BUSINESS NEWS MAY 2009

Friday, May 01st 2009
Bharti joint venture with Alcatel-Lucent
Continuing with its strategy of outsourcing technology functions while focusing more on sales and marketing, Bharti Airtel has entered a joint venture with Franco-American firm Alcatel-Lucent which will manage Bharti's landline and broadband businesses. Bharti will be the minority partner in the joint entity (24:76) and will invest Rs 2500 crore over the next five years. According to Bharti Airtel CEO Manoj Kohli, Alcatel-Lucent's global experience in the transformation of fixed line networks to make them Internet Protocol-based and also next generation network-enabled was the reason behind the choice of partner. Incidentally, Bharti also has multibillion dollar outsourcing deals with Ericsson and Nokia Seimens Network to manage its mobile networks, as well as with several BPOs which collectively handle customer services.

Saturday, May 02nd 2009
Restrictions on trade of telecom spectrum may be lifted 
If recommendations of a panel set up to resolve the controversy over allocation of airwaves or spectrum to telecom operators are accepted, then a three-year stock sale ban imposed on promoters of companies that acquired telecom licences last year may be lifted. The communications ministry and telecom regulator Trai had proposed this lock-in period to keep out non-serious players eyeing quick profits. But the committee has suggested that instead of imposing a ban on sale, the government should modify existing policies and allow larger operators to buy new entrants to fulfil their spectrum requirements. The Committee also criticised the current policy of allowing only about 15 players per circle saying that this led to increasing fragmentation within the industry.

Monday, May 04th 2009
Crisis Fund from Asian countries
In a move that might see some stimulation in regional markets in the midst of the ongoing financial crisis, 13 nations from East and South East Asia have come together to constitute a $120-billion emergency fund which would be used to provide liquidity or balance of payments support to any of the member nations should they need it during the economic downturn. The regional fund, named the Chiang Mai initiative, would receive finances from China (32%), Japan (32%), South Korea (16%) and the 10-member Asean. This was announced on the sidelines of the Asian Development Bank's annual meeting on the Indonesian island of Bali.

Tuesday, May 05th 2009
ONGC Videsh announces investment plan in Iraq
ONGC Videsh has announced that it will invest around $1.5 billion in a large oil block located in the western desert on the Iraq-Saudi Arabia border. This 10500-sq km exploration block was awarded to ONGC back in November 2000 but even though all pre-requisite formalities for exploration had been completed, the situation in the country had forced the company to stop work. The contract has since been renegotiated. The block is estimated to hold 54 million barrels of recoverable reserves and an  estimated total of 645 million barrels of in-place reserves.

Tuesday, May 05th 2009
Nano adds Rs 2500 crore to Tata kitty
With over 203000 fully-paid bookings for the Tata Nano since its March-end launch, Tata Motors is richer by Rs 2500 crore already! Among the three variants of the car, 20 per cent bookings were for the Nano Standard, 30 per cent for the Nano CX and the remaining 50 per cent for the top-end Nano LX. In a first-ever development for the Indian auto industry, Nano received 4000 online cash bookings through its website.Incidentally, the Tata Nano website witnessed a record 30 million hits between its launch on March 23 and April 25, when booking was closed. Undoubtedly, the proceeds from Nano will be extremely useful to Tata Motors at a time when it is seeking to refinance the debt it had incurred for the Jaguar-Land Rover purchase from Ford Motors.

Tuesday, May 05th 2009
Bharti to invite bids from network equipment vendors
Bharti Airtel's $2billion-dollar networking outsourcing deals with Ericsson and Nokia Siemens Networks (NSN) expire next year, following which the telecom giant will reportedly invite bids from global equipment vendors instead of automatically extending the agreement with the incumbent parties. Although Ericsson and NSN are likely to remain favourites for building, maintaining and managing Bharti's networks across the world, this decision will open up one of the world's largest network management contracts for potentials such as Alcatel-Lucent, Huawei and ZTE.

Tuesday, May 05th 2009
RBI Deputy Governor quits
In a surprise decision, the Deputy Governor of the Resrve Bank of India, Mr. Rakesh Mohan has quit his post, almost an year before his tenure officially expires, to take up an appointment as distinguished consulting professor at the Stanford Centre for International Development at Stanford University. As deputy governor, Mr. Mohan, who steps down on June 10, was in charge of monetary policy, financial markets, economic research and statistics, and communication. 

