India Abroad January 10, 2014 A23 BUSINESS
India Inc worried over US Bill
The United States Immigration Bill, which proposes high-
er visa fees and enhanced audit by US agencies, is still giv-
ing ‘sleepless nights’ and the Indian IT industry needs to
keep a watch, Som Mittal, the National Association of
Software and Services Companies chief, said.
The Border Security Economic Opportunity and
Immigration Modernization Act 2013 was passed by the
Senate and is yet to be passed by the House of
India may permit FDI in railways
The Indian government is likely to allow Foreign Direct
Investment in high-speed trains and other projects, includ-
ing development of rail lines.
Besides proposing 100 percent FDI through automatic
route in the cash-starved railway sector, India has also proposed to de-license and de-reserve few areas of the sector.
But FDI will not be allowed in train operations and safety.
Amul to start production
in America next month
Come February, the Gujarat Cooperative Milk Marketing
Federation, which owns the Amul brand, will start manu-
facturing ghee, Paneer and Shrikhand (a sweet dish made of
strained yogurt) from a plant near New York.
‘Initially, three products will be manufactured at the facility from February. There are around 3 million Indian and
many more Asian consumers whom we will target in the
initial phase,’ said R S Sodhi, managing director, GCMMF.
The dairy major has joined hands with a New Jersey-based non-resident Indian to use his plant.
IT: Light at the end of the tunnel?
For the quarter ended September 2013, most Indian and
offshore-centric information technology services companies
reported better-than-expected growth, led by the North
American market, which accounted for about 60 percent of
the industry’s exports revenues.
Experts say these trends are expected to increase in 2014,
primarily driven by demand from the United States, revival
in the European market, and increased momentum in the
adoption of new technologies.
‘2014-2015 will be a better year than 2013-2014, according to the initial talks we have had with our clients,’ the
Business Standard newspaper quoted N Chandrasekaran,
chief executive and managing director, Tata Consultancy
Services, as saying.
Mallya’s cup of woes overflowing
The Karnataka high court sought a probe into fund diver-
sion to the tune of Rs 40 billion ($643 million) by United
Lenders, led by BNP Paribas, said the diversion was not
in their interest and would impact United Breweries
Holdings Ltd. The latter and Mallya were both guarantors
to Kingfisher Airlines loans. After the airline defaulted on
payments, lenders and aircraft lessors sued UBHL and
Kingfisher in the high court, asking for their money.
Stage set for mining clean-up act
For a large part of 2013, the Indian mining sector grap-
pled with controversies related to allocation, production
and pricing of minerals. The sector seems set for a clean-
up in 2014, helping boost investor confidence and
The shift to gross calorific value-based grading of coal
aligned domestic prices with international benchmarks.
This year the the auctioning of more blocks and the finalization of the surplus coal policy is likely to introduce transparency, while revised fuel supply agreements will ensure
assured coal supply for fuel-starved power plants.
ArcelorMittal’s one big India
success is in Kolkata
ArcelorMittal, the world’s largest steel maker, is making
Kolkata one of its global hubs for engineering and project
management. What started in 2009 as a five-location serv-
ice has seen a steep expansion. The number of locations in
2013 was 17.
the week that was
The trial of Mathew Martoma in the largest insider trading case is due to start Monday, January 6. The pre-trial
conference was scheduled for January 3, but
was adjourned due to bad weather, his attorney Richard Strassberg told India Abroad.
The jury selection before US District
Judge Paul Gardephe was scheduled for
January 7, unless Martoma,39, pled guilty.
So far he has refused to do so or cooperate
with the prosecution against former boss Steven Cohen, founder, SAC Capital Advisors.
Martoma, whose earlier name was Ajai
Mathew, was arrested in November 2012
from Boca Raton, Florida — where he lives
with his wife and three children — for insider trading worth $276 million, which benefited CR Intrinsic, a part of SAC.
He was accused of arranging for paid con-
sultations with a leading Alzheimer’s disease
doctor between 2006 and 2008 to obtain
inside information about a drug being devel-
oped jointly by the pharmaceutical compa-
nies Elan Corporation and Wyeth, according
to court papers.
Martoma, a portfolio manager then, initially obtained inside information that the
drug trial was progressing well. By June 30,
2008, his company held approximately
$700 million worth of Elan and Wyeth equity securities.
On July 17, 2008, Martoma received information that the drug trial had produced negative results. Three days later, he sent Cohen
an e-mail asking for a meeting.
Over the next seven days, the hedge fund
liquidated its entire position in Elan and
almost all of its position in Wyeth — a total
of 17.7 million shares worth approximately
The hedge fund also shorted Elan and
Wyeth by approximately 7.75 million shares.
The drug results were announced July 29,
2008. The next day Elan stock closed
approximately 42 percent lower and Wyeth
shares fell approximately 12 percent.
The hedge fund is alleged to have avoided
losses of approximately $276 million,
according to the prosecution.
Martoma, who was fired in 2009, earned
$9.8 million from this, according to the
He was charged with one count of conspiracy to commit securities fraud and two
counts of securities fraud. He faces up to 20
years in prison, a fine and restitution.
He was released on a $5 million bail and
had to post $2 million in cash or property to
satisfy the bail requirements.
CR Intrinsic eventually agreed to pay $602
million on the charges tied to Martoma
(India Abroad, March 29, 2013). Cohen paid
$1.8 billion as penalties for settling many of
the charges brought against him by the office
of Preet Bharara, the United States Attorney
for the Southern District of New York (India
Abroad, November 15, 2013).
Charles Stillman, Martoma’s former attorney, had questioned the charges against his
client. “Martoma was an exceptional portfolio manager who succeeded through hard
work and the dogged pursuit of information
in the public domain,” he had told India
“Mathew continues to fight the charges
and is preparing for trial,” Strassberg added.
He has asked the judge to order the
authorities to turn over communications
between the government and the doctors
who shared information with Martoma and
are now cooperating with the prosecution.
He is also seeking to bar jurors from hearing that Martoma fainted when Federal
Bureau of Investigation agents came to
arrest him, which the prosecution has noted
as evidence of guilt.
Martoma trial set to begin
MANSI THAPLI YAL/REU TERS
Employees at the
of Larsen & Toubro
in Mumbai. Indian
companies like L&T
that built most of the
parts for the coun-
launched Mars mis-
sion are using low-
expertise in frugal
space engineering to
compete for global
and nuclear con-
tracts worth billions