring prospectus (DHRP) with the Securities and Exchange Board of India (Sebi), it changed its decision to go ahead with the process because of volatile stock markets and the resultant impact on its valuations.
Rithwik is not an isolated case. There are a host of companies that have filed the prospectus with the capital market regulator, but have chosen against it. According to the norms, a company has to come out with its public issue within 90 days of its prospectus being approved by Sebi. If it fails to launch the IPO within the stipulated time, the approval lapses and the company has to restart the exercise.
According to Delhi-based Prime Database, a company that tracks the developments in the primary capital market, Acme Tele Power (Rs 1,200 crore), Pride Hotels (Rs 250 crore), Vascon Engineers (Rs 350 crore), TCG Lifesciences (Rs 175 crore), Surya Foods & Agro (Rs 136 crore), Neel Metal Products (Rs 125 crore) and Prince Foundations (Rs 300 crore) have received the Sebi approval, but have not tapped the market.
When markets are topsy-turvy, everyone, including the companies' management, merchant bankers, retail and institutional investors, chickens out.
"It's the question of valuation and whether the market is willing to take it. It also depends on how keen the company is in raising funds through the IPO, the opportune time and the urgency to list it," said a senior executive of a leading investment bank, who is currently doing road shows for companies to assess the appetite of financial institutions for IPOs, which has dried up substantially in recent times.
The support of well-known institutional investors, to a large extent, boosts the success rate of an IPO.
Bankers opine that not only retail investors, but even institutional investors are very cautious about investing in this market condition.
However, there are exceptions too. Companies with smaller issue sizes were brave enough to come out with their issues and did meet with decent subscription.
For instance, Gokul Refoils and Solvent, Anu's Laboratories and Aishwarya Telecom sailed through the IPO market quite comfortably.
Consider this: 2007 saw 100 companies raising Rs 34,179 crore from the primary market, but during the four months of 2008, 18 companies have raised about Rs 14,908 crore.
"IPOs can be typically floated only in a stable or a buoyant secondary market. First the market crash in January this year and then huge volatility thereafter have made most issuers wary.
"The issuers expect higher value, but the market is in no mood to accept it, given the present depression. As many as 24 companies have currently got the Sebi approval and, in good times, they would have immediately rushed to the market. Given some stability in the market, the good news is that at least some of these, including UTI Asset Management, are now gearing up with their plans to hit the market," said Prime Database CMD Prithvi Haldea.

Bharti Airtel, SingTel plan funds for MTN buy

Mumbai: Billionaire Sunil Mittal, the founder of Bharti Airtel, plans to set up a separate company in partnership with Singapore Telecommunications (SingTel) that will be the vehicle for acquisition of the South Africa-based MTN Group, according to sources close to the deal.
The special purpose vehicle (SPV) will raise funds, including bridge loans. The company will later explore the option of selling American depository receipts (ADRs) or global depository receipts (GDRs) to repay the bridge loan, the sources said. Indian firms, including Tata Steel, in the past have formed SPVs to acquire foreign companies to protect local operations and also to avoid legal hindrances. The SPV may be registered in a tax-haven country, like Mauritius or Bahamas, the sources said.
The move to float an SPV will help Bharti Airtel to continue being listed on Indian stock exchanges, while MTN's promoters will be given a stake in the SPV. The quantum of the stake will depend on the cash-share ratio, which is yet to be finalised between Bharti and MTN. Bharti Airtel would raise funds by diluting the equity of the SPV and, if needed, the promoters' stake in Bharti and that of its partner SingTel to part-finance the deal.
Airtel may have to go for an open offer — merger or acquisition of over 35 per cent stake triggers an open offer in South Africa — and merge the companies' selected businesses into the SPV. As the effective foreign direct investment in Bharti Airtel is about 68 per cent (it should not exceed the 74 per cent limit set by the government), MTN would not be offered a stake in it. However, in Bharti Telecom, the foreign holding is only 42.8 per cent — SingTel holds 32.8 per cent, while Vodafone holds 10 per cent.
Thus, the SPV will be a subsidiary of Bharti Telecom and a stake in it will be offered to MTN promoters, said sources. Bharti Telecom owns a 45.31 per cent in Bharti Airtel, of which the Mittal family holds around 26 per cent. The MTN management holds over 13.3 per cent in MTN through Newshelf664. Lebanon's Mikati family owns 9.8 per cent stake.
"In return for the equity given to Bharti, the promoters of MTN will get cash and stake in the SPV. The Indian telecom major will pay the cash for the stake held by public and financial institutions. Bharti Airtel is looking at raising a bridge loan of around $15 billion for the cash portion of the deal. The remaining amount will be raised through internal accruals and fresh issue of Bharti's and the SPV's shares," banking sources said.
To initiate the merger move, Bharti Airtel executives are expected to hold talks with financial institutions and foreign institutional investors, who hold stakes in MTN. The move is to win the confidence of investors in the wake of counter-takeover offers from other players, like UAE-based Etisalat.
When contacted, a Bharti Airtel spokesperson said: "We have already issued a statement and have nothing further to add to our last statement." At this stage, MTN is not commenting further than the cautionary announcement released on May 5, 2008," an MTN spokesperson said.
Cost-sharing, co-branding, marketing, operations (existing and new), human resource sharing and employee relocation to other countries, among others, would also be conducted through the SPV. As equipment and software purchases are huge for telecom companies, the merger would give joint bargaining power to Bharti. "The SPV would also look at listing on the New York Stock Exchange, where valuations of telecom companies are relatively higher," said a source.The SPV would also be the vehicle for the Bharti Airtel-MTN combine's future acquisition plans in the US and Europe.

