The document summarizes various news stories from the 2nd week of August-September: 1) The telecom department is examining proposals to allow new mobile operators who received licenses under controversial circumstances to exit the market, paving the way for possible industry consolidation among the existing 14 players. 2) Reliance Industries surprised investors by acquiring a 14.12% stake in hospitality company EIH, which runs Oberoi and Trident hotel chains, paying over 30% premium and disrupting ITC's plans to control the company. 3) The government's claim of 8.8% GDP growth in the first quarter has been questioned by economists as the demand-side numbers show much lower growth of

1. 2ND WEEK NEWS(30 Aug -4 Sept)

2. NEW ENTRANTS SEEK REFUND OF FEESNew telcos may exit, set off consolidation THE telecom department (DoT) is examining proposals that would allow new mobile operators, who were given licences and airwaves under controversial circumstances two years ago, to sell out or exit, paving the way for a possible consolidation in the 14-player domestic telecom market. Several possibilities were being considered, including allowing new companies to merge with larger operators, shortening the three-year period during which the promoter of a new company cannot sell out, and relaxing rules to allow incumbents to retain airwaves held by these new companies if a buyout or merger were to happen.

3. RIL makes Grand entry into EIH with 14% buy Reliance Industries took investors by surprise with a stake buy in the hospitality company for 1,021 crore, paying an over 30% premium to EIH’s Friday closes. The deal upsets cigarette-maker ITC’s desire to one day control the company, and ends Max Group chairman Analjit Singh’s flirting with the Oberois for a substantial stake. RIL bought 14.12% in EIH, which runs the Oberoi and Trident chains, from the promoters, providing funds to them to subscribe to a possible preferential share sale.

4. Question mark on 8.8% GDP growth number THE government’s claim that the Indian economy grew at its fastest pace in over two years in the April-June quarter has been questioned by economists. The value of all goods and services produced by India, or the gross domestic product (GDP), grew 8.8% in the first quarter of the current fiscal. The robust 8.8% growth figure was not corroborated by the `demand side’. The demand number showed that the economy grew as low as 3.7% during the first quarter of the current year. On an average, the divergence is well below 0.5%, though on a few occasions it has touched 2-3%.

5. RatanTata on the joys of retirement After bidding Tata,Ratan wants to just break free Tata Sons, the holding company of the $71-billion salt-to-software Tata group, announced a fivemember panel in early August to choose a successor to Mr Tata, who has been chairman since 1991. The Tata group is expected to increase its focus on Africa with a slew of new business launches being drawn up. Currently, the group has investments in a ferrochrome operation in Richards Bay in the northern province of Kwazulu-Natal while software major Tata Consultancy also has an SA operation. Indian Hotels looking to launch Ginger in global markets

6. Proposed Norms: Difference Of Opinion THE provisions of the Companies Bill are set to bring the Securities & Exchange Board of India (Sebi) and the ministry of corporate affairs (MCA) in conflict with each other in a number of areas such as insider trading, independent directors, and delisting of publicly-traded companies. The bill, in its current form, has several potential areas of conflict. For instance, under Sebi’s listing agreement, independent directors cannot have any ‘material’ pecuniary relationships with the company or its promoters, which may affect their independence. In contrast, the bill has proposed that the cap on such a relationship should be 10% of the turnover of the company

7. Contd.. On being told by the members of the parliamentary committee that 10% was too high and gave ample scope for conflict of interest, the ministry revised this down to 2% where it stands currently. Under the Sebi Act, only companies listed for three years can delist from a stock exchange. The Companies Bill, however, does not lay down such a condition and allows for companies to effectively delist through a process supervised by company law tribunals. The Sebi Act prohibits trading on non-public price-sensitive information by ‘insiders’ of a company (without specifying who such insiders are) and applies a minimum fine of Rs 25 crore for such an offence. The Companies Bill prohibits insider trading by senior management, with a penalty of five years’ imprisonment, and a fine of up to Rs 1 crore.

8. Some of the differences between the regulator and the ministry’s stance have narrowed since the bill’s introduction in Parliament.