TIMES BUSINESSTHE TIMES OF INDIA, KOLKATA | SATURDAY, AUGUST 13, 2011

ONLY 6.74 LAKH REFUND CLAIMS PENDING WITHI-T DEPT: FM PRANAB MUKHERJEE

NC JHA-LED COAL INDIA POSTS CONSOLIDATED PROFITOF ̀̀ 4143 CRORE IN FIRST QUARTER

TNN

He’s the man inthe hot seat.At an agewhen most

people are well intotheir retirement, busyindulging grandchil-dren, 73-year-old VineetNayyar has spent thepast two years handlinga difficult child-likeSatyam—fire-fighting, fend-ing off intense scrutiny and fi-nally nursing back to health acompany hit by the worst fraudin the history of India Inc.

Obviously, helming Mahin-dra Satyam is no easy task (heputs in a punishing 12-plushours at work) and still has an-other year and a half to go be-fore he hangs up his boots.

Nevertheless, Nayyar hasdonned this hat as elegantly ashe has the rest of them in hisover four-decade career span-ning bureaucracy, stints withthe World Bank (where he wasinstrumental in refusing to fi-nance Enron’s controversialDabhol project) and a late en-try into the corporate world at56 with HCL Technologies.

Just back from a hecticmorning session expertly field-ing tough queries and emo-tional pleas from shareholdersnot to merge with Tech Mahin-dra at Mahindra Satyam’s 24thAGM in Hyderabad, Nayyar set-tles down with a cup of pipinghot cappuccino to face somemore questions from TOI. Wemet Nayyar in his fourth-flooroffice at Mahindra Satyam’s In-focity campus, a floor below thesprawling offices of disgracedSatyam founder B RamalingaRaju and his brother B RamaRaju—that wear a deserted lookas the MSat top brass prefer thefourth floor now.

So did the Mahindras, in thecourse of the forensic investi-gation of Satyam’s books, findevidence of swindling? “AskRaju,” Nayyar says jokingly, be-fore adding: “That the fraud oc-curred, books were fabricatedand money was going aroundin circles is established and CBIknows that. How much moneyRaju took out of it? How muchmoney he gained? It is very dif-ficult to say at this point oftime. But there was no palpa-ble evidence of a huge leakage.”

“The most curious part forme was what drove a man who

built this big a company to dowhat he did,” he says, shakinghis head in bewilderment.

Does he think the mess cre-ated by Raju can ever be com-pletely cleaned up? “Yes, allthose practices have been doneaway with. Our accounts arehonest and pristine and trans-parent. Yes, we also have a lega-cy and a colourful history, butthat we can’t change,”he admits.

Is he worried about Raju’smen still being around? “Someare there. I don’t believe thatpeople other than a handfulknew what was going on.”

So will the Satyam brandname, which has been a dou-ble-edged sword, be retained?“When we took over we clear-ly said that we want to keep thename Satyam. This is a deci-sion that will be taken after con-sulting clients and doing mar-ket research.”

As talk veers around toSatyam’s revival, Nayyar, whohas always equated it with a pa-tient in the ICU, feels the com-pany has been revived. “Thisquarter we showed an EBIDTAof 15% and, therefore, our tar-get does not appear as distantas it did two years ago. I am nowin the race.”

What about the timing ofthe looming recession becausethe company is just limpingback to normalcy, havingshown a net profit of Rs 225

crore in the first quarter of2011-12. “The downturn

does not bother me. Itwill impact everybodyequally. If hard timescome, they come,that’s life.”

He does agree thatbusiness pressures ofthe US and Europe are

becoming tougher, butfeels much would de-

pend on how quicklyMSat can change and an-

ticipate new areas of growthand opportunity and containcosts as IT is becoming closeto manufacturing.

“In many ways, the gooddays are over and competitionis intense. We have to innovateand invent a new mouse trapwhich will enable us to do whatwe want to do.”

But what about the sword ofliabilities hanging over thecompany? Having settled theUS class action suit for $125 mil-lion, Upaid dispute for $70 mil-lion and SEC litigation for $10million, Nayyar feels most ofthem have been settled and re-fuses to acknowledge the legalthreat back home of nearly 37Raju companies demanding Rs1,230 crore. He also pooh-poohsthe possibility of these liabili-ties posing a threat to the merg-er, for which they plan to set theball rolling in a few weeks.

According to him, if theydon’t merge they will miss a lotof cross-selling opportunities.“When you merge there is a fairamount of savings and support.TechM is a leader in telecomand MSat has expertise in en-terprise, manufacturing, bank-ing and finance and health-care,” he says, explaining thatthe day the Mahindras won thebid in 2009 they had decided tomerge the two.