RIL offers largest employee stock option

Mumbai: Riding the construction of a new refinery and several retail outlets, Reliance Industries Ltd (RIL) is turning a new leaf in the area of people management. During the last fiscal, it rolled out the largest ever employee stock option scheme (ESOS).
All told, 14,000 employees, constituting roughly 29.1 per cent of the total employee strength, have become the company’s shareholders through this scheme.
The company granted 2.97 crore options to its employees in three tranches in 2007-08, according to the company’s annual report released last week.
This is one of a string of measures that the company has put in place to nurture talent in an organisation that’s facing a huge shortage of manpower to deal with its expansion plans.
The company, which is expanding in high-growth areas including retail and energy, is facing a job market where competition to retain people is becoming increasingly difficult. In early 2007, RIL subsidiary Reliance Retail had rolled out a series of measures to retain its top brass.Under the new plan, RIL is taking a complete re-look at its existing human resource (HR) processes.
Hewitt Associates, a US-based consultant, has been appointed to shape up the new HR strategies. Once Hewitt completes its work, new performance management guidelines and career opportunities will be put in place.“The main objective being to take a re-look at the existing processes and benchmark with the best in each area and work towards going beyond,” said the RIL annual report.
Another overseas consultant, The Hay Group has recently completed job evaluation exercise for employees at RIL’s petrochemicals business. This will shortly be extended to other divisions. The Hay Group’s mandate includes, among other things, restructuring of employee hierarchy.
Attempts are being made to create a talent pipeline. For the refinery, RIL has been training a total of 1,700 carpenters, fitters and plumbers in Jamnagar. “We recruit people for our construction team and train them on soft skills,” said a Reliance official familiar with the development, who requested anonymity as he is not authorised to speak to the press.
The company has also hired 1,500 engineering graduates to cater to demand for its expansion plans. For the first time, a business management trainee (BMT) scheme was launched in the last financial year. “This will be an on-going annual initiative,” the annual report stated.

An Indian cabbie was brutally beaten by two men in Adelaide who allegedly also stole his taxi in a second such incident in the past three weeks.

NEW DELHI: TV viewers fed up with bad signal reception are set to get more choice, with Anil Ambani group company Reliance Communication on Sunday announcing the road map for launching competitively priced Direct-To-Home (DTH) services across 4,000 towns in the next few weeks.
The company has already completed trial runs across 2,400 towns and the service, under the brand name, Big TV DTH. The service is currently available for customers of other DTH operators for just Rs 1,000, compared to nearly Rs 4,000 being charged by existing DTH operators.
The company claims that as of April this year, it had a subscriber base of 40,000. Reliance, however, is offering the service at a monthly price of Rs 325, which includes Rs 100 worth free "pay per view" content, and is hoping to make a dent in the customer base of existing operators with aggressive pricing strategies.
Asked about the commercial launch of services, a spokesperson declined to comment, but said: "The DTH offering under the Big TV brand would be launched during the course of few weeks."

