Oil fell to its lowest level in nearly three months on Tuesday, extending a steep slide since mid-July on mounting evidence high prices and a souring economy were cutting into world energy demand.
The drop coincided with a firmer U.S. dollar, which may have reduced the appeal of commodities to some investors playing the strong negative correlation between the markets in recent months, analysts said.
OPEC President Chakib Khelil said on Tuesday oil could fall further to $70 to $80 a barrel in the long term but added he did not think the producer group should consider cutting output at this point.
U.S. crude dropped $2.54 to settle at $122.19 a barrel after dipping as low as $120.42, its lowest since May 6. Brent crude fell $3.13 to $122.71.
"We still believe that crude's rallies are vulnerable and we would advise not buying into them," said Edward Meir, analyst at MF Global.
Oil has fallen from a record peak of $147.27 set on July 11, pressured by signs that high prices and an economic slowdown are curbing demand, especially in the United States, the world's largest oil consumer.
The chief executive of BP Plc, Tony Hayward, said on Tuesday he saw demand destruction of 5 percent to 10 percent for gasoline in developed OECD economies as people drive less due to high fuel prices.
The Energy Information Administration said on Monday U.S. oil demand in May was 660,000 barrels per day less than previously thought. A separate government report said motorists drove 2.4 percent less during the first five months of the year than they did in the same period of 2007.
Limiting oil's drop, Shell declared force majeure on Tuesday on its Nigerian Bonny Light oil exports for July to September following Monday's attack by militants on an oil pipeline in the Niger Delta.
Tension over Iran's nuclear program also provided support. Iran is the second-largest producer in the Organization of the Petroleum Exporting Countries.
Attention on Wednesday will focus on the latest snapshot of U.S. oil supplies.
Crude oil stocks probably fell by 1.6 million barrels and gasoline rose by 200,000 barrels, analysts said in an expanded Reuters poll. Distillates inventories were expected to have risen by 1.9 million barrels.
Wednesday, July 30, 2008
Monday, July 28, 2008
Islamic group claims India bombings were revenge for 2002 riots
An obscure Islamic militant group warning of "the terror of Death" took credit for synchronized bombings that killed at least 45 people in western India - the second series of blasts in India in two days.
"In the name of Allah the Indian Mujahideen strike again! Do whatever you can, within 5 minutes from now, feel the terror of Death!" said an e-mail from the group sent to several Indian television stations minutes before the blasts began.
The pair of attacks put India on alert Sunday and security was stepped up at markets, airports and hospitals across the country.
Investigators, meanwhile, scoured Ahmadabad, detaining 30 people for questioning in the ancient city that was hit by 16 bombs around dusk Saturday, said the city's police commissioner, O.P. Mathur. Police also found and defused an unexploded bomb
"In the name of Allah the Indian Mujahideen strike again! Do whatever you can, within 5 minutes from now, feel the terror of Death!" said an e-mail from the group sent to several Indian television stations minutes before the blasts began.
The pair of attacks put India on alert Sunday and security was stepped up at markets, airports and hospitals across the country.
Investigators, meanwhile, scoured Ahmadabad, detaining 30 people for questioning in the ancient city that was hit by 16 bombs around dusk Saturday, said the city's police commissioner, O.P. Mathur. Police also found and defused an unexploded bomb
'Terrorists have sent a message that the claim of security is hollow'
We expected it earlier when other cities like Hyderabad and Jaipur were hit by terrorists," says poet Chinu Modi about the Ahmedabad blasts.
The surprise element was missing when Ahmedabad was rocked by 17 bomb explosions because at the back of people's mind many knew that the Gujarat riots of 2002 may lead to such a violent reaction.
Yet, the blasts of July 26 carry something more than the element of surprise. The act is shocking and incomprehensible because of the mastery of the strategic planning, the perfection of the execution and the bloody impact in terms of the political message it has left behind.
Since the blasts, Ahmedabadis are debating three issues:
1. Experts and common people are stumped to see the selection of the locations for planting the bombs.
2. The blasts were executed when a 'red alert' was declared in Ahmedabad after the blasts in Bangalore.
3. The extent of the involvement of local people and the secrecy maintained by the perpetrators of the act has shocked the residents of the city, which is still known as an 'overgrown village.'