He’s not too worried aboutthe decision to defer hikes toOctober or their ability to givethe hikes. “The question is whatwill happen next year becauseI do believe that a continuousinflation on wages will resultin India getting out of the mar-ket. Why is Germany the onlycountry in Europe doing well?Basically because they controlwages,” he said.

After sealing the merger,that will create a $2-3 billion ITgiant, Nayyar intends to workfor the education of under-privileged children through acharity his wife has set up.

C O R N E R O F F I C E

Yes, all thosepractices have beendone away with. Ouraccounts are honest

and pristine andtransparent. Yes, we

also have a legacy anda colourful history, butthat we can’t change

Chairman, Mahindra Satyam; V-C, MD & CEO, Tech Mahindra

VINEET NAYYAR

Career | 1961 batch IAS officer;founding CMD of GAIL; two stintswith World Bank; founded HCLPerot in ’96, was HCL Tech VC till’03; joined the Mahindra group in’05, became MSat CEO in ’09

Achievements | Hazira-Bijaipur-Jagdishpur gas pipeline; wasinstrumental in World Bankrefusing to fund Enron’s

Dabhol project

Our targetdoes not

appear asdistant as it

did 2 yrs ago

New Delhi: In June, the capi-tal goods segment shot up37.7%, led by mining equip-ment, printing machinery,dead burnt magnesite, rub-ber insulated cable anddriers, each of these growingat least 79%.

Although basic goodscomprising items such ascoal, bagasse and molassesregistered a 7.5% increase,the other four segments thatmake up manufacturing —intermediate, durables, con-sumer goods and non-dura-bles — grew anywhere be-tween 1% and 2.1%.

“Excluding this volatilesegment (capital goods),however, the remaining 90%or so of output is estimated tohave fallen for a fourthstraight month. Combinedwith indicators ranging fromdomestic vehicle sales to PMIsurveys, this adds to the im-pression that the domesticdemand destruction re-quired to bring cyclical infla-tion pressures to heel is like-ly in sight,” a research notefrom BNP Paribas said.

Economists also said thedata seemed to suggest thatfears of a tight monetary pol-icy regime affecting industrywere misplaced. “The strongJune IIP numbers do partial-ly dispel the notion that RBI’srate hikes have significantlycrimped overall growth

though consumer goodsnumbers suggest that domes-tic consumption is being im-pacted. However, the month-ly IIP numbers have been

volatile, and are only one in-put into the RBI’s decisionmaking data,” Royal Bank ofScotland’s Parul J Saini said.

But those like Ficci secre-tary general Rajiv Kumarsaid the rebound in manufac-turing sector should not bemistaken to be the beginningof recovery in industrial sec-tor as growth was still notbroad-based.

“The industrial produc-tion growth numbers sug-gest that, while a pickup in in-vestments pushed up theoverall growth, this trendmay not continue in Q3 (July-September), as suggested bythe moderation in manufac-turing PMI (purchasingmanagers’ index) from apeak of 58 in April to 53.6 inJuly. Moreover, exports de-mand, which is a strong de-mand driver of industrialproduction, is also showingsigns of a sharp slowdown.

The combined effect of weakconsumption and dwindlingexports will also likely startto affect upstream capital in-vestment, which shouldcause an overall slowdown,”added Nomura India econo-mists Sonal Varma andAman Mohunta.

Although there weremurmurs in the economistcommunity of the quality ofdata dished out by the com-merce & industry ministry— something that even theReserve Bank of India had re-cently mentioned — the gov-ernment did not seem to bebothered. “There is nochange in the system of datacollection. If you believe ourolder numbers, then you alsohave to believe the newer setof numbers,” said an official.

Some good economic data— ranging from exports, IIPto tax collections — over thepast few days is only going toadd to RBI’s plan to increaseinterest rates further to tameinflation, which remainshigh.

“With another sixmonths of uncomfortable in-flation readings to negotiate,however, on balance we stillexpect the RBI to hike oncemore this year,” BNP Paribassaid.

Varma and Mohunta pre-dicted a 25 basis point in-crease when RBI reviews themonetary policy on Septem-ber 16.

IIP growth dispels fears ofrate hike fetters: Experts

Surojit Gupta & Sidhartha TNN

MARKET WATCH

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Kolkata: Deepak Khai-tan has assumed execu-tive role in Mcnally Bha-rat Engineering (MBE),the engineering and con-struction firm of B MKhaitan Group. Khaitanwill now be the executivechairman from August12. So far he was non exec-utive chairman of thecompany.

