Today's Hot Stories - February 14, 2013
10 Headlines for Today(1) Bhaskar Rao is Karnataka Lokayukta
(2) Pranab rejects mercy pleas of four Veerappan associates
(3) Bribes necessary for doing business: Berlusconi
(4) Aavin butter in tiny, table packs soon
(5) Inflation declines to 6.62 p.c. in January
(6) Finmeccanica SpA appoints new CEO
(7) Mathews named Sri Lanka’s Test, ODI captain
(8) Motorsport: Daly crowned champion
(9) Pakistan lose early wickets
(10) Fermented castor solution traps pests of sugarcane, groundnut
5 Stories for Today
(1) Helicopter firm had kept Rs. 217 crore for bribe: Report
(2) N-test makes North Korea a big stride towards nuclear power
(3) Emami scouts for overseas acquisitions
(4) American, US Airways announce $11-billion merger
(5) Trade deficit soars to $20 b
(1) Helicopter firm had kept Rs. 217 crore for bribe: Report
Italy’s state-controlled AgustaWestland had allegedly kept aside Rs 217 crore as part of “corrupt activity” to bag India’s Rs 3,600 crore deal and its choppers became eligible only after certain required parameters were altered in the tender document.
According to the report filed by Italian investigators in an Italian court, the middlemen had agreed for a 7.5 per cent commission in the Rs 3600 crore for 12 VVIP helicopters.
Finally, the kickbacks were to the tune of about Rs 362 crore.
The payment of bribes through contracts between firms registered in Tunisia and India, was “still underway” when the scam was unearthed.
The report said CEO of Finmeccanica Giuseppe Orsi and AgustaWestland CEO Bruno Spagnolini had paid 30 million Euros (Rs 217 crore) to one of the main middlemen Christian Michel.
“Orsi and Spagnolin, moreover, paid Micheal Christian a total amount of about Euros 30 million, partly destined to support the corruptive activity meant to bag the order and partly to implement the contract,” the document said.
The arrested CEOs of the two companies had also “paid Guido Ralph Hashcke and Carlo Gerosa (two other alleged middlemen), through a consultancy contract between AW spa and Gordian Services Sarl an amount of 400,000 Euros (about Rs 2.8 crore), of which 100,000 Euros (Rs 72 lakh) were paid cash to the Tyagi brothers (Julie, Docsa and Sandeep.)”
The report suggests that the middlemen had close contacts with the family of former IAF Chief Air Chief marshal S P Tyagi, particularly his three cousins.
Source: The Hindu
(2) N-test makes North Korea a big stride towards nuclear power
North Korea’s latest underground test shows it is making big strides toward becoming a true nuclear power. But the test may also reveal key clues the secretive nation might have hoped to hide about how close, or how far away, it is from fielding a nuclear weapon capable of striking the United States or its allies.
North Korea hailed Tuesday’s test as a “perfect” success, saying it used a device that was stronger and more advanced than those in its past two attempts. Add that to its successful rocket launch in December and the threat of a North Korea ready to strike at the United States, which it sees as its arch-enemy, would appear to be more real than ever.
But just how close is it?
The main thing intelligence officials want to figure out is what kind of device was used. Was it a plutonium bomb, like the ones it tested in 2006 and 2009, or one that used highly enriched uranium?
James Acton, an analyst with the Carnegie Endowment for International Peace, said North Korea’s plutonium stockpile is small and it would be difficult and expensive for the North to produce more. But a test using highly enriched uranium, which is cheaper and easier to produce, would raise the threat that North Korea can expand its nuclear arsenal quickly.
“A highly enriched uranium test would be a significant development,” he said. “Unfortunately, we don’t yet have any evidence as to the device’s design yield or whether it was made from plutonium or highly enriched uranium.”
Finding that out is a race against time.
Joseph De Trani, former head of the National Counterproliferation Centre, predicted U.S. intelligence would determine the size and composition of the nuclear device in one to three days based partly on radioactive elements released into the environment.