Mukesh Ambani's pay cheque is over Rs 44 cr

NEW DELHI: Top business house Reliance Industries has given its chief Mukesh Ambani, the country's richest person and presumably top-paid executive, a hefty pay hike of about 45 per cent to take his annual remuneration to over USD10 million.
Mukesh Ambani, Chairman and Managing Director of Reliance Industries, got a total payout of Rs 44.02 crore in financial year 2007-08, marking an increase of about Rs 13.5 crore from the previous fiscal. In fiscal 2006-07, Ambani's annual remuneration had increased to Rs 30.46 crore, from Rs 24.77 crore previously.
However, a large part of Ambani's full-year pay cheque comes in the form of commissions that the company pays to select executives as a ratio of its net profits.
According to the company's annual report being sent to shareholders, Ambani got a salary of Rs 60 lakh (Rs 5 lakh per month) and another Rs 48 lakh (Rs 4 lakh per month) in the name of "perquisites and allowances".
In addition, he got Rs 18.75 lakh under the head of "retiral benefits" and Rs 4,275.44 lakh toward commission on net profit, taking his total to Rs 4,402.19 lakh for 2007-08. RIL Chief was the top-paid executive in fiscal 2006-07, followed by Madras Cement's Chairman and MD P R R Rajha, who had an annual payout of about Rs 24.8 crore.
However, Ambani, who was ranked as world's fifth richest by Forbes magazine earlier this year with a net worth of USD 43 billion, may not find a place even among the 200 most paid chiefs globally. In a separate list, Forbes named Oracle's CEO Larry Ellision at the top of 500 most paid CEOs in the US with a pay cheque of USD 192.9 million. A total 177 CEOs in the list had a salary of over USD 10 million. It is not yet clear whether Ambani would be highest paid executive in India for 2007-08, as most of the companies are yet to disclose the remuneration figures for that year.

Microsoft proposes alternative deal to Yahoo

SEATTLE: Microsoft Corp said on Sunday it has proposed an alternative deal to Yahoo Inc, rather than a full acquisition, in a move that could save the web pioneer from fighting a proxy battle with financier Carl Icahn. "Microsoft is considering and has raised with Yahoo an alternative that would involve a transaction with Yahoo but not an acquisition of all of Yahoo," the company said in a statement without clarifying what that alternative might be.
Microsoft emphasized it was not proposing to make a new bid to buy all of Yahoo, after recently being rebuffed, but could reconsider. Yahoo said in a statement later on Sunday that it continued to consider a number of strategic alternatives and was "open to pursuing any transaction which is in the best interest of our stockholders".
The company's board will "evaluate each of our alternatives, including any Microsoft proposal, consistent with its fiduciary duties, with a focus on maximizing stockholder value," Yahoo said in a statement. It added that it had confirmed with Microsoft that it was not interested in "pursuing an acquisition of all of Yahoo at this time". Analysts were split on the benefits of an alternative scenario to a full-fledged takeover.
"I definitely think an alternative deal is better than a full a acquisition," said Toan Tran, analyst at Morningstar. "It is positive for both companies, because you are getting the benefits of a Yahoo acquisition without the negatives namely the integration risks." But Kim Caughey, a senior analyst at Fort Pitt Capital Group, said the market will probably send Yahoo shares higher while pushing down Microsoft shares when the market opens on Monday.
Caughey said a joint venture or minority investment with Yahoo could cause confusion about who was in charge. "Microsoft walking away from Yahoo was a total head fake," said Caughey. "Microsoft is a terrible poker player if it thought people were going to believe that the deal was dead." The New York Times reported that Microsoft and Yahoo may form a partnership or joint venture for search-related advertising to take on Google Inc, which dominates the search market with a share significantly larger than a combined Yahoo and Microsoft. For its part, Yahoo continues to talk with Google Inc about a search advertising partnership and a deal could come as early as this week, a source familiar with the talks said on Thursday.
The statement from Microsoft comes on the heels of a proxy campaign launched on Thursday by Icahn to replace Yahoo's board with directors who would reopen talks with Microsoft, saying Yahoo had acted irrationally in refusing the giant software company's $47.5 billion bid

Microsoft walked away from its pursuit of Yahoo two weeks ago after three months of negotiations when Yahoo's board rejected Microsoft's sweetened offer of $33 a share, saying the company was worth at least $37 a share. Meanwhile, Microsoft and Icahn have not held discussions about Yahoo, said another source close to the company.

