Archive for November, 2009

SC allows Govt to become party to RIL-RNRL gas dispute

Wednesday, November 25th, 2009

In a setback to Reliance Natural Resources Ltd (RNRL), the Supreme Court allowed the ministry of petroleum and natural gas to become party to the ongoing dispute over gas supplies between the Ambani brothers.

The ministry’s SLP, the basis for the government becoming a party to the case, argues that the production-sharing contract (PSC) between the government and RIL and the government gas utilization policy should get precedence over private agreements such as the Ambani family memorandum of understanding (MoU)-an agreement on the basis of which estranged brothers Anil and Mukesh Ambani divided the assets of the Reliance business empire between themselves. This stand is roughly in line with RIL’s argument and opposes RNRL’s stand of the MoU being paramount. The ministry’s SLP against the Bombay high court judgment of 15 June says the ruling had adversely affected the government’s sovereign rights over natural gas and undermined the PSC and the government’s gas pricing policy.

Interestingly, the Bombay high court had allowed the government to “intervene” in the case. An “intervenor” can only make written submissions, but a party can make oral arguments besides filing replies and counter-affidavits.

“We have always maintained that the government should be a party to this as we would have to deal with the government after the judgment,” Salve said.

The Supreme Court is hearing the case between RIL and RNRL over the supply of gas from the former’s D6 block in the Krishna-Godavari (KG) basin. While RNRL has sought the apex court’s intervention in an SLP for immediate supply of 28 million standard cu. m a day (mmscmd) of gas from KG D6 at $2.34 (Rs108.58) per million British thermal units (mmBtu) for a period of 17 years, RIL has opposed this, saying the price is 44% lower than that mandated by the government and that it cannot supply gas at a price not approved by the government and to a user not listed in its gas utilization policy.

In another development, Gopal Subramanium, solicitor general of India, clarified that he has been instructed by the petroleum ministry as also the Union government to clarify in the Supreme Court that the interests of state-owned power utility NTPC Ltd have not been jettisoned.

The NTPC suit in the Bombay high court, seeking supply of gas at $2.34 per unit, should not be prejudiced in any manner by the RIL-RNRL dispute, Subramanium said.The solicitor general acceded to the request of the threejudge bench to file an affidavit on the government’s stand on NTPC.

The petroleum ministry had clarified its stand in an amended petition on 1 September, and said: “It is the unequivocal stand of Union of India that the approval of the price of gas at US$4.2 (per) mmBtu in respect of the D6 block was without prejudice to the rights of NTPC in the pending suit filed by it against RIL pending before the Bombay high court.”

Source: LiveMint

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RIL: Adding downstream assets

Wednesday, November 25th, 2009

The LyondellBasell acquisition will undoubtedly catapult the company into the big league.

The timing of Reliance Industries’ (RIL’s) non-binding cash bid for bankrupt petrochemicals player, the $50.7 billion LyondellBasell, is accurate. With the petrochemicals cycle just about emerging from the trough, or perhaps still in there, asset prices would be somewhere close to the bottom. With fresh capacity expected to enter the market next year from the middle east, supply may continue to outstrip demand for another two years.

Moreover, industry watchers point out that petrochemicals producers in the middle east are quite competitive as they access gas at rates as low as $1 per mbtu. According to analysts, while demand is picking up, prices could remain sluggish and margins might fall even further from the current levels. They are also cautious about the operational synergies from such a downstream acquisition, pointing out that Reliance hasn’t really run a global operation of this size, with 50 manufacturing sites across 20 countries, even if it enjoys a tremendous track record when it comes to implementing big projects at home.

No one doubts that Reliance will get itself a good bargain, as it may negotiate shrewdly. Besides, it would be in a position to pay in cash, given the cash balances of close to $4 billion, and so would be able to clinch the deal at a better valuation than other bidders. Apart from the discounted value of the debt on LyondellBasell’s balance sheet, Reliance would take note of the fact that the petrochemical major has facilities in Europe and North America, and therefore, it could take time before they become more financially efficient.

