HCL may lose 'lowest bidder' status for BSNL's Rs 900-cr IT deal

MUMBAI: In what could affect HCL Infosystems’ ‘lowest bidder’ status for BSNL’s Rs 900-crore IT outsourcing contract for the northern region, rival bidders and other officials familiar with the decision making are crying foul over the shortlisting process for awarding the contract.

BSNL, which is currently evaluating bids for outsourcing development and maintenance of IT technology and business systems across the four regions, had earlier identified HCL as the lowest, or the L1 bidder, ahead of rivals TCS, Mahindra Satyam and Spanco. Now, officials are scrutinising HCL’s bids for some erroneous calculations in
the proposal.

“The errors could be in the nature of an arithmetic error or a missing line item. If the prices of some line items are missing then the price submitted by the highest bidder is substituted in its place,” said a person familiar with BSNL’s outsourcing decisions. The financial evaluation takes place after the ‘financial reading’ in the bid process, he added.

If HCL loses its position, as the lowest bidder in the North zone, following errors detected in its bid during the financial evaluation, Spanco in the North zone and Tata Consultancy Services (TCS) and Mahindra Satyam in the other zones are bound to emerge favourites.

The contract for the North zone is over Rs 900 crore. Spanco, which is one of the companies bidding for BSNL’s outsourcing contracts, said HCL may lose its ‘lowest bidder’ status. However, ET could not independently verify these claims.

“We have come to know there is some calculation mistake in the financial bid of HCL. They may lose the L1 status in the North. BSNL has a very transparent and fair system, and we are sure that very soon the true picture will emerge,” said Kapil Puri, chairman and managing director, Spanco. When contacted HCL Infosystems chief executive Ajai Chowdhry said: “We’re not making any claims that we have got any contract or not got any contract. The announcement should come from BSNL.”

The contract, collectively valued at over $1 billion for all four zones, was closely fought by all vendors with the bids ranging from Rs 850-1,040 crore. So far, HCL had emerged as the lowest bidder based on the financial reading, which is a preliminary reading. “It is now almost certain that HCL Infosystems will not be the lowest bidder in any of the four zones (north, south, east and west),” said a source privy to the information.

The declaration of the winning bid that was expected to be announced on Friday for some zones is likely to be delayed, following the error that was discovered. Apart from HCL, Spanco and TCS are the two other bidders for the North zone.

The two are also the shortlisted contenders for the West zone. In the South and East zones, HCL is competing against TCS and Mahindra Satyam.

HCL inks pact with Bharathidasan Institute of Mgt

IT services firm HCL Technologies today inked a pact with Tiruchirapalli-based Bharathidasan Institute of Management to offer specialised courses for MBA students.

Under the partnership, HCL Technologies would provide courses and guidelines for the programme 'Enterprise Resource Planning' (ERP) offered as an elective to MBA Students, HCL Technologies Senior Vice-President (Human Resources) Ravishankar B told reporters here, after exchanging documents with BIM Director M Sankaran.

He said through their association with BIM, HCL would conduct special lectures for students and would also recruit them as and when required.

US - You Can Outsource City Hall, but Not Offshore--Yet

Public sector outsourcing is "in," as state and local IT leaders contend with shrinking budgets, limited human resources, and increasing demand for IT services. "There appears to be a perfect storm for IT outsourcing at the state and local level today," says Jason Khan, chief technology strategist for Washington, D.C.-based Touchstone Consulting Group.

Jim Harvey, partner and co-chair of the global technology, outsourcing and privacy group at law firm Hunton & Williams, agrees. "State and local governments are feeling the same, if not more, economic pressure as everyone else," he says. "Outsourcing is one switch they can throw to accomplish some combination of cost savings, improved performance and reduced fixed cost structures."

Public sector IT outsourcing is nothing new. Government agencies, particularly at the federal level, have outsourced a significant portion of technology services over the years. IT service providers such as Northrop Grumman, SAIC, Computer Services Corporation, Unisys and IBM count on government IT contracts for a significant portion of their annual revenue, points out Sandeep Karoor, managing director for outsourcing consultancy Neo Advisory.
Click here to find out more!

The major difference today is that local government IT organizations are outsourcing to cut costs. "The primary driver in government outsourcing has been resource flexibility and scalability," says Karoor. "Traditionally, cost containment was not high on the agenda."

Today, it's at the top of the list, and that's pushing an increasing number of state and local IT leaders to turn to third parties for help. "It was probably something that some governments wanted to put off as long as possible," says Harvey. "There are always concerns when any organization changes the model it uses to deliver services, particularly in the government sector. But I think governments are basically saying if we can do this for less some other way, we have to consider it."

Government Outsourcing: The Challenges

The road to outsourcing in the public sector, however paved with good intentions, has been bumpy at best. "Let's face it, outsourcing is not a popular internal option," says Touchstone Consulting Group's Khan. "It shifts jobs and budgets from agency managers to the outsourcing company."

In addition, some early attempts at wholesale IT outsourcing at the state level have come under scrutiny recently. A state audit of Virginia's 10-year, $2.3 billion IT services contract with Northrop Grumman noted that inadequate planning and poor understanding of state agency needs delayed projects and disrupted key services. In Texas, Chief Technology Officer Brian Rawson resigned after an audit accused the state IT organization of mismanaging the $863 million data center consolidation initiative outsourced to IBM.

But, Khan says, "a few non-popular outsourcing projects cannot stop the inevitable." Indeed, government IT organizations from Washington state to Houston are currently considering sending IT out the door.

State and local IT organizations simply need to learn how to manage third-party providers better, says Khan, who holds the state of Pennsylvania up as an example of what can be accomplished with an outsourcing provider.


But effective government-outsourcer partnerships take time to develop. And time is, most assuredly, money for state and local governments today.

The pressure to cut costs—or increase efficiency—overnight may set these fledgling public sector deals up to disappoint. "State and local agencies are in crisis mode, having to save money any way they can. Also, a lot of them are faced with looming deadlines," says Khan. "Unrealistic deadlines are unrealistic deadlines, and outsourcing companies can get into trouble when they sign up to deadlines like these."

The Offshoring Option

One option that could enable state and local governments to save money on IT services—offshoring—appears to be off the table for now.

In 2004 and 2005, lawmakers in virtually every state introduced legislation to restrict state contractors from performing work outside of the United States. Hundreds of bills of varying restrictiveness—from outright bans on offshore contracts to location disclosure rules—were introduced, although only a handful became law in states including Colorado, Illinois, New Jersey, North Carolina and North Dakota. Around that time the state of Indiana backed out of a $15.2 million contract with Tata America International, the domestic arm of India's Tata Consulting Services.

Several government agencies that have attempted to offshore customer-facing services have caved to citizen complaints about the practice. Florida and Nebraska had outsourced food stamp inquiries to JP Morgan Chase, which routed them to Indian call centers for a time. Georgia Governor Sonny Perdue famously said he would welcome offshore bids on the state's IT outsourcing work, but the state eventually sealed a deal with IBM.

Yet increasing opportunities for states and cities to offshore non-core, non-customer facing IT services, such as remote infrastructure management, exist. "Once you get outside of call centers, which is a traditional hot button area, there are many, many services that can be provided from offshore for less money," Hunton & William's Harvey says. But most public sector IT leaders are steering clear of the subject.

"None of the government agencies that we have worked with have wanted to attempt offshoring or nearshoring due to socio-political challenges," says Roshan Nambiyattil, director for Neo Advisory. Public sector leaders are unlikely to reconsider offshoring until the economy rebounds and "there are plenty of opportunities for all," Nambiyattil says.

Even then, adds Khan, large scale offshoring in the public sector is unlikely: "It's a losing battle and better left to commercial IT services."

Harvey disagrees. "There are just so many cost and performance advantages offered by offshore solutions that the public sector will inevitably consider that structure," the attorney says. "It's a tense and charged issue, but if a government can do more with less and deliver cost-efficient services to its constituents, it will be on the table."

For a glimpse of the future, he says, just peer across the pond where the U.K. National Health Service has created a joint venture to provide payroll, finance and accounting services from India, reportedly reducing operating costs by as much as 30 percent. "State and local IT leaders simply have to be sure that what they're doing results in at least material cost savings and hopefully improved performance to their constituents," says Harvey.
Other stories by Stephanie Overby © 2009 CXO Media Inc.

The medium, message and the money

P. Sainath

PTI Elderly voters on their their way to the polling station during the Assembly elections at Karad in Maharashtra.

The Assembly elections saw the culture of “coverage packages” explode across Maharashtra. In many cases, a candidate just had to pay for almost any coverage at all.

