The Week That Was:-12th July - 18th July
Saturday, July 18, 2009 , Posted by Silent Observer at Saturday, July 18, 2009
ICAI may seek ban on Price Waterhouse
THE country’s accounting regulator is planning strict action against audit firm Price Waterhouse after two of its partners allegedly failed to check accounting lapses and verify financial statements in the over Rs 7,000-crore Satyam fraud case.
The Institute of Chartered Accountants of India (ICAI) could likely consider recommending blacklisting of Price Waterhouse, which would bar the global audit firm from carrying out auditing in India. However, as the institute can only recommend, its decision can be challenged in a court of law. The institute is likely to announce its decision by the month-end, said people familiar with the development.
Such a move would be similar to the temporary suspension of a Japanese audit firm affiliated with PricewaterhouseCoopers in 2006, on charges of tampering with a client’s accounts. In its independent probe into the Satyam fraud case, ICAI, which is the nodal body for accountants and auditors in the country, has found the two auditors—Subramani Gopalakrishnan and Srinivas Talluri—were not carrying out adequate due diligence while auditing the software major’s books.
India to have independent Debt management office
The government has set in motion plans to create an independent office to manage its debt, divesting the central bank of this duty in a landmark reform as it braces to raise more than Rs 4 lakh crore this year to finance the highest fiscal deficit on record.
An independent debt managementoffice will take away the Reserve Bank of India’s (RBI) responsibility of conducting government borrowings, removing the conflict of interest inherent in its role as the setter of interest rates and the banker to the government. A draft bill that will pave the way for the creation of an independent debt management office (DMO) is currently being studied by the law ministry. The bill will be placed before the Cabinet for its approval by the end of this month, said a government official privy to the development.
Countries such as the UK and Portugal already have DMOs to manage public debt
Disinvestment roadmap in 3-4 weeks
A clear roadmap on disinvestment of Government holding in central public sector undertakings will be available in the next three-four weeks, the Finance Secretary, Mr Ashok Chawla, said here on Wednesday.
“The roadmap is being worked out. We are in discussions with various Ministries. There will be no strategic sales. The Government will retain 51 per cent,” Mr Chawla said at a post-Budget meeting organised by the Confederation of Indian Industry (CII). Mr Chawla later told reporters that no specific target (besides those in the Budget documents) has been fixed as yet.
On Tuesday, the Finance Secretary held a meeting with the officials of some 10 Ministries to discuss disinvestment-related issues. These Ministries have now been asked to identify disinvestment candidates (other than those already known to the markets) and come up with proposals on this front, official sources said. Mr Chawla also said at the CII meeting that divestment would be undertaken in both listed and unlisted entities. “The roadmap for disinvestment in terms of actual companies — which will go when and in what percentage — is being worked out”.
Sterlite raises $1.5 bn via ADS
Largest such issue in two years; equity dilution pulls down firm’s domestic stock 6 per cent
Sterlite Industries, India’s largest copper producer, has raised $1.5 billion (Rs 7,305 crore) through American Depository Shares (ADS), the largest US share sale from India in two years, to develop its power generation business and fund acquisitions. The US offering was priced at $12.15 each, a discount of 6 per cent to Wednesday’s closing price for Sterlite in the US and one per cent higher than the minimum price of $12.14 set by Sterlite. Each ADS represents one equity share.
The ADS sale is the biggest from India since ICICI Bank raised $2.46 billion in June 2007. Earlier the same month, Sterlite raised about $2 billion in an ADS offering. Today’s development suggests that the international market for funds is not as tough as most companies had anticipated.
TCS springs a nice Q1 surprise
Tata Consultancy Services Ltd on Friday announced a 19% growth in net profit for the three months to June, beating analysts’ estimates. This was achieved largely by cutting costs and freezing new hires. Besides, a weaker dollar also drove up the value of its exports to Western economies, where it does most of its business. Net profits for the quarter at India’s largest software services firm by sales rose to Rs1,534 crore, up from Rs1,290 crore in the same period last year. Its sales climbed 12% to Rs7,207 crore year-on-year. The earnings figures for the firm beat estimates by both Bloomberg andReuters financial news services, who had predicted a net profit of Rs1,290 crore (median) and Rs1,273 crore, respectively.
The company has managed to increase volumes by 3.6% and contain the drop in average price realization at a mere 0.25%
Anil,Spielberg script a $825-m Dream deal
Making his Hollywood debut, Anil Ambani is set to invest around $825 million as a first tranche towards making six films a year for global audiences. In one of the largest deals in global cinema in recent times, Ambani has teamed up with noted Hollywood filmmaker Steven Spielberg for their Los Angeles-based production house, Dreamworks Studios
