A close below 5,342 may see the Nifty slip to the level of 5,250
The market saw its third weekly close in the positive mainly on hopes that central banks across the world will step in with fresh initiative to spur growth in the light of dismal economic indicators. A fall in India’s headline inflation for July also supported the gains in the holiday-shortened week. Among economic events, July consumer price index (CPI) based inflation, to be announced on Tuesday, will be keenly watched.
The Sensex closed the week 133 points (0.76%) higher at 17,691 and the Nifty added 46 points (0.86%) to settle at 5,366. Going ahead, the market is likely to move sideways. However, if Friday’s low of 5,342 is broken and the Nifty settles below that level, we may see the index slipping to the level of 5,250.
The market closed in the green on Monday on a smart recovery in late trade. A fall in headline inflation for July and supportive global cues ensured a positive close for the second day. All markets in India were closed on Wednesday on account of the Independence Day holiday.
The benchmarks settled lower on Thursday on selling pressure in FMCG, metals and consumer durables sectors. Despite falling to the day’s low following the CAG report, select buying ensured a green close on Friday.
In the sectoral space, BSE Oil & Gas and BSE Auto gained 2% each while BSE Metal (down 2%) and BSE Power (down 1%) were the losers.
The top Sensex gainers in the week were Reliance Industries, Mahindra & Mahindra, Tata Motors (up 4% each), HDFC (up 3%) and Bharti Airtel (up 2%). Hindalco Industries (down 7%), Tata Power (down 3%), Sun Pharma, ITC and NTPC (down 2% each) settled at the bottom of the index.
The Nifty was led by Ranbaxy Laboratories, IDFC (up 7% each), RIL, M&M and HCL Technologies (up 4% each). The top losers were Hindalco Ind (down 8%), BPCL, Tata Power, Ambuja Cements (down 3% each) and NTPC (down 2%).
Hit hard by slowing overseas demand, India's exports in July contracted 14.8% to $22.4 billion in July. Imports too declined by 7.6% to $37.9 billion, leaving a trade deficit of $15.5 billion for the month.
Headline Inflation declined to 6.87% in July as the rate of price rise of the food articles category eased a little. Inflation, as measured by the Wholesale Price Index (WPI), was 7.25% in June and stood at 9.36% in July last year. Meanwhile, food inflation declined to 10.06% in July, from 10.81% in June.
The CAG on Friday charged the government of allocating coal blocks, power projects and land for the Delhi's airport at a pittance, costing the exchequer crores of rupees in lost revenues. Meanwhile, The government rubbished the CAG’s findings that private firms had got “undue benefits” to the tune of Rs3.06 lakh crore in coal, aviation and power sectors, arguing that the calculations were ‘misleading’ and faulty and accused the auditor of not following its mandate.
The BJP has demanded the resignation of prime minister Manmohan Singh taking “moral, political and personal” responsibility for the wrongful loss due to coal block allocations.
On the global front, US stocks settled higher for the sixth week on better-than-expected economic indicators. Analysts opine that the market is likely to face a challenge as September is seen as a month of heightened trading activity coupled with an increase in volatility.
European markets also settled higher as policymakers were making concerted efforts to find solutions to the continent’s debt crisis.
Even though the trend is bullish more convincing evidence is needed to support the bullish cause from here on
Oracle India sold software licenses and services to India’s government through local distributors, and then had the distributors ‘park’ excess funds, worth about $2.2 million from the sales outside Oracle India’s books and records, the SEC alleged in its charge-sheet
Washington: Computer software and services company Oracle has agreed to pay $2 million penalty to settle charges of US market regulator Securities and Exchange Commission (SEC) that its Indian subsidiary failed to prevent secret payments in its business transaction with the government between 2005 and 2007, reports PTI.
Oracle India structured transactions with the Indian government on more than a dozen occasions in a way that enabled Oracle India’s distributors to hold about $2.2 million of the proceeds in unauthorised side funds, the SEC alleged in its charge-sheet against Oracle.
According to the SEC’s complaint filed in the US District Court for the Northern District of California, the misconduct at Oracle’s India subsidiary—Oracle India Pvt Ltd—occurred between 2005 and 2007.
Oracle India sold software licenses and services to the Indian government through local distributors, and then had the distributors ‘park’ excess funds from the sales outside Oracle India’s books and records.
The charge-sheet, however, makes no reference to whom these payments were made in India, either private individuals or officials, except for refereeing to a particular $3 million deal with the Union ministry of information and communication in May 2006.
Of the $3.9 million, Oracle India sent only $2.1 million to Oracle to record as revenue on the transaction.
“As instructed by Oracle India’s then-sales director, only $2.1 million was sent to Oracle to record as revenue on the transaction, and the distributor kept $151,000 for services rendered. Certain other Oracle India employees further instructed the distributor to park the remaining $1.7 million for “marketing development purposes,” the complaint said.
SEC alleged, “Two months later, one of those same Oracle India employees created and provided to the distributor eight invoices for payments to purported third-party vendors ranging from $110,000 to $396,000.”
“In fact, none of these storefront-only third parties provided any services or were included on Oracle’s approved vendor list. The third-party payments created the risk that the funds could be used for illicit purposes such as bribery or embezzlement,” it added.
Without admitting or denying the SEC’s allegations, Oracle consented to the entry of a final judgment ordering the company to pay the $2 million penalty and permanently enjoining it from future violations of these provisions, the official statement said.
The settlement takes into account Oracle’s voluntary disclosure of the conduct in India and its cooperation with the SEC’s investigation, as well as remedial measures taken by the company, including firing the employees involved in the misconduct and making significant enhancements to its Foreign Corrupt Practices Act (FCPA) compliance program, it added.
“At the time, Oracle India’s typical business model involved selling Oracle software licenses and services through local distributors who had written agreements with Oracle India.
“In the transactions at issue, Oracle India was heavily involved in identifying and working with the end-user customers in selling products and services to them and negotiating the final price,” it said.
The purchase order, however, was placed by the customer with Oracle India’s distributor.
The distributor bought the licenses and services directly from Oracle, and then resold them to the customer at the higher price that had been negotiated by Oracle India.
“The difference between what the government end-user paid the distributor and what the distributor paid Oracle typically is referred to as ‘margin’, which the distributor generally retains as payment for its services,” the SEC alleged.
“On around 14 occasions related to eight different government contracts between 2005 and 2007, certain Oracle India employees created extra margins between the end-user and distributor price and directed the distributors to hold the extra margin in side funds.
“Oracle India’s employees made these margins large enough to ensure a side fund existed to pay third parties,” it said.
“At the direction of the Oracle India employees, the distributor then made payments out of the side funds to third parties, purportedly for marketing and development expenses. Some of the recipients of these payments were not on Oracle’s approved local vendor list; indeed, some of the third parties did not exist and were merely storefronts,” SEC alleged.
Meanwhile in an emailed statement Oracle said, in 2007, the company discovered that a few employees of its Indian subsidiary apparently had directed distributors to maintain side funds in violation of Oracle business practices.
Following a thorough investigation, the employees involved were terminated, it added.
Oracle disclosed the matter to the government and has cooperated with the SEC in its investigation, culminating in the announcement of a $2 million settlement, it added.
“Oracle has established policies, programmes and controls to deter and detect inappropriate conduct that have been recognised among the best in our industry,” Oracle spokesperson Deborah Hellinger said.
“We will continue to maintain a high standard of compliance and accountability for our business around the world,” she added.