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Today's Hot Stories - January 16, 2013

10 Headlines for Today

(1) DMK frowns at diesel hike, wants LPG cap raised
(2) Centre told to set up special court to try Italian marines
(3) Floods cripple Jakarta, several houses submerged
(4) Software cos will continue to get tax benefits: CBDT
(5) Mounting idle labour loss plagues BHEL’s ancillaries
(6) $11 m funding for Perfint Healthcare
(7) Saina smashes her way to No. 2 in world ranking
(8) Australia dismissed for 74; second lowest ODI
(9) Defiant IOA to go ahead with Executive Council meeting
(10) China’s first Tamil author looks to build bridges

5 Stories for Today

(1) Rana sentenced to 14 years by US court
(2) Algeria’s sudden hostage raid sparks anger
(3) Govt. raises LPG cap to 9 cylinders per year
(4) Nokia turns to TCS and HCL to cut cost, jobs
(5) Multiple roles of RBI create conflict: IMF

(1) Rana sentenced to 14 years by US court

A federal judge on Thursday sentenced a Chicago immigration consultant to 14 years in prison for his role in supporting the Pakistani terrorist group that worked with Pakistan's intelligence service to carry out the 2008 Mumbai attacks and plot a follow-up strike in Denmark.

Prosecutors had requested a 30-year sentence for Tahawwur Rana, 52, whom a jury convicted in 2011 on two counts of material support of terrorism of the Lashkar-e-Taiba militant group and of a plot to attack a Danish newspaper that published cartoons of the Prophet Mohammed.

Rana had been acquitted on charges of serving as an accomplice in the Mumbai attacks, which killed 166 people, including six Americans. His 2011 trial, however, revealed strong evidence that Pakistan's spy agency, the Inter-Services Intelligence Directorate (ISI), played a direct role in an operation that was designed to kill Americans and other Westerners. Pakistan receives billions of dollars in U.S. aid.

Rana's relatively minor role in the case grew out of his long friendship with the star prosecution witness: the enigmatic David Coleman Headley, who used a cover as a representative of Rana's immigration firm to do reconnaissance in India and Denmark. Headley, a Pakistani-American businessman and former drug informant, avoided the death penalty by pleading guilty to participating in those plots as an operative of Lashkar, the ISI and al Qaeda. He is scheduled to be sentenced next week.

At Thursday's sentencing, U.S. District Judge Harry Leinenweber cited a key finding by the jury in Rana's trial. Despite Rana's awareness that Headley was involved with Lashkar and the ISI as early as 2005, the judge said the jury had accepted Rana's argument that he was not aware of the Mumbai plot and that his support of Lashkar did not play a role in that 2008 massacre.

The judge rejected a prosecution request for a "terrorism enhancement" of the sentence on the grounds that the foiled 2009 plot was intended to influence the Danish government. Instead, Leinenweber found that the target was limited to the Jyllands-Posten, a private newspaper, and was meant to intimidate journalists.

On the other hand, Judge Leinenweber chose a punishment that was higher than the minimum 11 years in prison under federal sentencing guidelines. He underscored the seriousness of the crime, recalling that the terrorist masterminds wanted a team of gunmen to storm the newspaper building in downtown Copenhagen, decapitate hostages and throw the heads out of the windows to provoke public horror and a frantic police response. The judge also said Rana's awareness of Headley's involvement in the Mumbai massacre left no doubt as to the murderous potential.

A mindset that would contemplate such a slaughter "is something that I just frankly don't understand," Judge Leinenweber said. "This is about as serious as you can get. It only would have been more serious if it was carried out ... Something I have to take into consideration is to protect the public from future crimes of this defendant."

Judge Leinenweber also added five years of post-prison supervision to Rana's sentence.

The bespectacled Rana, who wore an orange prison uniform, did not make a statement in court. He has aged considerably since his arrest in October 2009. His hair and beard have turned gray, and he suffered a heart attack and other health problems in Chicago's Metropolitan Correctional Center. As an accused terrorist, he was held for 13 months in a harsh solitary confinement regime usually designated for problem inmates, according to his lawyer, Patrick Blegen.

Arguing for leniency, Mr. Blegen described Rana as a loving father of three with no criminal record and a background as a medical doctor in Pakistan and a businessman in Canada and the United States. Although he said Rana accepts blame for his crime, he called his client another victim of Headley, whose globe-trotting odyssey as a drug dealer, U.S. Drug Enforcement Administration informant, terrorist and Pakistani spy was full of deception and manipulation.