“Highly enriched uranium is something that degrades quickly, so you would have to collect within a 24-hour period,” especially because the traces from an underground explosion will be minimal, he said.
Neighbouring Japan may provide some of those answers.
Its fighter jets were dispatched immediately after the test to collect atmospheric samples. Japan has also established land-based monitoring posts, including one on its northwest coast, to collect similar data.
But experts caution such monitoring doesn’t always work because test sites can be sealed to prevent tell—tale leaks. They also note that North Korea has proven it has the ability to mask its tests quite well. No radioactivity was detected after North Korea’s test in 2009.
The first indication of the latest test was seismic activity at the test site, which U.S. officials estimated at roughly magnitude 5.1. That would be equivalent to a medium-sized earthquake. North Korea’s two previous tests registered at magnitude 4.3 and 4.7.
Working off that data, South Korean officials estimate the yield of the device a measure of how strong its explosion is in comparison to TNT to be between 6 and 7 kilotons. The United States has estimated it at “several kilotons.” Either way, it would be North Korea’s biggest yield yet but far less than that of the weapon dropped on Hiroshima in 1945, which was about 20 kilotons.
“Because the depth of the test is not known and the geology of the test site is uncertain, translating the seismic magnitude into yield is difficult,” said Acton, the Carnegie analyst. “My own back-of-the-envelope calculation suggests a yield of between 4 and 15 kilotons.”
The size of the blast suggests it was, as North Korea claims, a success.
North Korea’s first test is largely believed to have fizzled, with a yield of less than 1 kiloton, and the second was between 2 and 7 kilotons.
“The first test almost failed. The second one showed they could basically do it. The third one showed that this is really working,” said Won-Young Kim, a seismologist at Columbia University’s Lamont-Doherty Earth Observatory.
The final intelligence task will be confirming or debunking North Korea’s claim that this time around it tested a smaller, more advanced bomb. That is important because if the North is to field a nuclear weapon on the tip of a long-range missile, it must be lightweight. Making this determination will also depend on what materials leaked from the test, which experts can use to understand what kind of a device was detonated and infer how it was designed.
Experts have long been divided on whether North Korea has made much headway on clearing that hurdle, though the general consensus is they are not there yet. David Albright and Andrea Stricker, of the Institute for Science and International Security, said the latest test could be a measure of progress.
“Although more information is needed to make a sound assessment, this test could, as North Korea has stated, demonstrate this capability,” they said in a statement. “ISIS has also assessed that North Korea still lacks the ability to deploy a warhead on an ICBM, although it shows progress at this effort.”
Even so, they stressed North Korea could be years away from having a credible nuclear weapon that it could launch at the United States.
They said North Korea will need to conduct missile flight tests with a re-entry vehicle and mock warhead, increase the explosive yield of its warheads, possibly working to make them smaller, and improve the reliability of both its warheads and missiles.
Source: The Hindu
(3) Emami scouts for overseas acquisitions
Emami Ltd., which has mainly taken the inorganic route for growth, is keen on making an overseas acquisition, and is on the look out in regions where it has a presence.
“We are bullish on acquisition… but targets are seldom available in the domestic market,” Emami CEO, Sales, Supply Chain and Human Capital, N. Krishna Mohan told reporters.
There were indications that the company is looking at an overseas acquisition, in geographies that include West Asia, where it already has a presence. The company owes its robust growth to its acquisition of a regional brand, Himani, and its entry into healthcare products through the buyout of Zandu.
Addressing a press conference, along with N H Bhansali CEO, Finance, Strategy and Business Development, Mr Mohan said that while the company had already implemented its project in Bangladesh, its plans of a unit in Egypt was being re-examined in view of the current instability there.
Mr Bhansali said that the unit was proposed to be set up in Alexandria. “We are approaching Egypt cautiously as we are looking for clarity,” he said, adding that the final call may be taken in a month or so. The project pertains to personal and healthcare.