Some of the manufacturing facilities, analysts point out, use naphtha as feedstock. Reliance would take these factors into consideration while trying to achieve the larger objective of building scale.

The company’s idea is to try and get a bigger share of the global market. LyondellBasell is the world’s third largest petrochemicals company, while Reliance has a global market share of about 8 per cent; though its share in the home market is 60 per cent. Reliance can also leverage the global firm’s distribution channels. Reliance’s petrochemicals business did well in the September 2009 quarter, posting strong volumes and margins which grew 4 per cent sequentially. It was the lower than anticipated gross refining margins (GRMs) which pulled down the overall refining margins. Consequently, the company’s earnings fell six per cent year-on-year, though it rose five per cent sequentially.

Source: Business Standard

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Can farm-in costs be amortised?

Tuesday, November 24th, 2009

Despite attempts by the industry to seek clarification on the tax treatment of farm-in costs, there is not much guidance available to date.

Farm-in transactions are unique to the exploration and production (E&P) sector since mineral oils embedded in a particular territory in their natural habitat are the property of the State/Central Government in whose territory/jurisdiction they rest.
As such, no person other than such State/Central Government can carry out the exploration and extraction of mineral oil unless a right to explore and extract mineral oils from the specified areas is granted by the State/Central Government.

Such exploration rights typically rest with the company(ies) which enters into a Production Sharing Contract (PSC) with the Government and can be wholly or partly assigned and transferred to other companies subject to approval from the Government.

(Farm-in is “a transaction under which an incoming (farm-in) party earns an interest in a contract from an existing (farm-out) party to the contract in return for a consideration which may be payment of some or all of the farm-out party’s share of costs relating to the contract,” defines a glossary entry in www.emeraldenergy.com .)

Transfer of rights

It is very common in the E&P sector for the existing parties of the PSC to transfer such exploration rights through farm-out transactions. The acquisition of exploration rights may either be in the form of equity buyout or asset purchase. In case of an equity buyout, the purchase cost of shares of the entity is not amortisable, and thus, the cost of acquisition is locked until the shares are sold.

In case of an asset purchase, the tax treatment of the acquisition/farm-in cost has not been provided either in the Income-Tax Act, 1961 or in the Model PSC.

Despite several attempts by the industry to seek clarification on the tax treatment of farm-in costs, there is not much guidance available to date, resulting in a dispute between the industry and the tax department. Even the proposed Direct Taxes Code Bill, 2009 does not categorically provide for the treatment of farm-in costs leaving open the possibility of dispute with the tax authorities on this account.

In the absence of specific provision relating to the taxability of farm-in costs, under the current tax regime and depending upon the facts of the case, E&P companies have been resorting to three possible alternatives for claiming the farm-in costs: as revenue expenditure incurred for the purpose of business under Section 37 of the I-T Act; or as exploration expenditure in accordance with Section 42 of the I-T Act read with the PSC; or as depreciation on intangible assets being licence or business or commercial rights of similar nature to that enumerated under Section 32 of the I-T Act.

The Revenue’s stand

However, the revenue authorities do not allow the claim of the farm-in costs either as revenue expenditure or as depreciation. The revenue authorities reject the claim of farm-in costs as revenue expenditure under Section 37 on the ground that the specific section, that is, Section 42 of the I-T Act, is applicable to E&P companies to claim the deduction of expenditure. Hence, a deduction for such expenses under any other section is not allowable.

At the same time, the revenue authorities do not accept the claim under Section 42 by contenting that the exploration expenses are actually incurred by the farmer-out and the essence of the farm-in transactions essentially is to transfer the participating interest from one party to another.

Even cases where the farmer-in has merely reimbursed the exploration costs have not found favour with the tax authorities. While disallowing the claim of depreciation, the revenue authorities do not take into account that the exploration rights granted by the Government are in the nature of licence.

It may be noted that such exploration rights entail exclusivity to the holder of such rights over the exploration and production operations from a particular block and the assignment/transfer of such a licence gives a right to the farmer-in, which should be recognised as a licence eligible for depreciation.