"The blasts are part of the pan-Indian phenomenon and it is also aimed at the Bharatiya Janata Party government," believes Ghanshyam Shah, a former professor at the Jawaharlal Nehru University, New Delhi, and an authority on communal riots in Gujarat.
He argues that these blasts may not be exclusively connected to the riots of 2002 when more than 1,000 Muslims died in widespread communal riots after the Sabarmati Express was set on fire burning 59 Hindu passengers at the Godhra railway station.
Professor Shah says there was a surprise when after the violence of the majority, the minority community did not show their anger "in natural process."
He attributes it to the fact that the Muslims of Gujarat are diffident. "I see more and more diffidence in them. Muslims in Gujarat have realised that there is no solution of the issue (communal politics)."
However, he is not denying the involvement of Gujarati Muslims in the serial blasts. "The large terrorist group must have taken the support of local people. But I don't see the widespread support of Gujarati Muslims to such violence at all," he says.
To further support his argument that Gujarati Muslims by and large do not support the blasts to avenge the riots of 2002, he says, "In 1992, Surat witnessed communal riots (some Muslims were then burnt alive). Soon after, the plague spread in the city. At that time, Surti Muslims in the city were heard saying, 'Khuda e sajha kari' (God has punished them). But after the 2002 riots, I see an unusually high level of diffidence in them and we don't hear such remarks."
Professor Shah argues that when the Muslim community lives in isolation and in ghettos, it is easier for outsiders to get a handful of people to support their activity.
One of the surprises of Saturday's blasts was that except one blast in Sarkhej, all the blasts were executed in East Ahmedabad, which includes the highly communally sensitive walled city area. The accuracy of the planning suggests that a person with a complete grip on the social-political mindset of the city and its communal geography must be behind the blasts.
No one in this shaken city doubts that these blasts were planned by someone who has a thorough knowledge of the past 25 years history of communally sensitive areas and the Sangh Parivar's role in it.
The terrorists have targeted the constituencies of four veteran leaders belonging to the saffron brigade. Chief Minister Narendra Modi [Images], Home Minister Amit Shah, Ashok Bhatt, one of the oldest faces of the communal friction in the city, and Dr Pravin Togadia, the Vishwa Hindu Parishad leader.
Four blasts occurred in Modi's constituency -- Maninagar. Sarkhej is in Shah's constituency while the Dhanvantri hospital in Bapunagar has been run by Dr Togadia for many decades. The blast in Raipur was right at the spot where Bhatt has held daily meetings with his supporters for the last 40 years.
"The planners knew where the victims would go for emergency treatment and they hit those hospitals. L G hospital was targeted because victims from the Maninagar blasts would obviously go there because it is close by. They knew the social geography very well," says Achyut Yagnik, the Ahmedabad-based socio-political thinker.
Dr Yagnik is writing a book on Ahmedabad -- which will complete 600 years in 2011 -- along with fellow writer Suchitra Sheth. He points out that blasts were carried out in BJP-dominated areas of the working class and not in posh or middle class areas.
Secondly, the bombs were planted in places where Dalit and Muslims live side by side. Those well-versed with the communal history of Ahmedabad know how the Dalits and Muslims have been at loggerheads in these areas.
Bapunagar, Raipur, Sarangpur are areas that have seen communal tension in 1985, 1990-1992 and also during the 2002 riots.
"There is no doubt that Hindu-Muslim neighbourhoods have been targeted in these serial blasts," says Dr Yagnik.
In Ahmedabad, the political movement to capture Hindu and Muslim minds is carried on by political parties inside these areas where Dalits and Muslims co-exist side by side. It is not difficult to decipher why these areas and hospitals have been hit by the terrorists.
"The terrorists have served twin goals. By hitting BJP-dominated areas, they have sent the message to the chief minister that his claim of security is hollow. In spite of a red alert in the city, they have shown their capacity to strike at places they want. Second, by hitting hospitals in a cruel and dastardly manner they have caused the maximum damage."
The surprise element was missing when Ahmedabad was rocked by 17 bomb explosions because at the back of people's mind many knew that the Gujarat riots of 2002 may lead to such a violent reaction.
