Government notifies export of 5 lakh tonnes of sugar

Out of 5 lakh tonnes, the food ministry has reserved 51,500 tonnes for neighbouring countries and the remaining quantity would be allocated among sugar mills based on their last three years' average production

New Delhi: The government today notified its decision to allow five lakh tonnes of sugar exports, nearly a month after its approval by the panel of ministers, reports PTI.

On 22nd March, the Empowered Group of Ministers (EGoM) on food had allowed exports of 5 lakh tonnes of sugar under Open General License (OGL) as the country's sugar production is estimated to outstrip demand after a gap of two years.

The retail prices of sugar have also declined sharply in the national capital to Rs30-Rs32 per kg from nearly Rs50 per kg in January last year.

Out of five lakh tonnes, the food ministry has reserved 51,500 tonnes for neighbouring countries and the remaining quantity would be allocated among sugar mills based on their last three years' average production, a senior official said.

Mills would have to undertake exports within 60 days after they get release order from the ministry, he said.

India's sugar production is estimated to rise to 24.5 million tonnes in 2011-12 season (October-September) against 19 million tonnes in the previous year. The annual demand is pegged at 22 million tonnes.

The government had last year allowed mills to meet their export obligations of about one million tonnes under the Advance Licence Scheme (ALS).


Vedanta acquires 10.5% stake in Cairn India

Malaysian state oil company Petronas, which offloaded its entire 14.9% stake in Cairn India, was lapped up by Vedanta that bought 200 million equity shares (10.5% stake) for Rs331 apiece, with the rest being sold to domestic and foreign institutions

New Delhi: London-listed mining group Vedanta Plc has bought at least 10.5% stake in Cairn India from Malaysia's state oil firm Petroliam Nasional Bhd (Petronas), which exited totally from the Indian exploration major, reports PTI.

Sesa Goa, a unit of Vedanta, bought 200 million equity shares at Rs331 a piece, said sources in the know of the development.

Petronas sold its entire 14.9% stake in Cairn India with domestic and foreign institutions buying the rest.

The share sale happened in block deals and the tender price was lower than Rs355 a share that the Vedanta Group is offering for buying 20% stake in Cairn India through an open offer.

The Vedanta group in August last year had proposed to buy up to 51% stake in Cairn India from Edinburgh-based Cairn Energy Plc for as much as $8.48 billion.

Subsequent to the deal to buy Cairn Energy at Rs405 a share, Vedanta group firm Sesa Goa announced an open offer to buy an additional 20% stake at Rs355 a piece.

The Rs405 a share price that Vedanta is paying to Cairn Energy, includes a Rs 50% non-compete fee, which is not being paid to minority shareholders.

Sesa Goa's open offer commenced on 11th April and will close at the end of the month.

Sources said Petronas was frustrated at growth being impaired at Cairn India and had so decided to exit the company.

Petronas had invested $800 million to take a little less than 10% stake in Cairn India when the company got listed in 2006. In subsequent two tranches, it raised the stake to 14.9% but off late it had been frustrated as government delayed approvals to Cairn India to raise output.

Cairn India is producing 125,000 barrels of crude oil per day from the Mangala oilfield in the prolific Rajasthan block.

Output can be raised to 150,000 bpd without any new investment, but the oil ministry has been sitting on its request for several months now.


Will UTI AMC become 'Khosla ka Ghosla'?

According to media reports, the finance ministry is pushing the candidature of Jitesh Khosla as head of UTI AMC. However, T Rowe Price, the single largest stakeholder in the AMC, does not seem to agree
UTI Asset Management Company (AMC), one of the largest AMCs in the country, is still awaiting the appointment of a new boss, after UK Sinha left to take charge of the Securities and Exchange Board of India (SEBI) in February.

According to media reports, the finance ministry, which indirectly controls a 74% stake in UTI AMC, is in favour of its own candidate for the top post, but T Rowe Price (TRP), the single largest stakeholder in the AMC, has threatened to exit from the venture if that happens.

The Human Resources (HR) panel set up by UTI is likely to shortlist probable names of candidates for the post of chairman and managing director by the end of this month, which will be sent to the board to take a view, and the shareholders will finally appoint the chairman, according to a report from the Press Trust of India.

The fund house has also hired executive search firm Egon Zehnder to recommend a suitable candidate to the HR Committee of the board.

Paranjoy Guha Thakurta, in an article published on, has said, "Political circles in New Delhi and the financial world in Mumbai are abuzz with speculation about the real reason why the powers-that-be are reportedly backing the candidature of Jitesh Khosla, a 1976 Assam cadre officer of the Indian Administrative Service, to take over the reins of UTI AMC."

"Khosla's nomination assumes significance since he is the brother of Omita Paul, adviser to Union Finance Minister Pranab Mukherjee. Paul, who used to belong to the Central Information Service (later Indian Information Service), has worked as Mukherjee's confidante and adviser for decades, including his recent stints at the helm of the ministries of defence and external affairs," the article says.

Earlier, in January 2010, T Rowe Price, the US-based foreign institutional investor, completed its acquisition of a 26% stake in UTI AMC through its wholly-owned subsidiary T Rowe Price Global Investment Services for Rs650 crore and thus gained representation on the board of UTI AMC. The foreign fund acquired a 6.5% stake from each of the four original stakeholders-State Bank of India, Punjab National Bank, Bank of Baroda and LIC-amounting to 26%, in UTI Asset Management Company and UTI Trustee Company. The four original stakeholders, three nationalised banks and the insurance behemoth still hold 18.5% each, or 74% together, in UTI AMC. This gives the government an indirect control of the AMC.

"While speculation is rife as to whether the ministry wants to control UTI AMC by proxy, there is also a view that by appointing Khosla the finance ministry would be accused of nepotism. While it is not clear how strongly T Rowe Price would register its protest against attempts to appoint Khosla as the executive head of UTI AMC, the beleaguered Manmohan Singh government can ill-afford another scandal," Mr Guha Thakurta, who is also a member of the Press Council of India, wrote.

Mr Khosla is currently officer on special duty at the Indian Institute of Corporate Affairs. As joint secretary in the Union ministry of corporate affairs he had overseen the government's intervention in the Satyam scandal.

UTI Mutual Fund had assets under management (average) amounting to Rs65,387.25 crore and investor accounts of around one crore in 81 domestic schemes at the end of December 2010.


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