A spokesman for Yahoo declined to comment and Icahn could not be reached for comment. In a letter to Icahn last week, Yahoo board Chairman Roy Bostock said a new board would not be in the best interests of Yahoo investors, adding that Yahoo would consider any deal from any party, including Microsoft, if it offered the company full value. Icahn, who has said he had accumulated 59 million shares and options in Yahoo, also has the support of Paulson & Co, a $30 billion hedge fund that has amassed a 3.4 percent stake in Yahoo, and other investors upset by the board's handling of negotiations with Microsoft. Microsoft had said it had moved on from Yahoo and remained committed to building an online advertising powerhouse to rival Google. Company executives had said in making a case for a Yahoo acquisition that buying the web company would be the fastest way to close the gap on Google.

In an e-mail to employees on Sunday, Kevin Johnson, president of Microsoft's platform and services division, said the company must strengthen its online business regardless of how talks with Yahoo turn out. "The fact is that we are not where we want to be in this business yet and we've been in this position longer than we'd all like," Johnson wrote in the e-mail.

Bilimoria plans Cobra Beer sale

LONDON: Karan Bilimoria, prominent Indian- origin entrepreneur, is considering the sale of his multi-million pound Cobra Beer empire that he began from the back of his car in 1989. According to marketing documents prepared for financial institutions, the company's sale is expected within the next three years.
Cobra Beer has grown into a major company that has a significant market share in the UK as well as in India, in the last 18 months it has struck deals with nine regional brewers and has acquired a majority stake in another.
The documents identify companies: SABMiller, InBev, Molson Coors, Carlsberg and Anheuser-Busch as "obvious buyers" with others such as Heineken, Kirin and Indian-owned companies also "possible buyers".
The Sunday Telegraph today reported that Cobra is trying to secure £13 million from investors to help fund its rapid expansion in India.
Bilimoria said: "It's a very likely option that someone comes along and makes us an offer we cannot refuse. I am not saying I am definitely going to sell the company. What I am saying is that definitely within three years we will have to have a major event."
He pointed SABMiller's acquisition of Foster's Indian operations in 2006 as an indication of the interest that the leading international brewers have in the fast growing Indian market. Cobra is reported to be using investment bank N M Rothschild and City Capital Corporation, an advisory firm, to help it find new investment.
The company's revenue grew 34% last year. This year it expects 44.4 million pounds in sales and is aiming to touch 100 million pounds by 2009. Much of the company's growth is expected to come from India. Cobra sold 4.1 million cases of beer worldwide last year, with 23% of its sales in India. Bilimoria said to the newspaper that his King Cobra strong beer and milder Cobra Premium would double their Indian sales this year.
"As we continue to grow we are becoming more and more valuable, particularly because of growth in India," he said. "We are brewing in nine locations and we now own a brewer.
Our sales in India will have grown by 100% by July. We are growing very rapidly so it's becoming increasingly valuable to a large player in the Indian market or someone wanting to break into India." He added that a trade sale was not the only option open to Cobra. It will also consider a strategic partnership with an international drinks group or a flotation on a stock market, either in London or India.

Anil Ambani to fund Hollywood biggies

CANNES: Bollywood has always gone places. Now it’s going to the very fount of global entertainment — Hollywood — with big money in tow.
Anil Ambani's Reliance Big Entertainment (RBE) has signed deals to provide development funds to eight leading creative forces in Hollywood. The deals, announced here on Sunday, include those with production houses like Nicolas Cage’s Saturn Productions, Jim Carrey’s JC 23 Entertainment, George Clooney’s Smokehouse Productions, Chris Columbus’s 1492 Pictures, Tom Hanks’s Playtone Productions, Brad Pitt’s Plan B Entertainment and Jay Roach’s Everyman Pictures. ( Watch: Anil Ambani signs Hollywood stars )
In layman’s language, this means that the company will provide for the creation of a development silo for each of the Hollywood A-listers. RBE chairman Amit Khanna said: "This initiative will yield up to 30 scripts in the next two years. We are confident that at least 10 of them will go into production during that period." The movies that will be made could initially amount to $1 billion. "There will be no creative interference," said advertising guru Prasoon Joshi, who is also in on the deal. When creative freedom is combined with the huge cache of funds that Reliance will pump in, Bollywood is set to become a very significant player in the west.