Yet, the blasts of July 26 carry something more than the element of surprise. The act is shocking and incomprehensible because of the mastery of the strategic planning, the perfection of the execution and the bloody impact in terms of the political message it has left behind.
Since the blasts, Ahmedabadis are debating three issues:
1. Experts and common people are stumped to see the selection of the locations for planting the bombs.
2. The blasts were executed when a 'red alert' was declared in Ahmedabad after the blasts in Bangalore.
3. The extent of the involvement of local people and the secrecy maintained by the perpetrators of the act has shocked the residents of the city, which is still known as an 'overgrown village.'
"The blasts are part of the pan-Indian phenomenon and it is also aimed at the Bharatiya Janata Party government," believes Ghanshyam Shah, a former professor at the Jawaharlal Nehru University, New Delhi, and an authority on communal riots in Gujarat.
He argues that these blasts may not be exclusively connected to the riots of 2002 when more than 1,000 Muslims died in widespread communal riots after the Sabarmati Express was set on fire burning 59 Hindu passengers at the Godhra railway station.
Professor Shah says there was a surprise when after the violence of the majority, the minority community did not show their anger "in natural process."
He attributes it to the fact that the Muslims of Gujarat are diffident. "I see more and more diffidence in them. Muslims in Gujarat have realised that there is no solution of the issue (communal politics)."
However, he is not denying the involvement of Gujarati Muslims in the serial blasts. "The large terrorist group must have taken the support of local people. But I don't see the widespread support of Gujarati Muslims to such violence at all," he says.
To further support his argument that Gujarati Muslims by and large do not support the blasts to avenge the riots of 2002, he says, "In 1992, Surat witnessed communal riots (some Muslims were then burnt alive). Soon after, the plague spread in the city. At that time, Surti Muslims in the city were heard saying, 'Khuda e sajha kari' (God has punished them). But after the 2002 riots, I see an unusually high level of diffidence in them and we don't hear such remarks."
Professor Shah argues that when the Muslim community lives in isolation and in ghettos, it is easier for outsiders to get a handful of people to support their activity.
One of the surprises of Saturday's blasts was that except one blast in Sarkhej, all the blasts were executed in East Ahmedabad, which includes the highly communally sensitive walled city area. The accuracy of the planning suggests that a person with a complete grip on the social-political mindset of the city and its communal geography must be behind the blasts.
No one in this shaken city doubts that these blasts were planned by someone who has a thorough knowledge of the past 25 years history of communally sensitive areas and the Sangh Parivar's role in it.
The terrorists have targeted the constituencies of four veteran leaders belonging to the saffron brigade. Chief Minister Narendra Modi [Images], Home Minister Amit Shah, Ashok Bhatt, one of the oldest faces of the communal friction in the city, and Dr Pravin Togadia, the Vishwa Hindu Parishad leader.
Four blasts occurred in Modi's constituency -- Maninagar. Sarkhej is in Shah's constituency while the Dhanvantri hospital in Bapunagar has been run by Dr Togadia for many decades. The blast in Raipur was right at the spot where Bhatt has held daily meetings with his supporters for the last 40 years.
"The planners knew where the victims would go for emergency treatment and they hit those hospitals. L G hospital was targeted because victims from the Maninagar blasts would obviously go there because it is close by. They knew the social geography very well," says Achyut Yagnik, the Ahmedabad-based socio-political thinker.
Dr Yagnik is writing a book on Ahmedabad -- which will complete 600 years in 2011 -- along with fellow writer Suchitra Sheth. He points out that blasts were carried out in BJP-dominated areas of the working class and not in posh or middle class areas.
Secondly, the bombs were planted in places where Dalit and Muslims live side by side. Those well-versed with the communal history of Ahmedabad know how the Dalits and Muslims have been at loggerheads in these areas.
Bapunagar, Raipur, Sarangpur are areas that have seen communal tension in 1985, 1990-1992 and also during the 2002 riots.
"There is no doubt that Hindu-Muslim neighbourhoods have been targeted in these serial blasts," says Dr Yagnik.
In Ahmedabad, the political movement to capture Hindu and Muslim minds is carried on by political parties inside these areas where Dalits and Muslims co-exist side by side. It is not difficult to decipher why these areas and hospitals have been hit by the terrorists.
