New Delhi: Rajya Sabha Member of Parliament (MP) and former telecom entrepreneur Rajeev Chandrasekhar has questioned the spectrum issues raised by Tata Group supremo Ratan Tata while reminding him that his group company was a major beneficiary of the same, reports PTI.
Accusing Tatas of adopting double standards, he said in an open letter to Tata that “By virtue of dual technology—according to the CAG—your company has caused a loss to the exchequer to the tune of about Rs19,074.8 crore.”
Tata had recently said that old GSM operators were holding excess spectrum free of cost and had demanded a full fledged enquiry into allotment process from 1999 onwards when the new telecom policy came into effect.
Mr Chandrasekhar said Tata Group was one of the major beneficiaries of recent telecom policy by getting GSM spectrum out of turn while 343 applicants are still waiting.
Tatas reacted sharply to the open letter and said it was surprisingly devoid of facts and was meant to sensationalise matters. None of the issues are based on facts as they exist on the ground.
“Tata Teleservices Ltd has always followed government policy and regulations and has applied for any service only after the government has allowed the same,” Tatas said in a statement.
In fact, Mr Chandrasekhar said that TRAI had recommended on 11 May, 2010, that no more UASL licence with bundled spectrum can be given. This means that these 343 applications will never be processed and will never see spectrum.
The Tatas put in their dual technology applications three weeks after the 575 applications for second generation (2G) were received out of which 122 were given licences, 110 rejected and 343 were kept in abeyance, he said.
“You (Tata) will accept that this seems to be a case of arriving late, forming a new queue, jumping the priority and accusing others of getting priority on spectrum allocation and meets your point of out-of-turn allocation of spectrum.
“I am sure the 373 applicants who were rejected for no fault of theirs, will agree—while the Tata Group has sold its equity for billions of dollars to NTT Docomo based on its out-of-turn GSM allocation on dual technology policy,” he said.
As also on hoarding of spectrum by old GSM operators, a charge labelled by Ratan Tata, Mr Chandrasekhar said that TTSL perhaps holds more spectrum (combined CDMA and GSM) than any other operators and still serves least number of subscribers.
In response, Tatas said TTSL applied for dual-technology only after it was announced and was the first and only legitimate applicant, but still the company is yet to get spectrum in Delhi and 39 other key districts in nine telecom circles.
The company even followed the policy of WLL in letter and spirit, and shifted to Unified Access Service Licence (UASL) only after the policy was announced by the government, TTSL statement added.
Ispat Industries’ spokesperson writes to Moneylife denying closure of Nagpur plant due to cash crunch. However, the company has yet to give current production details
Over the past few days, Moneylife has reported that Ispat Industries, faced with a massive cash crunch, has been forced to shut down operations at its plant in Dolvi, Maharashtra, and that it was subjected to massive countrywide raids by the revenue intelligence wing of the Central Board of Direct Taxes (CBDT). The company spokesperson has now sent an elaborate 'clarification' to Moneylife, contesting some parts of our report. This clarification raises a few more questions, which we have sent back to Ispat, but have not heard from the company till the time of writing.
Ispat had closed down its electric arc furnace (EAF) in Dolvi, Maharashtra, which has a capacity to make 3.3 million tonnes of steel and also the cold rolling and galvanizing mill at Kalmeshwar, near Nagpur, due to an acute cash crunch. However, the spokesperson says that the Dolvi plant was supposedly shut down due to upgradation and the cold rolling plant at Kalmeshwar plant has been fully operational all this time, according to the spokesperson. We asked Ispat if it would specify the last week's production at this plant? We have not received a response from the company till the time of writing.
Ms Monaesha Pinto, vice-president, corporate communications, Ispat Industries stated in the clarification, "We have undertaken a technical upgradation of the facilities at our steel complex at Dolvi, District Raigad, Maharashtra, which involves their additional integration and harmonisation. To facilitate this, keeping in mind prevailing market conditions, planned periodic shutdown was preponed to November 7, 2010, to coincide with upgradation. All these activities are in the normal course, though they have stretched beyond the original timelines due to underlying/inherent technical intricacies." Sources tell us that production has not, in fact, resumed at the Dolvi plant.
To the statement by the spokesperson that "We have undertaken a technical upgradation of the facilities at our steel complex at Dolvi, District Raigad, Maharashtra, which involves their additional integration and harmonisation", Moneylife asked whether the company knew when this upgradation at Dolvi would be completed and when the plant would resume operations? We have not got a reply about this either.
