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Today's Hot Stories - April 16, 2010

10 Headlines for Today

(1) Tharoor issue: Sonia holds consultations with party leaders
(2) IBSA to develop satellites, cooperate on global issues
(3) Obama to meet security advisors on situation in AfPak
(4) Rupee eases by 12 paise against dollar in early trade
(5) Germans probe HP staff for fraud charges
(6) China's economy grows 11.9% in Q1
(7) Delhi Daredevils beat Chennai Super Kings by 6 wickets
(8) Saina, Aditi in quarters of Asian Badminton Championship
(9) Top seed Wozniacki in Family Circle quarters
(10) Volcanic ash grounds flights across Europe

5 Stories for Today

(1) Lalit Modi on backfoot as income tax sleuths enter field
(2) Benazir's death was preventable, bad security killed her: UN
(3) US scans role of Goldman, Rajat Gupta in Galleon scam
(4) HDFC cuts 1st yr rate to 8.25%
(5) KG-gas price unviable: ONGC

(1) Lalit Modi on backfoot as income tax sleuths enter field

The government on Thursday fired a loud warning shot across the bow of the IPL ship, skippered by Lalit Modi, as income tax officers paid an unexpected visit to the BCCIs office in Mumbai, the first such expedition to the headquarters of Indian cricket by taxmen in 60 years.

The officers asked for specific documents related to the IPL, including the funding details of the franchisees. Late in the evening they went to Lalit Modis office in Worli in Mumbai and were seeking certain information from the flamboyant but controversial IPL commissioner.

The fast-paced developments indicated that the ugly spat between Lalit Modi and Shashi Tharoor has not just got the tax department excited, but has also made the ruling establishment in Delhi disgusted with the testosterone-driven display of money and muscle.

However, agriculture minister and former BCCI chief Sharad Pawar came out in support of Modi, saying there was nothing wrong in disclosing the names of stakeholders to the public and that he was within his rights to seek information about any bid.

But that may be only a minor relief for Lalit Modi. Although this visit of I-T sleuths doesnt qualify as a raid, it still assumes significance because of its timing smack in the middle of am escalating controversy over the IPL coffers, ownership pattern of franschisees and the source of their funds.

It’s said record bids, dodgy source of funding, allegations of underhand dealings in awarding broadcast and marketing rights, lavish parties, have all combined to attract the attention of the tax authorities. The scrutiny can also help taxmen access the details of Rendezvous Sports something that can have a bearing on Shashi Tharoors ministerial innings. It is sure to compound matters for Modi whose handling of the dispute with Rendezvous has already attracted adverse attention from several quarters, including the ruling establishment.

This tax probe can also fan the resentment which is growing among BCCI office bearers against Modi, because many of them now hold Modis aggressive ways responsible for embroiling the BCCI in unseemly and avoidable spats.

The unease of the establishment with the IPL was evident on Thursday, with sports minister M S Gill demanding a probe into the the glamorous version of limited edition cricket whose phenomental success once promised to turn Modi into an icon of entrepreneurship.

The success story has been read differently since the controversy broke about his alleged pressure on Rendezvous to abort their effort to own an IPL team. The spiralling spat brought out disturbing details of alleged manipulation of bids, misuse of funds, favouritism and nepotism in the distribution of lucrative business rights.

A government intervention may not attract resistance from the Opposition, with the allegations of shady dealings eroding any immunity that IPL could have acquired because of its enormous success.

(2) Benazir's death was preventable, bad security killed her: UN

A UN commission on Thursday blamed inadequate security by Pakistan's federal, state and district governments for the 2007 assassination of the country's former prime minister, Benazir Bhutto.

The panel said her death could have been prevented if the government under then-President Pervez Musharraf, the Punjab state government, and the Rawalpindi District Police had taken adequate measures "to respond to the extraordinary, fresh and urgent security risks that they knew she faced."

Bhutto was killed in a Dec. 27, 2007, gun and suicide-bomb attack as she was leaving a rally in the garrison town of Rawalpindi, where she was campaigning to return her Pakistan People's Party to power in parliamentary elections.

"Ms. Bhutto's assassination could have been prevented if adequate security measures had been taken," the commission said.

Musharraf's government blamed Baitullah Mehsud, a Pakistani militant commander with reported links to al-Qaida. Officials at the US Central Intelligence Agency also said Mehsud was the chief suspect.

But Bhutto's party repeatedly hinted that Musharraf or his allies were involved and demanded a UN probe, claiming it was the only way the whole truth would be revealed.

The UN report found that the investigation into her death was severely hampered by intelligence agencies and other government officials "which impeded an unfettered search for the trust."

It said Pakistan's powerful Inter-Services Intelligence conducted parallel investigations, gathering evidence that was only selectively shared with the police.

"The commission believes that the failure of the police to investigate effectively Ms. Bhutto's assassination was deliberate," the report said. "These officials, in part fearing intelligence agencies' involvement, were unsure of how vigorously they ought to pursue actions, which they knew, as professionals, they should have taken."

The commission urged Pakistani authorities to carry out a "serious, credible" criminal investigation that "determines who conceived, ordered and executed this heinous crime of historic proportions, and brings those responsible to justice."

"Doing so would constitute a major step toward ending impunity for political crimes in this country," it said.