"The terrorists have served twin goals. By hitting BJP-dominated areas, they have sent the message to the chief minister that his claim of security is hollow. In spite of a red alert in the city, they have shown their capacity to strike at places they want. Second, by hitting hospitals in a cruel and dastardly manner they have caused the maximum damage."
Sunday, July 27, 2008
Oil falls $5 for the week
Oil prices sank Friday, settling down more than $5 for the week, after two stronger-than-expected economic reports calmed nervous investors. Lingering concerns over a drop in demand also pressured prices lower.
Light, sweet crude for September delivery fell $2.23 to settle at $123.26 a barrel, the lowest closing price since June 4. For the week, prices fell $5.62.
Earlier in the session prices reached as low as $122.50 a barrel, the lowest intraday level since June 5, when prices touched $121.61.
Prices fell after a government report showed new home sales were stronger than expected last month, and a survey from the University of Michigan revealed that the government's economic stimulus package had boosted consumer sentiment.
Both reports, on top of an unexpected increase in orders for durable goods, drove investors away from oil which has been used as a hedge against economic downturn.
"[Investors] bought oil because they were worried about the economy," said Phil Flynn, senior market analyst with Alaron Trading in Chicago.
The Dow industrials gained nearly 100 points in Friday morning trading and were still up about 40 points midday, following a sharp selloff the previous day, as investors poured money into stocks. These reports have given investors "a little more confidence that the world isn't coming to an end," added Flynn.
Demand: Oil prices have slipped in recent days as reports have confirmed that demand has indeed declined, largely due to high fuel prices.
An Energy Department report released Wednesday showed that gasoline demand in the United States last week had fallen 2.4% from the same period last year. And a weekly survey of filling station credit card swipes from MasterCard recorded declining demand for the 13th week in a row.
Worries about falling demand have helped push prices down $24 a barrel from a record trading high of $147.27 set July 11.
The fall in July demand has been of particular concern to investors because Americans have traditionally used more fuel in the summer.
"This is when we should be struggling with demand, but the demand isn't there," said Flynn.
Gas responds: Average gasoline prices have dropped in response to oil's decline, even though they remain above $4 a gallon at the pump, according to surveys by motorist group AAA.
And some investors fear that the U.S. demand decline may spread to other countries as well.
"The ever-deteriorating demand picture in the U.S. only seems to be getting from bad to worse and this contagion may even be spreading to China," wrote Nauman Barakat, energy trader at Macquarie Futures in a report Thursday.
Fragile market: Despite the trend, "there's always the possibility that something could happen in this market to turn it around," said Peter Beutel, oil analyst at Cameron Hanover.
International oil supplies remain tight. Tensions between the West and Iran, the second-largest producing member of the Organization of Oil Exporting Countries, and militant attacks in Nigeria, Africa's largest oil producer, have been one of the main concerns that drove oil prices to their record highs.
Hurricanes in the Gulf of Mexico have also been a traditional worry this time of year. Hurricane Dolly drove prices up briefly this week before it was clear the storm would miss vital oil facilities.
First Published: July 25, 2008: 9:43 AM EDT
Light, sweet crude for September delivery fell $2.23 to settle at $123.26 a barrel, the lowest closing price since June 4. For the week, prices fell $5.62.
Earlier in the session prices reached as low as $122.50 a barrel, the lowest intraday level since June 5, when prices touched $121.61.
Prices fell after a government report showed new home sales were stronger than expected last month, and a survey from the University of Michigan revealed that the government's economic stimulus package had boosted consumer sentiment.
Both reports, on top of an unexpected increase in orders for durable goods, drove investors away from oil which has been used as a hedge against economic downturn.
"[Investors] bought oil because they were worried about the economy," said Phil Flynn, senior market analyst with Alaron Trading in Chicago.
The Dow industrials gained nearly 100 points in Friday morning trading and were still up about 40 points midday, following a sharp selloff the previous day, as investors poured money into stocks. These reports have given investors "a little more confidence that the world isn't coming to an end," added Flynn.
Demand: Oil prices have slipped in recent days as reports have confirmed that demand has indeed declined, largely due to high fuel prices.
An Energy Department report released Wednesday showed that gasoline demand in the United States last week had fallen 2.4% from the same period last year. And a weekly survey of filling station credit card swipes from MasterCard recorded declining demand for the 13th week in a row.