Wednesday, May 06th 2009
IMF warns of severe recession for Asia
The International Monetary Fund (IMF) today sharply slashed its growth outlook for Asia, predicting a "long and severe recession" for the region's wealthier but export-reliant economies. The US-based institution said it now expected 4.3% growth in 2010, down from an initial forecast of 4.5%. For emerging nations in Asia, which excludes Japan, the IMF lowered its growth forecast to 3.3% from 4.4%. It put 2010 growth at 5.4%, down from an initial 6.0%. 

Wednesday, May 06th 2009
Obama's tax plans a dampener for US IT outsourcing
US companies especially in the IT sector will now see a rise in the cost of outsourcing business processes to India by about 50%. This new development would become a law if US President Barack Obama's new tax proposals are accepted. Come 2011, the proposed tax laws will require US companies to pay tax if an expenditure is made to avail services from outside the country. The move has been proposed to discourage outsourcing and contain the flight of jobs to other countries. Analysts however believe that Indian IT companies are set to gain from these tax laws as home grown Indian entities will become more competitive in any IT project for which they are up against a US company.

Wednesday, May 06th 2009
Wipro bags mega IT deal
Wipro Infotech has sealed a 9-year outsourcing contract with the telecom arm of real estate major Unitech, called Unitech Wireless, under which the Indian IT firm will deploy component-based service delivery platforms for the telecom major and deliver a wide range of services including multichannel access, real time information delivery, multimedia content and VAS. Although no figures were revealed by official sources, unconfirmed reports put the deal amount somewhere between Rs 2.5K to 2.8K crore.

Thursday, May 07th 2009
Tata Sons sells 1% stake in TCS
For quite some time now, speculation has been rife on how Tata Motors proposes to refinance the bridge loan of $2billion taken to fund its acquisition of the iconic Jaguar and Land Rover brands from Ford Motors. On Wednesday, May 6, the UK subsidiary of Tata Sons, sold 1% of its stake (amounting to 10.34 million shares) in Tata Consultancy Services at Rs 615 a share. The bridge loan has to be refinanced by June and it is reported that Tata Motors may also sell stake in its unlisted profit making subsidiaries such as Tata Daewoo Commercial Vehicle Company, Tata Motors Finance, Telcon and a few others. Fortunately the cash flow of Tata Motors has significantly improved due to the Rs 2500 crore inflow from fully paid bookings of its new low cost model, the Nano.

Thursday, May 07th 2009
Intel Capital and IBM eye stake in Deccan Express
Media reports indicate that Intel Capital and IBM may together pick up 24% stake in the start-up cargo airline Deccan Express, which is expected to start operations later this week. The combined investments are expected to bring in $30 million for Deccan Express - $25 million from Intel Cap and $5 million from IBM. Deccan Express, the new initiative of famed entrepreneur Captain Gopinath, has been conceived of an integrated logistics company which will add trucking and rail freight services to its offerings later and would link around 25 Indian cities within a year.

Thursday, May 07th 2009
Chrysler sale to fiat gets Court nod
In what is being seen as a relief victory for bankrupt auto major Chrysler and also the US government backing the move, the Court overseeing the bankruptcy process has approved Chrysler's proposal for a quick sale of its assets to Italian carmaker Fiat. The judge rejected the objections brought in by a group of 20 secured lenders to Chrysler who alleged that such sale, dominated by a Treasury Department that was working to get the country out of troubled times, violated the norms of normal bankruptcy procedures and would not maximize sale price of assets.

Friday, May 08th 2009
Bharati Shipyard buys into Great Offshore
Indian shipbuilder company Bharati Shipyard has acquired 14.89% stake in Vijay Sheth-promoted Great Offshore in a cashless deal, as a fallout of the latter's inability to raise money to free pledged shares. This is also being viewed in industry circles as a precursor move to Bharati's assumption of management control in the firm. According to unconfirmed reports, Bharati had lent around Rs. 240 crore to Great Offshore in 2008 when it was unable to meet margin calls from finance companies like ILF&S and Motilal Oswal, with whom the shares had originally been pledged. Great Offshore provides support vessels and services required by the offshore industry and this acquisition is expected to give Bharati a foothold in yet another sphere of the industry.

Friday, May 08th 2009
Porsche and Volkswagen in merger plan
In what is being viewed as a revolutionary period in global automobile industry, yet another momentous event has come about in the form of announcement of a merger plan from luxury carmaker Porsche and automobile major Volkswagen after a special meeting of shareholders and board-members in Austria. After intensive talks spanning weeks, a tie-up has been agreed upon which will create a merged car manufacturing giant coming out with 10 separate auto brands ranging from Audi, Volkswagen and Porsche in Germany to Czech maker Skoda, Seat in Spain, Lamborghini in Italy, Bentley in Britain and Bugatti. The independence of all brands, and specifically that of Porsche too, will be ensured. 

