Finally, Dayanidhi Maran puts in his papers
Union Textiles Minister Dayanidhi Maran resigned from the Union Cabinet, sending shares of Sun TV and SpiceJet down sharply in Mumbai trading. According to reports, the DMK leader met Prime Minister Dr. Manmohan Singh at his official residence on Thursday after a Cabinet meeting and tendered his resignation. Maran's exit from the Union Cabinet comes amid reports that the CBI will question him in connection with the ongoing 2G scam. Maran is being probed for allegedly favoring certain companies in the award of license and spectrum during his tenure as Union Telecom Minister in the UPA-I regime. The CBI is also looking into some deals done by Sun TV, owned by Dayanidhi Maran's brother Kalanithi Maran, with Malaysia's Maxis. It is also investigating various aspects of Aircel's takeover by Maxis.
On Wednesday, the CBI informed the Supreme Court that during his tenure as the Union Telecom Minister, Dayanidhi Maran had delayed the award of 2G licences and spectrum to Aircel for nearly two years. This, in turn, forced Aircel’s promoter - C Sivasankaran - to sell the firm to Malaysia's Maxis Group (owned by T Ananda Krishnan) in 2006, the CBI said, adding that its investigation in the matter is in a preliminary stage. Sivasankaran had earlier alleged that he was forced by Dayanidhi Maran to sell Aircel to Maxis. Maran has repeatedly denied all the charges against him.
According to CBI, Sun Direct received Rs 5.99bn from Maxis between December 2007 and December 2009. This came within months of Aircel receiving 14 new 2G telecom licences. Astro, a Maxis Group company, also made investments of Rs. 1.11bn in South Asia FM Ltd. (SAFL), an FM company owned by the Marans. The CBI also told the apex court yesterday that it would conclude its investigation into the money trail in the 2G scam by the end of next month. The apex court will hear the matter again on July 11.
Murli Deora offers to resign: Reports
Mining and metal shares tumble on draft law
Shares of mining and metal companies tumbled after the Group of Ministers (GOM) approved the draft Mines and Minerals (Development and Regulation) bill. For entities involved in coal mining, 26% of the profits from this activity has to be shared. While for other mining activities, companies have to pay an amount equal to the royalty they are currently paying to the Government, i.e. an effective doubling of royalty payments. In its current form, implementation of this bill could reduce Coal India’s earnings by 15% while impact on metal companies would range from 2% to 9%.
Coal India (CIL) would be the worst hit followed by other miners such as Sesa Goa, NMDC, NALCO and Hindustan Zinc. On the metals front, SAIL and Tata Steel would be hit due to their captive mines whereas the likes of JSW Steel would be the least impacted. The bill would be taken up in Parliament in the forthcoming monsoon session once it receives a green light from the Union Cabinet.
The original mining bill had stated that for new mines, a company will have to allot 26% free shares in the company to the local people affected by its mining activity. For existing mines, a company 26% of profits should be shared with the local population. The new draft makes a distinction between coal miners and non-coal miners. The GoM, headed by Finance Minister Pranab Mukherjee, includes the ministers of Mines, Steel, Law, Commerce and Tribal Affairs, and the Deputy Chairman of the Planning Commission. Thursday’s meeting was attended by all the members of the GoM, except Home Minister P Chidambaram.
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