C. Ram Pandit can now resume his weekly column. Dr. Pandit (name changed) had long been writing for a well-known Indian language newspaper in Maharashtra. On the last day for the withdrawal of nominations to the recent State Assembly elections, he found himself sidelined. An editor at the paper apologised to him saying: “Panditji, your columns will resume after October 13. Till then, every page in this paper is sold.” The editor, himself an honest man, was simply speaking the truth.

In the financial orgy that marked the Maharashtra elections, the media were never far behind the moneybags. Not all sections of the media were in this mode, but quite a few. Not just small local outlets, but powerful newspapers and television channels, too. Many candidates complained of “extortion” but were not willing to make an issue of it for fear of drawing media fire. Some senior journalists and editors found themselves profoundly embarrassed by their managements. “The media have been the biggest winners in these polls,” says one ruefully. “In this period alone,” says another, “they’ve more than bounced back from the blows of the ‘slowdown’ and done so in style.” Their poll-period take is estimated to be in hundreds of millions of rupees. Quite a bit of this did not come as direct advertising but in packaging a candidate’s propaganda as “news.”

The Assembly elections saw the culture of “coverage packages” explode across the State. In many cases, a candidate just had to pay for almost any coverage at all. Issues didn’t come into it. No money, no news. This effectively shut out smaller parties and independent voices with low assets and resources. It also misled viewers and readers by denying them any mention of the real issues some of these smaller forces raised. The Hindu reported on this (April 7, 2009) during the Lok Sabha elections, where sections of the media were offering low-end “coverage packages" for Rs.15 lakh to Rs.20 lakh. “High-end” ones cost a lot more. The State polls saw this go much further.

None of this, as some editors point out, is new. However, the scale is new and stunning. The brazenness of it (both ways) quite alarming. And the game has moved from the petty personal corruption of a handful of journalists to the structured extraction of huge sums of money by media outfits. One rebel candidate in western Maharashtra calculates that an editor from that region spent Rs.1 crore “on just local media alone.” And, points out the editor, “he won, defeating the official candidate of his party.”

The deals were many and varied. A candidate had to pay different rates for ‘profiles,’ interviews, a list of ‘achievements,’ or even a trashing of his rival in some cases. (With the channels, it was “live” coverage, a ‘special focus,’ or even a team tracking you for hours in a day.) Let alone bad-mouthing your rival, this “pay-per” culture also ensures that the paper or channel will not tell its audiences that you have a criminal record. Over 50 per cent of the MLAs just elected in Maharashtra have criminal charges pending against them. Some of them featured in adulatory “news items” which made no mention of this while tracing their track record.

At the top end of the spectrum, “special supplements” cost a bomb. One put out by one of the State’s most important politicians — celebrating his “era” — cost an estimated Rs.1.5 crore. That is, just this single media insertion cost 15 times what he is totally allowed to spend as a candidate. He has won more than the election, by the way.

One common low-end package: Your profile and “four news items of your choice” to be carried for between Rs.4 lakh or more depending on which page you seek. There is something chilling about those words “news items of your choice.” Here is news on order. Paid for. (Throw in a little extra and a writer from the paper will help you draft your material.) It also lent a curious appearance to some newspaper pages. For instance, you could find several “news items” of exactly the same size in the same newspaper on the same day, saying very different things. Because they were really paid-for propaganda or disguised advertisements. A typical size was four columns by ten centimetres. When a pro-saffron alliance paper carries “news items” of this size extolling the Congress-NCP, you know strange things are happening. (And, oh yes, if you bought “four news items of your choice” many times, a fifth one might be thrown in gratis.)

There were a few significant exceptions to the rule. A couple of editors tried hard to bring balance to their coverage and even ran a “news audit” to ensure that. And journalists who, as one of them put it, “simply stopped meeting top contacts in embarrassment.” Because, often, journalists with access to politicians were expected to make the approach. That information came from a reporter whose paper sent out an email detailing “targets” for each branch and edition during the elections. The bright exceptions were drowned in the flood of lucre. And the huge sums pulled in by that paper have not stopped it from sacking droves of staffers. Even from editions that met their ‘targets.’

There are the standard arguments in defence of the whole process. Advertising packages are the bread and butter of the industry. What’s wrong with that? “We have packages for the festive season. Diwali packages, or for the Ganesh puja days.” Only, the falsehoods often disguised as “news” affect an exercise central to India’s electoral democracy. And are outrageously unfair to candidates with less or no money. They also amount to exerting undue influence on the electorate.

There is another poorly assessed — media-related — dimension to this. Many celebrities may have come out in May to exhort people to vote. This time, several of them appear to have been hired by campaign managers to drum up crowds for their candidate. Rates unknown.

All of this goes hand in hand with the stunning rise of money power among candidates. More so among those who made it the last time and have amassed huge amounts of wealth since 2004. With the media and money power wrapped like two peas in a pod, this completely shuts out smaller, or less expensive, voices. It just prices the aam aadmi out of the polls. Never mind they are contested in his name.

Your chances of winning an election to the Maharashtra Assembly, if you are worth over Rs.100 million, are 48 times greater than if you were worth just Rs.1 million or less. Far greater still, if that other person is worth only half-a-million rupees or less. Just six out of 288 MLAs in Maharashtra who won their seats declared assets of less than half-a-million rupees. Nor should challenges from garden variety multi-millionaires (those worth between Rs.1 million-10 million) worry you much. Your chances of winning are six times greater than theirs, says the National Election Watch (NEW).

The number of ‘crorepati’ MLAs (those in the Rs.10 million-plus category) in the State Assembly has gone up by over 70 per cent in the just concluded elections. There were 108 elected in 2004. This time, there are 184. Nearly two-thirds of the MLAs just elected in Maharashtra and close to three-fourths of those in Haryana, are crorepatis. These and other startling facts fill the reports put out by NEW, a coalition of over 1,200 civil society groups across the country that also brought out excellent reports on these issues during the Lok Sabha polls in April-May. Its effort to inform the voting public is spearheaded by the NGO, Association for Democratic Reforms (ADR).

Each MLA in Maharashtra, on average, is worth over Rs.40 million. That is, if we treat their own poll affidavit declarations as genuine. That average is boosted by Congress and BJP MLAs who seem richer than the others, being well above that mark. The NCP and the Shiv Sena MLAs are not too far behind, though, the average worth of each of their legislators being in the Rs.30 million-plus bracket.

Each time a giant poll exercise is gone through in this most complex of electoral democracies, we congratulate the Election Commission on a fine job. Rightly so, in most cases. For, many times, its interventions and activism have curbed rigging, booth capturing and ballot stuffing. On the money power front, though — and the media’s packaging of big money interests as “news” — it is hard to find a single significant instance of rigorous or deterrent action. These too, after all, are serious threats. More structured, much more insidious than crude ballot stuffing. Far more threatening to the basics of not just elections, but democracy itself.

Subir Roy: The dreaded L word

To save the elderly a lonesome old age, families are going halfway to the joint family days, living together separatelySubir Roy / New Delhi October 30, 2009, 0:34 IST

My friend who went round the world in pursuit of a successful career with a leading multinational now, after retirement, lives in Dubai largely for tax reasons. But he also has a home in Brussels. This is particularly helpful as it is just right for his two daughters and their husbands who live in England to visit him over a weekend. But as he narrates this he adds, you know how it is, they come when they can make the time. In Dubai he has company mostly when someone he knows is passing through from India. He wouldn’t spell it out but it is written all over his face that something is lacking.

This is in sharp contrast to the situation of another friend who has his hands full in Kolkata. When his son and daughter-in-law come on a quick visit from abroad — fortunately they have the means to do so twice a year — he is simply not available to his friends. Their ability to catch up with him the rest of the time is, however, further limited by what is dumped on his and his wife’s shoulders by his working couple daughter and aspiring lawyer son-in-law.

The burden they land on my friend is little, all of three years old, nearly. But he is almost more than the two of them can handle. The grandson, like all such youngsters, is a bundle of hugely excessive energy who keeps them on their toes as they prevent him from pulling at tablecloths and sending side tables crashing. It is difficult to visualise how my friend and his wife would have been if they did not have to routinely look after that child.

The process of being alone starts long before grandchildren arrive. Our son now lives in Mumbai and our daughter is pursuing her postgraduate studies in Kolkata. So we thought the best way for us to have a family reunion was not to try and do that in Bangalore but to go down to Kolkata where our daughter already was. All went well when suddenly our son informed that he couldn’t make it. A film producer who he was chasing for an assignment had given him a date right in the middle of the pujas. So we ended up having half a family reunion. Our son himself was quite easy with the development, even the final denouement of the producer not having a meaningful dialogue with him. These things happen to youngsters in this line, he assured me and my wife.