Khaitan took up theexecutive role followingthe resignation by ma-naging director Shrini-vas Singh. “It’s a chal-lenging proposition forme,” Khaitan said.

The firm is forayinginto civil construction in-frastructure as a new ver-tical for MBE. CFO ofMBEL P K Ghosh saidthat it has already bookedorder worth Rs 200 crore

and are eying to touch Rs500-crore mark by the endof this fiscal. “This newventure can add up to 25%of MBE’s turnover in thenext 3 years. MBE is al-ready doing a fencing pro-ject with the BSF near theBangladesh border. HI-DALCO and IOC are someof the other names we aregoing to work with,” headded.

Khaitan later said :“We might go for an IPO ofMcnally Sayaji Engineer-ing (MSEL) in the fiscal2013-14 and in that casemy stake which is at 72%now will go down to 67%after the conversion ofwarrants.”

“Firm’s 30-35% order

book is coming from thepower sector but in gener-al term we can say thatthe power sector is goingslow,” added Ghosh.

The firm has regis-tered a growth of 24% intheir Q1 PAT at Rs 7.64crore against Rs 6.15crore during the corre-sponding period of lastyear. Total order book ofthe firm stands at Rs 3517crore as on July 30 2011.

DeepakKhaitan isMBE execchairman

TIMES NEWS NETWORK

NEW ROLE

New Delhi: The Reserve Bankof India on Friday reiterated itsstand that taming inflation re-mained its top priority to helpsustain medium term growthand dashed expectations that itmay change its monetarystance in the aftermath of thehistoric US debt downgrade.

RBI governor D Subbaraoand deputy governor Subir Go-karn both made it clear that itwas critical to keep inflationlow as it had the potential toshoot up if it is not tackled headon.

In the Nepalese capitalKathmandu, Subbarao said itwas too early to predict any

change of monetary policystance and highlighted theneed to tame inflation.

“There are lots of uncer-tainties. We will take all of theminto account while we formu-late our response in the mid-quarter policy (Sept 16),” hetold reporters. “It is too early tosay that we will change ourstance.”

“Possibly we are sacrificingsome growth in the short term,but reducing inflation is neces-sary to sustain medium-termgrowth,” he said.

Subbarao said the impact ofthe easy money policy in the de-veloped world was visible in ris-ing commodity prices and capi-tal flows. Earlier this week the

US Federal Reserve said itwould keep interest rates atnear-zero levels and had sig-nalled it was ready to act if nec-essary to stem any deteriora-

tion in economic conditions.The RBI has raised interest

rates 11 times since March 2010to calm price pressures and hassaid it is ready to some sacrifice

growth in the short-term.The US debt downgrade

and its impact on global growthhad fuelled expectations thatthe central bank may pause inits monetary policy tightening.Some industry groups had alsourged the RBI to cut rates fear-ing a slowdown.

In New Delhi, Subir Go-karn said the RBI was stickingto its growth forecast of 8% forthe current fiscal year whichends in March. The govern-ment expects growth to bearound 8.5% but economistsand economic think tanks say itcould be lower as the impact ofthe rate increases kick in andglobal slowdown hurts expan-sion.

Dy Guv Gokarn Sticks To 8% Growth Forecast For Current Financial Year

Apex bank still hawkish on inflation

D Subbarao

PTI

TIMES NEWS NETWORK

New Delhi: Sluggish indus-trial performance in thefirst few months of the cur-rent fiscal has had little im-pact so far on direct tax col-lection with corporate taxrising 30% during April-Ju-ly 2011.

The total corporate taxcollection in the first four

months was estimated at Rs85,222 crore, contributingmajorly to the overall tax col-lection which stood at Rs 1.33lakh crore, an increase of27%.

The growth is even betterthan what was seen in theApril-June period. The grossdirect tax collection during

the April-June 2011 quarterhad increased by 24%.

The gross direct tax col-lections last year April-Julyperiod was Rs 1.05 crore andthe share of corporate taxesin that was Rs 85,222 crore.

Net tax collections, how-ever, decreased 8.13% to Rs78,679 crore during the firstfour months of the fiscal. TNN

Tax mop upgrows 27%

Kolkata: Higher interestmight lead to higher nonperforming asset, feels RBIdeputy governor K CChakraborty.

“If the interest rate ishigh there is probabilitythat the NPA will go upbecause the burden hasgone up,” Chakrabortysaid. TNN

‘NPAs may go up’

New Delhi: Governmentsleuths have zeroed in onmassive cash deposits, run-ning into around Rs 1,000crore, in the Delhi branchesof three large privatebanks, ICICI Bank, HDFCBank and Axis Bank.