Monday, May 11th 2009
Nifty Results indicate signs of recovery
The financial results of 26 Indian companies registered on the Nifty Stock exchange over the three months ending March 2009 seem to indicate a turnaround of sorts in the corporate sector. These firms posted a 3% rise in net sales in the March quarter as compared to the same a quarter ago and a marginal 1% drop in profit. Despite enjoying the fruits of high economic growth during the same quarter a year ago, the aggregate results of these companies showed a 2% rise in sales in comparison. This indicates that corporate earnings may have bottomed out, and lower interest rates and rise in demand may bring about economic recovery.

Monday, May 11th 2009
Manchester United and Airtel sign deal
Keen on exploiting the existing business opportunitites in India, British football club Manchester United has signed a 10-million pound contract with Indian telecom major Bharti Airtel under which Airtel's 92 million subscribers can view Manchester United content on their phones, along with matches and interviews.

Monday, May 11th 2009
Religare bids for AIG Fund Management Unit
The investment arm of erstwhile Ranbaxy, Delhi-based Religare has reportedly bid to acquire the investment management arm of beleaguered US insurer, American International Group (AIG) as part of its expansion plans for its financial services portfolio. According to reports, Religare could pay around $600-700 million for the US insurer's investment subsidiary and is currently leading the race among eight other bidders. Religare has interests in stocks, currency and commodities broking, wealth management, mutual funds, life insurance and private equity. 

Tuesday, May 12th 2009
Government bailout for Emaar 
Delhi-based Emaar MGF becomes the first realty firm in the country to receive a bailout of sorts from the Central Government, which has agreed to extend a loan of Rs. 500 crore to the firm to help it complete the Commonwealth Games Village on schedule. The loan, carrying an interest rate of 12- 13%, will be extended through the Delhi Development Authority, which is also the agency hat had given out the contract to Emaar in the first place. Emaar had recently approached the government citing financial strains and with a plea for funds worth Rs. 800 crore for completing the Games Village, the deadline for completion of which is April 2010. But the government finally decided to lend only Rs. 500 crore. The Commonwealth Games are scheduled to be held in October 2010.

Tuesday, May 12th 2009
Rising losses for Jindal Steel in USA
The American units of Jindal group-owned JSW Steel have posted a whopping loss of $61 million following the sharp slump in demand in the industry triggered by the global economic crisis. The US steel industry as a whole has been struggling and the situation is such that some reports say that JSW could actually sell its plants at a discount. It had acquired the plants in August 2007 for $800 million. Incidentally, Tata Steel has also announced that it will inactivate its Teesside plant after an offtake agreement was terminated and plans for sale also fell through.

Tuesday, May 12th 2009
Microsoft to lay off 5000; India workforce to be affected too
Software giant Microsoft, which has plans to lay off 5000 employees worldwide as part of a global re-alignment plan announced this January, may reduce headcount in its India operations by around 55. The company has said that it will realign its business in the country and that it was also looking for alternative positions for the concerned employees. Meanwhile, the firm also seems to be going ahead with plans to hire 2,000-3,000 employees worldwide this year to focus on growth areas, including online services business and the enterprise server group.

Wednesday, May 13th 2009
OECD expects slowdown to persist
In the May release of its outlook, the Organization for Economic Co-operation and Development, or the OECD, as it's better known, has predicted that the economic slump will continue for now as indicated by the drop in its Composite Leading Indicator or CLI, which is based on a wide range of  parameters designed on the economic activity in each OECD economy and has a good track record of depicting qualitative information on short-term economic movements. The CLI for these economies has fallen by 0.1 points in March, indicating that the slump in demand is likely to continue for sometime. However, some better news came in the OECD outlook that some of these countries, such as Britain, France and Italy, are definitely showing signs of a tentative "trough" or "pause" in economic slowdown. 

Wednesday, May 13th 2009
Essar planning to hive off tower business
In the face of rapid consolidation among smaller players in the mobile tower industry, Essar Telecom Infrastructure is contemplating a possible merger or even a complete sell-out. If market speculation is to be believed, talks are on with the American Tower Corporation (ATC), the world's second largest stand-alone tower firm, which has recently made its foray into India by acquiring Xcel Telecom. The Ruia-group owned Essar Telecom Infra has of course been planning to hive off its tower business for quite some time now but its talks with the Tata-Quippo combine earlier this year for a possible merger did not make any headway. Even the sale to standalone tower company GTL Infrastructure for $2 billion last year fell apart at the last moment.