It is important to note that the licence is specifically covered as an intangible asset eligible for depreciation under Section 32(1)(ii) of the I-T Act. In any case, if not a licence, it should at least be recognised as a “business or commercial right” in the nature of licence, which again is eligible for depreciation. The position of the revenue authorities however has been that since the scope of the intangible assets eligible for depreciation is restricted to the assets which represent intellectual property rights, farm-in costs are not eligible for depreciation.

The contention of the revenue authorities appears to be incorrect as intangible assets eligible for depreciation also include trademarks and franchises, which may or may not include intellectual property rights.

The fact that the expenditure for acquisition of exploration rights has been incurred exclusively for the purpose of the business cannot be disputed. Thus, this expenditure deserves to be allowed within the start and finish line of business cycle. The position of the revenue authorities, however, has led to an anomaly, leading to permanent disallowance of the farm-in costs and resulting into unnecessary litigation. This anomaly since has put a question mark over the tax treatment of the farm-in costs, cause considerable financial hardship to the farmer-in.

The high tax costs result in farm-in transactions becoming uneconomical. The interpretation by the revenue authorities makes acquisitions less competitive in E&P sector, which is not in the country’s interest. India needs to encourage exploration of its vastly unexplored basins to increase its domestic oil and gas production to achieve better energy security, which is critical to its growth and economic development. Thus, a clarification in this regard is extremely critical.

Delhi ITAT
The question of whether the farm-in costs is amortisable has been answered for the first time by the Delhi Income-Tax Appellate Tribunal (ITAT) in its very recent ruling which is worth noting by all the upstream oil and gas companies. The Delhi ITAT, in the case of a key player engaged in oil and gas E&P activities, held that the commercial rights of exploration of mineral oils as acquired by the assessee falls under the expression of any other business or commercial right of the nature similar to licence as stipulated in Section 32(1)(ii).

The right has been granted to the assessee by way of licence and the assessee became owner of such right, that is, licence to have an access and to carry on the business of exploration and development of mineral oils. The ITAT has accordingly allowed the claim of the assessee of depreciation on the farm-in cost, based on the facts of the case.

Though the Delhi ITAT decision has provided some assurance to the E&P companies to reduce the financial hardship, it is still not conclusive and subject to challenge by the revenue authorities in the higher courts. It is highly desirable that the revenue authorities accept the decision and put a rest to the controversy. If the revenue authorities choose to challenge the decision, the matter would remain uncertain.
The Central Board of Direct Taxes or the Finance Ministry should issue appropriate clarification regarding the timing of the claim of such costs. Until then, the E&P companies should watch out and undertake adequate planning before giving effect to the farm-in costs in their tax returns.

Source: Business Line

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Will incur heavy loss if K-G gas is not sold to priority customers: Govt

Tuesday, November 24th, 2009

The government will incur a loss of Rs 75,000 crore if the gas from Reliance Industries Ltd’s (RIL’s) D-6 block in the Krishna-Godavari basin is not sold to priority customers like fertiliser and power sectors, additional solicitor general Vivek Tankha told the Supreme Court today.

Tankha and Mohan Parasaran, both additional solicitors-general, are government counsels in the gas supply dispute between the Ambani brothers. The government, through an Empowered Group of Ministers (EGoM), has allocated 90 million standard cubic metres a day (mscmd) of gas from the D-6 block to priority customers like power and fertiliser sectors, liquefied petrol gas extraction units, city gas distribution projects, petrochemical plants, steel units and refineries.

The government’s counsel based his arguments on the wide-spread impact the D-6 gas will have on the country’s economy. Tankha said the gas supplies from D-6, which started production in April, will help produce 7.6 million tonnes per year of urea and help save the government Rs 4,000 crore worth of subsidy annually. Similarly, D-6 gas will help generate 10,000 Mw of power, resulting in about Rs 11,000 crore savings per year, Rs 1,500 crore annual savings through city gas projects, Rs 1,000 crore savings to steel sector and Rs 3,000 crore to the refineries.