Worries about falling demand have helped push prices down $24 a barrel from a record trading high of $147.27 set July 11.
The fall in July demand has been of particular concern to investors because Americans have traditionally used more fuel in the summer.
"This is when we should be struggling with demand, but the demand isn't there," said Flynn.
Gas responds: Average gasoline prices have dropped in response to oil's decline, even though they remain above $4 a gallon at the pump, according to surveys by motorist group AAA.
And some investors fear that the U.S. demand decline may spread to other countries as well.
"The ever-deteriorating demand picture in the U.S. only seems to be getting from bad to worse and this contagion may even be spreading to China," wrote Nauman Barakat, energy trader at Macquarie Futures in a report Thursday.
Fragile market: Despite the trend, "there's always the possibility that something could happen in this market to turn it around," said Peter Beutel, oil analyst at Cameron Hanover.
International oil supplies remain tight. Tensions between the West and Iran, the second-largest producing member of the Organization of Oil Exporting Countries, and militant attacks in Nigeria, Africa's largest oil producer, have been one of the main concerns that drove oil prices to their record highs.
Hurricanes in the Gulf of Mexico have also been a traditional worry this time of year. Hurricane Dolly drove prices up briefly this week before it was clear the storm would miss vital oil facilities.
First Published: July 25, 2008: 9:43 AM EDT
FAMILIES UNDER FIRE
The 56-hectare Dhirubhai Ambani Knowledge City on the outskirts of Bombay is one of the showcases of India's high-tech sector. There, some 8,000 employees of Reliance Group, the country's largest private conglomerate, operate 24-hour call centers, monitor the company's fiber-optic network on giant video screens, and update data services provided to mobile-phone subscribers. Many wouldn't associate the gleaming campus with Reliance, which blossomed under legendary founder Dhirubhai Ambani in old-world industries such as textile production and petrochemicals. But Knowledge City is evidence that a new generation of the Ambani family is reinventing India's most powerful business enterprise.
People will remember you after you are gone not for your money or your power, but because of what you have left behind.
—MUKESH AMBANI, Reliance Industries chairman
After Dhirubhai died in July 2002, his sons, Mukesh and Anil (estimated net worth for both: $2.8 billion), took control. They've been on an expansion tear ever since, successfully bolstering Reliance's presence in power generation, oil exploration, finance and biotech, and consolidating the company's position as a leading player in India's fast-growing telecom sector. Last year, with revenues of $16.8 billion, Reliance accounted for 3.5% of India's GDP. So confident are wealthier Indians in the future of the firm that one out of every four stock-owning citizens possesses shares in it.
The Mori Family
Two brothers with different visions split a family empire in half
Built to last
The world's oldest family firm
The Li Family
Hong Kong's "Superman" Li Ka-shing is the richest man in Asia. Can his sons duplicate his dealmaking skills?
The Sy Family
Can Henry Sy's all-in-the-family approach handle the complexity of managing a retailing giant?
The Ambani Family
Despite the death of their patriarch, the Ambani family is bringing India's Reliance Group into the 21st century
The Chearavanont Family
Dhanin Chearavanont built his family seed shop into a multinational conglomerate, then risked everthing to save it during the 1997 economic crisis. Now, he's rebuilding again
The Tsai Family
Taking pains to be transparent at Taiwan's banking and finance colossus
Hard Times for the Rich
Many of Asia's powerful families have become targets for shareholders and prosecutors
TIME Covers
Asia's most powerful families on the cover of TIME
That's a large cheering section, especially considering the doubt that swirled around the conglomerate after Dhirubhai's death. Mukesh, now 46 and chairman of the group's flagship Reliance Industries, and Anil, its 44-year-old vice chairman, seemed so different from their father, a schoolteacher's son and self-made billionaire famed for his ability to work India's Byzantine bureaucracy to his advantage. Some questioned whether highborn Anil and Mukesh could fill their father's managerial shoes, even though Mukesh graduated from Stanford's business school and Anil from Wharton School. Others wondered whether the antipodean brothers could work together. The flashy Anil, who is married to a former film actress, likes designer clothes and jogs every morning, his chauffeur driving slowly behind. Mukesh is sedate and prefers spending time with his children or catching up on technical journals.