Wednesday, May 13th 2009
Tata Steel plans prepayment for Corus loan
Tata Steel, which had taken a non-recourse debt of £ 3.67 billion in July 2007 to finance its acquisition of Anglo-Dutch steelmaker Corus now plans to prepay £200 million of the loan. According to reports, Citigroup, Royal Bank of Scotland and Standard Chartered Bank have been appointed as the coordinating banks to facilitate the prepayment. Tha plan is part of restructuring and de-risking the firm's European operations as Tata Steel struggles to weather the downturn affecting the entire steel industry.

Wednesday, May 13th 2009
Sharp fall in IIP and exports
The Index of Industrial Production (IIP), driven primarily by manufacturing sector acoounts, registered a 2.3% drop in March compared to the level in March a year ago, according to statistics released by the Central Statistical Organization. However, the drop was not entirely unexpected as lead industrial indicators had already been indicating a contraction in industrial output. Moreover, there have been sure signs of recovery in recent weeks which makes the IIP numbers for March less significant. What is of greater concern, perhaps, is India's foreign trade situation with exports for April 2009 (by quick estimates from the commerce Department) falling 33% as compared to levels in April 2008. This is the seventh straight month that Indian exports have recorded a drop and the situation does not seem likely to improve for another few months at least given the lack of new orders and a high base effect. Imports too have fallen by 35% over the month.

Friday, May 22nd 2009
Tata Motors issues debentures to finance Jaguar loan
Exploring various ways to refinance the bridge loan taken for acquisition of the Jaguar and Land Rover brands, Tata Motors has issued non-convertible debentures to financial institutions worth Rs.4200 crore. The debentures, issued in four tranches with maturities ranging from 23 to 83 months, carry a coupon rate of 2 per cent and have been guaranteed by the State Bank of India. This is said to be the largest ever issue of loan paper by any Indian corporate and the first of its kind in Indian capital markets. Tata Motors has already repaid $1.11 billion of the $3-billion loan taken and the remainder is due for repayment on June 2.

Friday, May 22nd 2009
RBI urges govt. to make opening of bank account easier for new customers
The Reserve Bank of India has urged the government to reconsider portions of the Money Laundering Act which deals with the KYC (Know your Customer) norms that banks have to follow while opening accounts for customers. This makes it mandatory for every customer to furnish proof of identity or an introduction from an existing account holder of the branch in order to open a no-frills account. The RBI has suggested that an affidavit and a photo should be made sufficient for the purposes of KYC compliance, which would make it easier for new customers and those without access to organized credit to open a bank account.

Friday, May 22nd 2009
DLF consolidates verticals in restructuring move
Struggling in the face of a crash in real estate markets and markets in general, Indian realty major DLF has announced a plan for restructuring under which it will consolidate its six verticals, bringing all under just two divisions – the rental division and the sales division. The retail, offices, IT parks and SEZ verticals will move under the rental division while the homes and commercial complex verticals will be under the sale division. After consolidation, the verticals will still remain legal entities but will work in a more collaborative manner which is expected to improve operational efficiency. DLF has confirmed that there will be no job cuts as a result of this.

Saturday, May 23rd 2009
Air India MD lays down cost cutting guidelines for Company
With the appointment of Arvind Jadhav as Chairman and Managing Director of the national carrier Air India, the company seems all set to embark on a cost-cutting drive, hoping to improve its financial position. The airline also issued a circular suggesting that its 31,000-odd employees avoid business class from their flying entitlements. It has also decided to have strict reviews before allowing upgradation of class — from economy to business or first. The company has also extended a long leave-without-pay scheme to a maximum of five years. Air India currently accounts for almost half of the Rs10000-crore loss plaguing the Indian aviation sector. 

Saturday, May 23rd 2009
Central Bank chief stresses on fiscal discipline for economic revival
The governor of the Reserve Bank of India has predicted that given strong fiscal discipline and the effect of the fiscal and monetary stimuli on consumer spending and confidence, the economy may recover from the current downturn by the end of this year. He has maintained his earlier forecasts of 6% growth of GDP. Speaking at the 'Financial Management Summit 2009' organised by The Economic Times, he said that although the pressures on the govt. to announce more fiscal stimulus through the budget will be strong in the face of a vulnerable economy, the decision should be seriously judged on the criterion of fiscal prudence. 