Led by brands like Boroplus and Navratna hair-oil, the company posted a 21.3 per cent growth in the quarter ending December, 2013 with a near equivalent growth in its post tax profit. “A good winter helped us make healthy profits”, Mr Bhansali said. The company has a range of wintercare products.
Emami is also planning to have another manufacturing unit in the north-east, apart from the existing two in Assam.
Source: The Hindu
(4) American, US Airways announce $11-billion merger
American Airlines and U.S. Airways say they’re merging in a deal they value at $11 billion, creating the world’s biggest airline.
The combined carrier will be called American Airlines but run by US Airways CEO Doug Parker.
The airlines announced their deal on Thursday.
It reduces the number of major U.S. airlines to four.
The merger caps a turbulent period of bankruptcies and consolidation that will leave the U.S. airline industry dominated by four big carriers American, United, Delta and Southwest. Together they would control almost three-quarters of U.S. airline traffic.
The deal has been in the works since August, when creditors forced American to consider a merger rather than remain independent. American has been restructuring under bankruptcy protection since late 2011. AMR creditors and possibly its shareholders will own 72 per cent of the stock, and US Airways Group Inc. shareholders will get the rest, three of the people said.
If the deal is approved by American’s bankruptcy judge and antitrust regulators, the new American will have more than 900 planes, 3,200 daily flights and about 95,000 employees, not counting regional affiliates. It will be slightly bigger than United Airlines by passenger traffic.
Travelers on American and US Airways won’t notice immediate changes. It likely will be months before the frequent-flier programs are merged, and possibly years before the two airlines are fully combined.
When that happens, American’s presence will grow in key East Coast markets including New York’s LaGuardia Airport and Washington’s Reagan National Airport. The merger will add US Airways hubs in Charlotte, Philadelphia and Phoenix to American’s in Dallas-Fort Worth, Chicago, Miami, New York and Los Angeles.
US Airways would boost American’s service to Europe and the Latin America-Caribbean market but wouldn’t fix American’s weakness on routes to Asia.
Just five years ago, American was the world’s biggest airline. It boasted a history reaching back 80 years to the beginning of air travel. It had popularized the frequent-flier programme and developed the modern system of pricing airline tickets to match demand.
But years of heavy losses drove American and parent AMR Corp. into bankruptcy protection in late 2011. The company blamed bloated labour costs; its unions accused executives of mismanagement.
The merger is a stunning achievement for Parker and his management team at U.S. Airways, based in Tempe, Arizona. Just a few years ago, they were running a mid-sized carrier called America West Airlines when they bought the old US Airways out of bankruptcy.
Parker’s airline is only half the size of American and is less familiar around the world, but he prevailed by driving a wedge between American’s management and its union workers and by convincing American’s creditors that a merger made business sense.
Despite its smaller size, US Airways has prospered in the last several years, earning a record profit of $637 million last year.
“They’ve done an absolutely terrific job with what they have,” said Bill Swelbar, an airline-industry researcher at MIT and board member of Hawaiian Airlines’ parent company.
Parker began pursuing a merger almost as soon as AMR filed its Chapter 11 petition. He found willing partners in American’s three labour unions, who have long fought with management at their own company over pay, work rules and executive bonuses. American suffered strikes by pilots and flight attendants in the 1990s. Bad feelings hardened in the early 2000s, when union workers took pay cuts to keep the company out of bankruptcy while AMR gave bonuses to management employees when the stock price rose.
AMR’s Horton professed no interest in thinking about a merger until his company was out of bankruptcy court, but his creditors pressured him to reconsider. AMR lost more than $12 billion between 2001 and 2010. It has lost another $2.8 billion since it filed for bankruptcy protection in November 2011 a period in which US Airways earned about $650 million. Some analysts and creditors called for new management at AMR.
