Consumer Issues
IndiGo Air making fast progress with $2.6 billion funding from China
IndiGo Air, after signing an MoU with Industrial and Commercial Bank of China-ICBC for $2.6 billion funding, has inked an agreement for 250 Airbus NEO aircrafts
 
It is almost a month since the Chinese President Xi Jinping visited India, to a warm personal welcome by Prime Minister Narendra Modi, when the much anticipated Chinese plans to invest $100 billion came down to a marginal $20 billion over the next five years. But the actual progress in this matter has been slow as a result of which the Indian Embassy, it is reported in the press, are following up the issues with various Chinese authorities.
 
Simultaneous, it appears that the Department of Industrial Policy and Promotion (DIPP) have also found that some of the experiences have Chinese firms like Huawei and Longnjan Road have not been found to be satisfactory.  DIPP is now co-ordinating with various industries and associations to identify the obstacles the Chinese firms have faced so as to correct the situation.
 
It may be recalled that President Xi Jinping had shown interest in setting up industrial parks in both Maharashtra and Gujarat besides offering to assist India in high speed trains and related   infrastructure activities. They had promised to open up other sectors like meat imports so as to reduce the trade deficit, which is over $36 billion.
 
The major event that took place relates to the memorandum of understanding (MOU) signed by IndiGo Air with the Industrial and Commercial Bank of China (ICBC) for $2.6 billion to finance the purchase of some 30 aircraft. Under the terms of MoU signed, ICBC will provide "financing for the planes through either a sale and leaseback financial or commercial lending".  Full details of this MOU have not been made public, yet.
 
According to reports, IndiGo has singed a MoU with Airbus for 250 new engine option (NEO) family of aircrafts. Financial details and delivery of the order were not immediately available. The aircraft has a list price of $102 million per aircraft and Airbus charged a premium of $6.2 million for each NEO on A-319, A-320 and A-321 planes.
 
In the meantime, for the 6th year running, IndiGo Air has reported profit of Rs317 crore for the period ending 31 March 2014, which is much lower than Rs787 crore in the previous year, mainly due to increased  airport costs and high fuel prices.
 
Due to the intervention by the Civil Aviation Ministry, some states have started to reduce the tax on air turbine fuel (ATF).  This is like to be reflected in the next year's results!
 
At the moment, IndiGo Air has a fleet of 81 aircraft. This MOU will enable it to obtain 30 more A 320s and will enable the company to have a greater share of the market.  The other domestic airlines, such as Jet Airways and Spice Jet are not making profits and the industry is heavily burdened with carried over loss for the last several years (estimated to be over $10 billion) and the combined debt of over $ 16 billion. Several new companies have already begun their domestic operations, such as Air Asia, Air Costa, and Vistara may take to the sky soon.
 
So, having established itself as the largest successfully operating domestic carrier, and making profits, IndiGo Air is likely to come out with its IPO at the end of this year, or most likely in the first quarter of 2015. It appears from press reports that some of the bankers have been already selected for this purpose, but the details have not been made public.
 
The Indian domestic market is very competitive and it is likely to be for the best to survive which can meet the exacting needs of the traveller.  So far, IndiGo air has done well and with the enlarged fleet, they would be able to do better in due course, covering wider territory.
 
Finally, as Star Alliance is now open to add another airline from India, would IndiGo Air fit the bill?  This remains to be seen early next year.
 
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)

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Phillips' Colon Health's Bloated Claims
DOJ alleges Bayer violated previous court order by making unsupported claims about product
 
Pharmaceutical giant Bayer is once again in hot water for allegedly pushing unproven health claims to promote one of its dietary supplement products. 
 
Seven years after settling allegations that it falsely marketed its One-A-Day WeightSmart vitamins as a weight-loss remedy, Bayer faces similar charges over the marketing for another one of its dietary supplements, Phillips’ Colon Health.
 
The 2007 settlement slapped Bayer with a $3.2 million civil penalty — which was really mild considering the company’s revenues totaled nearly $140 billion during the time it sold the vitamins — but it also required that Bayer refrain from making any unproven health claims about its dietary supplements in the future.
 
Now, the U.S. Department of Justice says Bayer violated that court order with its multimillion-dollar marketing campaign for Phillips’ Colon Health.
 