Monday, May 25th 2009
Bharti, MTN resume talks to buy stakes 
India's Bharti Airtel and South African telecom giant MTN have resumed talks that had collapsed in 2008 to buy stakes in each other's company in a deal worth some $25 billion. Sources close to the deal said the two groups are discussing options under which Bharti will acquire 49 per cent stake in MTN and the South African company, along with its shareholders, will buy 36 per cent equity in the Indian company. Last year, Bharati had ended talks with MTN, rejecting the proposal that would have made the Indian firm a subsidiary of MTN. 

Monday, May 25th 2009
Maruti Suzuki promises entire new portfolio in 2 years
It has literally been a household name in that segment of Indian population which can afford automobile ownership. Every second car sold in India is rolled out by Maruti Suzuki. And now, the Company is all set to fortify its market leadership through a refreshed portfolio, a move that is also expected to help Maruti save on huge incremental costs incurred on development of new cars. The changes expected include a fresh design and new petrol engine for the premium hatchback Swift, a stripped down version of the Alto that will give Nano competition, and an upmarket variant of the same to take on Santro and the likes. The company will also overhaul the WagonR and Versa models while the engines of the ubiquitious Maruti 800 and Omni will be upgraded to meet the latest in emissions standards. Maruti may also launch the sedan Kizasha, developed by the Japanese parent, in India sometime next year, although there has not been any official confirmation on that as yet.

Monday, May 25th 2009
Exit of Malvinder Singh from Ranbaxy
There was a lot of flutter and excitement over Japanese drugmaker Daiichi Sankyo's acquisition of Ranbaxy Laboratories in 2008. In a much quieter, but nevertheless abrupt development, CEO and Chairman Malvinder Mohan Singh stepped down ending the family's five-decades-long association with the Company. Company COO Atul Sobti succeeded him as CEO and MD, while Daiichi executive Tsutomu Une took over as Chairman. While some sources pointed out that poor financial results and the ongoing tussle with USFDA over regulatory issues might have had a role to play in the decision, Malvinder Singh himself dismissed such speculations saying that it was just the right time for him to quit and move on.

Tuesday, May 26th 2009
Bharti takes on India's biggest Transnational deal with MTN
Bharti Airtel has relaunched an audacious merger bid with South Africa's MTN that could create a $61-billion transnational telecom giant with combined revenues of $20 billion and over 200 million subscribers across Africa, Asia and Middle East. The strategic plan and the objective is to achieve a complete merger of Bharti and MTN. The share swap deal will be exclusively be discussed and worked upon between the two firms till July 31. Bharti is to have 49% of MTN while the latter will have a stake of 36% in Bharti. 

Wednesday, May 27th 2009
Redial on Bharti-MTN Merger
A year after talks over a possible merger between South African telco MTN and Indian major Bharti Airtel was called off over disagreements on ownership structure, the two parties are back at the negotiation table. The companies are re-exploring a proposed $23-billion transaction (involving a complex stock-swap and cash deal) which would result in Bharti acquiring 49% shareholding in MTN through its first ever cross-border acquisition. MTN, in turn, would get a 36% "economic interest" in Bharti. The deal, if it goes through, is expected to create a global telecom powerhouse with projected combined revenues of over 20 billion dollars and a combined customer base of over 200 million. Clearly this will catapult the combine into the ranks of the top five operators globally. Bharti which already reported its 100 millionth customer earlier in May might see a saturation point in Indian markets in the next few years and given that the areas in which MTN operates are still relatively underpenetrated, this seems to be an important strategic leap. Shortly after the announcement of renewal of merger-talks, there were reports that Standard Chartered Bank has agreed to fund Bharti's net acquisition cost estimated at $4 billion through a bridge loan.

Wednesday, May 27th 2009
Accounting rule translates into $29-billion windfall for JP Morgan
When JP Morgan Chase acquired troubled Washington Mutual Inc. (WaMu) last year, few probably anticipated that the very same toxic sub-prime mortgages that threatened to topple WaMu would transform into a windfall gain for JP Morgan. But now, thanks to an accounting rule followed by it (purchase accounting), the US banker has said that it stands to gain $29 billion in income – in the form of accretable yield, defined as the difference between the amount at which the loans are valued in the Bank's balance sheet and the actual cash flows from them. According to the purchase accounting rule, JP Morgan at the time of acquisition recorded the bad loans at fair value, marking them down by 25%. Now as borrowers repay, the Bank anticipates a pre-tax revenue of $29.1 billion. A few other banks also stand to gain from this rule which allows them to mark down acquired impaired loans and these include Wells Fargo (which bought Wachovia), Bank of America (Countrywide Financial) and PNC Financial Services Group (National City).

