Govt to consider sugar decontrol after Parliament session

Besides removal of levy sugar obligations, the industry has been demanding end of monthly release mechanism, under which food ministry fixes the quantity of sugar that mills can sell in the open market every month

New Delhi: Noting that the sugar industry would be the priority area after the Food Bill, food minister KV Thomas on Wednesday said the government will consider the demand for partial decontrol of the sector after Parliament session gets over, reports PTI.

The minister also said the government would consider further export of sugar at an “appropriate time”, which would be favourable for the industry. Last month, an export of one million tonnes was allowed under Open General License (OGL).

“There is a request from the industry as well as farming community that there are too many controls on the sector. One is levy sugar, which we allocate to States for distribution through ration shops.

“After this Parliament session, I will discuss the issue (removal of levy sugar system) with finance minister Pranab Mukherjee and agriculture minister Sharad Pawar,” Mr Thomas said on the sidelines of the AGM of Indian Sugar Mills Association.

At present, sugar mills are required to contribute 10% of their production to government (called levy sugar) for public distribution system (PDS) at a cheaper rate.

“We have committed to the states to provide sugar at subsidised price... After this session, we will have detailed discussion with the finance minister on how this can be reasonably resolved,” Mr Thomas said, adding that detailed discussion was required as this involved financial implications.

Making a demand for removal of levy sugar, ISMA president Narendra Murkumbi pointed out that the compulsion to supply 26 lakh tonnes of sugar for the PDS at a discounted rate causes losses of around Rs3,000 crore to the industry every year.

Addressing the function, Mr Thomas said the issue of decontrol involves a large number of stakeholders—farmers, mills, States and consumers—and a consensus needed to emerge on this issue.

Besides removal of levy sugar obligations, the industry has been demanding end of monthly release mechanism, under which food ministry fixes the quantity of sugar that mills can sell in the open market every month.

Expressing concern over cyclical nature of sugar industry he said there was a need to tackle this phenomenon through long-term solution.

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ONGC to buy Cairn’s 10% stake in gas-discovery block

Cairn India had made four discoveries in the Krishna Godavari basin block KG-DWN-98/2 and in 2005 wanted to sell 100% of its stake in the area to ONGC. But ONGC bought only 90% as it wanted to utilise Cairn India’s expertise and knowledge in exploiting the resource in the block

New Delhi: State-owned explorer Oil and Natural Gas Corporation (ONGC) today said it will buy 10% stake of Cairn India in a gas-discovery block that sits next to Reliance Industries’ prolific KG-D6 area in the Bay of Bengal, reports PTI.

“That (buying Cairn India’s 10% stake in Block KG-DWN-98/2) has been agreed in our last board meeting,” ONGC chairman and managing director Sudhir Vasudeva told reporters here.

Cairn India had made four discoveries in the Krishna Godavari basin block KG-DWN-98/2 and in 2005 wanted to sell 100% of its stake in the area to ONGC. But ONGC bought only 90% as it wanted to utilise Cairn India’s expertise and knowledge in exploiting the resource in the block.

But the two firms have not been on agreement on issues like the optimum way of developing the four pre-2005 discoveries and six subsequent finds.

Sources said there was a big gap in understanding of the resource with Cairn India feeling ONGC’s estimates of the blocks holding an in-place volume of 25.61 million tonnes of oil and 197 billion cubic metres of natural gas were grossly over-estimated.

It felt the large programme that ONGC was drawing was not justified and choose to exit the area.

Mr Vasudeva said ONGC will pay whatever past cost Cairn India had invested in the block as past cost. Cairn’s share of past cost comes to $47 million.

Cairn had some months back written to ONGC saying “the hither-to discovered oil and gas resources in the block are only marginal to non-commercial, because of their small size and the potential high development costs due to water depth versus the prevailing gas prices.”

ONGC proposes to invest over $7.3 billion to produce up to 30 million metric standard cubic metres per day (mmscmd) of gas.

Before selling 90% out of its 100% stake and giving away operatorship of the block, Cairn made four discoveries in the area—Padmavati, Kanakdurga, N-1 and R-1 (Annapurna).

Subsequently, ONGC made six significant discoveries—E-1, A1, U1, W1, D-1/KT-1 and the first ultra-deepwater discovery UD-1 at a record depth of 2,841 metres.