Rana and Headley's friendship began when they attended military school in Pakistan. Rana later helped Headley overcome his heroin addiction, Blegen said, and put up his house as bond when Headley was arrested on heroin smuggling charges. Rana's attorneys have criticized the plea bargain that allowed Headley, a frontline operative who had access to Pakistani terror chiefs and spymasters, to testify against his old friend.

"It's impossible to talk about Rana without talking about Headley," Blegen said. "He got sucked into this by Headley. There was no suggestion he was looking to do jihadist things on his own. He was someone who succumbed to the advances of Headley."

In contrast, Assistant U.S. Attorney Daniel J. Collins cited intercepts of conversations in which Rana praised the mastermind of the Mumbai plot and said the gunmen who carried out the massacre deserved Pakistan's highest military honor. Rana's willingness to join the Denmark plot reveals his true personality, Collins told the judge.

"He knew they had blood on their hands," Collins said. "And it didn't give him pause for an instant. That speaks volumes about who he is."

There was little discussion during the sentencing hearing about the most explosive aspect of the case: the revelation of the ISI's active role in terrorism against the West. One difficulty that prosecutors faced was that Rana had contact with Headley's ISI handler and an al Qaeda operative, but not with Lashkar figures other than Headley. The sentence and jury verdict reinforce the defense's assertion that, during the three years he prepared the Mumbai attacks, Headley kept Rana largely in the dark and duped him into thinking they were working mainly with the ISI on espionage in India.

Rana helped Headley conduct undercover terrorist reconnaissance by allowing him to work as an overseas representative of his immigration consulting firm. Rana enabled Headley to open an office in Mumbai, use business cards, obtain visas and otherwise maintain a cover.

The two friends were arrested in Chicago in October 2009 as Headley prepared for a third visit to Denmark to conduct surveillance for an attack on the Jyllands-Posten. In trial testimony that gave an unprecedented look into the terrorist underworld in Pakistan, Headley described how he was recruited, trained, funded and directed by Lashkar and the ISI to do two years of surveillance on luxury hotels, a Jewish center and other targets in Mumbai.

Federal prosecutors used Headley's account and corroborating evidence to file charges against a suspected mastermind of the Mumbai attacks known only as Major Iqbal, Headley's alleged ISI handler - the first time the U.S. government has charged a serving Pakistani intelligence officer with terrorism. Major Iqbal is charged with the murders of six U.S. citizens who died in Mumbai. Pakistan has refused repeated U.S. requests to arrest him.

Prosecutors also charged three Lashkar bosses who directed the three-day rampage by 10 gunmen in Mumbai from a control room in Pakistan. Pakistani authorities arrested one of those militant bosses and a few other suspects, but their trial in Pakistan has stalled. The failure to judge them and capture other top figures has intensified accusations that Pakistan protects Lashkar, which Western and Indian counterterror agencies regard as a proxy of the ISI.

Major Iqbal remains a serving officer in the ISI, and accused masterminds, including Sajid Mir, whose voice was caught on telephone intercepts as he directed the slaughter in Mumbai, continue to run the terrorist group, according to Western and Indian counterterror officials.

(2) Algeria’s sudden hostage raid sparks anger

The Algerian military’s sudden raid to free dozens of international hostages caught world capitals off guard and sparked anger and frustration over the lack of coordination and information.

From London to Washington and Oslo to Tokyo officials complained they had no details of the outcome of the raid on an Algerian gas complex on Thursday morning which may have claimed dozens of lives. The final death toll from the rescue attempt was uncertain by late Thursday, although there were reports that the action had ended.

Since the hostages were first seized on Wednesday, British offers of assistance were declined, and Prime Minister David Cameron was only told the operation was under way when he telephoned the Algerian Prime Minister shortly before noon on Thursday.

“It’s a fluid situation, it’s ongoing, it’s very uncertain. We should be prepared for the possibility of further bad news, very difficult news, in this extremely difficult situation,” Mr. Cameron said.

In Washington, officials sputtered over repeated demands by reporters for information about the American hostages who are believed to be among the dozens of Japanese, French, British, Irish and Norwegian hostages seized Wednesday morning by terrorists in Algeria.

White House spokesman Jay Carney called the situation “ongoing” and “fluid” several times and expressed concern “about reports of loss of life.” “We are seeking clarity from the Algerian government about this matter,” Mr. Carney said.

U.S. State Department spokesman Victoria Nuland declined to answer questions about whether the Algerians had informed the US prior to the helicopter-mounted operation. She said that the US had offered “to be helpful” in its talks with the Algerian government since the crisis began.

