Archive for July 24th, 2009

IDR norms by RBI to allow only serious investors: Analysts

RBI’s recent direction to have a lock-in period of one year for investors to redeem their investment in Indian Depository Receipts is aimed at attracting long-term players to these instruments, say analysts.

Also, the central bank’s rule that proceeds from IDR issues have to be immediately repatriated from India is designed to prevent companies from misusing foreign exchange market, they said.

Yesterday, RBI allowed overseas companies to raise money through issuing rupee-denominated IDRs in Indian markets and framed rules in this regard.

The central bank had said the proceeds from the issue of IDRs will have to be immediately repatriated outside India by the companies issuing such IDRs.

It had also said IDRs will not be redeemable into underlying equity shares before the expiry of one year period from the date of issue of the IDRs.

“It is a safeguard by the RBI to prevent non-serious investors from investing into such IDRs and also to prevent foreign companies to misuse the IDRs for managing foreign exchange,” Jagannadham Thunuguntla, equity head of SMC Capitals said.

As per the norms, FEMA Regulations will not apply to persons resident in India for investing in IDRs and subsequent transfer arising out of transaction on a recognised stock exchange.

Further, other persons resident in India will be allowed to hold the underlying shares only for the purpose of sale within 30 days from the date of conversion of IDRs.

The financial/banking companies having presence in India, either through a branch or subsidiary, have to get permission of the sectoral regulator like RBI or IRDA before issuing IDRs.

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Indian IT industry on strong footing: Infy

Indian IT industry on strong footing

The Indian IT industry is still on a strong balance and is bound to develop with more investment in research and development and in spite of cutting costs; it has not reduced strategic investment, stated Infosys Technologies Chief Executive and Managing Director S Gopalakrishnan.

Additionally, he said that they invest more in new services, value additions, new solutions and products; therefore if they don”t pay now, they will pay later on.

Hence, although radical innovation is lengthy, it will certainly pay in the future.

Although Indian companies were focusing on process innovations, they should switch over to product innovations, he said, adding Universities should also focus on R&D.

Therefore, Indian companies are also buying companies located in the developed countries which will help them market their products globally and would also help to speed up on growth.

Additionally, he said India was in a better position in terms of economic growth as it was driven by people, unlike in China where it is government driven whereas, another advantage for India was its young population.

RealLife Conair in Belgium !!

Belgian convicts flee in daring airborne escape !!

Belgian convicts flee in daring airborne escape !!

Three prisoners, among them one of Belgium’s most dangerous criminals, escaped Thursday in an audacious jailbreak in broad daylight aboard a hijacked helicopter, the Justice Ministry said.

Two accomplices rented a helicopter, took the pilot hostage, and forced him to land in the courtyard of the jail, located in the northern city of Bruges, a ministry spokesperson told Belga news agency.

The escaped convicts and the accomplice were dropped off near a major road and the helicopter was abandoned at Aalter, on the outskirts of Bruges.

The convicts then seized a vehicle from a nearby petrol pump, later switching cars and taking a female driver hostage before dropping her off at Melle in Flanders, according to the police.

The three escapees — bank robber Ashraf Sekkaki, Mohammed Johry and Abdel Had Kahjary Mulloul — are all repeat offenders, prosecutors in Bruges told Belga.

Sekkaki, 26, has been described as one of Belgium’s most dangerous criminals, and was jailed for 10 years for a slew of crimes. He had escaped from a prison in the northern city of Turnhout in September 2003 and spent five months on the run before being captured by police.