So we are looking forward to a family reunion now in Bangalore during the yearend. He will certainly be there then, our son assures us. Our daughter will also travel there from Kolkata. That is if a new development does not intervene. She may land a somewhat coveted job in Kolkata, which will of course make the December reunion for the family also a partial one. Your child growing up to get a good job is a great thing and so if that happens we will rejoice. But it’s long since we have got together as a family.

We are all enormously better off than what we were as children. Foreign travel was virtually unknown; even travel within India was a big thing. My first train trip out of home after my BA exams had my parents going to the station to see me off. In our joint family the menu was far more frugal than what we can now go in for if the doctor and age hadn’t got in the way. And I remember my mother occasionally complaining that we as a family had so little space and time to ourselves. The door of the one room in our rumbling joint family home that was ours was always open.

Where will the current condition of material plenty and, let’s use the word, loneliness for the aged finally end up, I keep thinking. Well, good news of sorts comes from a leading marketing consultant friend. We are now on our way to the modular family from the nuclear family, he declares from his grassroots knowledge.

Increasingly, he say, families are going back halfway to the joint family days. They live together but separately, in little flatlets under one roof, partially sharing a general kitchen and also having a kitchenette in the flatlet, not getting into each other’s way but being around for company and help when needed. One good thing about this arrangement is being able to travel without having to worry about who will keep an eye on the children.

But absolute the best will be the lot of the older people, particularly that aunt who never married or the uncle who never had any children and lost his wife long ago. Their great relief is having something to complain about, like children making too much of a noise after returning from school in mid-afternoon. The wife says these issues shouldn’t bug me as I am not that old; what’s sixty odd these days. But the forbidding though is that people live so much longer these days, and you do get a bit lonely at times.

This column will henceforth appear every other Friday.

Mahindra Satyam Appoints Vijayanand Vadrevu as CSO

Mumbai, Oct 29, 2009 1830 hrs IST

Mahindra Satyam has announced a key appointment of Vijayanand 'Vijay' Vadrevu as the SVP for strategic initiatives.
Vijay has vast experience in IT services industry with over 17 years with Wipro Technologies. For the last three years he was working as VP and head for life sciences vertical solutions, responsible for strategy, sales and delivery, and was instrumental in shaping it as one of the fastest growing verticals.
Vijay, who holds a Masters degree in computer engineering from IIT Kharagpur, has spent more than six years in the US in a number of client-facing and practice-building roles. In his new role, Vijay will be assisting the CEO, in providing leadership on "Strategic Initiatives" to Mahindra Satyam, and will play a key role in scripting the growth plans of the organization.
CP Gurnani, CEO, Mahindra Satyam, said, "Vijay is a critical addition to the leadership team at Mahindra Satyam, and his role will be very significant in providing a strategic direction to the organization to achieve long term objectives. I welcome Vijay, to the Mahindra Satyam family and wish him all best for the challenging tasks ahead of him."

IT to generate 5.8 million new jobs by 2013

International Data Corporation research says that IT will create more that 75,000 new businesses in the next four years and add jobs at a rate of 3% annually

Information technology will be an employment machine, generating 5.8 million new jobs in the coming four years, according to International Data Corporation (IDC) research released Sunday.IDC predicts that the IT industry will be an engine powering economies out of economic doldrums, creating more that 75,000 new businesses in the next four years and adding jobs at a rate of 3% annually.


“Countries that foster innovation and invest in infrastructure, education and skills development for their citizens will have a major competitive advantage in the global marketplace,” said Microsoft chief executive Steve Ballmer.“In this fundamental economic reset, innovative technologies will play a vital role in driving productivity gains and enabling the creation of new local businesses and highly skilled jobs that fuel economic recovery and support sustainable economic growth.” US software colossus Microsoft sponsored the IDC research into the impact of IT in 52 countries that represent 98% of the global IT spending.


“IT spending growth is a good sign as we come out of the recession,” Microsoft corporate affairs communications manager Scott Selby said. Employment growth in IT related jobs will be three times that of overall job growth in what Selby said is a “good driver of economic growth.” While the world has been in the gripes of a recession, it has also been in the midst of a “technology renaissance” flush with advances in software, devices, and Internet-based services, according to IDC.IDC expects IT spending in the countries studied to grow at slightly more than three percent annually, three times as fast as the gross domestic products between now and the year 2013. In what is good news for software powerhouse Microsoft, spending on software is predicted to grow faster than overall IT spending, rising 4.8% annually.


“Software is a driving force behind this IT growth,” Selby said. “IT allows us to do more with less.” New technologies are also ushering in a new “cloud computing” paradigm in which applications are provided online as services instead of as software bought and installed on home or office machines, according to IDC. Money saved by using software as needed “in the cloud” instead of buying, maintaining, and updating applications will likely be devoted to bringing new products or services to market faster and cheaper, according to Selby.


IDC estimates that cloud services could add $800 billion in net new business revenues between the end of 2009 and the end of 2013. “Over the past 20 years, we’ve seen transformative power in how investments in IT innovations foster economic growth,” said Robert D. Atkinson, founder of the Information Technology and Innovation Foundation in Washington DC. “Continued innovation and investment in information technology will help jump-start recovery from the current recession and will significantly contribute to the growth of employment and new businesses.”


Emerging markets will reap the greatest economic gains from IT, according to Selby. “Emerging markets are really going to take advantage of IT for years to come,” Selby said. “One reason is they will be able to leapfrog and enjoy benefits of innovations like cloud computing much more quickly.” Microsoft played up the prime role its software is playing in IT systems worldwide.

Placement: Goldman Sachs, McKinsey, Morgan Stanley & JPMorgan are back on IIM campus

NEW DELHI: The B-school is back in business. After a year-long stupor that saw billion-dollar names shying away from campuses in the wake of the global financial slowdown, the Indian Institutes of Management (IIMs) are waking up to a buzzing summer internship season, a pointer to a packed final placement list.

Goldman Sachs, the investment bank that just emerged a tad stronger from the slowdown, is back at IIM campuses with a bigger number of offers, and so are the traditional Slot Zero names-the B-school jargon for the most coveted-like McKinsey & Co, Morgan Stanley, JPMorgan, UBS and Boston Consulting Group.

The summer placement season-set to begin early November-often mirrors the final placement lineup as companies tend to make job offers depending on the candidates’ performance during the two-month internship. IIM-Bangalore , for instance, has scored a 100% conversion rate for the current batch in consultancy summer jobs.

“Companies are bullish this year,” says IIM-Calcutta’s Prafulla Agnihotri, who is the chairperson for career development and placements.

Around 100-odd companies have confirmed their participation across the seven IIM campuses for picking up summer internees , and the list includes top Indian names such as Hindustan Unilever (HUL) and Procter & Gamble (P&G ). The return of i-banks to the campuses is significant since they traditionally opt to select from their internees instead of scouting the campuses with final recruitment offers.

IIM-Lucknow placement committee member Sharat Chander says final placements in 2010 are showing every indication of being a whole lot better than last year, if summer placement trends are anything to go by. “This is especially true of the financial sector, hit the most by the economic downturn last year,” he says.

Smaller firms, including start-ups , that managed to land talent dirt cheap last year too are back now, but with sweetened deals in the face of increasing competition. IIM-C’s Agnihotri says many of them offer students more challenging roles with an exposure to serious decision-making.

While none of the institutes wanted to risk any official comment, the general sentiment is that stipends for the two-month period will also go up this year compared to 2008. Stipends generally range from Rs 10,000-15 ,000 per month on the lowest side, and had gone up to $20,000-plus for a two-month foreign internship in the pre-slowdown days. “There is a positive sentiment on campus,” says Sapna Agarwal, head-career development services, at IIMB.

For students, this return of enthusiasm means they will get placed faster, at a job of their choice, she says. All the rush notwithstanding, the process this year is unlikely to be wrapped up in the usual six-day period. Last year, because of the low turnout by companies, the summer placement season was extended across campuses. However, this year, with an increased number of students to place, the process may take the same time as last year.

Mr Agnihotri says his school will be placing 408 students this year, up from last year’s 300-odd students. “Slot 0 and Slot 1 will be of two days each, after which the process will be open-ended. We want to give our students plenty of options,” he says. The summer glow comes just after the IIMs did a successful pre-placement offer (PPO) season. Around 15-20% of the batch at IIM-A , B and C have got offers till now. Other IIMs like Lucknow and Kozhikode, too, are witnessing a much better flow of job offers as compared to the past year.

General Electric to axe 2,700 jobs in Hungary

BUDAPEST: US industrial giant General Electric said on Wednesday it will axe 2,700 jobs in Hungary over the next two years after a decision to phase out traditional energy-guzzling light bulbs in Europe.

