Permanent Satyam employees number stands at 43,622: Provident Fund Organisation

The Provident Fund Organisation(PFO), Hyderabad, has put the official count of Satyam Computer Services permanent employees at 43,622. Officials of the regional office in Hyderabad lodged a complaint with the CID on Thursday against B Ramalinga Raju, the founder and former chairman of beleaguered outsourcing giant Satyam Computer, and former chief financial officer V Srinivas for not depositing Rs 7.5 crore, the employees’ share of the PF collected by Satyam for December 2008.

For the record, the government-appointed board of directors for Satyam had earlier asserted that the number of Satyam employees tallies with the 52,000 figure as was claimed by the Ramalinga Raju-led management. The Hyderabad PFO’s figure is in line with the public prosecutor’s argument in court that Satyam had close to 40,000 employees on its rolls.

According to sources in the PF department, the office would be filing a case against Raju and Srinivas for breach of trust as the company has already deducted the employees’ share of the PF, but failed to deposit it with the PF office.

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Satyam takes on political colour

Three weeks after the Satyam saga unravelled with its founder B Ramalinga Raju’s startling confessions, the story has begun to move from the regulators’ domain to the political landscape. On Wednesday, Andhra Pradesh chief minister YS Rajasekhara Reddy sent feelers to the Centre to transfer the Satyam fraud case to CBI if it is deemed appropriate. Accepting that the probe into Satyam’s affairs is ‘complicated’, Reddy reiterated that the present political context ahead of general elections has made the issue all the more sensational.

Even as the parliamentary standing committee on finance asked tough questions about the Reserve Bank’s earlier decision to revoke the suspension on audit firm Price Waterhouse, corporate affairs minister Premchand Gupta said the government will take a view on handing over the probe to CBI. He also said there has been poor coordination between the state police and the central investigating agencies in the case. Gupta said he had raised the matter in a recent letter to the Andhra CM. “I think there will be better coordination now,” he said in an exclusive interview .

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Over 70K jobs cut in a single day

The deepening global economic recession claimed over 70,000 jobs in a single day, with six companies, ranging from manufacturing to telecom across the US and Europe, announcing job cuts as part of a cost cutting measures to grapple with the slump in consumer spending. With the bloodbath in the job market on Monday, the tally of total jobs lost in January so far crossed two million.

Construction machinery manufacturer Caterpillar, pharma major Pfizer, telecom firm Sprint Nextel Corp, home improvement retailer Home Depot were among the six major firms that announced massive job cuts.

A total of 207,120 jobs have been lost so far this year. Nearly 2.6 million people were rendered unemployed through 2008, the highest yearly job loss total since 1945. Caterpillar said it would cut 20,000 jobs amid a "very challenging global business environment".

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Homage paid to country’s real heroes with gallantry awards

Emotions ran high and thunderous applause reverberated the Rajpath on Monday as kin of six security personnel who died fighting terrorists during the Mumbai attacks, received the Ashok Chakra during the Republic day celebrations in New Delhi.

Maharashtra ATS chief Hemant Karkare, additional commissioner Ashok Kamte and four others who lost their lives in the Mumbai carnage were among the 11 security personnel honoured with the highest peace time gallantry award.

Thousands of people including foreign invitees accoladed the supreme sacrifice of the security personnel as President Pratibha Patil presented the awards.

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Ghost workers at Satyam

Just how many people does Satyam Computer Services employ? In June 2008,Satyam reported it had 51,643 employees on the rolls.The company’s website and government statements after founder & former chairman B Ramalinga Raju’s confessions put the number at 53,000. Minister of corporate affairs Premchand Gupta said last Friday that the only way to determine the actual staff strength was through the provident fund office.

According to the public prosecutor arguing the matter in a Hyderabad metropolitan magistrate court on Thursday, the number of employees is 40,000. FE learns that the last time Satyam filed its monthly returns to the Employees’ Provident Fund Organisation (EPFO), for the month of November 2008, the number of employees stood at 43,622.

For December,EPFO is yet to receive the PF contribution returns from the company, although the law mandates that contributions be deposited by the 15th of the following month.

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Raju:funds were given to Maytas

The Satyam Computer Services fraud grows murkier. According to police sources,former chairman B Ramalinga Raju has now confessed that he diverted Satyam funds to family-owned Maytas Infra and Maytas Properties since 2004. The two had earlier denied receiving any funds from Satyam.

