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Ex-company secy levels charges against Kanorias.

Viom Networks, a venture between Tata Teleservices and Srei Group enterprise Quippo, has run into a cloud of controversy over charges of financial irregularities.

The company has appointed KPMG to assess the extent of the graft, if any, after a former company secretary alleged that the Kanorias of the Srei Group diverted funds to the tune of Rs 300 crore to some private institutions.

In 2009, the tower businesses of Tata Teleservices and Quippo were merged to form Tata Quippo, which was subsequently named Viom Networks. Initially, Tata had 51 per cent stake and Srei the balance. The stake of Srei has subsequently come down to about 18 per cent, but they still have management control over the company.

According to a contract between the two partners, the Srei Group will continue to have management rights till it has 12 per cent stake in the venture.

When contacted, Hemant Kanoria, chairman and managing director of Srei Infrastructure, said the company secretary was fired on

July 25, following which he made certain allegations. "Since the company has a whistle-blower policy and shareholders maintain higher standards of corporate governance, it was decided to appoint an independent auditor for a probe."

According to people close to the development, KPMG has already started looking into the issue.

In a late evening statement, Viom said the shareholders, board and management of Viom Networks were committed to the highest standards of corporate governance and the action reflected that philosophy.

Viom has more than 38,500 towers and around 95,000 tenancies. The company plans to roll out nearly 20,000-25,000 additional towers in the next two years. According to the company's website, Viom is the strongest player in neutral host shared in-building communication solutions, with installations already completed at most of the major airports.

Options traders are making the most bearish bets in a year against India, Asia's worst-performing stock market, before the central bank meets to consider extending a record series of interest-rate increases.

Prices for three-month puts to sell the S&P CNX Nifty Index have climbed 62 percent higher than calls to buy, and they reached 66 percent on Aug. 22, the highest since September 2010, according to data compiled by Bloomberg. Open interest for September 4,500 puts has jumped by 24,547 in the past week to 111,264 for the largest increase among all contracts on the benchmark index, which has slid 19 percent this year to 4,940.95, the data show.

Investor confidence is waning on concern that the Reserve Bank of India's five rate increases this year may compound the effects of a global economic slowdown on corporate profits. The highest inflation among major Asian economies may force the central bank to raise borrowing costs on Sept. 16, two days after the government releases data that may show inflation rose.

"Investors are buying puts as rising rates will continue to slow production," Arun Khurana, a Mumbai-based fund manager at UTI Asset Management Co., said in a telephone interview on Sept. 12. The mutual fund company is the nation's fourth largest, with $15 billion in assets. "Consumption isn't slowing and that is pushing inflation higher. The situation is moving out of the Reserve Bank of India's control."

Growth Slows

The central bank will lift the benchmark repurchase rate by a quarter point, according to all 11 economists in a Bloomberg survey, in an attempt to curb wholesale-price inflation that stayed above 9 percent for an eighth straight month in July. The rate has risen 1.75 percentage points this year to 8 percent. Factory production in July grew at the slowest pace in almost two years as consumer demand moderated after the rate increases, government data showed Sept. 12.

The India VIX rose 0.1 percent to 32.77 yesterday, near the two-year high of 34.88 reached on Aug. 9. The gauge of prices for Nifty options and expected share-price swings has averaged 30.75 in its almost four-year history. The Chicago Board Options Exchange Volatility Index fell 4.4 percent to 36.91 yesterday, while Europe's VStoxx volatility gauge lost 8.3 percent to 49.12.

Morgan Stanley cut its year-end estimate for the BSE India Sensitive Index, another benchmark gauge of the nation's equities, on Aug. 18 by 15 percent to 18,850. CLSA Asia-Pacific Markets lowered its forecast to 18,200 from 19,500 on Aug. 24.

'Constrained'

"It would be negative in the near term if they decide to increase rates," Seth Freeman, chief executive officer at EM Capital Management LLC in San Francisco, said about India yesterday in a phone interview. "Revenues are likely to go down because customers are constrained from higher borrowing costs."

Falling commodity prices and the worldwide economic slowdown may ease inflation pressures in developing nations including India, according to Geoffrey Dennis, global emerging- market strategist at Citigroup Inc. in New York.

