Vodafone plans to sell its stake in China Mobile for over $6 billion to raise funds for planned asset sales. India received the most financial assistance from the World Bank in 2009-2010, with over $9 billion in loans committed. The Direct Taxes Code has been passed by the Cabinet with tax rates similar to current rates but a higher 30% corporate tax rate. SEBI has introduced new rules requiring media companies to disclose any equity stakes received in exchange for advertising and any participation in company management to avoid conflicts of interest.

1. Weekly news: Submitted by: TanpreetKaur

2. Vodafone to sell China Mobile stake British mobile phone giant Vodafone is to sell its shares in China Mobile to raise more than four billion pounds (6.2 billion dollars, 4.9 billion euros), The deal with China Telecom, the world's biggest telecom operator, is expected to be the first in a series of planned sell-offs Vodafone will make in the coming months, according to the Sunday Times. The deal is expected to be rubber-stamped next month, although Vodafone is deciding whether to seek a strategic investor for the stake or sell the shares on the Hong Kong stock market, where China Mobile is listed, the report said.

3. Cont… Vodafone, which has a market value of 81 billion pounds, is committed to reshaping its portfolio of assets to improve its share price.

4. India largest recipient of World Bank loans in 2009-10 India was the World Bank's favorite last fiscal when it came to extending financial aid in the form of loans, both among developing countries and the world's poorest nations. The World Bank, through its lending arms IBRD and IDA, committed USD 9.3 billion in financial assistance to India in the 2009-10 fiscal, more than the aid committed by the US and the European Union. The International Bank for Reconstruction and Development (IBRD) committed USD 6.7 billion, or 15.1 per cent of its total lending in the fiscal, to India, according to government officials. In comparison, the second highest recipient, Mexico, got USD 6.4 billion.

5. Cont… The World Bank's concessionary lending arm, the International Development Association (IDA) committed 17.7 per cent of its total aid, amounting to USD 2.6 billion, to India in 2009-10. Even in terms of actual disbursement, India was the largest recipient of World Bank financial assistance last fiscal, with a total of USD 4.7 billion -- IBRD (3.4 billion) and IDA (1.3 billion) -- being released, officials informed. The country was also the largest recipient of assistance from other external funding agencies like the International Fund for Agricultural Development (IFAD) and the UK's Department for International Development (DFID).

6. Corporates to welcome 30% cap on tax but increase in MAT rate a dampener With the draft bill for the Direct Taxes Code (DTC) now cleared by the Union Cabinet and set to be tabled before Parliament on Monday, it seems almost certain that the DTC deadline will be met. While the revised discussion paper released earlier for public discussion did indicate a calibration of tax rates to make up for the loss in the tax kitty, little did the individual taxpayer expect that the tax slabs would largely be aligned to the current slabs! Preliminary news reports indicate that the basic exemption limit has been marginally increased to Rs 2 lakh (Rs 2.5 lakh for senior citizens and women). Currently the exemption limit stands at Rs 1.6 lakh (Rs 2.4 lakh for senior citizens and Rs 1.9 lakh for women).

7. Cont.. The tax slabs as announced on Thursday have been have been fixed as: 10% for income between Rs 2 lakh and Rs 5 lakh, 20% for income between Rs 5 lakh and Rs 10 lakh and 30% for income over Rs 10 lakh. Currently, the lowest tax rate is 10% for those earning income between Rs 1.6 lakh and Rs 5 lakh and 20% for those earning income between Rs 5 lakh and Rs 8 lakh. The highest marginal tax rate stands at 30% for income above Rs 8 lakh. The DTC had made some bold announcements of reducing the tax rates for individuals. For instance, the maximum marginal rate of 30% would have applied only on income above Rs 25 lakh.

8. Cont… However, it should also be recalled that DTC had called for the EET (exempt-exempt-tax)regime, which was largely diluted by the revised discussion paper. With the continuance of the EEE (exempt-exempt-exempt)system in most instances, it is likely that the tax rates could not be reduced to the extent as originally intended. On the corporate tax front, it appears that the tax rate has been increased to 30% (including education cess and surcharge) from 25% proposed in the DTC.

9. SEBI frames rules for media companies Market watchdog Securities and Exchange Board of India (SEBI) is gunning for those media houses which receive equity in companies, either listed or those about to be listed in exchange or in barter to the advertising space in their publications or channels through private treaties terming it as conflict of interest. SEBI said that, henceforth it would be mandatory for media groups to disclose stake in companies under such private treaties. SEBI said that after deliberating on the issue, PCI has accepted certain suggestions made by SEBI. This include disclosures regarding stake held by the media company should be made in the news report, article or an editorial in newspapers or television relating to the company in which the media group holds such stake and disclosure on percentage of stake held by media groups in various companies under such private treaties’ on the website of media groups should be made.

10. Cont…. On the issue of participating in the management of such companies, SEBI has said that any disclosures relating to such agreements such as any nominee of the media group on the board of directors of the company, any management control or other details which may be required to be disclosed and which may be a potential conflict of interest for media group, should also be mandatorily disclosed. Presenting its point SEBI had said that agreements with media companies could give rise to conflict of interest and may, therefore, result in dilution of the independence of press. This may consequently compromise the nature, quality and content of the news and editorials relating to such companies. “Needless to say, biased and motivated dissemination of information, guided by commercial considerations can potentially mislead investors in the securities market. Such journalism would not be in the interest of securities market,” SEBI noted.