Companies & Sectors
Mallya gives Rs5,904 crore guarantee to Kingfisher lenders

While guarantees given by Mallya fell from Rs6,156 crore in the previous year 2010-11, the guarantees provided by Kingfisher’s holding and associate companies rose from Rs8,863 crore to Rs8,926 crore in this period

 
New Delhi: Kingfisher Airlines chairman Vijay Mallya gave guarantees worth Rs5,904 crore for the carrier’s loans and other liabilities in 2011-12, but did not get any commission for the same because of lenders’ opposition, reports PTI.
 
While guarantees given by Mr Mallya fell from Rs6,156 crore in the previous year 2010-11, the guarantees provided by Kingfisher’s holding and associate companies rose from Rs8,863 crore to Rs8,926 crore in this period.
 
Mr Mallya had received a commission of Rs51 crore for these guarantees in 2010-11, but the airline has said that payment of such commissions has been withdrawn after directions from the consortium of its lenders.
 
As per the company’s latest annual report 2011-12, sent to shareholders ahead of their Annual General Meeting on 26th September, the airline did not make any payments to Mr Mallya during the fiscal.
 
On the other hand, remuneration paid to its CEO Sanjay Agarwal nearly doubled from Rs2.12 crore to Rs4.01 crore, although the total employee remuneration fell marginally by 1% to Rs669.5 crore on account of lower headcount.
 
Kingfisher said its headcount fell by 1,651 people or 22% to 5,696 persons in the last fiscal and the carrier is planning further measures for optimising its “human resources utilisation.”
 
Writing on behalf of the company's board, chairman Mallya said in the “Report of Directors for the year 2011-12” that Kingfisher is working on a “holding pattern” basis with limited operation, pending policy changes.
 
“Due to the current situation, your company is operating as a ‘holding pattern’ with limited operation, pending policy changes which are in the offing,” Mr Mallya said.
 
In aviation parlance, an aircraft is said to follow “holding pattern” when it makes several mid-air turns waiting for a clearance to land, or to avoid hitting other plane.
 
Kingfisher’s net loss more than doubled to Rs2,328 crore in 2011-12, from Rs1,027 crore in the previous year.
 
Its total long-term borrowings stood at Rs5,695 crore as on 31 March 2012, down from Rs6,306 crore a year ago.
 
Besides, it had short-term borrowings of Rs2,335 crore at the end of 2011-12, up from Rs604 crore as on 31 March 2011.
 
For these loans, the airline has used as security all its movable assets, trademarks, ‘goodwill’ of the company, credit card and other receivables and a mortgage on Kingfisher House.
 
The airline said the government is actively considering relaxing Foreign Direct Investment (FDI) norms to allow foreign airlines to pick up equity in domestic players, after representations made by it and other domestic carriers.
 
“This change in policy could provide your company with widened access to equity capital and potential to induct strategic partners,” the airline told its shareholders.
 
Mr Mallya said India's airline industry is currently exposed to one of the toughest operating environments and is expected to struggle with profitability pressures, with one of the highest prices for jet fuel across the world, rupee depreciation and high cost of borrowing.
 
“The Government of India is in the process to usher in fiscal measures and reforms that will make the operating environment more conducive for profitable business,” he said.
 
He also said that the government is in the process of modifying the FDI policy that will allow foreign airlines to invest in Indian carriers.
 
Kingfisher said its “employee relations remained cordial”. In recent months, there have been various reports about Kingfisher staff abstaining from work due to non-payment of salaries on time, thus affecting the airline's operations.
 
On the heels of a strike by its pilots demanding salaries, a section of engineers did not report for work yesterday protesting non-payment of March salaries.
 
Listing out the measures proposed to be reviewed and undertaken to maximise its profits and cut losses, Kingfisher said it would be “optimising human resources utilisation”.
 
Other such measures include phased capacity re-induction, transitioning to a single brand offering, strengthening route structures and reconfiguring aircraft for productivity, revising sales and distribution reach.
 