The cuts, which were announced at meetings with employees and trade unions on Wednesday, would begin at the start of next year, GE said.

The group is the biggest US investor in Hungary, where it currently employs 14,000 people.

A new EU regulation phasing out old-style light bulbs by 2012 came into effect in September.

And this would inevitably hit GE's Hungarian operations, said Phil Marshal, regional chief of GE Lighting.

The factory in Nagykanizsa, southwest Hungary, would be hardest hit, with 1,300 jobs to go there.

But six other sites would also be affected, said company spokesman Balazs Szanto, pointing out that the factory in Vac, near Budapest would be shut down entirely in 2011.

GE would also close one of its five GE Energy plants in Hungary.

Last year, GE laid off 500 employees and closed down a lighting factory and cut back output citing fierce global competition.

HCL Tech to hike salaries

NEW DELHI: IT services provider HCL Technologies will increase the salaries of their employees by 0-10 per cent from October 1, which will result in a drop in its gross margin by 130 basis points.

"We have decided to increase the wages of the employees effective from October 1, 2009 by 0-10 per cent and this will result in our gross margin dropping by 130 basis points for the next two quarters," HCL Tech CEO Vineet Nayar said after announcing the first quarter results.

At the end of September 30, HCL Tech's total employee strength stood at 54,443. The company added 665 professionals in the IT services segment during the period.

Further, the company is looking at acquisitions aggressively to 'fill in the gap' in its service areas and offerings.

"Acquisition is a part of our growth strategy. You will see acquisitions hopefully in BPO, enterprise application space, engineering and cloud computing side," Nayar said.

"We have successfully managed five acquisitions in the last 3-4 quarters. Our margins are back to its original level of 19 per cent," he said, adding there is no fixed price tag for the acquisition.

For the first quarter ended September 30, HCL Technologies today reported 18.50 per cent growth in its net profit at Rs 300.75 crore. Shares of HCL Tech were trading at Rs 317.80, down 0.56 per cent in afternoon trade on the BSE.

iGate to hire 300 by Dec

NEW DELHI: Nasdaq listed Software company iGate will hire 300 people by December as the company sees rebound in contract and demand picking up gradually by that time. "We will hire 200 people for our software services and 100 for BPO by December to expand our existing operations. We believe there is already revival of demand for IT and BPO services and to meet that demand we are hiring," iGate CEO Phaneesh Murthy said. The company had frozen recruitment earlier this year when recession was at its peak. Murthy said hiring reflect the slow tapering up of the recession. Last week, iGate posted a minor increase in its net income for quarter ending September 2009 at $8.9 million. The company had a net income of $8.5 million in the Q3 of last year. Revenue from continuing operations, however, declined to $49.1 million during the quarter from $55.4 million made in the corresponding quarter of FY 2008, the company said. The company added six new customers in the quarter. Its employee base in Q3 fell slightly to 6,380 employees as of September 30, 2009 compared to 6,407 in the same period last year.

Wipro, TCS, Infosys either met or exceeded expectations

New Delhi/Mumbai: Notwithstanding the growing concern over an appreciating Indian rupee against the US dollar which could eat into their operating (Ebitda) margins, major Indian IT services providers believe the worst is behind the sector.

Wipro Chairman Azim Premji at a press conference in New Delhi, India.

On expected lines: Wipro, TCS, Infosys

All the top three major Indian IT firms -- Tata Consultancy Services (TCS), Infosys Technologies and Wipro -- either met or beat market and analyst expectations in the quarter ended September 30, 2009, registering their best performance in six quarters.

The heartening fact, say analysts, is the growth in volumes which implies that business is picking up. TCS, for instance, registered a 5 per cent growth in volumes while Infosys posted a 2.3 per cent growth. Wipro was the only company to show a dip in volume growth. But Edelweiss analysts opine that, since Wipro has not committed offers to the campus (unlike TCS and Infosys), it can absorb these volume declines without impacting margins in the coming quarters.

Wipro surprised positively

Viju George of Edelweiss says Wipro's numbers were "in line with expectations". However, he says the company "surprised us positively in registering a margin improvement in IT services of over 140 basis points (bps) sequentially to touch 23.8 per cent and providing a healthy guidance for IT-services revenues for Q3FY10 (2.5-4.5 per cent growth quarter on quarter)".

Wipro's guidance more robust than Infosys

And all companies are telling D-street that they see growth. Wipro's guidance was much more robust than that of Infosys, the guidance of which was in the range of Rs 5,429 crore and Rs 5,476 crore for the quarter ended December 31, 2009. Wipro guided for revenue in the range of $1,092 million to $1,113 million (around Rs 5,121.5 crore to Rs 5,219.9 crore), representing a growth of 4.5-5 per cent on top line. Wipro has said the next quarter will see volume growth in the range of 2.5-4 per cent.

Further offshoring (moving work to India, in this case) has been a key to improving margins and give cost benefits to clients this reporting quarter. In the case of TCS, for instance, offshoring improved by 74 bps this quarter, bringing the offshore component to 51 per cent of the overall revenue. In the case of Infosys, offshoring recorded a 3 per cent gain. This, coupled with increased utilisation rates, helped the margins grow.

Tata Consultancy Services Chief Executive Officer Natarajan Chandrasekaran vows to boost the global market share of India's largest outsourcing company.

Broad based growth

For all the three companies, the growth has been broad-based rather than restricted to a single vertical or client. In case of TCS and Infosys, their largest vertical -- banking, financial services and insurance (BFSI) -- witnessed stable growth. The BFSI segment revenue contribution went up to 45 per cent for the quarter from 43.9 per cent sequentially.

Infosys won 35 clients

In case of Infosys, of the 35 client wins this quarter, six belonged to the BFSI vertical which now accounts for 33.5 per cent of the company's revenue. For Wipro, though, the financial services segment has been flat sequentially.

But both TCS and Infosys saw the manufacturing, telecom and hi-tech verticals bear the pressure of the slowdown. In the case of Wipro, revenues from its telecom segment showed sequential improvement. Apart from these, the three IT majors saw growth in the healthcare, power & utility and media & entertainment sectors.

Infosys Technologies Ltd. Chief Executive Officer S. Gopalakrishnan gestures during an interactive session organized by Confederation of Indian Industry in Bangalore, India.

Marginally above expectations

Hitesh Agarwal, head (research), Angel Broking, acknowledges that the "results were marginally above expectations". He believes margins "are pretty high, and we do not expect them to grow further". But he asserts that the "rupee is a concern and we are watching it".

Anil Advani, head of research, SBICAP Securities, concurs that "the only concern going ahead is the rupee. A steady appreciation will be manageable but a sudden or sharp movement below 45 will be a concern".

Rupee can play spoilsport

The rupee can indeed play spoilsport. TCS, for instance, suffered a Rs 113-crore forex loss during the reporting quarter. It has a total hedge of $210 million (of this, $75 million are old hedges booked at Rs 40.50 and the new $135 million is at the rate of Rs 47). Wipro, on the other hand, has a total hedging of $1 billion, and booked hedging gains of Rs 24 crore. Infosys takes a short-term view on hedges. It increased its hedges to $699 million in Q2, against $598 million in the June quarter.

Finally, on the hiring front, TCS and Infosys will continue to hire and honour their campus offers. Infosys has increased its total hiring by 2,000. In the case of Wipro, though, the number of hires have declined. The company's total headcount declined by 630 for the quarter. But in case of TCS, it had gross addition of 5,530 and net addition of 320. Besides, in October-December quarter, the company will add 8,000 freshers. Most of the additional employees will be experienced hands to cater to new work which is being viewed as a positive sign by analysts.

Source: Business Standard

Infosys sees more biz from bank system integrations

BANGALORE: Infosys Technologies, which counts Bank of America, Royal Bank of Scotland and ABN Amro among its top customers, sees more opportunities emerge as these banks merge their business and technology systems in order to consolidate their operations and integrate better with the acquired entities.

For Infosys, which derives around 33% of its revenues from banking and financial services (BFSI) customers, consolidation among the top US and European banks is bringing new business, with some of these individual contracts worth around $500 million each, potentially.

“There are six integration projects we are currently looking at,” said Ashok Vemuri, senior vice-president and global head for banking and capital markets business at Infosys. “Fortunately, we have landed on the right side in most of these M&A developments,” he added without offering comments about any specific customers.

While BofA is in the process of integrating its systems with Merrill Lynch, RBS is attempting to consolidate its IT systems with ABN Amro. As these banks merge, they now face a mammoth task of integrating their software applications, consolidating their data centres and other trading platforms into single entity, so that their customers are able to transact without facing any merger-related issues.