Enforcement Directo-rate is probing why thesebanks didn’t alert the au-thorities about huge cashdeposits made by an ac-cused who allegedly laun-dered more than Rs 1,000crore to a third country in aspan of less than a year mis-using the banking channel.

Working on a specific in-telligence tip about the sus-pect Pankaj Kapoor laun-dering huge cash on behalfof some top politicians andindustrialists, ED in Junelast week had searched CPVault Pvt Ltd owned by Ka-poor and seized Rs 10 crorecash. His deposits of Rs 8crore were frozen in bankaccounts.

Sources said, during hisinterrogation, Kapoor hadtold ED officials that he haddeposited more than Rs1,000 crore in the centralDelhi branches of thesethree banks in the last ninemonths alone, with his aver-age single transaction ex-

ceeding Rs 10 crore.Kapoor’s CP Vault Pvt

Ltd offers locker facility toindustrialists in Delhi’sConnaught Place area. Hisclient list is virtually thewho’s who of industry. Hisalleged modus operandiwas to collect cash, issue bo-gus diamonds trading bills,and remit the money tocompanies located in Dubaiand from there to benefici-ary accounts in a thirdcountry.

An official spokesper-son for the Axis Bank said:“CP Vaults doesn’t main-tain an account with AxisBank. However, two relatedfirms maintained accountswith us and on their behalfwe have handled import re-mittances in the past. Theprescribed procedures forreceipt of cash and for im-ports have been adhered toby the Bank including regu-latory reporting.”

An ICICI Bank spokes-person said, “The bank hasadhered to all the norms

laid down by RBI with re-gard to the transactionsmentioned.” While HDFCBank spokesperson said:“We have stringent systemsand processes in place thatflag off any suspicioustransactions. Needless tosay these transactions getreported to appropriate au-thorities from time to timeas prescribed under law.”

On his part, Kapoormaintained that he hadbeen buying diamonds fromDubai and selling them todealers in Surat and Mum-bai in cash, an ED investiga-tion revealed all the billsgenerated by him were bo-gus and he had actually notdone any diamond trade.

All the addresses andnames of dealers providedby Kapoor in Surat andMumbai were verified by

ED officials and they, claimsources, turned out to befake and in some cases deal-ers refused that they had ev-er done any trading with theaccused.

Three banks under ED scannerPradeep Thakur TNN

Mumbai: HDFC Bank, thesecond largest private sectorbank in India, has raised itslending rates, and has alsoraised deposit rates for twoseparate tenures. EffectiveSaturday, HDFC Bank’s baserate will be 10% per annum,from 9.50% now, while itsprime lending rate (PLR) hasbeen revised from 18% to18.5%, sources said. The baserate is the rate which appliesto borrowers who haveavailed loans after July 2010.Following this hike, the newauto loan customers will haveto pay a higher rate. TNN

HDFC Bank hikeslending, deposit rates

REGULATION OF TRAINS

Due to unavoidable circumstances night running of Mail / / Express and Passenger trains in entire Assam portion ofN F Railway is being suspended from 18.00 hrs. of 13.08.2011 to 05.00 hrs. of 17.08.2011 as directed byGovernment of Assam. Consequently, the following arrangements have been made in train running on those days :-

PARTIAL CANCELLATION / / SHORT TERMINATION OF TRAINS

• 14056 Up Delhi-Dibrugarh Brahmaputra Mail scheduled to leave Delhi on 1118, 12/8, 1318 and 14/8/2011and arriving Guwahati on 13/8, 14/8, 15/8 and 16/8/2011 will be short terminated at Guwahati and willremain partially cancelled between Guwahati and Dibrugarh.

• 15959 Up Howrah-Dibrugarh Kamrup Express scheduled to leave Howrah on 12/8, 13/8, 14/8 and

15/8/2011 and arriving Guwahati on 13/8, 14/8, 15/8 and 16/8/2011 will be short terminated at Guwahatiand will remain partially cancelled between Guwahati and Dibrugarh.

• 14055 Dn Dibrugarh-Delhi Brahmaputra Mail scheduled to leave Dibrugarh on 13/8, 14/8, 15/8 and

16/8/2011 will remain partially cancelled between Dibrugarh and Guwahati and will be originated fromGuwahati at 600 hrs. on 15/8, 16/8, 17/8 and 18I8/2011 respectively.

• 15960 Dibrugarh-Howrah Kamrup Express scheduled to leave Dibrugarh on 13/8, 14/8, 15/8 and

16/8/2011 will remain partially cancelled between Dibrugarh and Guwahati and will be originated fromGuwahati on 14/8, 15/8, 16/8 and 17/8/2011 respectively as per time table.

