Posted by miapancho > 2014-09-28 17:58 | Report Abuse

fong7 India’s Supreme Court has confirmed the cancellation of more than 200 coal licences held by dozens of private sector industrial groups, sending stocks in affected companies down sharply.
In a harsher than expected decision, the court on Wednesday also levied fines of about $1.2bn on the owners of the cancelled licences, and said that mines affected could be handed to state-backed mining group Coal India before being re-auctioned.
In August, the court declared as “arbitrary and illegal” the process by which 218 licences to mine coal had been handed out to businesses in sectors such as power and steelmaking, following allegations of irregularities brought by anti-corruption campaigners.
The formal cancellation of the licences hit shares in a range of Indian power, steel and aluminium groups, while dashing hopes that groups with operational mines would be allowed to keep them.
Jindal Steel and Power, an industrial conglomerate owned by billionaire tycoon Naveen Jindal, closed down 10 per cent shortly after the ruling.
A range of industrial groups, including energy venture Adani power and steelmaker Tata Steel, also fell on the news.
Companies that had begun mining under the now-cancelled licences now face fines of approximately $1.2bn, according to estimates from analysts at Macquarie.
Jindal Steel and Power, the worst affected group, is set to pay close to $500m.
Shares in Indian public sector banks also fell on worries that the ruling could lead to a jump in bad loans in sectors such as power and metals.
Concern over mine cancellations has cast a shadow over the recent tentative recovery of India’s industrial economy, and raised concerns about a knock-on impact on coal supplies, with many power companies facing fuel shortages.
The decision represented a defeat for India’s government, which had argued that operational mines should remain with their owners, potentially in exchange for a fine.
“This is a tough ruling, the companies were hoping that working mines would be in some ways protected, but this has not happened,” said Kameswara Rao, an energy specialist at consultants PwC in India. “But this does present a far cleaner slate on which the government can begin a new policy, in which everything will be re-auctioned, so it isn’t all bad.”
The ruling is also a blow for companies such as UK-listed Vedanta Resources, who now have to rebid for mining licences that they had previously acquired, but which had not yet begun operations.
Shares in Coal India closed up nearly 5 per cent, however, on news that it would take control of any operational mines by April 2015, giving India’s government breathing space to allow the mines to be re-auctioned.
Billionaire Anil Ambani’s Reliance Power also jumped more than 5 per cent, as the court said that a mine providing coal for a major power plant operated by the group would not be affected by the ruling.
Companies hit by the Supreme Court’s decision have said little in public about their plight since the first ruling in August, but anti-corruption campaigners welcomed Wednesday’s decision.
Environmental group Greenpeace called the decision “a victory for the environment and the people of India against rampant corruption and crony capitalism rife in the resource extraction industry”.

Copyright The Financial Times Limited 2014


HOPE MUDAJAYA IS NOT AFFECTED BY THIS NEWS???

Posted by johnny cash > 2014-09-29 08:15 | Report Abuse

http://www.moneycontrol.com/news/business/sc-coal-verdict-banks-power-cos-likely-to-get-affected-_1187657.html

RMK POWERGREN NOT MENTION, HOPE MUDAJAYA IS NOT AFFECTED???