Right now, there is no sign of friction. Mukesh, Anil and their wives and children live under one roof with their mother, Kokilaben, called "Mummy" by Reliance employees. The Ambani boys appear to many to have absorbed some of their father's deft political touch, too. Last year, Reliance triggered a major row over its entrance into the mobile-phone market. A latecomer to the business, the Ambanis in 2002 acquired a license to sell basic fixed-line telephone services, which included the right to provide limited-range wireless services using souped-up cordless phones that enabled customers to roam around their own neighborhoods. But with a $2.7 billion investment in advanced network technology, Reliance began hawking mobile-phone services essentially as capable as those sold by existing cellular carriers—without having to pay the high fees required of government-sanctioned cellular operators. As Reliance began capturing market share (more than 6 million subscribers at recent count), a flood of complaints from rivals prompted regulators to rewrite telecom policy, allowing Reliance to continue in mobile telephony if it paid a $116 million penalty. To critics, this was a wrist slap. Columnist S. Gurumurthy charged that regulators were "condoning a deliberate, planned illegality. And it is happening because Reliance is in a position to control the levers of power." A Reliance spokesman counters, "When you're successful, your competitors will try to find alibis for your success."
Unfazed by criticism, Mukesh says he's determined to keep Reliance growing. His father demonstrated that Indian companies could be modern, vital and competitive. Now the sons have picked up the torch. "People will remember you after you are gone not for your money or your power," Mukesh says, "but because of what you have left behind."
People will remember you after you are gone not for your money or your power, but because of what you have left behind.
—MUKESH AMBANI, Reliance Industries chairman
After Dhirubhai died in July 2002, his sons, Mukesh and Anil (estimated net worth for both: $2.8 billion), took control. They've been on an expansion tear ever since, successfully bolstering Reliance's presence in power generation, oil exploration, finance and biotech, and consolidating the company's position as a leading player in India's fast-growing telecom sector. Last year, with revenues of $16.8 billion, Reliance accounted for 3.5% of India's GDP. So confident are wealthier Indians in the future of the firm that one out of every four stock-owning citizens possesses shares in it.
The Mori Family
Two brothers with different visions split a family empire in half
Built to last
The world's oldest family firm
The Li Family
Hong Kong's "Superman" Li Ka-shing is the richest man in Asia. Can his sons duplicate his dealmaking skills?
The Sy Family
Can Henry Sy's all-in-the-family approach handle the complexity of managing a retailing giant?
The Ambani Family
Despite the death of their patriarch, the Ambani family is bringing India's Reliance Group into the 21st century
The Chearavanont Family
Dhanin Chearavanont built his family seed shop into a multinational conglomerate, then risked everthing to save it during the 1997 economic crisis. Now, he's rebuilding again
The Tsai Family
Taking pains to be transparent at Taiwan's banking and finance colossus
Hard Times for the Rich
Many of Asia's powerful families have become targets for shareholders and prosecutors
TIME Covers
Asia's most powerful families on the cover of TIME
That's a large cheering section, especially considering the doubt that swirled around the conglomerate after Dhirubhai's death. Mukesh, now 46 and chairman of the group's flagship Reliance Industries, and Anil, its 44-year-old vice chairman, seemed so different from their father, a schoolteacher's son and self-made billionaire famed for his ability to work India's Byzantine bureaucracy to his advantage. Some questioned whether highborn Anil and Mukesh could fill their father's managerial shoes, even though Mukesh graduated from Stanford's business school and Anil from Wharton School. Others wondered whether the antipodean brothers could work together. The flashy Anil, who is married to a former film actress, likes designer clothes and jogs every morning, his chauffeur driving slowly behind. Mukesh is sedate and prefers spending time with his children or catching up on technical journals.