The latest admission intensifies pressure on the reconstituted board to contain the damage, given that clients have threatened to ditch the be leaguered company. “Two large customers have given us notice on leaving.But there are others and many of them have indicated that they would like to renew and expand their contracts,” said Satyam board member Kiran Karnik.

On Thursday and Friday, the board will hear presentations on a potential buyout by a clutch of suitors. L&T is seen as the front runner in the race. Others, including IBM and HP, are also said to be in the reckoning.

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Satyam gets buyout offers

A Satyam Computer Services sell-off could follow the way of erstwhile Unit Trust of India. This would mean bifurcating the company: one part with the troubled assets taking upon itself the lawsuits, which would be handled with government help, while the functional business part would be sold off. But a decision on any such plan would have to be taken by the new board, which will be meeting in Hyderabad on Thursday and Friday.

The possibility of a buyout was confirmed on Tuesday by Tarun Das,one of the six-member board headed by Deepak Parekh. He told reporters that some domestic and foreign companies had expressed interest in taking over the IT company. “The board has not yet discussed the issue of looking for a buyer. But I have to truthfully say, we have been approached by potential buyers,” said Das, chief mentor of CII, at The Partnership Summit 2009 in New Delhi. He said offers had come from multinational entities and Indian IT companies.

While Das did not name the interested companies, L&T chief AM Naik met corporate affairs minister Prem Chand Gupta along with key ministry officials and discussed options related to L&T’s ‘strategic’ investment in Satyam.

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Will Michelle oust Jackie to become Fashion’s First Lady?

Fashionist as world over are closely monitoring Michelle Obama,the US First Lady to be, to see whether she manages to out do her sharp dressing on the campaign trail with husband Barrack Obama.

Designers including Rodarte, Halston and previous White House favourite Marches a have all submitted sketches for 45-year-old Michelle’s inaugural ball on Tuesday.

The designer of her gown, however, remains a secret, although grapevine reports suggest that the First Lady in waiting would most probably go for an unknown designer or even a High Street label.

Michael Flowers, from Chicago, who has been styling Michelle’s hair since she was 18, was flown into Washington on Sunday to prepare the tresses of his most famous client for Tuesday’s inauguration ceremony.

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Slowdown to hit Aditya Birla Group’s Q3 performance

The $28-billion Aditya Birla Group, 50% of whose revenues flow from overseas operations, is expected to report a bleak Q3 performance in its main businesses in the current financial year,say experts.The group has a major presence in metals, cement, textile and telecom. According to experts, the fourth quarter of FY09 as well as the next year(FY2010)will be challenging for the group.

With base metal prices being corrected by more than 50% in the last couple of months, and demand for aluminum-rolled products slowing down in North America and Europe, Hindalco (including Novelis, the Canadian firm it acquired in early 2007 for $6 billion) is expected to degrow 12% in top line and bottom line in the third quarter of the fiscal.

Meanwhile,BNP Paribas has turned cautious on Novelis as US and Europe, which account for about 70% of Novelis’ deliveries, are witnessing a 912% dip in demand.“We expect Novelis to report a minor loss in 2009 due to lower volume and profit margin.

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Nortel bankruptcy to have little impact on Information Technology vendors

Indian IT industry’s Big Three—TCS, Infosys and Wipro—put up a brave front on Thursday after North America’s largest telephone equipment firm, Nortel Networks, filed for Chapter 11 bankruptcy a day earlier. Though Nortel is a major client of all three firms, its contribution to their revenues is not significant.

However, at a time when the IT sector faces slower business growth, coupled with fallout from the Satyam accounting fraud and World Bank ban, the market reacted nervously. Infosys closed down 4% at Rs 1,252.05 on the BSE on Thursday, Wipro plunged 3.5% to close at a low of Rs 235.30 and TCS was down 5% at Rs 510. Shares of Sasken Technologies, in which Nortel has a 9.5% stake, was most severely hit, sliding 19% at Rs 43.75.

According to the bankruptcy statement filed by Nortel, Infosys and TCS had receivables of $2.9 million each from the company, while for Wipro,the figures too dat$3.1 million.