Indeed, Infosys was able to increase and sustain its revenues from the BFSI segment even as business from manufacturing and telecom customers were coming down during the past two quarters. Revenues from BFSI contributed around 33.5% of the company’s total revenues during the quarter ended September 30, 2009, even as revenue contribution from manufacturing and telecom customers declined to 19.3% and 16.2%, respectively.

However, M&A practice is not an area where Indian companies have been positioned as leaders yet, especially with top consultants of the world, including Deloitte and Accenture, being the most preferred vendors.

“A year ago, Infosys was not among the ones to be called for such high end M&A related consulting, a Deloitte was called,” said Mr Vemuri who also heads Infosys’ strategic global sourcing business focused on large multi-year contracts. “However, we are now increasingly getting pulled into it across the projects related to change management, developing common systems with our front-end consulting capabilities,” he said.

US banks are not the only ones offering new outsourcing opportunities for merger related work. Lloyds TSB, which merged with HBOS, is also seeking partners to help the merged entity integrate its retail and wholesale banking systems through an information technology (IT) platform.

The company has already outsourced its human resource activities to Xansa two years ago, in a five-year deal. “The $19.5-billion merger betweenLloyds TSB and HBOS will lead to a massive IT systems’ consolidation,” a person familiar with the transaction told ET on conditions of anonymity.

And since offshoring will helps them save costs by as much as 30-40%, these merged banking entities are seeking to partner with a vendor having significant offshore presence.

“It’s more like changing the engine of a plane while it’s flying, we do have a focused practice on M&A now and we think there are similar opportunities in other sectors where we can leverage this,” added Mr Vemuri.
Meanwhile, rivals Cognizant, TCS and Wipro are also pursuing these opportunities as well and Infosys will need to prepare for competitive bidding by these companies.

“We are extremely conscious of our margins, and at time, we would let go business because of not wanting to compromise (on this front),” Mr Vemuri added.

HCL may lose BSNL IT contracts worth Rs 1,700 cr

NEW DELHI: IT firm HCL Infosystems will have to give up two large IT contracts jointly worth over Rs 1,700 cr after the company emerged as the lowest bidder in all the four zones for state-run Bharat Sanchar Nigam’s (BSNL) $1-b IT outsourcing contract. This is because, as per the BSNL tender norms, a single company cannot be awarded more than 50% of the total contract. After emerging as the lowest bidder or L1 in East, West and South zones, HCL Infosystems has now become L1 for managing BSNL’s IT requirements in the northern region also. But considering the telco’s tender conditions, the IT company can be awarded only a maximum of two contracts thus implying that it can provide solutions to BSNL in only two regions. In all the four zones, HCL’s bid has been supported by HP, which will supply hardware and systems and Convergys, which will provide billing solutions. HCL Infosystems chief executive Ajai Chowdhry told ET on the sidelines of an event in Delhi that the company has emerged as the lowest bidder in all the four zones adding that BSNL was yet to award the contract. Asked about HCL’s preference for the zones Mr Chowdhry said: “It is for the telco to decide which regions will be allotted to us. We are well placed as far as positioning is concerned”. “As is the norm at BSNL, the financial bid by HCL Infosystems will be evaluated and it will go through the process of negotiations. The entire procedure will take some more time, after which the contract will be awarded,” Mr Chowdhry added. Earlier this year, HCL had won Rs 230 cr enterprise resource planning (ERP) contract from BSNL. HCL’s mandated surrendering of two contracts may benefit other IT firms like TCS and Mahindra Satyam. For instance, TCS is the second lowest bidder for south zone and west zone while Mahindra Satyam along with Spanco is next to HCL is L2 the East zone. In the West zone, HCL’s had bid amount was for Rs 980 cr, followed by TCS which quoted Rs 906 cr and Spanco/Mahindra Satyam at Rs 1,042 cr. In the East Zone, HCL Infosystems was the lowest bidder at Rs 861 cr followed by Mahindra Satyam/Spanco (Rs 904 cr), TCS (Rs 934 cr) and Prithvi Information (Rs 2,000 cr). In the South Zone, HCL’s bid was of Rs 865 crore, followed by was While TCS’ Mahindra Satyam, Wipro and Infosys bid Rs 906 cr, Rs 1,030 cr, Rs 1,500 cr and Rs 2,000 cr respectively. This IT outsourcing contract is part of BSNL’s 93-million line GSM project worth over $1 b, for procuring network equipment, tower infrastructure and technology solutions and services. The project was split into four zones to allow companies to bid separately for each zone.

Caterpillar cuts 2,500 jobs, ends some layoffs

NEW YORK — US heavy equipment maker Caterpillar said Monday it was cutting about 2,500 jobs and had started to bring more than 500 laid-off employees back to work, in a sign of improving economic conditions.

About 550 furloughed US employees have returned or will return to work before the end of 2010, including support, management and production employees, the company said in a statement.

"We are pleased that signs of recovery in the global economy allow us to return a selected group of laid-off employees to work," said Caterpillar chairman and chief executive Jim Owens.

"But it's important to remember that we are not close to the record-breaking demand we experienced from 2004 through 2008," he said.

Also Monday, Caterpillar began notifying about 2,500 laid-off US employees that they would not be returning to work, without giving details.

"The company is offering a separation package for those employees. A breakdown of impacted employees by location will not be provided."

Since late 2008, Caterpillar slashed 18,700 jobs as the company faced problems amid the financial crisis which slammed the brakes on growth.

The company recently reported third-quarter earnings of 404 million dollars, or 64 cents a share, down 53 percent from a year earlier, as revenue fell 44 percent.

The US economy was expected to have returned to growth in the third quarter of 2009 after slumping into recession in December 2007.

KPIT Cummins Eyes Acquisitions In US

KPIT has been quite active on the M&A front acquiring five companies in six years time.

Continuing with its healthy M&A appetite, Pune-based IT consulting firm KPIT Cummins Infosystems Ltd, in which Cargill Ventures invested $9 million in 2007, is looking at acquisition opportunities in the US.

The board of directors of the company will meet on October 30, 2009 to discuss the same, said the company in its filing to the stock exchange. The company offers enterprise-wide solutions for automotive and industrial sectors.

KPIT has been quite active on the M&A front acquiring five companies so far. In 2003, it acquired US-based Panex Consulting Inc, a SAP implementation services firm in business intelligence & data warehousing space, followed by the acquisition of SolvCentral.com in 2005. It also acquired Pivolis.com, a French outsourcing consultancy firm in 2005; CG Smith Software Pvt Ltd, an automotive electronics software & solutions company in 2006; and the mechanical design services business of Harita TVS Technologies in 2008.

Net sales and net profit of the company in fiscal 2008-09 were Rs 793.15 crore and Rs 65.81 crore respectively. The stock was traded at Rs 83.10, down by Rs 2.85‎ or 3.29% at 12:39 pm today.

How The iPhone Is Blowing Everyone Else Away (In Charts)

How The iPhone Is Blowing Everyone Else Away (In Charts): "

Yesterday at the Web 2.0 Summit, Morgan Stanley Internet analyst Mary Meeker did her annual data dump slide presentation, this year focusing on the growth prospects of the mobile Web. As usual, there were 3 or 4 slides that really captured the trends she was talking about, particularly the ones around iPhone adoption and how that phone in particular is catapulting mobile Web usage into the mainstream.

You can see her full slide show below (all 68 of them), but let me pull out the three iPhone slides that helps put its growth into perspective. The first one above shows the growth of data traffic on AT&T’s mobile network. It is 50 times higher than it was just three years ago. I added two arrows to show when the first iPhone launched in June, 2007 and the iPhone 3G in July 2008.

AT&T saw massive pops in data usage following those two launches as consumers discovered the unadulterated mobile Web for the first time. And it is not just the iPhone. With the ubiquity of WiFi, the iPod Touch offers pretty much the same experience without AT&T’s monthly fees. Taken together, the adoption of the iPhone and iPod Touch is outstripping the early adoption the desktop Internet, as represented by AOL and Netscape in Meeker’s chart below. It is also outstripping the early growth of NTT Docomo’s imode, which was the most successful example of the first generation of mobile Web adoption in Japan.

The chart overlays the first 20 quarters of user growth for each product. Only eight quarters after launch, the iPhone and iPod Touch has more than twice as many users (57 million) as imode (25 million), five times as many as Netscape (11 million), and eight times as many as AOL (7 million) at a comparable points in their histories.

The iPhone/iTouch combo is also the fastest-growing consumer electronics product of all time. Its adoption ramp is even steeper than videogame consoles including the Nintendo Wii, Nintendo DS, and Sony PSP. The original iPod and Blackberry aren’t even in the same league.