Right now, there is no sign of friction. Mukesh, Anil and their wives and children live under one roof with their mother, Kokilaben, called "Mummy" by Reliance employees. The Ambani boys appear to many to have absorbed some of their father's deft political touch, too. Last year, Reliance triggered a major row over its entrance into the mobile-phone market. A latecomer to the business, the Ambanis in 2002 acquired a license to sell basic fixed-line telephone services, which included the right to provide limited-range wireless services using souped-up cordless phones that enabled customers to roam around their own neighborhoods. But with a $2.7 billion investment in advanced network technology, Reliance began hawking mobile-phone services essentially as capable as those sold by existing cellular carriers—without having to pay the high fees required of government-sanctioned cellular operators. As Reliance began capturing market share (more than 6 million subscribers at recent count), a flood of complaints from rivals prompted regulators to rewrite telecom policy, allowing Reliance to continue in mobile telephony if it paid a $116 million penalty. To critics, this was a wrist slap. Columnist S. Gurumurthy charged that regulators were "condoning a deliberate, planned illegality. And it is happening because Reliance is in a position to control the levers of power." A Reliance spokesman counters, "When you're successful, your competitors will try to find alibis for your success."
Unfazed by criticism, Mukesh says he's determined to keep Reliance growing. His father demonstrated that Indian companies could be modern, vital and competitive. Now the sons have picked up the torch. "People will remember you after you are gone not for your money or your power," Mukesh says, "but because of what you have left behind."
MoU between Ambanis takes centre stage in court hearing
The memorandum of understanding (MoU) signed between the warring Ambani brothers during their split in June 2005 took centre stage in the Bombay High Court once again on Thursday, with Harish Salve, senior counsel for Mukesh Ambani-promoted Reliance Industries, asking for the MoU to be produced in the court.
Salve, who had dubbed the agreement as trash during the case hearing in April 2008, however, told the court that the MoU cannot be taken as the basis for allocation of gas to Anil Ambani-promoted Reliance Natural Resources (RNRL).
"The MoU between the brothers is in the private domain and has never been produced in the court. Agreements between the brothers were entered into on the basis of negotiations and no decision can be taken on this basis," Salve told the division bench of Justice J N Patel and K K Tated.
According to Salve, the board of directors of the company does not know the details of the MoU. Salve will take a few more hearings to complete his argument.
Ram Jethmalani, the RNRL counsel, said that the MoU is not limited to gas arrangement but various other aspects of the scheme.
The MoU was the basis for the demerger of the Reliance Group. After the split, Mukesh Ambani got RIL and Anil Ambani got Reliance Capital, Reliance Communications and Reliance Energy.
According to the agreement, gas from RIL's KG basin fields would be allocated to Reliance Energy for its upcoming power plants, including the 4,000 megawatt Dadri project.
As per the agreement, Reliance Energy would have the right to 28 million cubic metres of gas per day from KG basin at a price of $3.18 per mmbtu.
It would also be allotted another 12 million cubic metres of gas if an earlier agreement between RIL and power major NTPC falls through. Besides, ADAG will have the first right over 40 per cent of all future gas discoveries made by RIL.
In 2006, the central government had said the gas sale price as per the June MoU does not hold as it has not been arrived at by the arm's length formula and the government would lose a lot of revenue if that price were to receive official sanction.
Based on the government directive, RIL refused to enter into a gas contract with RNRL. The ADAG company sued RIL in late 2006 and the matter is still pending before the courts.
RIL has so far invested Rs 30,000 crore in the KG Basin in finding gas since 2002 when the company first struck gas there, said Salve. The company plans to produce gas between 80 million standard cubic metres per day (mmscmd) and 120 mmscmd.
Salve, who had dubbed the agreement as trash during the case hearing in April 2008, however, told the court that the MoU cannot be taken as the basis for allocation of gas to Anil Ambani-promoted Reliance Natural Resources (RNRL).
"The MoU between the brothers is in the private domain and has never been produced in the court. Agreements between the brothers were entered into on the basis of negotiations and no decision can be taken on this basis," Salve told the division bench of Justice J N Patel and K K Tated.
According to Salve, the board of directors of the company does not know the details of the MoU. Salve will take a few more hearings to complete his argument.
Ram Jethmalani, the RNRL counsel, said that the MoU is not limited to gas arrangement but various other aspects of the scheme.
The MoU was the basis for the demerger of the Reliance Group. After the split, Mukesh Ambani got RIL and Anil Ambani got Reliance Capital, Reliance Communications and Reliance Energy.
According to the agreement, gas from RIL's KG basin fields would be allocated to Reliance Energy for its upcoming power plants, including the 4,000 megawatt Dadri project.