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Satyam handles Australia, Singapore government accounts

The Satyam fiasco is now raising concern amongst foreign governments. At least two countries, Singapore and Australia, where Satyam handles several government accounting contracts including salary disbursals, have flagged their concern to the Indian government regarding the latest revelations, according to a senior minister of the UPA government.

Satyam has contracts with several government agencies in Singapore, which continue to be in operation so far. Similarly,the IT company has ongoing projects with government clients in Australia as well as its largest bank,the National Australian Bank. Among the concerns voiced by these countries, according to the minister, are those related to fulfillment of commitments made by Satyam in its contract. The UPA government in fact, he added,was giving top priority to fulfilling all commitments made by Satyam in the 60 odd countries.

“It is not only a matter of Satyam. The reputation of the entire IT industry is at stake” the minister said.

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Monday Blues

In what could further sully the image of an Indian IT sector still coming to grips with the Satyam fraud, the World Bank announced in Washington late on Sunday that it had barred Wipro Technologies from contracts under its corporate procurement programme until 2011. Two other companies were also barred: the beleaguered Satyam Computer Services and a relatively smaller company, Megasoft Consultants.

The Bank also intends to publicly list all companies that have been barred from its corporate procurement to ensure fairness and transparency, it said. The World Bank said it had imposed the ban from 2007 because Wipro offered shares during its US IPO in 2000 to Bank employees.

The BSE IT index fell by 3.80% on news of the Wipro ban.However, a statement by Wipro saying earnings from the World Bank were negligible and that the ban been issued in 2007 assuaged the woes of traders.

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Bollywood on road to professionalism, but has miles to go

Will Asin Thottumkal (Ghajini) and Genelia D'souza (Jaane Tu... Ya Jaane Na) be able to cast their spell on the Star Screen jury? Or will the Best Actor (female) award be a toss-up between veterans Kajol (U Me Aur Hum) and Priyanka Chopra (Fashion)?

In the run-up to the 15th Star Screen Awards, slated for January 14, 2009, The Financial Express looks at Bollywood in a three-part series flagged off on January 10. In the first part we examined the effects of the economic slowdown on the Hindi film industry. Today, we look at Bollywood's journey towards corporatisation.

This year at least three big-budget Bollywood films, Singh is Kinng, Rab Ne Bana Di Jodi and Ghajini, saw a wide release with 1,000-plus prints, a trend similar to Hollywood films. What's more, producers Vipul Shah, Yash Raj Films and Madhu Mantena put in place a mirror marketing plan to create that demand.

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Oil pricing decision comes back to haunt government

Whereas striking oil company executives are adamant that record losses to their companies from fuel subsidies cannot be a reason for giving poor pay hikes, truck operators are standing their ground demanding a cut in diesel prices. Though the government claimed on Thursday the situation is still manageable, and some states have invoked the Essential Services Maintenance Act to get truckers back on the road and oil executives back in the office, commodity prices could start moving up soon.“If the strike continues for long,it would build pressure on us and there is very little that we cando(to keep price in check),” Reliance Retail president & CEO (operations & strategy) Raghu Pillai told agencies.

The problems stem from the government’s ill-considered volte-face on developing a free market regime for petro-products soon after it came to power in 2004. The then petroleum minister Manishanker Aiyar said the plan stood rolled back. As the government now faces the prospect of rising prices nullifying its inflation control plans, the rollback is proving very costly. If the government cuts prices on diesel now it would benefit the truck operators but would hurt the bottom lines of the oil companies even more.

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Final fall for a poster boy of Indian Information Technology

On Wednesday,Satyam Computer Services Ltd founder chairman B Ramalinga Raju acknowledged that the company had massaged its balance sheet to show an inflated accrual of Rs 9,440 crore over the years.Moreover,he confessed in a letter to the board and market regulator Sebi, that to cover his tracks, he had cajoled one of India’s largest IT companies into a plan to buy out of two infrastructure and real estate firms run by his sons at a cost of Rs 8,000 crore($1.6billion).

As markets regulator Sebi ordered a probe into a scandal that chairman CB Bhave described as“horrifying”,Satyam’s shares fell to a low of Rs 39.95 on the BSE, while its ADRs turned into penny stock, slipping below a dollar to 85 cents, a drop of 91% since last night. The ministry of corporate affairs is mulling reference of the case to the Serious Fraud Investigation Office after a report from the registrar of companies,Hyderabad.