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Mahindra Satyam to position itself as ICT company

Mahindra Satyam, the rebranded Satyam Computer Services, is set to position itself as an information and communication technologies (ICT) company.

"Tech Mahindra (the parent company) has unique skills in communications, while Satyam is strong in IT and enterprise services. We are going to the market with a bundled approach to bring in the 'C' component to our enterprise customers and we are successfully demonstrating this value preposition with two reference customers," the company's chief executive officer, C P Gurnani, said during an informal chat.

Gurnani said the company had appointed Bain and Company, the US-based management consultants, to help it in driving some of its processes. That includes better servicing of existing clientele, regaining some lost clients and looking at the value offered to customers. "The company has formed a 'Win Room' led by Atul Kanwar (Satyam's Europe president), who is closely working with Bain," he added.

Satyam Computers had 500-odd customers; close to 100 dropped their contracts with the then fourth-largest IT outsourcer after the confession by the now-jailed founder, Ramalinga Raju , that he had cooked the company's accounts for several years.

"We found Satyam pricing to be in line with that of the industry and I don't think our customers have any reason to question it. Neither have we asked a higher pricing and nor has any customer sought any reduction," Gurnani said.

He said "my lips are sealed, as the company is still in a long silent period till the accounts are restated" on being asked to comment on the New York Stock Exchange (NYSE) saying it would include Satyam in its late filers list and could commence delisting proceedings at any time if circumstances warrant, and on the Satyam-Upaid disparagement case. Adding: "There is no move to delist from the NYSE and we will continue to be listed on the exchange. We are actively in discussion with them (Upaid)."

On the current market scenario, Gurnani said the overall market signs are positive. "We are part of the same pond and the temperature indicators are good." Terming Australia , China, Egypt, Malaysia and Budapest (Hungary) as cheap destinations, he said the company was intending to expand their operations in these geographies.

After rationalising staff costs, Mahindra Satyam is now focusing on reducing its real estate expenditure. It plans to terminate lease contracts with property owners and consolidate its operations, with its own campuses. Close to 30 per cent of Mahindra Satyam's office space is unutilised. "We have already moved out of six leased facilities in Hyderabad. We will be closing two leased offices in Bangalore by this month end," a company spokesperson said.

Satyam's scrip ended the trade at Rs 109.50 on the Bombay Stock Exchange on Monday, down 1.13 per cent as against the previous close of Rs 110.75.

Satyam margin still wallows

Hyderabad: B Ramalinga Raju had stunned everyone on January 7 this year when he disclosed in his grand confessional that the erstwhile Satyam Computer Services made a net profit of just Rs3 on every Rs 100 revenues.

Six months after taking over the company, C P Gurnani, CEO of Mahindra Satyam -- as the company is called now -- says margins are "slightly over 3%."

That compares with more than 25% levels for Infosys, 20% for TCS and 15% for Wipro.
Gurnani said per se, there is no problem with the pricing formula followed in Raju's time.

During the turbulent times, it is said, Satyam was bagging projects by quoting $23 to $25 per hour.

Later, investigators also found evidence of such low billing rates.

"Most of the contracts are being continued at earlier prices. We found Satyam's pricing was in line with the industry. I don't think any customer had any reason to question the pricing. We have not gone about asking for higher prices nor have the customers bargained for lower prices," Gurnani said.

The company has also been struggling to sort out certain legal issues. A case filed by UK-based mobile payment solutions company Upaid alleging forgery and fraud on Satyam has been demanding significant resources from the new management of the company.

"We are currently engaged in negotiations with Upaid on settling the case out of court," Gurnani said.

Upaid had sought $1 billion in damages from Satyam and the case is likely to come up for hearing in a US court shortly.

Satyam lost about 100 customers after the fraud unraveled. The company currently has about 400 customers.

According to him, the company is now making efforts to woo back those that walked out.

"We have appointed Bain & Co as consultants for bringing back the customers. They are helping in driving some of the processes. We have a group of people getting together in a 'Win Room' for delivering better transformational experiences to the customers and getting back to our ex-customers. This team has several senior leaders," he said, without elaborating on the success so far from this effort.

The New York Stock Exchange last week threatened to delist the company for not filing accounts on time and marked it a 'late filer'.

"The restatement accounts to us is historical and it will happen one of these days. Since we are trying to do it for the last five years, it is important for us. KPMG is working as hard as humanly possible to complete it," Gurnani said.

He said the merger of Tech Mahindra and Mahindra Satyam is imminent. "Both companies have some synergies and it only makes sense to merge them. But, the merger would happen only after the restatement of accounts," he said.

The Company Law Board has extended time for the company to restate its accounts till June 2010.

This follows Raju's confession that accounts of the company were fudged for over five years.

Mahindra Satyam is also working on a plan to make the company an ICT entity instead of just an IT firm.

Though not formally announced, the concept is getting some traction, Gurnani said.
"Ultimately telecommunications is an integral part of Tech Mahindra. IT and telecommunications have now become integral part of each other. Tech Mahindra has the unique skills of telecommunication and Mahindra Satyam has the unique skillsets in IT and enterprises. It will be a bundled approach. We are doing one or two cases (using the ICT model). We are successfully demonstrating the values and advantages. We are doing it for few reference customers," he said.

Once these reference customers are in place, Mahindra Satyam is planning to go to market aggressively to offer an entire range of ICT solutions as against pure-play IT solutions.

Gurnani said there were never any non-existent employees --- there were talks of about 10,000 of them during the height of the scam.

Mahindra Satyam currently has about 35,000 employees and about 8,000 were dispatched into a virtual pool. Of these, about 5,000 are believed to be on the verge of getting laid off by December 2009.

Late for flight, techie makes hoax bomb call to airline

New Delhi A passenger, who was getting late for his flight to Bangalore decided to delay the plane by making a hoax call about a bomb threat. The 25-year-old employee of Infosys has been arrested.

The GoAir flight G8201 to Bangalore, scheduled to depart from Delhi at 8:45 am, was delayed by over four hours by software professional Abhishek Gupta, a resident of Lucknow.

Senior airport officials said Gupta was coming to Delhi from Lucknow by the Gorakh Dham Express. The train was scheduled to reach New Delhi Railway Station at 5.55 am.

“But it was running late, and Gupta could reach the railway station only at 8:30 am,” said Joint Commissioner of Police (Operations) Satyendra Garg. With 15 minutes in hand before the flight took off, Gupta made a bomb hoax call at the airline’s headquarter to delay the flight.

The Indira Gandhi International Airport was alerted by GoAir.

“About 157 of the 163 passengers had already boarded the flight,” an airport official said.

“The CISF was immediately alerted.” The aircraft was taken to an isolation bay and the security machinery was put into action.

The Bomb Threat Assessment Committee — comprising the CISF, BCAS, DIAL, Delhi Police, GoAir representatives and an Indian Airlines representative -- met to identify if the call was specific or non-specific.

“All passengers were made to disembark the plane, and the registered baggage de-boarded,” said a senior CISF official.

At 9.20 am, Gupta reached the airport. “As he reached the entry gate of Terminal 1A, he was apprehended and interrogated by the CISF team,” said CISF spokesperson Rohit Katiyar.

According to the officials, he admitted to making the call from his mobile phone. He however, showed no remorse. “My job is very important. This was the best way to catch the flight,” he reportedly said.

Gupta had hit on the idea of delaying the flight after the airline thrice refused to allow him to reschedule his flight, said an investigating officer. “He called the airline’s headquarters in Mumbai and said there was a “suspicious object on the flight, which could be dangerous”.

Gupta was later handed over to the Delhi Police. The CISF is believed to have asked the police to take stern action against him as cases of individual passengers creating panic after getting late for flight are on the rise.

“He has been arrested and a case has been registered against him under Sections 505 1(B) (statements conducing to public mischief with intent to cause alarm to the public), 341 (wrongful restraint) and 182 (false information) of the Indian Penal Code. These are non-bailable sections,” said Garg. He has also been booked under the provisions of the Airport Act and will be produced in the court on Monday and remanded to judicial custody, Garg added.

The GoAir flight finally left at 12.57 pm, with 162 passengers on board.