The S&P GSCI Spot Index of raw materials has declined 13 percent from this year's high on April 8. Brazil's central bank unexpectedly cut interest rates on Aug. 31, while Turkish policy makers reduced borrowing costs to a record low after an unscheduled meeting on Aug. 4.

"The short-term inflation problem, which has been quite tough for emerging markets for the last 12 months, will ease," Dennis said during a Sept. 12 Bloomberg Radio interview. "That's going to help because it means less in the way of interest rate hikes than we thought would be the case a couple of months ago."

Implied Volatility

Nifty put options 10 percent below the index level have an implied volatility of 33.30, compared with 24.10 for calls priced 10 percent above, JPMorgan data show. Implied volatility is the key gauge of prices for options, which become more valuable as swings in the underlying stock or index increase.

September 4,700 puts have the largest open interest of all contracts on the index, with 167,619, followed by 142,526 outstanding September 4,800 contracts. The Nifty hasn't closed below 4,700 since November 2009. There are 1.76 million total puts on the index versus 1.29 million calls.

India's Nifty dropped for a third day yesterday, losing 0.1 percent to 4,940.95. Overseas investors withdrew a net $2.4 billion from Indian equities last month, the most since October 2008, data from the Securities and Exchange Board of India show. That helped send the Nifty down 8.8 percent, the biggest August drop since 1997.

Companies in the Nifty trade at 14.2 times reported profits, compared with a price-earnings ratio of 10.1 for the MSCI Emerging Markets Index.

'Not Justified'

"India's valuation premium over emerging markets is not justified with high inflation and slow growth," Saurabh Mukherjea, the Mumbai-based director of institutional equities at Ambit Capital Pvt, said in a Sept. 9 telephone interview. "Markets will continue to grind lower as the premium should narrow in line with long-term averages." The Reserve Bank may raise rates by another 50 basis points, he said.

Indian stocks are "somewhat overpriced," according to Mark Mobius, who oversees about $50 billion as executive chairman of Templeton Asset Management's emerging markets group. "Inflation at this stage is beginning to moderate but the concern going forward will be growth," he said in a Sept. 7 interview broadcast in India on Bloomberg UTV.

India's economy grew 7.7 percent in the June quarter, beating the 7.6 percent median of 26 estimates in a Bloomberg survey. Its growth was 7.8 percent in the previous three months, the second-fastest rate among the four-nation group including Brazil, Russia and China known as the BRICs.

'Stubborn'

The Reserve Bank of India said on Aug. 25 that price gains may remain "stubborn," which could limit the ability to hold or lower interest-rate levels. India's benchmark wholesale-price inflation was 9.22 percent in July, remaining at more than 9 percent for an eighth straight month. Consumer prices rose 6.5 percent or less in China, Indonesia, South Korea and Thailand for the same period.

This NEWS in FINANCIAL TIMES created last hour Buying in US Market and this is the reason ….ASIAN Markets are UP 

Italy's centre-right government is turning to cash-rich China in the hope that Beijing will help rescue it from financial crisis by making "significant" purchases of Italian bonds and investments in strategic companies.

According to Italian officials, Lou Jiwei, chairman of China Investment Corp, one of the world's largest sovereign wealth funds, led a delegation to Rome last week for talks with Giulio Tremonti, finance minister, and Italy's Cassa Depositi e Prestiti, a state-controlled entity that has established an Italian Strategic Fund open to foreign investors.

Italian officials were in Beijing two weeks ago to meet CIC and China's State Administration of Foreign Exchange (Safe), which manages the bulk of China's $3,200bn foreign exchange reserves. Vittorio Grilli, head of treasury, met Chinese investors in Beijing in August. Italian officials said further negotiations were expected to take place soon.

The possibility of Chinese investment comes at a critical moment for Italy, as markets demand increasingly high yields to buy Italian public sector debt, projected to reach 120 per cent of GDP this year, a ratio second only to Greece in the eurozone.

Mr Tremonti has written extensively in the past about his fears of China's "reverse colonisation" of Europe. But he has been driven to seek new alternatives as Europe prevaricates over strengthening its bail-out fund and the European Central Bank warns that its month-old bond-buying programme cannot go on indefinitely. In a reflection of Italy's refinancing problems, the treasury on Monday sold €11.5bn of short-term notes at higher yields.

