Fertiliser sector will be starved for gas
The fertiliser sector has been hit by another blow. The Empowered Group of Ministers (EGOM), headed by finance minister Pranab Mukherjee, in a fresh gas allotment plan, has allocated maximum of amount of gas available from the KG Basin to the power sector. NTPC and other power producers will get 13 million cubic meter of gas per day (mscmd) on firm basis and 12 mscmd on fallback basis.
 
Refineries, which were not in the priority list, will get 5 mscmd on firm basis and 6 mscmd on fallback basis. This will go to Reliance Industries Ltd. Fertilisers will get only 0.178 mscmd (against its demand of 20 mscmd) and steel will get only 0.44 mscmd. Fallback basis will be calculated only after RIL’s excess production rather than specified quantity of assured production.
 
In fact, in its previous policy, the fertiliser sector was the first priority for gas allocation and then came the steel and power sectors. There was no priority for refineries. But since new EGOM was appointed, power became the first priority and refineries are the second in priority. That is the reason why power sector is given bulk of new gas availability. US Jha, chairman of Rashtriya Chemicals & Fertilisers, told Moneylife that “as a fertiliser unit RCF expects gas allocation.” But he is not aware of the new allocation.
 
Fertiliser companies based on natural gas could be hit by a major crisis if they are not given natural gas, which is used as a fuel and raw material. Already eight fertiliser units in Barauni, Sindri, Haldia, Gorakhpur, Talchar, Ramagundam, Korba and Durgapur have shut down. On an average, about 950 to 1,000 cubic metres of gas are used for each tonne of fertiliser. Around 20% of natural gas is used as feedstock and 80% is used as a fuel. If gas is not made available to fertiliser companies, more units may face closure and that may in turn see sharp rise in fertiliser imports and subsidies. Fertiliser subsidies were around Rs 46,000 crore in 2007-08 and are likely to cross Rs 1,00,000 crore this year.
 
In addition to natural gas, fertilisers can be made from heavy oil and coal. Heavy oil and coal options are very expensive as compared to natural gas. Heavy oil conversion to fertiliser plant will mean 30% more energy and coal conversion to fertiliser plant will consume 70% more energy. Investment cost in heavy oil and coal plants are also very expensive. Heavy oil plant is 40% more expensive and coal-based plant is 140% more costly. Production cost is also very high, as compared to the cost of natural gas. Production cost of fertiliser through heavy oil is 20% more and for coal it is 70% more. So if natural gas is not made available to fertiliser plants, cost pressure on other options will create huge losses for the country.  

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CVC recommends major penalty proceedings against 111 officers
The Central Vigilance Commission has advised initiation of major penalty proceedings against 111 officers from the government's various departments and State-run or public sector units (PSUs). The Ministry of Railways tops the list with 24 officers, followed by Govt of National Capital Region of Delhi, Municipal Corp of Delhi (MCD) and State-run banks with 19, 15 and 14 officers, respectively.
 
The commission also advised imposition of major penalty against 70 officers. This list is dominated by state-run or public sector banks (PSBs) with 11 officers, Central Board of Excise and Customs (CBEC) with eight officers and MCD with seven officers. The list includes six from Department of Telecommunications, five each from United India Insurance Co Ltd and Ministry of Defence, four each from Kendriya Vidyalaya Sangathan and Ministry of Railways, three from Central Board of Direct Taxes (CBDT), two each from National Insurance Co Ltd, Central Coalfields Ltd, Central Public Works Department (CPWD) and Delhi Development Authority (DDA), while one officer each from Chandigarh Administration, CRPF, BSF, DTL/IPGCL, Department of Health, Gas Authority of India Ltd, LIC, Ministry of Information Technology and Ministry of Urban Development are also named.
 
During September, the Commission disposed 1,101 cases referred to it for advice. It sent 144 cases for investigation and report and the rest 987 cases for necessary action. The Chief Technical Examiner's (CTE) Organisation submitted intensive examination reports in six cases during September of which two were in civil works, three in electrical and one in stores or purchase. The intensive examination of the CTE Organisation resulted in recoveries of Rs32.10 crore during the month, the commission said in its report.
 