Mukesh Ambani-led RIL and Anil Ambani’s RNRL are locked in a legal battle over supply of gas, based on differing interpretations of validity of a memorandum of understanding reached between the two brothers in 2005 at the time they split their father’s industrial legacy.

The family pact said RIL would supply 28 mscmd of D-6 gas to RNRL for 17 years at $2.34 per mBtu, which is 44 per cent lower than the later government-approved price of $4.2 per mBtu. The government is opposed to the portion of the Ambani family pact that divides the entire gas from D-6 Block between RIL and RNRL.

Source: Business Standard

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RIL again tops valuable brands chart

Friday, November 20th, 2009

In a year marred by the global financial crisis, stock market volatility and cost-cutting all around, India Inc has managed to retain a tally of 19 homegrown companies with a brand value of more than $1 billion each.

With just one company slipping below that mark — last year there were 20 companies with a brand value of more than $1 billion — the latest edition of India’s Most Valuable Brand 2009 (IMVB) study gives a sense of déjà vu with the Top 10 league carrying all the labels from last year’s list, led by Reliance Industries yet again.

The study was carried out by Brand Finance, a London-based global brand valuation firm, exclusively for The Economic Times.

Using the relief-from-royalty method of brand valuation, which assumes that a company does not own its brand and needs to license it from a third party, Brand Finance India’s Top 50 Most Valuable (Company) Brands, 2009, was drawn up from consumer-facing corporate brands listed on BSE. The study left out holding companies such as Hindustan Unilever that own a portfolio of branded business.

All top 10 brands from last year’s list have maintained their place in the roster, albeit with a minor reshuffle in positions.

Reliance Industries consolidated its position as the most valuable brand with a 15% jump in its brand value to $7.8 billion, followed by the country’s largest bank, State Bank of India, which climbed two spots with a 30% spike in brand value at $5.5 billion.

Last year’s No. 2, Tata Consultancy Services (TCS), swapped places with the state-owned bank as Indian Oil Corporation retained its third position.

Information technology was among the sectors impacted the most by the global recession, with global clients slashing their IT budgets and driving hard bargains with vendors. Besides TCS, Wipro and Infosys too saw their brand value drop this year.

ICICI Bank, India’s top private sector bank, saw its brand value rating slip three slots to 10. While the global recession has caused significant declines in global enterprise

values, some commentators had suggested that the current economic climate would lead to a collapse in the value of brands because they are seen to be an unnecessary luxury.

Also, in their bid to control the damage, most companies slashed their expenses, particularly the spend on advertisements and brand-building. But the Brand Finance IMVB study indicates that so long as brands continue to reinvent and deliver good value for money, they will do well. Overall, the IMVB Top 50 list doesn’t show any upheaval in last year’s line-up, with only three new entrants into the list compared with 11 last year.

A sectoral analysis shows while the top brands are evenly spread out across sectors pretty much like last year, manufacturing has emerged as a big force this year. Thanks to automobile and steel, manufacturing ruled the list with as many as 20 brands.

The Top 50 list points to the declining influence of companies from the banking and finance services sector that sent nine brands into the list.

Warren Buffett once remarked that “you only know who’s swimming naked when the tide goes out”. Well, the tide has gone out. “Banks, insurance companies and ratings agencies were the first to be found out,” says Unni Krishnan, MD of Brand Finance India. He believes that the next two to three years will challenge companies to introspect about the sustainability of their most prized assets-reputation and stakeholder value.

Yet for all its very real economic pain, within this global crisis there is an opportunity for Indian companies with a long-term value-building agenda. The crisis acts as a great stimulant for change, to innovate and spot robust growth opportunities amidst the rubble.

Source: Economic Times

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RIL AGM okays 1:1 bonus issue; Nov 27 is record date

Thursday, November 19th, 2009

The shareholders of the country’s most valued company Reliance Industries (RIL) today approved the 1:1 bonus issue for which the company fixed November 27, 2009 as the record date.

In a filing to the Bombay Stock Exchange, RIL said the shareholders at the 35th annual general meeting today approved November 27, 2009 as the record date for determining the shareholders who will be entitled to bonus issue.