Trade through Nathu La reopens amid fresh border row

Nathu La: Bilateral trade between India and China opened on Monday through the fabled Silk Road amid a fresh border row, with Beijing claiming a strip of land in Sikkim.
"Border trade was earlier scheduled to open on May 1 but was postponed after Beijing requested New Delhi to delay the start following landslides in the Tibet Autonomous Region," said Ujwal Gurung, Sikkim's director of industry and commerce.
"Formal trade for the current year began on Monday and would continue until Nov 30," Gurung said.
The reopening of bilateral trade comes at a time when Beijing has once again raked up a border row by claiming a narrow strip of land near village Gyangyong in northern Sikkim.
Chinese officials have apparently objected to stone cairns erected at the village by Indian soldiers.
India has told China it would not allow Chinese troops into the area and that it would mean a breach of the treaty between the neighbours to maintain peace along the border.
The two Asian giants in July 2006 reopened trade across the 15,000-ft Nathu La Pass, 52 km east of Sikkim's capital Gangtok, as part of a broader rapprochement. The move marked the first direct trade link between the nuclear-armed neighbours since a bitter border war in 1962.
Under an agreement reached between the two countries, trade takes place four days a week - Monday to Thursday - beginning May 1 each year and lasting until Nov 30 when snow makes the area impassable.
Although two-way trade was slow in the first two seasons, about 1,200 Chinese traders crossed the border separated by a rusty barbed wire marker to the bazaar of Sherathang, five kilometres below the pass on the Indian side.
About 700 Indian traders headed to the Renqinggang interim market in Tibet on the Chinese side, 16 km from the border.

Wipro brings all its consultants under one roof

BANGALORE: Wipro Technologies, which recently did a top-level rejig of its organisational structure, has bunched its 1,500-odd technology and business consultants splintered across various domains and verticals under one separate umbrella. Wipro, which has been consolidating its consultant force over the past six months, is hoping to leverage on the vast resource pool in a more structured way and deploy their expertise across the bandwidth of the diversified enterprise. Consulting accounts for 4% of Wipro’s revenue. That is not likely to change significantly with this rejig. However, the new structure will have upsides in the way the company will package its offerings for strategic and deep engagements with its customers. The consulting practise will directly report to Girish Paranjpe, who was recently elevated as joint CEO. “Till now, consultants were deeply embedded in their own respective domains and businesses. The full power of what consulting could do was not completely visible even internally,” says Wipro executive vice-president (HR) Pratik Kumar. The bunching together has created a sizeable resource pool that will now be an active part of the company’s go-to-market strategy. Consultants will engage with client CEOs/CIOs and act as partners in enhancing productivity.
Just like with any consulting firm, these professionals will actually get to work with their own fraternity rather than being split in individual projects. Wipro consulting practise would cover the gamut of technology, business, process and quality. Apart from consulting, Wipro’s other practises include testing, BPO, infrastructure management and enterprise applications. “It is about creating an eco-system. They get the benefit of learning from peers and that is how consultants work. They are like partners who contribute to each other. Because it is a practise, it sells right across the organisation and they will get to see variety,” Mr Kumar says.

MindTree open offer for Aztecsoft to begin on June 27

MUMBAI: IT services firm MindTree Consulting on Friday said its open offer to acquire an additional 20 per cent stake in Aztecsoft will now start on June 27. The open offer would close on July 16, the firm said in a filing to the Bombay Stock Exchange. Earlier, the company had said the offer would start on June 30 and end on July 21. The offer would be made to existing shareholders of Aztecsoft at Rs 80 per share. MindTree had said that it entered into a definitive agreement with the largest shareholder of Aztecsoft to acquire 32.57 per cent at Rs 80 per share. Post acquisition, MindTree would initiate the process of merging Aztecsoft into itself.

