1. JAGAN INSTITUTE OF MANAGEMENT STUDIES
The World This Week
22 JULY 2010 VOLUME 1, ISSUE 2
Inside this issue: Takeovers: SEBI Panel Wants 100% Open Offer
Takeovers: SEBI 1 any entity that has purchased and other public sharehold-
Panel Wants 100% 15 per cent equity, either ers.
from the promoters or from
Open Offer By the current practice, all
the open market.
the public shareholders do
AIG To Pay $725 1 Sebi had set up a Takeover not necessarily get an exit
Mn To Settle Regulatory Advisory Commit- option, even if the owner-
tee, with former Securities ship of a company changes
Fraud Case
Appellate Tribunal presiding hands, as the open offer size
Interview: 2 officer, C Achuthan as chair- need not be more than 20
man. The Committee, which per cent. In most M&As, the
Venugopal Dhoot
prepared the report in consul- promoters sell their stake to
Aluminium Ex- 2 tation with the various stake- the acquirer, which later
Takeovers are set to get
holders, is believed to have makes a 20 per cent open
ports May Rise By costlier, with a Securities
recommended making suit- offer for public sharehold-
Year-End and Exchange Board of
able changes in the existing ers. Accordingly, an acquirer
India (Sebi) panel favoring
takeover regulations. can get away with acquisi-
Godrej To Convert 2 making it mandatory for
tion of just 35 per cent stake
Hyderabad IT the acquirer to make an Also, it might increase the
in a listed company 15 per
offer for up to 100 per cent open offer trigger limit from
SEZ Into Housing cent from promoters or
stake in any listed com- 15 per cent, sources said.
Project open market and further 20
pany.
While an increase in open per cent from public open
Dhoni Inks Rs 2 As of now, an open offer offer size could mean larger offer thus leaving as much
for a minimum of 20 per cash outgo for the acquirers, as 65 per cent equity holders
200-Cr Deal With
cent in the target company the step is being considered in without any option to sell
Rhiti Sports is required to be made by the larger interest of retail their shares.
AIG To Pay $725 Mn To Settle Fraud Case
 Government plans
ban on unbranded
-minary court approval of the expected recovery for AIG
settlement with a class of shareholders to about $1
mobile phones
shareholders. The company billion, Cordray said. AIG
may fund the remaining $550 said it was "pleased to have
 Escorts Q3 net
million through one or more resolved this matter."
jumps over two-
common stock offerings.
fold to Rs 45.84 cr "This settlement ends a long
The litigation, which began in
-standing lawsuit, allowing
American International October 2004, involved alle-
 Sony to introduce AIG to continue to focus its
Group Inc agreed to pay gations that AIG engaged in
new PlayStation3 efforts on paying back tax-
$725 million to settle a long accounting fraud, bid-rigging
with bigger memory payers and restoring the
-running securities fraud and stock price manipulation,
value of our franchise for
lawsuit led by three Ohio said Ohio Attorney General
the benefit of all our stake-
public pension funds, in Richard Cordray, who repre-
holders," spokesman Mark
one of the largest class sented the Ohio funds.
Herr said. Cordray said to-
action settlements in US
The settlement resolves alle- gether this was the tenth-
history.
gations of AIG's wide-ranging largest securities class action
AIG would pay $175 mill- fraud from October 1999 to settlement in US history.
ion within 10 days of preli- April 2005 and brings the

2. JAGAN INSTITUTE OF MANAGEMENT STUDIES
Interview: venugopal dhoot
The World This Week Page 2
Aluminium Exports May Rise By Year-End
“Currency float by China will have nations. Prices, which reached
a positive impact on exports, but close to $2,316 a tone for three-
may not affect growth substan- month delivery in April, had fallen
Oil and gas is turning out to be tially. However, aluminium de- 16 per cent to $1,930 per tone in
your cash cow now. How do you mand in the international market is June. At present, aluminium for
see the revenue and profit mix of sound and will get support from three-month delivery is around
the group? the decreasing inventory of the $2,000 per tone. “We expect prices
Oil will be a major income genera- metal at LME,” said A K Sharma, to stabilize at the current level.