High attrition continues to shadow Corporate India

SALARY SURVEY: Companies continue to search for talented people even under tough economic milieu

India Inc continues to see a double-digit attrition rate, this time of 13.8 per cent — the highest in Asia Pacific region — despite economic uncertainty, says a survey. As per global HR consultancy Hewitt Associates’ annual Asia Pacific Salary Increase survey for 2009-10, most Asian companies have continued to experience double-digit voluntary employee turnover rate amid the economic downturn. “The top four markets reporting the highest turnover rate are India (13.8 per cent), Australia (11 per cent), New Zealand and China (10.3 per cent),” the report stated. Turnover rate refers to the ratio of the number of workers that had to be replaced in a given time period to the average number of workers. “While many would believe the economic uncertainty should help ease pain on high employee voluntary turnover, the Hewitt 2009/2010 Annual Asia Pacific Salary Increase Survey does not reveal the same. The comparatively high turnover rate...raises an alarm to the world,” Hewitt Associates Regional Leader Broad-Based Compensation practice Stella Hou said. The survey stated that ‘better external opportunity’ was consistently cited as the top reason for employees voluntarily leaving their organisations across all markets. “This means companies continue to search for talented people even under a tough economic situation... organisations will continue to face a tight talent market,” it added. Single digits Other economies in the Asia-Pacific market, including Singapore, Korea and Thailand, are on high single digits in terms of employee turnover rates in the range of 8.8 per cent to 9.3 per cent. “An organisation’s ability to retain talent is a challenge facing all companies. This provides challenges to be more innovative in retaining the top people in their firms with a tighter budget,” Hou said. Companies need to focus on pursuing different talent management strategies suitable for its own workforce, while the most notably the variable pay programme was the most popular incentive adopted by most companies in the region. “Companies realise that they cannot afford to lose talent. They know ‘high performers’ will help them lead the firm out of the storm into the winning field. Even for those companies experiencing unprecedented levels of uncertainty and cost reduction pressures, they tend to reward and retain their best talent with special incentives,” Hou added. The Hewitt survey revealed that the challenging talent market also compelled companies to reward talent differently with top performers receiving 50 per cent higher rewards than the average performers.

Sreelatha Menon: Winning a fight

Villagers had to fight to get unemployment allowance worth Rs 14 lakh in Sitapur’s villages though this is something they are assured under the National Rural Employment Guarantee Act.

Villagers in Misrik and Pisawan blocks in Sitapur district of Uttar Pradesh would vouch for the benefit of persistence. There were 826 families from about 19 villages, all miserable and in need of work, and denied work ever since the National Rural Employment Guarantee Scheme was launched. So, in 2007, when their requests for work drew no response from pradhans, Sangatim (or best friend) stepped in. It was a non-governmental organisation (NGO) started by former social workers of the Mahila Samakhya and celebrated in a book called Playing with Fire, published by Zubaan. Sangatim advised the villagers to keep receipts of each application they had made for work so that they could demand unemployment allowance, which is guaranteed under the Act if work is not provided within 15 days of the application.

To cut a long story short, the struggle led to the villagers getting Rs 14,99,340 as unemployment allowance, nearly two years after they first applied for work. The allowances ranged between Rs 150 and Rs 8,000. About 37 villagers got the latter amount.

The job applications were dated between May and December 2007. Armed with receipts of their various applications in a year, they began to send applications to the community development officer at the district level seeking unemployment allowance.

At first, there was no response. Then they were verbally told that it was next to impossible. So, the NGO, along with 500 villagers, began a dharna in Sitapur town before the district office that lasted till the district magistrate formed a committee of three officials and three people from the organisation. Following the report, the rural development department in the state government ordered payment of allowances early this year, sending the villagers into celebration and raising hopes in other areas of Sitapur, said Sangatim.

The block development officers went to the high court but were told off promptly by the court. Finally, in May this year, the villagers got their dues. Since this, there is more enthusiasm among villagers for demanding work under the scheme in Sitapur, says Sangatim. It is not that the pradhans have decided to give them work, but villagers have learnt to ask for it, says Richa Singh of the NGO. But a look at official data shows that most blocks, including Misrikh and Pisawan, haven’t crossed the average of 20 days of work, though half the year is over. In the whole district, just 421 people have completed the 100 days of work that the Act guarantees.

In Uttar Pradesh, it is an unwritten rule that payment of unemployment allowance is punishable. Ever since the compensation order was passed by the State Rural Department this year, at least two block development officers and five panchayat secretaries have been put under suspension and pradhans of 19 gram sabhas have got showcause notices. The entire pradhan fraternity in Sitapur has, meanwhile, turned against the NGO, even as there are shrill demands for jobs from other blocks, says Singh.

Narrating the story of the struggle, Singh does not seem ready to take up another battle on behalf of the villagers. What intrigues her is that why a simple provision in the Act needs such a long agitation to be implemented.

Whether Sangatim is ready or not, the villagers, she says, are demanding both work and allowances all the time, much to the dislike of the authorities.

The strong case against Raj Rajaratnam

NEW YORK (Fortune) -- Insider trading cases are notoriously hard for the government to prove, but the use of a wiretap gives the prosecution a very strong hand against Raj Rajaratnam, the billionaire hedge fund manager accused of trading on illegal information obtained by a web of informants including executives at IBM and McKinsey, according to several experts.

According to newspaper reports, an informant named Roomy Khan allowed the government to wiretap conversations between she and Rajaratnam as part of her work to help the government build its case against six people.

The government alleges that Danielle Chiesi and Mark Kurland, who worked at the hedge fund New Castle, swapped illegally obtained information with Rajaratnam. It says that they received this information from the other three defendants also named in the case: Robert Moffat, an executive at IBM , Anil Kumar, a director at McKinsey, and Rajiv Goel, who worked at Intel Capital.

None have entered pleas yet, but lawyers for all six defendants have proclaimed their innocence.

"The recordings help prosecutors destroy the 'mosaic defense,' the most common defense against insider trading," says James Angel, a business professor at Georgetown University. "With the mosaic theory defendants try to say that by using lots of little bits of legal information and tips that fall into a gray area, they made investment decisions. It says no one intended to do anything wrong."

But the U.S. Attorney's complaint released last Friday includes conversations recorded by tapping phones owned by Rajaratnam and others involved in the case.

Wiretaps are rare in insider trading cases; and these conversations seem to show the speakers involved in the alleged scheme knew they were doing something wrong.

For example, the government complaint has Chiesi on tape telling "a co-conspirator not named as a defendant" information about an upcoming reorganization at AMD and answering his questions about when the announcement will be made.

Chiesi then says, "You put me in jail if you talk... I'm dead if this leaks. I really am... and my career is over. I'll be like Martha [expletive] Stewart."

"With the recorded conversations, it's harder for the defendants in the case to claim that their conversations were misconstrued," says Paul Radvany a law professor at Fordham and who formerly headed the criminal division for the U.S. Attorney's Office in the Southern District of New York.

But Alan Kaufman, the attorney representing Chiesi, says the case is not a slam dunk for the government. "What stands out is what is not in the complaint," says Kaufman. "There is not any allegation that Danielle, in connection with getting information from people, either gave or promised anything of value.

"I'm left to wonder what distinguishes what she did versus what other people on Wall Street do every day, where information is the coin of the realm and people work hard to get new information about publicly traded stocks."

It is true that Wall Street investors use a brew of paid research, market rumor, and conversations with company insiders to make trading decisions.

There are two ways to get an insider trading conviction, says Angel. One is to prove there was a simple breach of trust. "If you're an officer or director of a company, you work on behalf of shareholders," he says. "You can't breach trust and give out information that can be used to trade against the company or its shareholders; and you can't give it to some players ahead of others."

Angel says this will put a lot of pressure on Robert Moffat, and executive at IBM, Anil Kumar, a director at McKinsey, and Rajiv Goel, who worked at Intel Capital.

Getting the executives from IBM, McKinsey, and Intel to plead guilty and testify against Rajaratnam, Chiesi, and Kurland would be a big coup for the government, says Angel, because proving a case against the latter three people seems much harder.

"The government will have to prove that Rajaratnam, Chiesi, and Kurland actually obtained the information illegally," says Angel. "The person they really want is Rajaratnam, and to get him, they'll need a group of witnesses who all say that they were directed to trade or gather illegal information for him."

CBI digs up Rajus’ accounts in Mauritius

HYDERABAD: A top Indian team including sleuths from the Central Bureau of Investigation (CBI) has zeroed in on six bank accounts in Mauritius linked to alleged money laundering by B Ramalinga Raju, prime accused in the Satyam scam, and his family members.
The team, headed by CBI DIG V V Lakshminarayana, included an RBI officer, and left for Mauritius on October 18, sources told STOI on Saturday. “In all, there is at least Rs 600 crore in the six accounts in Mauritius linked to the Satyam scam and the figure can rise by the time the investigations are over,” the sources said.