Panchvi fail and other Bollywood blog tales

It's no longer about cold wars. The starry world of Bollywood is busy with caustic combats instead. So Aamir Khan writes a cheeky blog entry describing his smelly dog named Shahrukh while Amitabh Bachchan rates Shah Rukh Khan's new reality show as "Panchvi Fail". Bachchan goes on to compare Panchvi Pass's ratings with his own high-ranking KBC show. Salman Khan is brattish as usual, checking on Akshay Kumar's fee before naming his price. The gloves are off in Bollywood. While yesteryear stars Dilip Kumar and Raj Kapoor and other antagonists kept their mutual dislike private, today the bitching is out in the open. The change has perhaps to do with Bollywood's changing dynamics. Bachchan has reportedly been paid over Rs 100 crore for his blog, so dishing out controversy is part of the domain, quips an industry watcher. Aamir probably felt that Bachchan was stealing the limelight, so he posted a mischievous comment. Two months ago, Aamir had demoted SRK, calling him the Number 2 star of the industry. "Suddenly it's no longer a politically correct, diplomatic Bollywood," says a media observer. "Bachchan, who over the years has been the epitome of modesty and political correctness, has thrown caution to the winds, especially in his blog. The others seem to be following suit. One doesn't know whether this is for the better or worse."
Salman Khan, not given to something as literary as a blog, makes his views clear in more prosaic ways. He has been openly attacking actors like John Abraham and Vivek Oberoi and refuses to acknowledge their presence at public events. Khan's latest bete noire is Akshay Kumar, not because his girlfriend Katrina is more comfortable with Akshay than him but because Akshay charges more. Says an insider, "A corporate approached Salman with a project and quoted Akshay's price to him. The actor told the reps that he would charge at least Rs 5 crore more than that.” The media has a definite role to play in flaring up star wars-take, for instance, the recent reports of friction between Rajnikanth and Shah Rukh Khan over a film. "The media tried to rake up another controversy between Shah Rukh and Hrithik over the Krazzy 4 song-reports said that Rakesh Roshan was not promoting Shah Rukh's song and only focusing on Hrithik's number," says an observer, who adds that stars are certainly more aggressive these days. "It stems from a variety of factors," he says. "It's like a chain reaction-one unsavoury reference engenders a series of retorts and rejoinders. The combination of factors-a highly active media with a growing penchant for tabloidish reporting, an increasingly competitive stance, and high stakes-is probably responsible for this kind of situation. But it could just be a temporary phase." "There's been rivalry in the film industry from the days of Dilip Kumar and Raj Kapoor,” says an industry insider. "But all they did was not cross each other's path. They would not work together, and each one forbade his ‘regular' heroine from working with his rival." Bharathi Pradhan, a senior film journalist, says that even if stars of yesteryear spoke out, the media was not such a tremendous presence and there were no blogs. "What Aamir Khan has done is in bad taste,” she says. "He does not a sense of humour and should not have attempted it." Raj Grover, former production head of Sunil Dutt's company, agrees. "Though rivalry has always existed, I have never seen actors calling other names so openly. What Aamir has done is certainly in poor taste."

Income Tax Department sends notice to BCCI over IPL taxes

NEW DELHI: The Income Tax Department sent notice to the Board of Control for Cricket in India (BCCI) asking for copies of agreements. The Income Tax department has asked for contract details of all Indian Premier League (IPL) players, as reported by a private news channel. According to reports, the IT-D wants to check whether TDS Tax Deduction at Source (TDS) was deducted at 11.3%. Earlier, the Central Board of Excise and Customs had asked its regional commissioners to examine all contracts the BCCI has entered on or behalf of the IPL with all corporate bodies who have either bid for teams or are providing services - from entertainment to broadcasting to advertising
Under the franchise model, a sponsor owning a team pays a stipulated fee to the BCCI to get ownership. The franchisees have to pay 10 per cent of the bid amount every year to BCCI, as a franchisee fee. With the auction fetching BCCI $723.59 million, BCCI will get $72.36 million each year.
So the BCCI gets liable to pay service tax under 'business auxiliary service.' Since players, too, are not playing for the country, their purchase fees would be liable to service tax again under BAS. Broadcasting rights to a consortium of Sony Television and Singapore-based World Sports Group for 10 years for over $1 billion and their sale of time slots for ads would also attract service tax under the broadcasting service. So would branding of stumps in DLF name, showing its logo on the sidescreen. Naming Pepsi as the IPL official drink for five years for a fee of $12.5 million would also mean that BCCI would have to pay service tax on it.