The report was originally scheduled to be presented on March 30 but Pakistan's President Asif Ali Zardari asked Ban to delay the release of its findings on his wife's killing, and the secretary-general agreed.

The secretary-general agreed to appoint a commission to assist Pakistan by determining the facts and circumstances of Bhutto's death and it began work on July 1, 2009.

Under terms agreed to by the UN and the Pakistani government, Pakistani authorities would determine any criminal responsibility.

(3) US scans role of Goldman, Rajat Gupta in Galleon scam

The US is examining the possible role of Goldman Sachs and well-known investment banker Rajat Gupta in the Galleon hedge fund insider trading scam, says a report.

Prosecutors are looking at whether a Goldman Sachs' board member gave information about the entity to Galleon hedge fund owner Raj Rajaratnam during the height of the financial turmoil. The name of Goldman Sachs emerged in a March 22 government letter "listing companies whose trading by Rajaratnam and others in the Galleon case the US is investigating.

The government is examining whether Rajat Gupta — a current Goldman director, former head of McKinsey & Co and close associate of Rajaratnam — shared inside information about Goldman.

No criminal charges or other allegations have been filed against Gupta, nor is there any indication that investigators are looking at his own stock trading.

Gupta is unaware of any examination of any such issue and has done nothing wrong. As per the letter, the government is scrutinising trades by Rajaratnam and others in Goldman Sachs from June 2008 through October 2008.

(4) HDFC cuts 1st yr rate to 8.25%

At a time when the economy is buzzing with the possibility of interest rates hardening, home loan major HDFC surprised everyone on Thursday by slashing rates for the first year to 8.25% per annum, from 8.75% earlier. As of now, this offer is for loan application made before April 30 and at least part-disbursement taken before June 30. With its new offer, HDFC, in effect, also brought back what is popularly called 'the teaser rates', and will take on SBI, which had raised rates for its housing finance products earlier this month. Under the new scheme, HDFC is offering a fixed rate of 8.25% loans up to March 2011 and then 9% for the next one year, i.e. till March 2012. Thereafter, the HDFC customer will move to a floating rate structure according to the prevailing rate for the loan amount and tenure, a company release said. The fixed rates, till March 2012, will be applicable for all loans irrespective of the tenure. The cut in rates was possible since HDFC's cost of funds now permits it to offer a lower fixed rate for the first and the second years, said Renu Sud Karnad, MD, HDFC.

The teaser loans were introduced by SBI which forced other players to follow suit. While SBI still continues with its now-famous 8% rate for the first year, it has increased rates for the subsequent years and also cut the spread, effectively increasing rates over the tenure of the loan. However, that has not stopped the banking major from cornering a big chunk of the housing loan pie lured by the teaser rates.

HDFC will also continue with its existing floating rate product without any change where the rates applicable are 8.75% for loans up to Rs 30 lakh, 9% for loans between Rs 30 lakh and Rs 50 lakh, and 9.25% for loans of Rs 50 lakh and above, the release said.

"This special offer is applicable to all new home loan customers who apply before April 30, and take at least part-disbursement before June 30. These customers will get a fixed rate of 8.25% up to March 31, 2011, 9% for the period between April 1, 2011 and March 31, 2012 and for the balance period the floating rate will apply," Sud Karnad said. While the fixed rate will remain the same irrespective of the loan amount, the floating rate will vary with the loan amount. Under this offer, the floating rates has two slabs, i.e. loans up to Rs 30 lakh where the rate will be 9% and above Rs 30 lakh where the rate will be 9.25%.

"Even though there is a marginal increase as compared to the earlier offer, our effective rate over a 15-20 year term is very attractive and is much better than other large players," Sud Karnad added.

(5) KG-gas price unviable: ONGC

Oil and Natural Gas Corporation (ONGC) on Thursday asserted that at the current sale price of natural gas it was not feasible to produce gas from its Krishna-Godavari basin block./p>

ONGC, which has made 10 gas finds in a block adjacent to Reliance Industries' prolific KG-D6 block, off the Andhra Pradesh coast, wants over $7 per million British thermal unit (mBtu) as gas price.

“I am categorically stating that the current price level is not viable to make investments,'' ONGC Chairman and Managing Director R. S. Sharma said.

The government has fixed $4.20 per mBtu as the sale price of gas from the RIL's KG-DWN-98/3 or KG-D/ block for five years.

The rate, which is now being considered the benchmark rate, is lower than $5.7 per mBtu that the gas from the BG-led Panna/Mukta and Tapti fields command. “This is not a viable price for making future investments,'' he said. ONGC plans to begin gas production from the KG-DWN-98/2 block in 2015-16, later than previously anticipated 2013.

Mr. Sharma said 20-25 million standard cubic metres a day of peak output was envisaged from the ONGC's KG block. When asked what price level would be comfortable, he said something certainly higher than the current rate but lower than LNG import price of over $9 per mBtu.

<>ONGC is planning to invest a minimum of $5.3 billion in developing gas finds in two of its eastern offshore Krishna Godavari basin blocks to produce 25 million standard cubic metres a day of gas.

ONGC is also in talks with oil majors like ExxonMobil to replace Norway's Statoil and Petrobras of Brazil which have decided to quit its KG basin gas block.

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