Three ADA group companies under scanner for violating ECB norms: Govt

The Indian government on Tuesday said three companies of the Anil Dhirubhai Ambani (ADA) group—Reliance Infrastructure Ltd (RInfra), Reliance Natural Resources Ltd (RNRL) and Reliance Communications Ltd (RCom)—have violated overseas debt norms, reports PTI.

While the matter pertaining to RInfra has been referred to the Enforcement Directorate (ED) over non-payment of penalty, the RNRL case has also been handed over to the ED for further investigation.
 
In a written reply in the Rajya Sabha, minister of state for finance Namo Narain Meena said end-use violations have been detected by the Reserve Bank of India (RBI) in respect of two external commercial borrowing (ECB) transactions of $360 million and $150 million by RInfra.
 
The company brought the proceeds raised through the ECBs to India and kept these invested in debt mutual funds, pending utilisation for the declared end-use, in gross violation of the existing guidelines, the minister said.
 
A penalty of Rs124.7 crore was imposed on RInfra, he said, adding that since it did not pay the penalty in accordance with the rules and provisions of the Foreign Exchange Management Act (FEMA), the violations were referred to the ED in December 2008 for adjudication.
 
RNRL had issued foreign currency convertible bonds worth $300 million for a project under the automatic route. As much as $275 million (about Rs1,127 crore) was brought to India in May 2007 and parked in debt mutual funds pending utilisation.
 
Subsequently, in August 2008, Rs1,160 crore ($275 million) was invested in a wholly-owned subsidiary in Singapore, the minister said.
 
Since the alleged transactions have a cross-border angle and since the RBI does not have privileges of investigation, the issue has been referred to the ED for further investigation, he said.
 
He added that RCom’s audited annual report for 2007 revealed that Rs5,142 crore of unutilised funds raised through foreign currency convertible bonds (FCCBs) had been deposited interest-free with a wholly-owned subsidiary, which in turn has parked the money in bank deposits.
 
After ascertaining the facts, the company was advised to apply for ‘compounding’. In its response, RCom denied any contravention of the regulations and maintained that the FCCB proceeds were utilised for telecom capital expenditure, taking into account the business exigencies. The minister said the company’s reply is being examined before initiating further action.

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GMR Energy to invest Rs18,000 crore by 2012

GMR group company GMR Energy Ltd on Tuesday said it would invest Rs18,000 crore over the next three years to increase its electricity generation capacity to around 3,300MW from a little over 800MW now, reports PTI.

"These projects would be funded in a debt-equity ratio of 75:25. For the equity portion, we have internal accruals and short-term loans," said Raaj Kumar, chief executive, GMR Energy.
 
The company is in talks with various banks, including State Bank of India and Axis Bank, and has also approached SBI Capital Markets to mobilise debt funds for these projects. "These lenders have been with us for a long time," Mr Kumar said.
 
The company currently operates three plants in India—a 380MW unit at Vemagiri in Andhra Pradesh, a 200MW plant in Chennai and a 235MW plant in Mangalore.
 
GMR Energy's projects in the pipeline include a 1,050MW plant at Kamalanga in Orissa and an 800MW expansion at the Vemagiri plant. It is also implementing a 600MW project for its subsidiary, Emco Energy. These three projects are scheduled to be commissioned by 2012.
 
The company is also setting up a 1,320MW plant in Chhattisgarh, which will be commissioned in early 2013. "We are investing Rs4,540 crore in Orissa, Rs3,360 crore for the Emco project, Rs2,800 crore in Vemagiri and Rs5,500 crore in Chhattisgarh," Mr Kumar said.
 
GMR Energy is also setting up five hydro-power projects—three in India and two in Nepal. The financial closure for the company's 300MW hydro plant at Uttarakhand will be completed by March 2010, after which it would take 54 months to complete the project, he said.
 
He said the debt component for the Emco project would be arranged from Axis Bank and the company is in talks with SBI for the Chhattisgarh project and the gas-based project in Andhra Pradesh.

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UTV signs Rs95 crore syndication deals with TV channels

UTV Software Communications Ltd said its unit, UTV Motion Pictures, has signed a series of non-exclusive television rights syndication deals worth Rs95 crore with some TV channels.

The deals cover the entire portfolio of UTV Motion Pictures’ 2008 and 2009 productions, from ‘Oye Lucky! Lucky Oye!’ and ‘Dev D’ to recent hits like ‘Kaminey’, ‘Wake Up Sid’ and ‘Kurbaan’, the company said in a release to the Bombay Stock Exchange (BSE).
 
Siddharth Roy Kapur, chief executive, UTV Motion Pictures, said," We are pleased to announce these television syndication deals that are non-exclusive in nature and hence allow us to exploit the same content across multiple additional broadcasters in India and worldwide."
 
As part of the deal, Colors will telecast the premiere run of these movies in India, followed by NDTV Imagine. These channels will have the right to telecast a fixed number of runs of each movie. UTV has the right to further syndicate the television rights to these movies to any other channel in the same period.
 
In other overseas syndication deals, B4U has acquired the non-exclusive rights to air UTV’s movies across its international beams and Channel 4 has acquired the rights to air these movies in the UK market.
 
In the last few years, UTV has carved a unique place for itself as the only non-family-run, true-blue studio model in the industry that creatively develops, produces, markets, distributes and syndicates movies across various genres, star casts, scales and budgets.
 
The company has in a short span of five years brought audiences such iconic films as ‘Swades’, ‘Rang De Basanti’, ‘Jodhaa Akbar’, ‘Khosla Ka Ghosla’, ‘Life in a Metro’, ‘A Wednesday’, ‘Mumbai Meri Jaan’ and ‘Fashion’.
Yogesh Sapkale
 

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