The block is divided into a Northern Discovery Area and Southern Discovery Area.

The NDA comprises discoveries like Padmawati, Kanadurga, D, E, U, A, while the ultra deepsea UD find lies in SDA.

Even ONGC has acknowledged that the NDA discoveries are small to marginal and cannot be developed on a standalone basis due to high deepwater development costs.

Accordingly, it is proposing to develop the discoveries in an integrated cluster.

Sources said the ONGC Declaration of Commerciality of NDA on 15 July 2010 was submitted without OC approval and so was the DOC of SDA on 21 December 2009.

The Directorate General Hydrocarbons (DGH), they said, wants a fresh proposal for DOC to be submitted by the operator after completion of the proposed appraisal drilling programme by 16 July 2013, in case of NDA and by 22 December 2012, in case of SDA, or by 16 July 2013, for both the NDA and SDA.

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SC dismisses special leave petition of Helios and Matheson

The recent order by the apex court paves way to restart proceedings against the accused, including H&M's chairman V Ramachandran, in the vMoksha case

The Supreme Court has dismissed the special leave petitions (SPL) filed by Helios & Matheson Information Technology Ltd (H&M) and Pawan Kumar, the then chief executive officer of vMoksha Technologies. Both have challenged the Bombay High Court (HC) order, which allowed the revision application of vMoksha’s co-founder Rajiv Sawhney against H&M.

Dismissing the SPLs, the apex court said, “In the result, we see no reason to interfere with the order passed by the High Court in exercise of our jurisdiction under Article 136 of the Constitution of India.”

In an order passed on 6 May 2011, the HC had restored an order passed by the Additional Chief Metropolitan Magistrate (ACMM) of the 47th Court at Mumbai, to restart proceedings against the accused, including H&M's chairman V Ramachandran.

While dismissing the SLPs, the SC said, “It is interesting to note that even in the present SLPs the petitioner has filed an unsigned copy of the alleged minutes of the meeting   dated 19th July, 2005. We do not think that we can possibly look into that document without proper proof and without verification of its genuineness. There was and is no clear and unequivocal admission on the record, at least none was brought to our notice, regarding the genuineness of the document or its probative value.”

 Earlier, Justice JH Bhatia of the Bombay HC in an order had said, “The Additional Sessions Judge, on the basis of facts disclosed in the complaint, had also come to the conclusion that a prima facie case was made out. Having come to such a conclusion, the judge embarked upon the consideration of other grounds and quashed the order, which was well-reasoned and based on facts disclosed in the complaint. Therefore, in my opinion, it is a fit case where this Court should, under its inherent power under Section 482, interfere and quash the order passed by the Additional Sessions Judge.”

Moneylife had previously reported about the bruising battle between H&M and Rajeev Sawhney.

The case dates back to 2005, when shareholders of vMoksha, an IT company, decided to sell its three units. The company appointed PriceWaterhouseCooper, who found out H&M as potential buyer for vMoksha's three units. On 11 May 2005, both the companies signed a share purchase agreement under which V Ramachandran, chairman of H&M, was to pay $19 million for the three units, out of which $4 million was to be paid to Pawan Kumar, the then chief executive of vMoksha and also former CEO of the controversial DSQ Software, as earn out. Although, Pawan Kumar and his family members were also stakeholders in vMoksha, Mr Sawhney later bought out their stake as well.
 
Mr Ramachandran was supposed to pay $13.4 million to Mr Sawhney, after paying some amount to Tapan Garg and Madhuri Garg, son and wife of Pawan Kumar for their holding. Mr Sawhney soon realised that he had been kept in the dark about many aspects of the deal. For instance, he found that instead of receiving $19 million, a bank account had been 'fraudulently' opened in the State Bank of Mauritius in vMoksha's name and used to borrow $13.5 million, using a fake board sanction and false entries. That money was remitted to H&M ostensibly for subscription of redeemable preference shares on 28 June 2005.
(Read more - http://www.moneylife.in/article/771.html)

Moneylife had also reported on how the market regulator, the Securities and Exchange Board of India (SEBI), had fined H&M Rs50 lakh for making false announcements to influence the stock price and hiding information about acquisition of vMoksha.

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