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Buying Time For A Search

BW Online Bureau Nov 08, 2014

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[The ITC board needs more time to find a successor to Yogesh ‘Yogi' Chander Deveshwar. It has reappointed him for another five years as its wholetime director and chairman with effect from 5 February 2012. That, the board hopes, will give the company enough time to find the right successor. The re-appointment will also make Deveshwar, who took over in 1996, the longest-serving chairman of the company. The problem is the man is a hard act to follow. During his tenure, he has grown the company's topline from Rs 5,000 crore to about Rs 30,000 crore. Under his leadership, ITC also made several diversification moves that transformed it from a tobacco company into a fast-moving consumer goods giant. The board has bought time. Now the task is to find the right man within the next five years to fill a rather big pair of shoes. Oil Slick This one did not create as big a fuss as its 2G auction report, but the Comptroller and Auditor General of India's (CAG) draft report on the capital costs cleared for the exploration of oil and gas fields by private players has also created quite a controversy. The CAG feels that the petroleum ministry in general and its technical arm — the Director-General of Hydrocarbons (GDH) — in particular have bent rules to allow four private players to make a lot more money than warranted. The CAG particularly came down on the DGH's decision to allow Reliance Industries (RIL) to quadruple its exploration costs in the D6 block of the KG Basin. The petroleum ministry has ruled out any loss to the exchequer on account of RIL raising the capital cost. On its defence, RIL has said it has acted responsibly, and fully complied with the production sharing contracts. The government is now hoping that this does not create as much furore in Parliament as the CAG's other reports. Coal Turns Heads The past week has seen the coal sector hogging one too many headlines. On 17 June, coal ministry revoked mining licences of seven blocks of NTPC, Damodar Valley Corporation and Jharkhand State Electricity Board, saying the players were not serious to develop the blocks. Of the seven blocks that got cancelled, five belong to NTPC. The state-run power major has reportedly vociferously expressed its protest against the review by the ministry. On Friday, Tata Steel sold its 26.3 per cent stake in Riversdale Mining to Rio Tinto for $1.12 billion, giving the Chinese major control over the mining firm. <table style="width: 155px;" align="right" border="0" cellpadding="5" cellspacing="5"> <tbody> <tr> <td><img src="/businessworld/system/files/Maruti-Manesar_AFP-th.jpg" style="float: right; margin: 5px;" width="155" height="155"></td> </tr> <tr> <td>LABOUR BLUES: About 2,500 workers of Maruti went on a tool down strike demanding a new union at its Manesar plant (AFP)</td> </tr> </tbody> </table> In an interesting development, state-owned Coal India (CIL) has sought a complete overhaul of the coal policy. CIL's demands include a roll back on the 10 per cent volume limit on coal e-auction, abolition of tapering linkages, and limiting supplies through fuel supply agreements only to consumers by Coal Governance and Regulatory Authority, among others. The latest buzz is that Hyderabad-based GVK is close to picking up controlling stake in the Queensland coal projects owned by iron ore mining magnate Gina Rinehart's Hancock's group. According to reports, GVK will pay close to $3.4 billion to buy the flagship assets of Hancock. Speculation gathered steam as Rinehart, Australia's richest woman, flew down to Hyderabad on Friday to attend the wedding of Mallika Reddy, granddaughter of GVK chairman G.V.K. Reddy. Maruti Strike Fizzles Out The workers' strike at India's largest car maker Maruti Suzuki ended on 17 June with the workers agreeing to start production. The 13-day strike at the Manesar plant had crippled production by 11,000 units — a loss of Rs 450-500 crore. The workers, backed by All India Trade Union Congress (AITUC), were demanding recognition of a separate union at the Manesar plant, which Maruti rejected. The company agreed to reinstate the 11 workers, which it had sacked for fomenting the strike, but refused to recognise the new union. (This story was published in Businessworld Issue Dated 27-06-2011)