Reliance Big Entertainment to spend $1 bn on films

CANNES: Reliance Big Entertainment, the media and entertainment arm of the $75 billion Reliance Anil Dhirubhai Ambani group, on Friday announced that it would spend $1 billion on the Indian film and entertainment business over the next 12-15 months. This is by far the biggest commitment made by an Indian entertainment company for show business. Amid the glitter and glamour at the 61st edition of the Cannes Film Festival at the French Riviera, Reliance BIG Entertainment also revealed that 69 films in nine languages would be ready for distribution over the next 18 months. Over a dozen films will be released this year. "India is uniquely positioned in the global economic order. We believe this is the right time to make this commitment of $1 billion for the film entertainment business," said Amit Khanna, chairman of Reliance Entertainment.
We believe we are creating 21st century's truly integrated media and entertainment company. Our $1 billion spend is bigger than the cumulative investments of all other Indian players put together in this space. We will continue our aggressive expansion plans in film exhibition and leverage synergies to our growing production and distribution pipeline." The Indian entertainment business is a $4 billion industry, growing at 18 percent annually. Reliance Big Entertainment will be working with the best of Indian directors including Vidhu Vinod Chopra, Farhan Akthar, Shyam Benegal, Shaji Karun, Sudhir Mishra, Rituparno Ghosh, M S Sathyu, Madhur Bhandarkar, Buddhadev Dasgupta, Girish Kasravalli and Amol Palekar. "We have one of the best creatively differentiated slate of movies," said Rajesh Sawhney, president of Reliance Entertainment. "Our biggest challenge is to get our content and distribution to work in harmony. We believe digital and home entertainment will be unique for our growth." Reliance Big Entertainment has appointed senior ad man and well known lyricist Prasoon Johsi as its advisor to evaluate scripts and products. "People love good cinema and hate bad cinema. Our whole idea is to create good cinema from Reliance," said Joshi. He will evaluate scripts received by Reliance from independent filmmakers. Ace filmmaker Vinod Chopra is excited to have formed a production partnership with BIG Entertainment. "This alliance will ensure that our films will reach every corner of the world and take Indian cinema to the next level," Chopra said. The first of the feature films under this deal is a mainstream English language film "Broken Horses" directed by Chopra. The second film is based on a classic Indian tale, to be directed by Ram Madhvani. Reliance also announced a strategic tie up with Excel Entertainment, run by Ritesh Sidhwani and Farhan Akthar. The six films covered under this alliance include Abhishek Kapoor's "Rock On", Zoya Akhthar's "Lucky by Chance", Farhan's "Voice of the Sky" and "Don II", Abhinay Deo's "7 Minutes" (working title) and Reema Kagti's "Accident Spot". "It is a noteworthy collaboration," said Sidhwani. Reliance Big Entertainment business arms include Big Motion Pictures, Adlabs Films, Big ND Studios, Big Animation, Big Music and Big Entertainment.
The company has also forayed into Big Broadcasting, Big 92.7 FM and Big DTH and IPTV. Its new media companies include Zapak (India's number on online gaming portal), Big Adda (social networking site), Jump Games (moble games) and Big Flix (movie rental and download service). Reliance Big Entertainment is set to open offices in Southeast Asia, the Middle East and Australia and also in major cities in India. The Reliance group, which also has 160 operating screens in India, is likely to increase the number to 400 screens by end-2009. Early this year, the group made its foray into the US film exhibition market with agreements to operate 250 screens covering 28 cities in the key markets in the east, mid west and west coast. The company has also entered into an agreement to acquire controlling stake in Lotus Five Star Cinemas and operate 51 screen exhibition chains in Malaysia.

Toyota considers new plant to make low-cost, small cars

TOKYO: Toyota Motor Corp said on Wednesday it is considering building a new plant to make low-cost, small cars for emerging markets. The automaker, which has announced plans to open a small-car plant in India, is in the early stage of planning for a second factory in an emerging country, a company spokeswoman said on condition of anonymity, citing policy. Toyota has not decided details such as the location, production capacity and the timeline for the plant, she said. A media report said on Wednesday that Toyota is eyeing a factory in Brazil for a launch in 2011 for the fast-growing auto markets in South America. Toyota plans to invest tens of billions of yen (billions of dollars) in the plant, which would have a production capacity of about 150,000-200,000 units a year, the report said. The small sedan and hatchback models would be priced at around 1 million yen (US$9,540; euro6,170), the report said. Other top carmakers, including General Motors Corp of the US and Nissan Motor Co, are also working on cheap cars targeting India and other emerging markets. The Renault-Nissan French and Japanese auto alliance said Monday it's forming a joint venture with Bajaj Auto Ltd. of India to develop, make and sell an inexpensive car there with a starting price around US$2,500 (euro1,600).