As per the agreement, Reliance Energy would have the right to 28 million cubic metres of gas per day from KG basin at a price of $3.18 per mmbtu.
It would also be allotted another 12 million cubic metres of gas if an earlier agreement between RIL and power major NTPC falls through. Besides, ADAG will have the first right over 40 per cent of all future gas discoveries made by RIL.
In 2006, the central government had said the gas sale price as per the June MoU does not hold as it has not been arrived at by the arm's length formula and the government would lose a lot of revenue if that price were to receive official sanction.
Based on the government directive, RIL refused to enter into a gas contract with RNRL. The ADAG company sued RIL in late 2006 and the matter is still pending before the courts.
RIL has so far invested Rs 30,000 crore in the KG Basin in finding gas since 2002 when the company first struck gas there, said Salve. The company plans to produce gas between 80 million standard cubic metres per day (mmscmd) and 120 mmscmd.
I am now a sinner in the eyes of the party: Somnath
In his first hard-hitting reaction after expulsion from the Communist Party of India-Marxist (CPI-M), Lok Sabha Speaker Somnath Chatterjee has said he was now a "sinner" in the eyes of the party, and asserted that he would see how far those spreading "canards" against him could go.
Chatterjee also promised to reply to the "canards" being spread against him "in a day or two".
"I am a sinner in the eyes of the CPI-M and not a gentleman. That's why they thought I deserved the summary expulsion," Chatterjee was quoted as saying in the Kolkata-based English daily The Telegraph Sunday.
The Bolpur MP has been the target of a vitriolic attack by the Left leaders, who have branded him a "traitor", a "bourgeois" and one who always hankered for posts, after he defied the party diktat to step down from the speaker's post ahead of the July 22 trust vote in parliament.
"Let them say whatever they are saying. I would like to see how far they can go," Chatterjee said.
On allegations that he had "sided" with the government on the day of the confidence motion, Chatterjee said, "I tried to fulfil my constitutional obligations impartially."
He also questioned the CPI-M's claim that it was compelled to come down hard on him as he remained stubborn on not resigning despite the party exempting him from the trust vote whip.
"If they were being so accommodating - to the extent of allowing me not to vote (against the government) - why were they goading me to resign?" Chatterjee told the daily.
The Speaker reiterated that he would visit Kuala Lumpur for the Commonwealth Parliamentary Association conference Aug 1-10 and preside over the Hiren Mukherjee Memorial Lecture by Nobel laureate Amartya Sen in the Lok Sabha on Aug 11.
He said he was yet to decide on whether to continue in the post after Aug 11.
The CPI-M politburo expelled Chatterjee from the party's primary membership Wednesday, a day after the United Progressive Alliance (UPA) government won the trust vote with a comfortable 19-vote margin.
Chatterjee also promised to reply to the "canards" being spread against him "in a day or two".
"I am a sinner in the eyes of the CPI-M and not a gentleman. That's why they thought I deserved the summary expulsion," Chatterjee was quoted as saying in the Kolkata-based English daily The Telegraph Sunday.
The Bolpur MP has been the target of a vitriolic attack by the Left leaders, who have branded him a "traitor", a "bourgeois" and one who always hankered for posts, after he defied the party diktat to step down from the speaker's post ahead of the July 22 trust vote in parliament.
"Let them say whatever they are saying. I would like to see how far they can go," Chatterjee said.
On allegations that he had "sided" with the government on the day of the confidence motion, Chatterjee said, "I tried to fulfil my constitutional obligations impartially."
He also questioned the CPI-M's claim that it was compelled to come down hard on him as he remained stubborn on not resigning despite the party exempting him from the trust vote whip.
"If they were being so accommodating - to the extent of allowing me not to vote (against the government) - why were they goading me to resign?" Chatterjee told the daily.
The Speaker reiterated that he would visit Kuala Lumpur for the Commonwealth Parliamentary Association conference Aug 1-10 and preside over the Hiren Mukherjee Memorial Lecture by Nobel laureate Amartya Sen in the Lok Sabha on Aug 11.
He said he was yet to decide on whether to continue in the post after Aug 11.
The CPI-M politburo expelled Chatterjee from the party's primary membership Wednesday, a day after the United Progressive Alliance (UPA) government won the trust vote with a comfortable 19-vote margin.
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