tor for us, and the energy business director (production), National They may touch $2,150 a tone by
will take the lead in five years in Aluminium Company Ltd (Nalco). December,” Sharma said.
terms of revenues and profits by a
large margin. For now, both con- Sharma, who also heads the Fed- Talking about the current inven-
Falling LME inventories, yuan
sumer electronics and oil and gas eration of Indian Mineral Indus- tory level of 4.3 million tones at
revaluation to be likely trigger
— both in India and globally — tries (Fimi) panel for non-ferrous LME, he said, “Most of the inven-
India‟s aluminium exports
are generating cash. metals, said Nalco had been selling tory has been tied up with financial
which likely to pick up within
aluminium at a premium of close deals, with less stock available for
the next two quarters, due to
to $90 a tone of late and expected physical delivery. Also, the de-
falling inventories at the Lon-
So, where do you see Videocon the trend to continue. Aluminium creasing stock shows signs of de-
Industries five years down the don Metal Exchange (LME) and
prices were hit due to the sover- mand growth from economies.”
revaluation of the Chinese yuan.
line? eign debt crisis in some European
We will be a large player in global
oil production and exploration —
with global assets of more than $4 Godrej To Convert Hyderabad IT SEZ Into Housing Project
billion — and power generation in
India with 2,400 MW in produc- The Godrej Group‟s realty arm, following the slowdown in the IT alternatively, an IT SEZ in Hy-
tion and another 2,400 MW in Godrej Properties (GPL), plans sector and some government regu- derabad. Currently, the company is
construction. This vision is based to convert its information tech- lations. We are looking at convert- developing two IT parks in Kol-
on what has been established on nology (IT) special economic ing our Hyderabad SEZ project kata‟s Salt Lake city, one of which
ground for us in energy today. We zone (SEZ) project in Hydera- into a residential one, most likely will be completed by this year-end.
have a „long‟ global view on en- bad into a residential one, a top catering to the mid-market seg-
GPL‟s profit for the first quarter
ergy. company official said. GPL had ment. We will not focus on SEZs
in 2010-11 has increased seven
bought over 34 acres in Hydera- as of now,” Godrej Chairman Adi
times to Rs 22 crore on the back
bad in 2006 to set up an SEZ, Godrej told reporters after the
How will you address competi- of impressive bookings in its resi-
keeping in view the then boom company‟s AGM.
tion in the telecom business? dential projects in Ahmedabad and
in the IT sector.
The Videocon brand is powerful The company earlier had plans to Kolkata, Godrej said.
and popular. We have gone to the “SEZs are no more lucrative build a six-million-sq-ft IT park or,
remotest areas in the country,
where multinationals have not
penetrated. So, it is easy for us to Dhoni Inks Rs 200-Cr Deal With Rhiti Sports
do the same in telecom as well,
because self marketing is our main Indian cricket captain Mahendra brand associations, corporate pro-
strength. Singh Dhoni has signed a whop- file, patents and digital rights, im-
ping Rs 200-crore endorsement ages, visibility on social network-
What is the rationale behind deal with a talent management ing sites and merchandise through
your attempts to acquire or company, surpassing Sachin a joint venture.
partner with foreign brands Tendulkar in the corporate con- Tendulkar's three-year deal with
tract sweepstakes. sports management firm Iconix,
such as Philips?
Dhoni has entered into a two- signed in 2006, was worth Rs 180
Consumers in India like interna-
year deal with Rhiti Sports Man- crore.
tional brands. With global brands
agement and Mindscapes, which Confirming the development, per the agreement, the company
coming here, we also have to offer
will manage the Indian skipper's Rhiti Sports General Manager will be looking after Dhoni's entire
similar products.
long list of endorsements and (Operations) Sanjay Pandey said as spectrum of endorsements.
Team Members: Sanjeev Chaudhary, Piyush Sharma, Varun Vats, Ankita Sachdeva, Jaya Sachan