In its wake,Indian investors are now left wondering whether the fabled run of India’s IT sector is over. For corporates across sectors, the big fallout would be on valuations abroad, while family-run enterprises could now find themselves field in gun comfortable questions on corporate governance.

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Pakistan using terrorism as state policy : Prime Minister

Rubbishing Islamabad’s contention that non-state actors might have been involved in the Mumbai attacks, Prime Minister Manmohan Singh on Tuesday accused Pakistan of using terror as an instrument of state policy and asserted that the world community must compel it to abandon such tactics.

‘‘On the basis of investigations carried out,(including by agencies of some foreign countries whose nationals were killed in the attack), there is enough evidence to show that, given the sophistication and military precision of the attack, it must have had the support of some official agencies in Pakistan,’’ he said. The PM’s tough talk came a day after India handed over to Islamabad and to other countries evidence of Pakistani elements’ links to the Mumbai attacks.

Addressing a day-long conference of chief ministers on the internal security, Singh conceded that the country’s defence mechanism, especially in countering terrorism, was inadequate and there was need to review the effectiveness of setup for the collection of technical signal and human intelligence.

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Sony likely to announce drastic cost cuts: media

Japan's Sony Corp is likely to announce closures of Japanese factories and major divisions early next month, the Times of London said on Monday, but the company denied any such plan existed.

The maker of Bravia flat TVs and PlayStation video game consoles faces halting sales and mounting piles of inventory in the wake of the financial crisis, even as a stronger yen bites into earnings.

Sony,whose empire encompasses semiconductors, movies and insurance, is braced for a series of measures that would abolish some of its domestic operations and transform the electronic giant's business, the Times said, citing company sources. “We do not plan to announce additional restructuring measures at this time,” spokesman Atsuo Omagari said, in response to the report. “We don't have any such plan.

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Defence Research and Development Organisation drug for malaria to hit market within two years

The Defence Research and Development Organisation (DRDO) has found a solution for to counter the dreadful malaria in the region by developing a drug from the extracts of the wild plant Gommostama. This wild plant is found in the northeast.

The DRDO chief controller in R&D in life sciences, W Selvamurthy speaking at the 96th Indian Science Congress on Sunday said: “We have found the extracts from Gommostama effective in developing a drug for malaria. Our experiments on animals are encouraging. We will soon experiment on human beings. The drug is expected to be in the market within two years.”

The DRDO laboratories in Gwalior and Tezpur are engaged in developing this medicine. The malaria causing agents have already developed resistance to the existing medicines—chloroquin and artemisin. Hopes are high that the new medicine will solve the problem.

Selvamurthy said that DRDO was working on not only territorial security but also internal, environmental and economic security.

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Government sticks to New Year resolution

The second stimulus package from the government and RBI on Friday received a far stronger endorsement from corporate India than the first.The immediate beneficiaries will be commercial vehicle manufacturers like Ashok Leyland and Tata Motors, as well as non-banking finance companies (NBFCs) such as M&M Financial Services, Sriram Transport Financial Services and Sundaram Finance. But it left the realestate sector—which hoped for an extension in the soft interest rate coverage to loans of up to Rs 30 lakh disappointed.

Overall, however, industry felt the latest stimulus package of Rs 2.01 lakh crore (including Rs 40,000 crore in fore gone revenue), 100-basis point cut in repo and reverse repo, as well as the 50-basis point cut in cash reserve ratio would help companies across sectors. However, industry captains said the success of the measures would hinge on banks providing lower rates to make cheaper credit available to industry and consumers.

Ravi Kant,managing director of the country’s largest commercial vehicle maker, Tata Motors, said, “We welcome the pos work on ensuring that ultimately liquidity reaches customers at reasonable costs.”

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New pay panel for defence

In a New Year gift to the armed forces, the government would set up a separate pay commission for defence personnel and place the 12,000plus lieutenant colonels and their equivalents in Navy and Air Force in a higher pay band. It would also restore 70% pensionary weightage for jawans. The higher pay band means that the personnel will get an additional Rs 10,000 to Rs 12,000.

“The market is anticipating that the government will take up more borrowings in the last quarter of this fiscal. That should help the yields reach an equilibrium range of 5.255.50%, going forward,” he said.

RBI has pumped in Rs 1,80,000 crore of liquidity into the market since October 11, when the central bank first reacted to the global meltdown.

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