New twist in ongoing tussle between two former partners
A day after UAE-based Etisalat announced that it planned to sue Indian realty major DB Realty for “fraud and misrepresentation”, the latter has issued a statement saying no suit has been filed against them.
A press release from DB Realty said, “DB Realty is in the business of real estate development and has no direct or indirect shareholding in Etisalat DB (EDB). No suit or claim has been filed against DB Realty since it was never party to any agreements or otherwise.” The press release also said that Etisalat’s exit will not affect the financials of DB Realty.
The statement comes a day after Etisalat declared it was going to sue DB Realty for fraud and misrepresentation, and has started legal proceedings in the Bombay High Court against Shahid Balwa, chairman of Etisalat DB (EDB); vice chairman Vinod Goenka and Majestic Infracon Pvt Ltd, a DB group company.
Etisalat said that it was “induced into its investment in the company that was then Swan, without any disclosure of the matters that are now alleged by the CBI (Central Bureau of Investigation) and Supreme Court to have occurred in connection with the obtaining of second generation (2G) licences by EDB”.
The overseas company said that the events occurred a year before it had invested in the joint venture and admitted that it is facing major losses due to its investment “despite having no hand in 2G scam”. The Dubai-based telecom major’s statement was followed by a joint declaration by Mr Balwa and Mr Goenka, who claimed that they had filed a suit against Etisalat for mismanagement with the Company law Board (CLB), but withdrew it because Etisalat promised to perform better. The promoters of DB Realty said that Etisalat did not keep its promise, and said that the JV company was facing FEMA investigations due to Etisalat’s investments; and added that “Etisalat will be held responsible for their wrongful acts”.
The combined estimated liabilities for employee benefits across BSE-100 companies was Rs2.9 trillion as on 31 March 2011, as compared to Rs2 trillion in the year-ago period: Towers Watson study
Indian companies seem to be facing a sharp rise in their liabilities towards employees’ retirement benefits and the cumulative figure for the top-100 firms grew by 45% to Rs2.9 trillion last fiscal.
As per a study conducted by global risk management and human resource consultancy major Towers Watson, the combined estimated liabilities for employee benefits across BSE-100 companies was Rs2.9 trillion as on 31 March 2011, as compared to Rs2 trillion in the year-ago period.
Liabilities for employee benefits for India Inc are long-term in nature and comprise of retirement provision made by the companies. Provident fund and gratuity are two mandatory retirement benefits for employees in India. Besides, gratuity, defined benefit (DB) pension, leave benefits and other DB plans can also be termed as liabilities for employee benefits in India.
“While, the liabilities of companies have increased significantly in the last one year, the proportionate rise in assets has not been commensurate,” Towers Watson India director client account management Kulin Patel said.
The significant rise in liabilities is likely to have a direct impact on the profits, the report said.
“Employee benefits liabilities would continue to increase as companies grow and this becomes all the more important, if the economic environment is uncertain. Going forward, companies should be more vigilant about how their liabilities develop, relative to company financials,” Mr Patel added.
Consistent with findings over the previous years, public sector banks by far have the largest risk of the extent of liabilities against their finances. The liabilities for the banks as a collective within the BSE 100 have increased almost two fold to Rs0.1 trillion as on 31 March 2011 from Rs0.06 trillion as on 31 March 2010.
“This could be due to the liabilities fully reflecting the impact of wage revisions and employees taking advantage of the second pension option offered by the bank into the defined benefit pension scheme,” the report said.
Far behind the banking sector, the oil & gas segment within the BSE 100 takes the second position with average benefit liabilities at Rs0.018 trillion as on 31 March 2011 compared to Rs0.016 trillion as on 31 March 2010.
The findings are based on an analysis of pertinent statistical data found in annual reports of 95 out of the BSE 100 companies and in particular notes to accounts related to employee benefits costs and liabilities.
Prashant Bhonsale, country head of Credila Financial Services, confirms the rising trend in the number of loan applicants. “In our experience the number of students applying to study abroad is rising. There is definitely an uptrend”
Signs of slowing global economy, strict visa norms in the UK with scrapping of student visa scheme and stringent immigration policies seem to have little impact on Indian students preferring to study abroad. While experts say that the overall market is down, statistics on loan applications and students taking GRE suggest otherwise.
“There has been 25%-30% decline in the market. We believe that there are many students who would still want to pursue higher education abroad owing to the quality aspect of learning. These changes also have to do with the economic cycle. If there is slowdown, students expect a boom period as well. Meanwhile, there are some universities which are also offering work as a part of the course,” Richard Lasrado, director, Education Abroad Counselling told Moneylife.
Prashant Bhonsale, country head of Credila Financial Services, a private lender specializing in education loans, confirms the rising trend in the number of loan applicants. “In our experience the number of students applying to study abroad is rising. There is definitely an uptrend.”
The US, UK and Canada are the preferred destinations for higher education among Indian students. The UK government last year announced a host of changes in the criteria for student visas. Accordingly, the Tier-1, or post-study route will be closed from April 2012. This route had provided students an access to the job market for two years after completing a course and allowed them to take up low-skilled jobs. As per the new rule, only graduates having an offer for a skilled job, with a minimum salary of 20,000 pounds a year from a sponsoring employer will be able to stay on and work, provided the job matches a student’s skills. The company, where the student would work, also has to be registered to accept overseas workers in the Tier-2 point system.
Reports confirm a 30% drop in the applications to study in UK, from Indian students and few students have also cancelled their plans. However, experts say many are still keen to go abroad for their education.
In fact, the GRE test, mandatory for students choosing to study in the US, has also seen a 43% rise in the numbers of students. From 47,276 students in 2010, it jumped to 67,605 students in 2011, surpassing the number of Chinese applicants.
Another Mumbai-based counsellor explains that other countries like the US and Canada will try to attract more students. “These numbers may not actually mirror the reality. But it clearly indicates the students’ choice. It is clear that students want to experience studying/working abroad. Apart from the US, UK, other countries like Canada, Australia and Singapore are also aggressively attracting students.”
Recently, Jim Nickel, deputy high commissioner of Canada, said that his country will welcome Indian students as part of strengthening its bilateral ties with India. He also informed that the numbers of Indian students have increased four times from only 3,000 in the past two years and around 50 Indian universities have already tied up with 35 Canadian universities for academic and research activities.
Meanwhile, British Council and Universities UK have opposed the changes in the visa rules, as it could impact the number of students going to the UK.