Was majority in parliament on FDI in retail funded by Wal-Mart asks CPI(M)

Referring to the vote in Lok Sabha and Rajya Sabha on the issue of FDI in retail, CPI-M leader Yechury said it has to be found whether Wal-Mart financed this majority too

New Delhi: Accusing Congress of "manufacturing majority" in Indian Parliament on teh issue of foreign direct investment (FDI) in retail, Communist Party of India-Marxist (CPI-M) on Tuesday asked whether this was funded by American retail giant Wal-Mart, reports PTI.
"An independent and time-bound inquiry is necessary. It is necessary to find out whether the amount (reportedly spent by Walmart in lobbying) was spent on bribes too," senior CPI(M) leader Sitaram Yechury said.
Observing that the US media reports had said that the company had spent $25 million on lobbying with US lawmakers in 2012, he said "it has to be found whether Wal-Mart financed this majority (in Parliament) too," he said, referring to the vote in Lok Sabha and Rajya Sabha on the issue of FDI in retail.
In this context, he also referred to the Enron power project case in Maharashtra saying the now-bankrupt US energy firm had "spent money to 'educate' Indian officials about the company." 
Yechury said Walmart considered India a "very big market" as its own estimations valued the retail market here to be worth $500 billion which is set to grow to $1 trillion by 2020.
Walmart, he said, was looking at India at a time when US and Europe had been hit by the global recession and Britain was threatening to walk out of the European Union.
"This is the simple truth" about Walmart's interests in India and the company was "not interested in investing to improve infrastructure but solely to reap profits," he said.
The US retail chain has been "doing such activity not only in India but in a large number of other countries also, most of them developing ones. Their activities in Mexico for eight years have now come to light," the Marxist leader said, adding "our stand has been vindicated".
To questions on government agreeing to a probe, he said "we are open to a judicial inquiry, either by a sitting or a retired judge, or one under the Inquiry Act. CBI can be used (by the probe panel) to investigate." 
On Reserve Bank of India's amendments to Foreign Exchange Management Act (FEMA) which would give legal effect to FDI in retail, Yechury said the amendments have not have been tabled in Rajya Sabha so far, though they have been placed in Lok Sabha.
"By not tabling it in the Upper House, the government is violating the equality of the two Houses provided in our Constitution. The government is trying to throw a subterfuge as it knows that, most likely, it will lose in Rajya Sabha", he said.
Observing that the amendments would "have to be laid in both Houses within 30 days", he said the last day is 13th December. "If they don't do it by then, the judicial review process, which is already on in the Supreme Court, will take over. Not tabling them will be serious subversion of our parliamentary structure."




4 years ago

Manmohan Singh led Government is the most corrupt since independence. He lost in a parliament election but later entered the temple of worlds largest democracy through the back door. But still Manmohan is regarded as an honest and clean man. All crony capitalists extols the virtues of this man and he unabashedly clinging to his chair.

Investors have woken up to governance issues in Hexaware

The share price of Hexaware Technologies has gone down by 24% in the last six months. This is not the first Atul Nishar-promoted company we have seen come crashing down

The operating margins of Hexaware Technologies have been highly volatile in the past. According to a research report from Espirito Santo, the company’s service portfolio is not big enough a differentiator to drive sustainable growth. The research report also cites that not only the company’s margins have been highly volatile in the past, it has also fallen from 20% to low single digits twice in the last six years.

Companies promoted by Atul Nishar have had a chequered history. He set up Hexaware Technologies in 1990 from the demerged software arm of Aptech. Following the shakeout in the software sector after 2001, Aptech demerged its software business. The ownership itself changed hands from Atul Nishar in 2003 and was substantially acquired by a group of independent investors led by Rakesh Jhunjhunwala a few years later. Then there is the now defunct non-banking finance company (NBFC), Apple Finance which is promoted by the Atul Nishar-owned Apple Industries group and was engaged in leasing and hire purchase. Apple Finance failed to pay the banks a total principal amount of Rs75 crore and accrued interest for the debentures they held.

Is Hexaware fraught with the same management issues?  The recent cut in its CY12 revenue and its margin guidance surprised the market, but Hexaware also faced these client specific issues in CY08 and CY10, according to the research report. Investors had bought the stock on the back of high growth prospects, improving margins and a high dividend yield. However, with Hexaware’s intent to make an acquisition of $40 million to $60 million and with this cut in revenue and margin guidance, all the main support arguments for the stock have crumbled, mentions the research report.

Hexaware has seen EBITDA margins drop to mid-single digits twice in the last six years. Dividends too, were not sustainable. The company announced a 20% dividend cut in Q3CY12. The research firm expect a further cut by another 20% or so due to reduced profitability.

“Our concerns are more about the ability to generate growth from existing clients, rather than its ability to win new deals,” says the report. The company’s revenues stagnated from Q2CY07 to Q3CY08 due to client specific issues, and declined from Q4CY08 to Q1CY10 as its top client materially cut spending. The growth since then has been driven by winning large deals from its existing top-10 clients. In the period when its revenues stagnated or declined Hexaware faced severe margin pressures, with margins dropping to the low single digits.



Vaibhav Dhoka

4 years ago

Thanks Moneylife for alerting investors about Atul Nishar. It can be named as Mini SAHARA.He has leached investor slowly.

BSE Sensex, Nifty under pressure: Tuesday Closing Report

If the indices go under today’s low expect a downtrend to start


The uproar over the Wal-Mart issue which rocked the Parliament for the second day pushed the market lower today. The market is seen under pressure and if the indices go under today’s low, a downtrend may begin. The National Stock Exchange (NSE) witnessed a higher volume of 83.96 crore shares and the advance-decline ratio was 575:1234.