The RIL board had last month approved 1:1 issuance of bonus shares after a 12-year hiatus. The last time RIL announced a bonus issue was in October 1997.

The company founded by the late Dhirubhai Ambani, credited for drawing retail investors to the stock markets in the 1970s, recommended an issue of one bonus share for every share held by shareholders, which the company felt would help unlock value.

“The proposal for bonus and dividend continue RIL’s tradition of awarding shareholders on a sustained basis. If we look at our track record since we listed in 1978, our shareholders have got 25 per cent compounded return over these 31 years since RIL became a public company,” RIL CFO Alok Aggarwal had said.

However, shares of RIL today shed 0.65 per cent to close at Rs 2,133.75 on the BSE, as the AGM failed to enthuse investors, who were expecting some big-bang announcements. The market as a whole had a choppy day, as Asian cues were not encouraging.

The RIL counter, which carries the most weight in the benchmark Sensex, has gained as much as 74 per cent so far this year from Rs 1,230.25 on December 31, 2008

Source: PTI

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RIL closes in on big-bang overseas acquisition

Friday, November 13th, 2009

Reliance Industries (RIL), India’s largest private sector company by market capitalisation and sales, is close to announcing a major overseas.

If all goes according to plan, RIL is looking to do so before its annual general meeting on November 17, a source close to the development said.

The likely target is a part of the assets owned by troubled petrochemical major LyondellBasell, which is undergoing reorganisation under the protection of a US court. “The intent is certainly to make an announcement on the day of the AGM or very close to it but that depends on how the talks progress,” one person familiar with the transaction said.

A team of senior RIL officials is said to have been camping in New York since September, according to a senior banking source. All the people with direct knowledge of the deal who we contacted for this story spoke on condition of anonymity because the transaction had not yet been consummated.

ET spoke to a number of bankers and analysts to ascertain the possible size of the transaction. One banker said the transaction could be in the region of $6 billion and may include both the US and the European assets of LyondellBassell.

Earlier media reports had referred to a deal in the region of $3.35 billion for the company’s US assets. An external spokesperson of RIL, who responded by e-mail to ET’s questions, said the company was evaluating global opportunities. “Reliance Industries is reviewing a number of global opportunities for growth in its core business. The difficult operating environment of the past year has made available several interesting opportunities, where an investment
by a strategic operator of industrial assets can add substantial value.“

The review is on and there can be no assurance that any approach will be made with respect to the opportunities under review or that any such approach will result in a transaction.”

The spokesperson said he would not be able to elucidate further.

Jal Irani, head of research at Macquarie Securities, told ET the deal had synergies for RIL. “RIL will enjoy a lot of synergies if it acquires LyondellBasell. It will benefit from state-of-the-art technologies of LyondellBasell. Besides, its marketing and distribution network come in handy. LyondellBasell will provide a ready market for RIL and RIL may turn it around if it is able to source feedstock at a cheaper rate.” He refused to comment on the size of the deal.

The fact that RIL may make a large buy outside India has been in the public domain for some time. In an interview with ET NOW last month, RIL’s chairman Mukesh Ambani had said that an overseas acquisition was one of the options as the company sought new growth opportunities after the completion of the Jamnagar refinery and the start of production of natural gas from the Krishna Godavari basin.

Maurice Bannayan, a senior official in RIL’s refinery business, had been recently quoted in agency reports as saying that RIL was considering overseas acquisitions in the US and Europe.

Mr Bannayan was speaking on the sidelines of a conference in Abu Dhabi. RIL may also be trying to diversify outside India, partly as a reaction to recent events in the country. The company’s top leadership, according to people familiar with their thinking, has become disillusioned by the uncertainty created by the prolonged litigation with Anil Ambani’s Reliance Natural Resources over the price and supply of gas from the KG basin and frequent changes in India’s tax regime.A senior RIL official who spoke to ET this summer expressed frustration and annoyance over the curtailing of tax benefits for pipelines carrying natural gas. An unlisted company which is part of the RIL Group is building a pipeline network to carry natural gas
from the KG basin off India’s eastern coast.