During the course of its investigations in the Satyam scam, the CBI discovered that the scam money was either stashed in foreign bank accounts or was being diverted back to India through these accounts. Accordingly, the CBI special court sent letters rogatory to six countries where the bank accounts linked to the scam were said to be in operation. Apart from Mauritius, the letters rogatory were sent to courts in the US, UK, Belgium, British Isles and Singapore. “The purpose of sending the letters rogatory was to request the courts in these countries to record the statements of the account holders and other connected persons and convey the same to the special CBI court in Hyderabad,” the sources said. The CBI team left for Mauritius after the court there communicated that it had recorded the statements of the account holders and others as sought by the Indian investigating agency. “The purpose of taking the RBI officer was to check the banking norms and procedures in Mauritius and assist the CBI in tracing the money trail,” the sources added.

The Interpol is assisting the CBI in unearthing the foreign link in the Satyam scam, the sources said, and added that the CBI teams will visit the other countries where such bank accounts are alleged to exist as soon as the courts respond to the letters rogatory.

By establishing the foreign link in the Satyam scam, the CBI hopes to prove its case that the Raju family had floated almost 325 alleged benami companies and that the foreign accounts acted as conduits to divert the money from Satyam only to be re-routed to these fictitious companies and then laundered further for purchasing land and property in and around Hyderabad. The CBI team is scheduled to return to Hyderabad on Sunday.

Shobhana Subramanian: What're the builders so worried about?

It’s a pity that home buyers in this country have got such a raw deal all these years while developers have been almost a law unto themselves. Finally, the ministry of housing is trying to help protect consumers and keep a check on the construction of residential property with the proposed Model Act for Real Estate (Regulation of Development). Of course, developers are upset that they will now be made far more accountable, but the government owes it to ordinary, middle class citizens of this country not to drag its feet on this piece of legislation. And since the Act has to be adopted by states, the Centre needs to incentivise state governments to enforce the new rules. Otherwise, home buyers in this country will continue to be at the receiving end. If developers are playing by the rules, then what are they so worried about? After all, there is an appellate tribunal that’s been thought of and with the civil courts out of the picture, decisions can be speeded up; indeed the tribunal is expected to sort out disputes in three months.

Indeed, it’s a shame that there needs to be a law so that a home buyer knows how much space he’s actually getting in terms of carpet area and doesn’t discover after he’s moved in that the space is smaller than he’d thought. Moreover, half the time a buyer doesn’t know what exactly he’s being charged for his apartment and how much he’s paying for the common area and other amenities. Of course, he almost never gets possession on time because very often money collected from customers for a specific housing project is diverted either to buy land or to some other venture. That should change because the draft Model Act proposes that money raised for a specific project be kept aside in some kind of an escrow account, which would be audited by a chartered accountant. That’s pretty much the way it works in China and in other parts of the world where payments have to be utilised for a specific project.

Also, Chinese developers can pre-sell a residential property only when a third or two-thirds of the construction is complete, depending on which province they’re in. It’s a far easier world out here where builders are free to pre-sell property even before they’ve started digging or got necessary clearances. The draft rules propose that developers sign a sales agreement with buyers before they start pocketing any money. If the project is not completed on time, the developer must repay the customer’s advances with interest and, in addition, fork out a penalty. Developers may have a point in that the time line for completing a project should be decided by them and not fixed by the authorities, as is being contemplated. After all, what’s important is that customers know upfront when the project will be completed. It’s also true that in the past, projects may have been delayed because of the numerous approvals and clearances needed and so it hasn’t always been the developers’ fault. But this can’t be an excuse any longer because the draft rules suggest that any project should be marketed only after all approvals are in place. Should the developer fail to put up the property in time, the regulator could recommend that the local land authority develop the remaining portion. If buyers are able to move into their homes within the promised time, it should put an end to the practice of developers charging any kind of premium for a completed project. Today, with developers desperate to grow land banks and in no hurry to start any construction, land lies vacant. Compared to their Indian counterparts, Chinese developers hold relatively smaller land banks; brokerage CLSA estimates it would be sufficient to meet growth targets over a four-to-ten-year period in India, but developers are estimated to be holding on to land banks for anywhere between eight-fifteen years. So, it’s unbelievable that developers are complaining about a 5 per cent bank guarantee that they have to provide on the estimated cost of the ‘development works’. Let them not lose their sleep over the extra cost, let them pass that on to the buyers. Even the smallest home buyer will not mind paying that extra bit because it will save him a whole lot of time and money that he otherwise loses, paying interest on a home loan given that he almost never gets possession of his flat on time.

Fascist British politician flayed on BBC show

London: A fascist British politician who openly wants Indian and other immigrants to be deported to their countries of origin, was pilloried by the audience during prime time BBC programme on Thursday night amidst protests on the streets.

The BBC's decision to invite Nick Griffin, British National Party (BNP) leader, raised a welter of protest with hundreds of protesters grappling with the police during a violent demonstration outside the television centre in London, where the Question Time programme was recorded.

Griffin shared the panel with members of mainstream political parties such as Justice secretary Jack Straw (Labour), Baroness Warsi (Conservative) and Chris Hune (Liberal Democrats). The audience included Asians, African-Caribbeans and white British.

Amidst criticism that the programme had lent respectability to the fascist party, the BBC insisted that it was right to invite Griffin on the programme because the party had won over a million votes in the June election to the European Parliament and that the party had not been banned.

On the widely watched programme, ethnic minority members of the audience termed Griffin a 'disgrace', while others ridiculed his stance on race and immigration.

Straw highlighted the fact that British campaigns during the two world wars included large contingent of soldiers from the Indian sub-continent.

Griffin, whose party until recently admitted only whites as members, claimed that he had changed his views and had no problems with Indian and other communities who had settled here, but was against allowing any more immigrants in the country.

One Asian member of the audience asked him bluntly, "Where do you want me to go? I love this country, I'm part of this country. I was born here, educated here." He went on to advise Griffin to go to the South Pole if he wanted an all-white country.

Griffin coming on to the programme dominated prime time television channels and newspapers. While many dismayed at the BBC inviting him on the programme, others agreed with the BBC stance and saw the programme as an opportunity for the British public to know more of Griffin and his party.

John Walker, a resident of Belfast, said, "If Nick Griffin's appearance on Question Time has the ultimate effect of shaking the 'great' British public free of their political apathy and encourages them to ask probing questions, then his appearance will be a good thing".

Koneru Humpy accuses AICF secretary of harassment

Chennai: All India Chess Federation (AICF) Secretary D V Sundar on Friday denied that he had agreed to meet world no 2 Koneru Humpy's father's expenses for the World Indoor Games or permitting the latter to accompany his daughter as her trainer.

In a strong rejoinder to the charges made by Humpy that the confusing situation created by Sundar had forced her to pull out the Games, the AICF secretary told UNI, "It is a lie to say that AICF

had agreed to spend for Koneru Ashok."

He sought to clarify that it was for the first time that in India AICF had arranged back-to-back tournaments, one in Delhi and the other in Chennai.

He said these tournaments attracted more than 20 Grand Masters.

"It is our wish that players like Humpy should participate in such events. In fact, we have been repeatedly asked by our members, chess lovers and the press as to why we are not pressurising all top players to play in India. Therefore, we want players like her to play", Sundar said.

He said Humpy had never sought the permission of AICF to participate in any tournament before.

"The first time, we received a request in August and we didn't deny her any permission," he added.

Meanwhile, Humpy said, "The first time in my career when I went alone (without my father and personal trainer Koneru Ashok) to play in the Chess Olympiad at Turin, Italy in 2006, I kept falling sick throughout the tourney, "Humpy said.

She said inspite under medication throughout the tourney, "I played 12 games out of 13. Then Sundar issued a warning letter to me stating that as I didn't wear the T-shirts provided by the AICF and that he would initiate action against me if this was repeated."

Stating that Sundar was very passionate about issuing such warning letters to players, Humpy said a recent victim was Grand Master G N Gopal.

She alleged that Sundar's chess understanding was 'very poor'.

"He insists I play in all tournaments he can think of and if don't accept he creates hurdles," she added.

"Being the World No 2 player, I have am selective of tournaments. I have to keep my rating and world ranking in mind. I think that a person who doesn't know the game and doesn't know my preparation strategies can't really blindly insist that I go play certain tournaments," she said.

However, she conceded that despite Sundar's 'ridiculous' administrative techniques, AICF was still producing good results as there were some good organisers who knew thier chess like Bharat Singh Chauhan, R M Dongre and Soumen Majumdar - all of whom frequently conducted international events.

She said, "Sundar is testing my patience. Everytime, I adjust myself and let things pass without making an issue. But every now and then he troubles me and I can't bear this any longer."

"If a world level player like me is suffering because of him then I shudder to think as to what the condition of upcoming players will be like," she added.