M&M refuses to 'confirm or deny' Kinetic Motor buyout talks

MUMBAI: Two-wheeler maker Kinetic Motor' shares on Wednesday soared nearly five per cent, the maximum permissible limit, amid reports about a possible buyout by Mahindras, even as the rumoured acquirer said it will not "confirm or deny" the talks about any such deal. The leading auto maker Mahindra & Mahindra (M&M), which makes both personal and commercial vehicles, said in a statement issued to the stock exchanges that it is not in a position to either confirm or deny any talks about acquiring Kinetic Motor. M&M said it examines various opportunities in different areas, from time to time on a continuing basis, but it is not practicable to comment upon every opportunity at every stage. The statement followed media reports that M&M is in talks to buy Kinetic Motor. "The company is not in a position to confirm or deny the veracity of the report given its policy of not commenting on speculative reports that emanates from such activity," the filing added. However, the share price of Kinetic Motor, which had fallen by over 12 per cent in the past one week, reacted positively to the reports and closed 4.9 per cent higher at its upper circuit limit for the day at Rs 27.95. However, the shares of M&M closed lower at Rs 656.15, down by 1.58 per cent from its previous close on the BSE. Brokers said any additional financial burden arising out of a possible buyout of Kinetic Motor weighed down on the sentiments for M&M shares, while expectations for a potential buyout offer propelled the stock of the two-wheeler maker

Hyundai plans to launch $3,500 car in India by 2012

CHANDIGARH: Car maker Hyundai Motor India on Friday said it plans to roll out its low-cost car at $3,500 in India by 2012. "It will take at least 4 years to develop the car and we think we will be able to introduce this car by 2012 for Indian market," Hyundai Motor India Managing Director and CEO H S Lheem told reporters here today. However, he said that this car would not be competing against the Tata's Nano car. The low priced car is in the process of evolution stage at its research and development centre in Korea, he said. On being asked about raising prices of the cars due to rising input cost, he said the company was seriously considering to hike the prices, which is expected to be decided during next month. However, he refused to divulge any detail regarding the hike in the prices.
He said the company would introduce several new models during this year in Indian market which includes Santro LPG, Accent LPG and CNG and i20. On the export front, he said the company expects to export 2.12 lakh units during this year. The company is exporting four models in overseas markets which includes i10, Santro, Getz and Accent and its export is spread in 95 countries. The company today also announced the launch of its fifth regional office here which will cater to Jammu and Kashmir, Himachal Pradesh, Punjab, Chandigarh and Haryana. In this region, the company was expecting to sell 33,000 units this year against 20,300 units sold last year

Bharti Airtel eyes full takeover of MTN

India's number one mobile operator Bharti Airtel's negotiations with South African telecom major MTN is now headed towards complete take-over by the former, media reports said.
Bharti's talks with South African mobile operator MTN Group Ltd are now centered on a full takeover by the Indian operator for a combination of cash and stock, The Wall Street Journal said quoting a person familiar with the situation.
"Bharti still wants majority control (a 51 per cent stake) but MTN prefers a full takeover which in South Africa can be portrayed as a merger of equals. Talks this week are focused on this (full takeover) and ways it could be done," Wall Street Journal said in a report posted online.
The person said Bharti was considering paying as much as USD 20 billion in cash, said the paper. Bharti on Tuesday said it was in talks with MTN to "combine the strengths of the two leading players from emerging markets, and is accordingly veering toward possible structures to achieve this objective".
Bharti Group Chairman Sunil Mittal is understood to have held talks with the South African telecom major MTN's top management in London on Wednesday to work out a broad scheme of arrangements for a possible merger between the two companies.
Mittal met MTN Chairman M C Ramaphosa, CEO P F Nhleko and single majority stakeholder Azim Mikati to put forward Bharti's proposals in which the Delhi-based company is said to have insisted on 'exclusivity agreement' with MTN.
An exclusivity agreement would bar MTN from sharing any information or arrangements for a merger with any other firm. Bharti management is also believed to have offered 168 rands a share to MTN shareholders, while the South African company wants a higher price.
It is also learnt that Bharti wants to offer 70 per cent stock and 30 per cent cash for a possible merger to the MTN shareholders, whereas the South African telecom firm has asked a higher price.