AMR, however, has made measurable progress under Mr. Horton, who became CEO the day before the company filed for bankruptcy protection. The company earned operating profits in the second and third quarters of 2012, and its revenue for every seat flown one mile an arcane-sounding statistic but one that is closely watched in the airline business rose faster than at its rivals for much of the year. With leverage from bankruptcy laws, AMR won new union contracts with lower costs.
That performance may also have gotten a better deal for Mr. Horton’s creditors. US Airways’ initial proposal called for AMR creditors to get only 49 per cent of the stock in the combined company, according to people familiar with the talks. Instead, they’ll get 72 per cent, although they might have to share some of that with shareholders, said the people familiar with the deal.
In recent weeks, AMR won bankruptcy court approval to buy hundreds of new planes from Boeing and Airbus, an important step to reduce fuel costs and offer a more comfortable experience for passengers. American even unveiled a new logo and paint job for its planes, although the reviews were mixed.
Source: The Hindu
(5) Trade deficit soars to $20 b
India’s exports barely inched into the positive zone, after a gap of eight months, recording a meagre 0.82 per cent growth at $25.58 billion in January. The growth, however, is unlikely to help in reaching the $350 billion export target for 2012-13.
The positivity in exports has come mainly on account of better performance by sectors such as engineering goods, textiles and gems and jewellery. Exports have been contracting since May 2012. The trade deficit also continues to be a cause of concern, soaring to a three-month high of $20 billion. “I hope with exports growing marginally in January, it should help India in narrowing the trade gap at the close of the fiscal,” Commerce and Industry Minister, Anand Sharma said in a statement here.
The country's exports stood at $25.37 billion in January, 2012. Imports, too, rose by 6.12 per cent to $45.5 billion in the month under review. However, during the April-January period of 2012-13, the country's overseas shipments shrunk by 4.86 per cent to $239.6 billion.
Commerce Secretary S.R. Rao told journalists here that the export performance in January had shown marginally better resultsand cumulative exports too had shown a slight arrest. Mr Rao said he hoped that the incentive package, which came into force in January, would help the country's exports improve significantly in the coming months. “In the last couple of months, there has been an arrest in the fall of exports,” he said.In October 2012, India's exports declined to 1.63 per cent from 11 per cent in September. In December, shipments declined by 1.9 per cent from 4.17 per cent in November 2012. Imports during the 10-month period rose by 0.01 per cent to $406.8 billion. Trade deficit during the period stood at $167.16 billion. “The most worrying aspect as usual is the widening trade deficit. Figures show that there is a substantial increase in the imports of petroleum and crude oil which is widening the trade deficit,” Mr. Rao said.
Since April 2012, petroleum and crude oil imports too have shown an increase. While in August the imports grew by 3 per cent, in September it jumped by 30 per cent and in October by 31 per cent. In November, December and January, petroleum and crude oil imports went up by 16.8 per cent, 23.6 per cent and 7 per cent respectively.
Mr. Rao said these imports were increasing mainly because of its high use in power generation. “Unfortunately, at least in 3-4 states power situation is adverse. In Tamil Nadu and Andhra Pradesh, power cuts are very distressing and it is close to 16 hours,” he said.
The export sectors, which registered positive growth, cumulatively include rice, tobacco, oil meals, carpet, pharmaceuticals and drugs. Fall in the exports of engineering, textiles and gems and jewellery, the main contributors, have also been arrested. Engineering exports declined by 4 per cent, while gems and jewellery and textiles exports shrunk by 0.6 per cent and 8 per cent during April-January. Oil imports in January grew by 6.91 per cent to $15.89 billion from $14.87 billion in the corresponding period last year. Non-oil imports, too, increased by 5.71 per cent during the month under review to $29.68 billion.
During April-January 2012-13, oil imports grew by 11.56 per cent to $140.42 billion from $125.87 billion in the corresponding period of previous fiscal year. However, non-oil imports during the period declined by 5.17 per cent to $266.43 billion.
Source: The Hindu
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