On the commission’s recommendations, the competent authorities issued sanctions for prosecution against 26 officers including 18 from CBEC. Major penalty was imposed on 77 officers. These included 16 from PSBs, 14 from Railways, 7 from MCD, 3 from DDA and one each from CPWD, Dept of Telecommunications, Calcutta Port Trust, Central Coalfields Ltd, Northern Coalfields Ltd, Bureau of Indian Standards (BIS) and CBDT.
 
On the basis of advice tendered by the commission, stiff major penalty has been imposed on two officers from Andhra Bank while four senior officers, of the rank of joint secretary, equivalent and above were punished during the month. The punished officers included three from Department of Personnel and Training and one each from Ministry of Home Affairs and BIS.
 
The commission said it is deeply concerned over continuing delays in filling the post of chief vigilance officer (CVO) in several key organisations like Delhi Transport Corp, Kochi Shipyard Ltd, Bharat Coking Coal Ltd (BCCL), Indian Renewable Energy Development Agency (IREDA), Food Corp of India (FCI), Employees' Provident Fund Organisation (EPFO), Kudremukh Iron Ore Company Ltd (KIOCL) and Ircon International Ltd (IRCON).
-Yogesh Sapkale [email protected]

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SAT upholds SEBI order; dismisses broker Shankar Sharma's appeal
Upholding the Securities and Exchange Board of India (SEBI) order to bar First Global Stock Broking Ltd's (FGSB) managing director Shankar Sharma from trading in equities market for a year, the Securities Appellate Tribunal (SAT) has dismissed his appeal against the SEBI order.
 
Earlier in February, SEBI barred Shankar Sharma from trading in securities market for one year for indulging in synchronised trades, buying and selling at the same time, to rig share prices of 10 companies in 2001. Following the SEBI order, Sharma appealed to the SAT, which stayed the debarment order in March.
 
The SAT, in its order on Wednesday, stayed the regulator's order until it heard the appeal, allowing Sharma to continue trading. It is scheduled to hold a separate hearing on 3rd November to decide on the stay.
 
In the February order, SEBI's whole-time director MS Sahoo has said, “First Global Stock Broking manager and Vrudhi Confinvest India Pvt Ltd (VCIP) had indulged in large transactions in 10 securities (Global Telesystems, HFCL, DSQ Software, Zee Telefilms, Wipro, Satyam Computers, MTL, SBI, Infosys Technologies and Sterlite Opticals) in early 2001.”
 
“As these trades for Shankar Sharma in his proprietary account, as a client of Bang Equity on the one hand and the trades of VCIP which is 100% owned by Shankar Sharma and Devina Mehra, as a client of FGSB, resulted in large-scale synchronisation which resulted in creation of large artificial volume in those shares, I hold Shankar Sharma guilty for synchronising the trades in violation of regulation 4 (b) (c) and (d) of PFUTP Regulations, 1995,” Mr Sahoo said in his February order.
 
Upholding the SEBI order and after examining the alleged synchronised trades, SAT in its latest order said, "It is true that the Broker and Sub-broker are companies but when we lift the veil, it is the appellant and his wife who are lurking behind the curtain. It is thus clear that the appellant was on both sides. He was buyer as well as the seller."
 
"We have no hesitation to hold that these trades were fictitious as there was no change in the beneficial ownership of the shares traded and it was the appellant on both sides of the trade," the order said.
 
SAT said it heard at length Somasekhar Sundaresan, the counsel for the appellant. "He (Mr Sundaresan) laid great emphasis on the theory of 'witch-hunting' against the appellant by the authorities for the appellant's association as a financier in the case of the 'Tehelka expose' on certain defence deals. Impugned action of the Board, according to him, is one such manifestation of the revengeful action launched by the powers that be. We are unable to agree with the learned counsel," SAT added.
 
Earlier, in 2001, Shankar Sharma had vociferously advanced the same 'witch-hunt' theory when he filed an appeal before SAT which was rejected by the tribunal.
 
According to media reports, Mr Sundaresan said, "The application (on the stay order) will be heard next week. We only know that the appeal has not been allowed (by SAT)."

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