LyondellBasell had posted a loss of $7.3 billion on annual revenues of $50.7 billion. It has $27 billion of assets and $19 billion of debt. On Friday, the RIL scrip closed at Rs 1956, up 0.87%. RIL, the potential acquirer, is smaller. It had a profit after tax of $3 billion on a topline of $29 billion for the year ended March 31, 2009.

The RIL overseas acquisition buzz started getting louder after the company raised Rs 3,188 crore by selling its treasury shares recently. The company had cash reserves of $4 billion or about Rs 18,000 crore as on September 30.

LyondellBassell is the outcome of a number of mergers. Lyondell Chemical Company was earlier listed on the NYSE. It was the third largest chemical company in the US. In December 2007, it was acquired by Basell Polyolefins for $12.7 billion to create LyondellBasell — one of the world’s largest polymer, chemical and fuel companies. RIL has been eyeing the company after it filed for Chapter 11 under the US Bankruptcy Code in January 2009.

In May 2009, LyondellBasell Industries gained an additional owner in German investor Andreas Heeschen, whose firm ProChemie Holding has joined with LyondellBasell owner Access Industries to create ProChemie GmbH, a joint venture in which each side will own 50% equity in LyondellBasell. This deal was structured to give Access Industries flexibility to invest additional funds in LyondellBasell as part of the bankruptcy process, but without triggering unfavourable tax consequences for the company.

In September this year, the company submitted its reorganisation plan and disclosure statement to the US Bankruptcy Court to emerge from Chapter 11. The United States Bankruptcy Court for the Southern District of New York is administering this restructuring and reorganisation process.

As part of the Chapter 11 process, LyondellBasell obtained approximately $8 billion in debtor-in-possession (DIP) financing to fund continuing operations. The DIP financing includes two credit agreements: a $6.5-billion term loan (comprising $3.25 billion in new loans and a $3.25 billion roll-up of existing loans) and a $1.62 billion asset-based lending facility, according to media reports.

Bank of America-Merrill Lynch, Royal Bank of Scotland and Citigroup are among the lenders to the company, which obtained debtor-in-possession financing of $8.1 billion in February this year.

LyondellBasell is learnt to be offering a partial exit to these bank lenders by offering equity through a rights issue. Bank of America-Merrill and Citigroup are believed to be involved in the deal with RIL as investment bankers.

According to earlier reports the lenders may get into a pre-offer arrangement, under which RIL will pick up some of the forfeited rights and directly pay the lenders for the stake, entailing a minimum payment of $3.35 billion or Rs 15,000 crore.

The primary products of LyondellBasell are polymers (polyethylene, polypropylene), chemicals (styrene, ethylene) and fuel (two oil refineries — one in Houston, one in France). The Houston refinery processes heavy crude (mostly from Venezuela) and has a capacity of 13.5 million tons/year. The other refinery in France, which was purchased from Shell in 2008, has a capacity of 5 million tonnes.

The US arm of the company had filed for bankruptcy protection on January 6, 2009.On September 15, LyondellBasell announced it will shut its 185,000 tonne a year low density polyethylene plant (LDPE) in the UK.
Source: http://economictimes.indiatimes.com

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Oil Discovery by RIL in Cambay Basin

Tuesday, November 10th, 2009

Reliance Industries Limited (RIL) is pleased to announce the first oil discovery in the onland exploratory block CB–ONN–2003/1 (CB 10 A&B) awarded under the NELP-V round of exploration bidding. RIL holds 100% participating interest (PI) inthis block which is located at a distance of about 130 kms from Ahmedabad in Gujarat in the Cambay basin. The block covers an area of 635 sq km in two parts viz., Part A located in the west with an area of 570 square kilometers & Part B located to the east with an area of 65 square kilometers.