Japanese Prime Minister Shinzo Abe on Thursday called Algerian Prime Minister Abdelmalek Sellal to demand a halt to the assault on the hostage takers, Japan’s Kyodo News agency reported on Friday.

Mr. Abe told his Algerian counterpart that Japan “strongly urges Algeria to refrain from military operations,” the report quoted Deputy Chief Cabinet Secretary Hiroshige Seko as saying.

Japan’s Yomiuri Shimbun newspaper reported that the JGC engineering corporation knew of three Japanese employees who had been taken hostage and was uncertain about the whereabouts of another 10 workers.

The company, which has operated in Algeria for more than 40 years, was described as “disturbed” over the sparse information it had received. JGC said it would consider sending staff to Algeria to confirm the safety of workers on the ground.

“Overall, we are having difficulty gathering information,” a JGC spokesman said Thursday morning.

The Norwegian government said it had no information about the status of nine of its nationals.

Norwegian Prime Minister Jens Stoltenberg said Algerian authorities informed him at about 1100 GMT (4.30 p.m. IST) that the military operation was already underway.

“They had sought a solution overnight but felt they had no other option but to launch the operation,” Mr. Stoltenberg said, but declined to comment on the decision to launch the attack.

French President Francois Hollande said on Thursday afternoon the situation seemed “to be unfolding in dramatic conditions.” Earlier in the day, Algerian Information Minister Mohammed Said had only indicated there had been deaths during the rescue attempt, but did not mention the numbers.

But he made clear that the Algerian government would continue its tough stance against terrorists.

“No negotiation, no blackmail, no respite in the fight against terrorism,” Mr. Said said in a televised statement.

(3) Govt. raises LPG cap to 9 cylinders per year

The Cabinet Committee on Political Affairs (CCPA) on Thursday raised the cap on supply of subsidised LPG cylinders to nine bottles from six per year per household and authorised the oil marketing companies (OMCs) to undertake periodical hike in diesel prices till the Rs. 9.60 paise per litre subsidy is completely wiped out.

However, the CCPA did not take any decision on the proposal of the Petroleum Ministry to hike LPG cylinder prices by around Rs. 50 immediately and then in a phased manner over the next two years to wipe out the nearly Rs. 500 per cylinder subsidy. It also decided not to go with the Petroleum Ministry proposal to hike kerosene oil prices in a phased manner leaving both the commodities of mass consumption untouched.

The CCPA, that met under the leadership of Prime Minister Manmohan Singh, virtually announced the “deregulation’’ of diesel prices thereby authorising the OMCs to hike diesel prices over a period of time to cover up the Rs. 9.60 paise per litre loss being incurred by them. However, Petroleum and Natural Gas Minister, Veerappa Moily refused to share the details or formula for a phased price hike in diesel prices. The Cabinet decision came on the note submitted by the Petroleum Ministry based on the recommendations of the Kelkar Committee which had called for an end to the subsidy regime in the petroleum sector by 2015-16.

As soon as the Cabinet decision came, the marketing departments of the OMCs got down to the business of calculating the proposed hike that is likely to take effect tonight. “We are still awaiting the notification from the government before deciding on the quantum of hike. We have been given a brief on the issue and indirectly we will have to take the consent of the Petroleum Ministry before undertaking any kind of hike in diesel prices,” a senior OMC official said.

Mr. Moily said there will be no change in LPG and kerosene rates. “I am happy to inform the CCPA has decided to raise the cap on subsidised LPG to nine cylinders per household per year from existing six cylinders. Consumers will get a quota of five subsidised cylinders between September 2012 and March 2013 and from April 1, 2013, they will be entitled to nine cylinders per annum.. As far as diesel is concerned, oil marketing companies have been authorised to make price correction from time to time. The price correction could take place commence even from tonight,’’ he added.

But it was left to the Finance Minister P. Chidambaram to clarify the situation and he maintained that the OMCs have been allowed to make `small correction’. “I am looking at same subsidy bill as was expected earlier,’’ he said.

Price of diesel was last revised on September 14 when it was hiked by a steep Rs. 5.63 per litre. At present, diesel costs Rs 47.15 per litre in Delhi. Subsidised LPG costs Rs. 410.50 per 14.2-kg cylinder and any household requirement beyond the new limit of 9 cylinders will cost a near market price of Rs. 895.50 per bottle. The government had in September capped the supply of subsidised cooking gas to six cylinders per household in a year, with a view to checking diversion to unintended

beneficiaries. The increase in the LPG cap would mean an additional subsidy outgo of Rs. 9,300 crore annually.