Wednesday, May 27th 2009
UPA may sell stake in Power PSUs
Disinvestment, a primary agenda of the newly elected government, may begin with the government offloading its equity in power sector PSUs such as NTPC, NHPC and Power Grid Corporation, bringing its holding down to 51% over a few years. This is expected to bring in Rs.60000 crore for the government and also help in meeting the whopping finance requirements of the sector, estimated at Rs.10, 00,000 crore in the next three years.

Thursday, May 28th 2009
Government spending likely to continue on a high; budget in July
Finance Minister Pranab Mukherjee said that the Government will present the full budget for 2009-10 in the first week of July. From what the Minister indicated, government spending in the coming fiscal will continue to be at a high given the stress on "inclusive" elements such as creating rural jobs, providing education and health insurance cover, and food guarantee for the poor. The mandate received in the recently concluded elections seem to have vindicated the UPA's stance in terms of the emphasis on social support spending although how the government will balance that with the management of a ballooning fiscal deficit is what needs to be studied closely. The upcoming budget will also present the government's vision and approach for the next five years.

Thursday, May 28th 2009
Domestic BPO revenues from telecom sector set to grow at 31%
According to a study conducted by Ernst & Young on the potential of the Indian BPO industry, the latter's revenues from telecom sector may reach $2 billion by 2012, growing at a compounded annual rate of 31%. Given that the telecom industry adds roughly 10 million subscribers every month to a base of 375 million (2008-09), this is indeed a likely target. In a trend primarily set by India's largest mobile services provider Bharti Airtel, which started outsourcing most of its non-core functions as far back as in 2005, many other telecom players too are providing substantial revenues to the domestic BPO firms, primarily through outsourcing of customer care and sales & marketing services. Telecom revenue, valued at $661 million, accounted for approximately 50% of the industry's total revenues in 2008. 

Thursday, May 28th 2009
Stanchart backs out of race for RBS Asian assets
Troubled European bank, the Royal Bank of Scotland, may have problems selling its loss making Asian retail and SME assets as planned since many of the contenders including Standard Chartered Bank have reportedly backed off from the sale. At present, Australian major ANZ is the only confirmed contender in the fray, though there is some doubt as to whether it will be interested in RBS' Indian assets. Should RBS have difficulties in finalizing a buyer for the entire block of Asian assets, it may consider individual transactions for each country.

Friday, May 29th 2009
Size no longer a bar for SEZs
In an amendment that is seen to provide an impetus to bigger special economic zones, or SEZs, in the country, the government has ruled that the area limit of 5000 hectares will no longer be applicable in a case where two such zones are merged to form one. Furthermore, clarity on the definition of vacant land for the purposes of SEZs (land where there are no functional ports, manufacturing units, industrial activities or structures in which any commercial or economic activity is in progress) will make it easier for developers to select locations.

Friday, May 29th 2009
STT collections hit by recession too
As global recessionary trends hit Indian stock markets and arbitrage activities too came down drastically, collection of the Securities and Transaction Tax – a direct tax levied on the buying and selling of securities – dipped by 22% according to sources in the Central Board of Direct Taxes (CBDT). The STT collection between April and May 25 this year was Rs 800 crore while the same during the corresponding period of the last fiscal was Rs 1,026 crore. STT is calculated at 0.125% of the transaction value.

Friday, May 29th 2009
GM to file for bankruptcy on June 1
According to unidentified sources close to the company, US automaker General Motors will finally file for Chapter 11 bankruptcy protection on or around June 1, while it plans to sell most of its assets to a new company. June 1 was the deadline set by the US for GM to restructure and cut debt by at least $44 billion, a deadline it does not seem likely to meet. The US treasury will fund GM while the asset sale is arranged to a government-formed company. GM's bankruptcy, with global assets of $91 billion and total liabilities of $l76.4 billion (December 31), will reportedly be the third largest in the history of the United States after Lehman Brothers and Worldcom.

Friday, May 29th 2009
Time Warner announces separation plan for AOL
US media-entertainment giant Time Warner has announced that it will spin off AOL's internet business (which it had acquired in 2001) into a separate division and eventually a standalone company focusing on the Internet access business, web publishing and social networking including Bebo, and the Platform-A advertising programme. Time Warner on the other hand will focus on TV including HBO and CNN, Warner films and its magazine publishing business.