The market witnessed a firm opening on hopes that the parliamentarians would clear more pending bills, which would bolster investors’ faith in the economy. On the global front, US markets closed with marginal gains ahead of the Federal Reserve’s two-day meeting which begins later today. Markets in Asia were mostly higher on hopes that US policymakers would sew a budget deal in time to avoid higher taxes and spending cuts.


The Nifty started the day at 5,924, up 15 points and the Sensex was up 56 points at 19,466. Across-the-board buying saw all sectoral indices in the green in early trade. The gains enabled the benchmarks hit their intraday highs in the first hour itself. At the highs the Nifty rose to 5,965 and the Sensex climbed to 19,612.


However, the market could not sustain the gains and traversed a gradual southward journey following uproar in Parliament over reports of Wal-Mart engaging lobbying firms to get an entry into the country. The government assured the Lok Sabha that it was willing to initiate an enquiry into the matter.


Meanwhile, India’s exports declined 4.17% in November to $22.3 billion, down for the seventh month in a row. On the other hand, imports grew by 6.35% to $41.5 billion last month, leaving a trade deficit of $19.28 billion.


 The market entered the negative terrain in noon trade as selling intensified. The market touched the day’s low at around 2.40pm with the Nifty falling to 5,865 and the Sensex dropping to 19,285.


A minor recovery in late trade helped the benchmarks close off the lows, but in the red. The Nifty closed 14 points down at 5,895 and the Sensex settled 23 points lower at 19,387.


While the Sensex ended with a minor loss, the broader indices were hammered today. The BSE Mid-cap index tanked 1.15% and the BSE Small-cap index dropped 0.91%.


Excluding the BSE Fast Moving Consumer Goods (up 1%), all other sectoral indices settled lower. The losers were led by BSE Realty (down 1.96%); BSE Power (down 1.05%); BSE TECk (down 0.92%); BSE PSU (down 0.91%) and BSE Oil & Gas (down 0.89%).


Ten of the 30 stocks on the Sensex closed in the positive. The chief gainers were Jindal Steel (up 2.54%); Bajaj Auto (up 2.28%); Hindustan Unilever (up 2.08%); Sun Pharmaceutical Industries (up 1.77%) and HDFC (up 1.29%). The main losers were BHEL (down 2.59%); Hindalco Industries (down 2.40%); NTPC (down 1.66%); Coal India (down 1.55%) and Tata Power (down 1.51%).


The top two A Group gainers on the BSE were—Piramal Enterprises (up 9.38%) and Jet Airways India (up 4.18%).

The top two A Group losers on the BSE were—Strides Arcolab (down 5.14%) and Gujarat State Petronet (down 4.44%).


The top two B Group gainers on the BSE were—Radha Madhav Corporation (up 19.86%) and Bartronics (up19.52%).

The top two B Group losers on the BSE were—Sharp Industries (down 19.98%) and Alka India (down 11.76%).


Out of the 50 stocks listed on the Nifty, 17 stocks settled in the positive. The major gainers were Bajaj Auto (up 2.24%); Ambuja Cement (up 2.15%); Jindal Steel (up 2.05%); HUL (up 1.71%) and Sun Pharma (up 1.47%). The key losers were Hindalco Ind (down 2.76%); BHEL (down 2.67%); Cairn India (down 2.11%); DLF (down 2.05%) and HCL Technologies (down 1.59%).


Markets in Asia settled mostly higher on hopes of the US government coming up with a budget deal that would avoid new taxes and spending cuts. However, nervousness ahead of the two-day US Federal Open Market Committee meeting capped the gains.


The Hang Seng gained 0.21%; the Jakarta Composite rose 0.36%; the KLSE Composite climbed 0.58%; the Straits Times rose 0.13%; the Seoul Composite advanced 0.37% and the Taiwan Weighted added 0.06%. On the other hand, the Shanghai Composite declined 0.44% and the Nikkei 225 fell 0.09%.


At the time of writing, the key European indices were trading with gains in the range of 0.19% to 0.595 and the US stock futures were in the positive.


Back home, foreign institutional investors were net buyers of shares aggregating Rs698.23 crore on Monday. On the other hand, domestic institutional investors were net sellers of equities totalling Rs586.58 crore.


Jindal Steel and Power (JSPL) today said it expects to start supplying coal from its Mozambique mine early next year.  The company, which has plans to produce 10 million tonnes per annum (MTPA) coal from the mine at peak level, is also looking to set up a 2,640 MW thermal power plant in the African nation. The stock surged 2.05% to close at Rs418.45 on the NSE.


Videocon Industries on Tuesday announced a new discovery of light hydrocarbons in a well, which is a part of a concession area of Sergipe Alagoas ultra deep water basin in Brazil. Brazilian energy giant Petrobras is the operator of the concession area (BM-SEAL-11) with 60% participating interest, while the rest is held by IBV Brasil (a Brazilian joint venture company equally held by Videocon Energy Brazil, a wholly owned overseas subsidiary of Videocon, and BPRL Ventures a subsidiary of Bharat Petroleum Corporation. Videocon settled 0.82% lower at Rs231 on the NSE.


The Hinduja Group-promoted IndusInd Bank has raised Rs2,000 crore through placement of shares with domestic and overseas institutional investors. This is the third qualified institutional placement issue by the Mumbai-based bank, and was launched on 26th November, the bank said in a statement. The proceeds from the issue of 5.21 crore new equity shares, or 9.98%, will be used to support growth and also augment the total capital adequacy ratio. The stock declined 1.34% to settle at Rs412 on the NSE.


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