Petroleum Secretary G. C. Chaturvedi said CCPA has authorised oil firms to make small changes over a period of time. “There was no discussion on the quantum of price increase or the period over which these changes are to be effected. It has been left to the oil companies,’’ he said.

However, he hastened to add that the government had not de-regulated the diesel prices. ``If we are to deregulate, then diesel price will have to be raised by Rs 9.60 per litre, which is not the case. Only a small quantum of change has been permitted over a period of time. It cannot even be called partial deregulation,’’ he added.

State-owned oil companies sell diesel at a loss of Rs. 9.60 per litre, kerosene at Rs. 30.64 a litre and LPG at Rs. 490.50 per 14.2-kg cylinder. For the full 2012-13 fiscal, they are projected to lose about Rs. 165,000 crore.

Keywords: LPG cap, subsidised LPG cylinders, M. Veerappa Moily, Oil Minister, Cabinet Committee on Political Affairs

(4) Nokia turns to TCS and HCL to cut cost, jobs

Struggling mobile handset marker Nokia has turned to increased outsourcing, transferring up to 820 employees to HCL Technologies and Tata Consultancy Services on Thursday, in a bid to cut operating costs as it looks to regain lost market share.

The company also cut 300 jobs, mainly in Finland, as part of a focussed strategy that it had laid out last year.

Diminished size

“As part of the planned changes, Nokia plans to transfer certain activities, and up to 820 employees to HCL Technologies and Tata Consultancy Services. These are the last anticipated reductions as part of Nokia’s global streamlining as announced on June 2012,” the company said in a statement.

“We believe these changes will create an organisation appropriate for Nokia’s current size and scope,” it added.

Meanwhile, according to a separate statement from HCL Technologies, the company has entered into a long-term IT infrastructure management outsourcing services agreement with Nokia.

“The scope of this arrangement will include network management across Nokia’s global IT infrastructure operations. We will be deploying our MyCloud solutions as part of this engagement,” HCL Technologies said.

Nokia’s job cuts are part of its overall strategy to axe 10,000 employees, including 3,700 in Finland.

“Nokia is beginning the process of engaging with employee representatives on these plans, and will offer the employees affected both financial support and a comprehensive support programme,” the company said.

(5) Multiple roles of RBI create conflict: IMF

The International Monetary Fund (IMF) has said that despite recent successes in developing a stable financial system, India’s financial sector still confronts long-standing impediments to its ability to support growth as well as new challenges to stability.

“The prominent role of the state in the financial sector — through ownership of large financial institutions, captive government financing, directed credit to priority sectors, tight controls over the range of allowable activities, and restrictions on the availability of foreign capital — contributes to a build-up of fiscal contingent liabilities and creates a risk of capital misallocation that may constrain economic growth,” IMF said in its ‘India: financial system stability assessment update’.

This report is part of IMF’s Financial Stability Assessment Programme (FSAP) for members with systemically important financial sectors.The assessment recognises that the Indian financial system remained largely stable on account of a sound regulatory and supervisory regime. However, the assessment identifies some gaps, including some limits on the de jure independence of the regulators (RBI and IRDA).

Reversal risk

As demonstrated by the current turbulence in international markets, there is a risk of reversal of capital flows and a repeat of the liquidity pressures experienced in 2008. Stress tests suggest, however, that banks’ substantial buffers of high quality assets (cash and holdings of government paper) should enable them to deal with such pressures, including through recourse to central bank facilities.

The IMF also is concerned with the multiple roles of RBI which create the potential for conflicting goals. “RBI officers are nominated as directors on the boards of public sector banks while, at the same time, RBI serves as the prudential supervisor of these banks. It would be preferable for the government to focus on policies that ensure the appointment of well qualified, independent board members that are not from the RBI. And while there may be some synergies, RBI’s role as monetary authority, bank regulator, and government debt manager may have led it to require banks to hold larger holdings of government debt than might be needed on prudential grounds.”

Using the banking system rather than government programmes in meeting the needs of priority sectors — agriculture, small and micro credit, education, health — and underserved areas may conflict with RBI’s supervisory role, IMF opined.

Even though RBI has broad resolution authority, “stronger powers to conduct carve-outs and more attention to crisis preparedness would be desirable”. Resolution powers and contingency planning for insurance companies and the payment system also need strengthening.




           
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