Moneylife had reported how the struggling company was attracting generous funds from leading banks and institutions despite gross mismanagement on the part of its promoters. We wrote that the State Bank of India (SBI), in a brazen attempt at preventing its loan from being classified as a non-performing asset, had recently sanctioned a further Rs130 crore to the company, adjusting Rs30 crore against earlier dues. However, the company has refuted this report, while accepting that there have been delays in repayment. "Our company has also been fulfilling its obligations to its lenders, though there are some delays. Our company has not been sanctioned any new credit facilities by the State Bank of India," the spokesperson said.
Apart from SBI, IDBI, IFCI and ICICI Bank are also among the prominent lenders to the company, who have a charge on the entire fixed assets of Ispat Industries. Pedder Realty Pvt Ltd is an independent entity of the company. The property held by the company in a residential apartment at Pedder Road, Mumbai, has been mortgaged in favour of the lenders. Moneylife had mentioned that the sale of flats is pending since 2006 and that the flats would have been snapped up, but for the fact that the owners want a huge component in cash. The spokesperson mentioned, "Pedder Realty Pvt Ltd is in the process of completing the sale of the residential flats comprising the property at Pedder Road, Mumbai. The allegation that the promoters of our company seek a 'huge component in cash' appears entirely mischievous, and is perhaps made with an intent to malign their standing".
Moneylife had also stated that the entire promoter holding of the Mittals was to be pledged to the lending institutions, but far from getting tough with the promoters, the lenders agreed with their plea to reduce this to 95% of their holdings and not create a 'pledge' in favour of the lenders. The company has clarified, "In accordance with the stipulations under the Corporate Debt Restructuring mechanism approved for the company, the promoters of our company were required to pledge 95% of their shareholdings in the company.
Accordingly, 95% of their shareholdings have been pledged by the promoters in favour of the lenders. There has been no relaxation, whatsoever, in the form of submission of non-disposal undertakings by the promoters, and this allegation is entirely baseless. The promoters of our company had proposed to subscribe to a preferential issue of equity share warrants to the extent of Rs233 crore. The necessary approval of shareholders has already been obtained by the company. The promoters have already subscribed an amount of Rs18 crore towards the preferential issue of equity share warrants. Balance subscription is expected to be shortly received from the promoters."
However, the fact remains that Ispat is in dire straits, as is evident from its financials. Ispat has been making continuous losses for the past many years and in the September quarter again it reported a massive loss. In the last quarter, the company lost Rs332 crore compared to a loss of Rs79.4 crore in the corresponding quarter last year.
New Delhi: Top finance ministry advisor today said inflation would fall to 7.5% in November, data for which will be released next week, from 8.58% in the previous month, reports PTI.
“My forecast for overall inflation for November is 7.5%,” chief economic advisor Kaushik Basu told reporters after the tabling of Mid-Year Analysis in Parliament.
Having peaked to 11% in April 2010, inflation moderated to 8.58% in October.
Mr Basu also said food inflation will go below 8% in November. Food inflation stood at over 10% for the first two weeks of November and then fell to 8.60% for the week ended 20th November.
Earlier in the day, finance minister Pranab Mukherjee said inflation will fall to about 6% by March end.
“Inflation is coming down. Now it is at single-digit but I would like it to be further reduced. I am hoping that by March it would be around 6%, but it should come down further,” he said.
Pointing out that inflation, measured by movement in wholesale prices, remained high in the current fiscal, the analysis said, “(inflation) is now coming down.”
The deceleration in inflation, according to analysis, can be attributed to a slew of policy measures taken by the government and the Reserve Bank of India “to douse inflationary expectations and pressures.”
The analysis also revised upwards the projections for economic growth to 8.75% (plus or minus 0.35%), from 8.5% (plus or minus 0.25%) pegged in the Economic Survey, brought out in February this year.
Mr Basu said the revision is based on economic performance during the second quarter. “Besides, the IIP figures have also been good.”
The Indian economy grew 8.9% in the second quarter this fiscal, raising hopes that it may record 9% expansion in 2010-11.
To a query about larger range (0.35%) in the analysis, compared to the Economic Survey (0.25%), Mr Basu said, “it is due to two reasons... because if the situation in developed countries improves, the 9% growth is possible, but the situation in European Union is worrying and the crisis in Ireland may spill-over to Italy, Spain and also Belgium.”
So, it was decided to expand the range of the forecast, he said.
Mr Basu said the high unemployment in countries like the US and Spain is also a cause for worry.
He termed the current growth in India as “robust” and said the upward revision has been made due to good performance in agriculture and manufacturing.
“Agriculture is reviving. It grew by 4.4% in the first half and we expect that it will do even better in the second half,” the chief economic advisor said
Although the government has kept 9% growth forecast for next fiscal, it could come this fiscal itself, Mr Basu added.
He asserted that the economy is not overheating, and is reverting to the numbers achieved before the global financial crisis in 2008 hit the economy.