• 15657 Up Sealdah-Guwahati Kanchenjungha Express scheduled to leave Sealdah on 13/8, 14//8, 15//8and 16/8/2011 will be short terminated at New Alipurduar and will remain partially cancelled betweenNew Alipurduar and Guwahati.

• 15658 Guwahati-Sealdah Kanchenjungha Express scheduled to leave Guwahati on 13/8, 14/8, 15/8 and

16/8/2011 will remain partially cancelled between Guwahati and New Alipurduar and will be originated fromNew Alipurduar at rescheduled time of 08.15 hrs. on 14/8, 15/8, 16/8 and 17/8/2011 respectively.

• 15929 Chennai Egmore-Dibrugarh Express scheduled to leave Chennai Egmore on 11/8/2011 andarriving New Coochbehar on 13/8/2011 will be regulated at New Coochbehar upto 04.00 hrs. on 14/8/2011.

• 12509 Bangalore City-Guwahati Express scheduled to leave Bangalore City on 11/8 and 12/8/2011 andarriving New Jalpaiguri on 13/8 and 1418/2011 will be regulated regulated at New Jalpaiguri upto 02.15 hrs. on14/8 and 15/8/2011 respectively.

• 12513 Secunderabad-Guwahati Express scheduled to leave Secunderabad on 14/8/2011 and arrivingNew Jalpaiguri on 15/8/2011 will be regulated at New Jalpaiguri upto 02.15 hrs. on 16/8/2011,

• 12515 Thiruvananthapuram-Guwahati Express scheduled to leave Thiruvananthapuram on 14/812011and arriving New Jalpaiguri on 16/8/2011 will be regulated at New Jalpaiguri upto 02.15 hrs. on 17/8/2011.

• 15643 Puri-Kamakhya Express scheduled to leave Pun on 13/8/2011 and arriving Alipurduar Jn. on14/8/2011 will be regulated at Alipurduar Jn. upto 04.00 hrs. on 15/8/2011.

• 15661 Ranchi-Guwahati Express scheduled to leave Ranchi on 14/8/2011 and arriving Alipurduar Jn.on 15/8/2011 will be regulated at Alipurduar Jn. upto 04 20 hrs. on 16/8/2011.

• 15941 Jhajha-Dibrugarh Express scheduled to leave Jhajha on 12/8/2011 and arriving Alipurduar Jn.on 13/8/2011 will be regulated at Alipurduar Jn. upto 04.00 hrs. on 14/8/2011.

• 14055 Dibrugarh-Delhi Brahmaputra Mail scheduled to leave Dibrugarh on 12/8/2011 will be regulatedat Guwahati on 13/8/2011 and will leave Guwahati at 05.00 hrs. on 14/8/2011.

RESCHEDULING OF TRAINS

• 15930 Dibrugarh-Chennai Egmore Express scheduled to leave Dibrugarh on 14/8/2011 is rescheduledto leave Dibrugarh at 05.00 hrs. on 15/8/2011 and will be regulated at Lamding upto 05.00 hrs. on16/8/2011.

• 12518 Guwahati-Kolkata Garib Rath Express scheduled to leave Guwahati on 13/8/2011 is rescheduledto leave Guwahati at 05.15 hrs. on 14/8/2011.

• 15662 Kamakhya-Ranchi Express scheduled to leave Kamakhya on 16/8/2011 is rescheduled to leaveKamakhya at 05.00 hrs . on 17/8/2011.

• 15648 Guwahati-Lokmanya Tilak Express scheduled to leave Guwahati on 16/8/2011 is rescheduled toleave Guwahati at 05.15 hrs. on 17/8/2011.

• 15640 Guwahati-Puri Express scheduled to leave Guwahati at 18.45 hrs. on 14/8/2011 is rescheduledto leave Guwahati at 05.15 hrs. on 15/8/2011.

• 12346 Guwahati-Howrah Saraighat Express scheduled to leave Guwahati at 12.45 hrs. on 13/8, 14/8,15/8 and 16/8/2011 is rescheduled to leave Guwahati at 05.30 hrs. on 14/8, 1518, 16//8, and 17/8/2011.

• 15612 Dn Kamakhya-Lokmanya Tilak Karmabhumi Express scheduled to leave Kamakhya on 13/8/2011at 18.45 hrs. is rescheduled to leave Kamakhya at 05.00 hrs. on 14/8/2011.

Any train running out of schedule will be regulated suitably during or after the block period dependingon the train running on the section.

Chief Passenger Transportation Manager