Improving aircraft utilisation and schedule efficiency, focusing on driving revenue premium through yield management and a comprehensive review of costs across key functions are also proposed.
 

User

Coal scam: CBI files FIR against five companies

According to a CBI spokesperson, five FIRs have been filed against five companies and unknown government officials for alleged cheating

 
New Delhi: The Central Bureau of Investigation (CBI) has registered cases against five companies and unknown government officials as part of its probe into alleged irregularities in allocation of coal blocks and carried out searches across 10 cities, reports PTI.
 
According to a CBI spokesperson, five FIRs (first information reports) have been filed against five companies and unknown government officials for alleged cheating.
 
The agency sleuths were also conducting searches at 30 places in ten cities including Delhi, Mumbai, Kolkata, Patna, Hyderabad, Dhanbad and Nagpur, the spokesperson said.
 
The filing of FIRs comes three months after registration of a preliminary enquiry into the coal scam by the agency on the directions of the Central Vigilance Commission.
 
During the preliminary enquiry, the CBI was informed by the coal ministry officials that it had issued show cause notices to some of the firms which were allocated the mines for explaining the delay in conducting the mining work.
 
Some of the firms, which were allocated coal blocks in 2005, were yet to start mining, official sources said.
 
The CBI had also examined the past areas of operation of some of the companies which were allotted coal blocks in Jharkhand, Chhattisgarh and Karnataka, the sources said alleging some of these firms had been set up only for getting coal blocks allocated and the same was later sublet to other companies at a premium.
 
The agency has already questioned senior bureaucrats who were overseeing allocation of coal blocks during 2005-09, the sources said.
 
They said the questioning of the coal secretaries, who also chair the screening committee, was done to understand the issues involved in the allocation of coal blocks during the period and so far the agency has not found any irregularities on their part.

User

Competition Commission probing alleged cartelisation in pharma and telecom

CCI is investigating alleged cartelisation in various sectors such as pharmaceuticals, telecom and milk distribution

 
New Delhi: The Competition Commission of India (CCI) is investigating alleged cartelisation in various sectors such as pharmaceuticals, telecom and milk distribution, the government said on Monday, reports PTI.
 
CCI keeps gathering information on issues related to cartelisation and if prima facie case is found, then it takes up the issue for further investigation, Minister of State for Corporate Affairs RPN Singh informed the Parliament.
 
"Some such sectors recently have been taken up by the Commission in respect to alleged cartelisation related to real estate, pharmaceuticals, civil aviation, telecom, tyre manufacturing, cement, milk distribution, onion and asbestos," Singh said in a written reply to the Rajya Sabha.
 
CCI is mandated to look into the cartelisation by enterprises, which is anti-competitive activity having appreciable adverse effect on competition that could adversely affect prices, the Minister said.
 
He noted further that data on price rise is not maintained by the CCI.
 
According to the Minister, parties involved in cartelisation activities are dealth with severely by the Commission as per provisions in the Competition Act 2002.
 
In June, the anti-competition regulator had slapped a hefty penalty of about Rs 6,200 crore on 11 leading cement companies including ACC, Ambuja Cements, Ultratech and Jaypee Cements for price cartelisation.
 
The other companies found guilty were Grasim Cements now merged with Ultratech Cements, Lafarge India, JK Cement, India Cements, Madras Cements, Century Cements and Binani Cements.
 
The industry body Cement Manufacturers Association (CMA) was also fined.
 
The regulator was looking into 39 cases and 26 other cases were under investigation with the Commission's Director General as on 30 June 2012. Majority of them were related to the infrastructure sector.
 
There were also cases related to banking and financial services, film/entertainment/TV, information technology/ telecom, medical/pharmaceuticals, civil aviation, petroleum /gas and automobiles, among others.
 
The pending cases are mostly related to anti-competitive agreements and abuse of dominant market position.
 

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)