3D Seismic data has been acquired over 80% of the block area and 2D Seismic data has beenacquired over the entire area. Five wells have been drilled in this block. The fifth well,CB10A-A1, which is the discovery well was drilled to a total depth of 1451 m in Part A of the block with the objective of exploring the play fairway in the Miocene Basal Sand (MBS) of Babaguru formation. A gross reservoir thickness of about 15 m was encountered and the well flowed at a rate of 500 barrels of oil per day (bopd) through a 6 mm bean with a flowing tubing head pressure of 360 psi on conventional testing. This Discovery is expected to open future potential within the block.

The Discovery, named ‘Dhirubhai–43’ has been notified to Government of India and
Directorate General of Hydrocarbons. Commerciality of this Discovery is being ascertained through more data gathering and analysis.

This Discovery supplements RIL’s understanding of the petroleum system in this block in the Cambay basin. Based on interpretation of the acquired 3D seismic data in the Contract Area, several prospects have been identified at different stratigraphic levels to fulfill Minimum Work Obligation under the PSC.

About Reliance Industries Ltd.

Reliance Industries Limited (RIL) is India’s largest private sector company on all major
financial parameters with a turnover of Rs. 1,46,328 crore (US$ 28.85 billion), cash profit of Rs 22,365 crore (US$ 4.41 billion), net profit (excluding exceptional income) of Rs. 15,637 crore (US$ 3.08 billion) and net worth of Rs 126,373 crore (US$ 24.92 billion) as of March31, 2009.

RIL is the first private sector company from India to feature in the Fortune Global 500 list of’World’s Largest Corporations’ and ranks 117th amongst the world’s Top 200 companies in terms of profits. RIL ranks 75th in the Financial Times FT Global 500 list of the world’s largest companies. RIL is rated as the 15th ‘Most Innovative Company’ in the World in a survey conducted by the US financial publication-Business Week in collaboration with the Boston Consulting Group.

BSES men booked for bribe blackmail

Monday, November 9th, 2009

Four employees of power discom BSES have been booked by the Delhi Police for threatening to implicate a man in a false case of electricity theft.

The four were posted at the company’s Karkardooma office.

Rampal Singh, a resident of Karawal Nagar in Anand Vihar, had two power meters, one residential and the other commercial, installed at his residence.

On August 16, 2007, the commercial one went kaput. Singh contacted BSES’s Karawal Nagar office and a technician cut the power cable from the damaged meter and connected it directly to a nearby pole. He was assured that till the meter was repaired, Singh could pay the bill on the basis of the average of past bills.

On August 8, 2007, the cable got damaged. The company replaced the cable. But soon after, four officials of the company, assistant manager N. K. Sharma, assistant manager C. B. Singh, assistant manager S. P. Sharma and engineer N. S. Bhangahri, inspected the residence of the complainant.

Singh explained the matter to them. The officials, however, demanded a bribe of Rs 50,000 and threatened to implicate him in a false case of electricity theft, he alleged.
Singh showed them the receipts issued by the company at the time of supplying electricity to his house directly from the pole. “When I refused to pay the bill, the officials prepared a false bill of Rs 3.35 lakh and Rs 1.01 lakh against me and threatened to sell my house if I failed to pay the sum within 24 hours,” Singh said.

Singh informed the matter to the general manager of the company, who ordered a high-level inquiry. Singh also moved court and filed a civil suit against the officials.
After the inquiry report came out, the company waived the shocking bills Singh had received.

Source: http://indiatoday.intoday.in

RIL Wins Global Award for Best Success Story in Japan

Friday, November 6th, 2009

Reliance Industries Limited (RIL), Hajira’s, manufacturing division has won the Global Award for best success story at Association of Overseas Technical Scholarship (AOTS) convention.

RIL’s success story titled Growing seeds of excellence together with AOTS’ under the category - technology transfer was presented at the convention held at United Nations University in Tokyo, Japan, as a part of AOTS’s 50th anniversary.

During the convention, 10 best success stories were selected from 198 that were submitted from 26 countries from the fields of technology transfer, cultural exchanges and social contribution. The manufacturing division of RIL was adjudged one of the 10 best practising units, according to a company release.

Source: Times of India

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