The DOJ said in a release last month:
… the United States alleges that Bayer expressly claims Phillips’ Colon Health can “defend against” occasional constipation, diarrhea, and gas and bloating, and impliedly claims that Phillips’ Colon Health prevents, treats and cures constipation, diarrhea, and gas and bloating, even though the company lacks competent and reliable scientific evidence for those claims.
 
Consumers have paid hundreds of millions of dollars for Phillips’ Colon Health, the DOJ said.
Bayer refutes the allegations, arguing that “the government’s motion is based on an erroneous standard” on how it deals with dietary supplements.
 
“Probiotic bacteria, including the three species used in Phillips’ Colon Health, have a long and well-documented safety record, complemented by substantial science supporting their digestive benefits,” the company said in a statement. “Indeed, the government does not dispute that the product is safe.
 
“Claims about PCH are fully substantiated by numerous clinical, animal and genetic studies, among other things, and satisfy all applicable legal standards.” 
 

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In Wisconsin, Dark Money Got a Mining Company What It Wanted
An accidentally released court filing reveals how one company secretly gave money to a non-profit that helped get favorable mining legislation passed 
 
This story was co-published with The Daily Beast.
 
When billionaire Chris Cline's company bought an option to mine a swath of northern Wisconsin in 2010, the company touted the project's potential to bring up to 700 well-paid jobs to a hard-pressed part of the state.
 
But the Florida-based company wanted something in return for its estimated $1.5 billion investment — a change to Wisconsin law to speed up the iron mining permit process.
 
So, Cline officials courted state legislators and hired lobbyists. And, unbeknownst to Wisconsin voters and lawmakers, the company waged a more covert campaign, secretly funding a nonprofit advocacy group that battered opponents of the legislation online and on the airwaves.
 
Since the Supreme Court's 2010 Citizens United ruling, which allowed corporations and unions to spend unlimited amounts on politics, hundreds of millions of dollars have flooded into the political system — much of it through nonprofit groups that have no legal obligation to identify their donors.
 
Usually such efforts remain hidden from view, leaving voters unaware of who's paying for the gush of campaign calls, flyers and attack ads. But a court filing recently made public by a federal appeals court in Chicago provides a rare look at how so-called "dark money" groups helped one company get what it wanted.
 
The document shows how, in its push for a new state law, a Cline Group subsidiary gave $700,000 to a conservative nonprofit in 2011 and 2012. That group, in turn, donated almost $3 million in 2012 to a second, like-minded nonprofit that also campaigned to change the mine permit process, tax filings show.
 
Both nonprofits worked to pass the mining bill. One helped to write the measure and launched a radio campaign even before it was introduced. The other tried to pressure a Republican holdout. Together, the two groups played a critical role in defeating a freshman Democratic state senator who'd voted against the bill, paving the way for its passage months later.
 
After the 2012 elections, some observers downplayed the impact of dark money groups after most of the candidates supported by the largest one, Karl Rove's Crossroads GPS, lost. As this year's elections approach, the Cline Group's strategy in Wisconsin reveals the much bigger impact such groups can have in state races. Here their money goes much further, in some cases dwarfing the amount candidates themselves spend on their campaigns.
 
The nonprofits that pushed for the mining law — the Wisconsin Manufacturers & Commerce Issues Mobilization Council (WMC), an arm of the state's largest business lobby, and the Wisconsin Club for Growth — declined to comment for this story. On its website, the WMC states "we have never disclosed our donors, and never will."
 
Neither nonprofit reported spending any money on politics on their 2012 tax returns, potentially violating Internal Revenue Service rules, experts said.
 
In an interview, James Buchen, a former WMC vice president, said the group's efforts on behalf of the mining bill were no different from its support of other pro-business legislation. "Our interest in this was trying to create an environment where someone was interested in coming and mining in the state," said Buchen, who left in 2012 to start a lobbying practice.
 
A spokesman for Gogebic Taconite, Cline's Wisconsin subsidiary, did not respond to requests for comment.
 
Still, documents and interviews show that Gogebic's money secretly made its way into the political battle over the mining law — and that the efforts of the WMC and the Wisconsin Club for Growth significantly swayed the results.
 
With the help of ads funded by the two groups, the GOP retook the state senate in 2012 and passed mining legislation similar to what the company had wanted.
 
Sen. Dale Schultz, R-Richland Center, the veteran legislator targeted by one of the groups, said Gogebic's efforts to hide its influence went beyond anything he'd witnessed since his election to the state assembly. "I've never seen anything like this done by special interests in Wisconsin in 32 years," he said.
 
 

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