European analysts were cautious over the outcome of talks. Despite Beijing's numerous expressions of confidence in the creditworthiness of countries such as Greece and Portugal analysts say Chinese purchases of peripheral European debt have been relatively small.

How much of Italy's €1,900bn of debt is already held by China is unclear, though one Italian official told the FT that Beijing held about 4 per cent.

Italy's debt crisis has forced the government to consider possible sales of strategic stakes in companies such as Enel, the Italian power utility, and Eni, the oil and gas multinational.

Cassa Depositi e Prestiti is a founding member of the informal "long-term investors club" along with similar institutions in France and Germany. In July it launched its Italian strategic fund with an investment of €4bn that it plans to expand to €7bn with participation from other sources, including foreign institutional investors.

CIC was set up in 2007 with capital of $200bn and its assets under management now total about $410bn. It says it "maintains a strict commercial orientation and is driven by purely economic and financial interests" and that it is committed to "high professional and ethical standards in corporate governance, transparency and accountability". China's embassy in Rome had no immediate comment.

Three years after launching the Nano as “the world’s cheapest car”, Ratan Tata, chairman of India’s second largest industrial group, presented what may be the world’s most-expensive automobile: the jewel encrusted GoldPlus Nano. Covered in 80kg of 22 carat gold and 15kg of silver, and inlaid with 10,000 semi-precious stones and gems, the ‘bling’ version of the Nano is a one-off showpiece that will tour Tata-owned jewelry stores across the country. What was originally marketed as the People’s Car, selling for about $2,500, has been transformed into a golden chariot, with an estimated value some $4.68 million higher, based on the current price of bullion. The makeover highlights the paradoxes of one of the world’s fastest-growing economies, where billionaires live side-by-side with the severely impoverished. The original Nano, which launched with a 100,000-customer waiting list in 2008 and was aimed at an emerging middle class, has seen sales plummet. In August the Mumbai-based group shipped just 1,202 units, down 88 percent from April’s 10,012 units. Analysts blame the fall on safety issues, poor marketing and a misunderstanding of the Indian consumer. “Really for the Nano project to make any sense, you need to sell between 15,000 to 20,000 cars every month … [for] a couple of years,” said Deepesh Rathore, managing director for India at IHS Automotive. Tata made clear the new car was simply a promotion for its GoldPlus stores, but analysts said that could confuse consumers and failed to address the broader problems the People’s Car has had since its launch. “They are not getting their brand and marketing strategy right and it’s confusing the buyers,” said Surjit Arora, auto analyst at Prabhudas Lilladher. “They need to have a better and more aggressive marketing [strategy]. Tata Hands Jaguar $8 Billion to Match German RivalsTradition, Sprawl Confront Next Tata Group LeaderWorld's 10 Largest Auto Markets Analysts also blame the Nano’s poor safety record. Several incidents of the cars spontaneously erupting into flames were widely reported, pushing Tata to offer its existing 70,000 Nano customers a safety upgrade to its electrical system and exhaust. However, a more fundamental issue, according to Mr Rathore is that the car has been marketed in the wrong way from the beginning. Indians, he said, generally do not want to be known as buyers of the world’s cheapest car. The showcasing of the car comes as Tata Motors announced a new Jaguar Land Rover engine plant in the U.K. on Monday and only 11 days after Carl-Peter Forster, the chief executive of the group, stepped down for personal reasons. After reporting deep losses during the financial crisis, JLR is now solidly profitable and the main driver of Tata’s growth. The U.K. unit reported net profit of £1.04 billion for the 2010-11 financial year. Tata’s lower-end brands have been suffering a broader drop in sales in the small passenger vehicles segment, which has also affected its domestic competitors. India’s auto sales fell in July for the first time in nearly three years. The Mumbai-based group has plans to combat low sales by opening exclusive Nano-only dealerships throughout rural India, the market for which the small car was originally intended. The move has worked with the more utilitarian Tata Ace mini-truck, but an analyst said operating and start-up costs would prevent many entrepreneurs from starting the dealerships.