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This was one industry Vijay Mallya had not dabbled yet. The world’s oldest and 2nd largest scotch-whisky brewer has been a politician, is into aviation business, collects vintage cars, has business interests in racing, horse breeding, hotels etc.

Now after promoting a preimium airline and acquiring a big stake in a low budget airline, Mallya (51) wants to enter into high-end retail business.

The flamboyant Indian tycoon, Vijay Mallya’s UB Group, will hold a 55 percent stake in UB City - the Collection, a Bangalore shopping mall exclusively retailing luxury brands.

Mallya the self-styled king of good times, has already roped in France’s Louis Vuitton to be one of the anchor tenants of the mall, to be located in downtown Bangalore. The mall will be thrown open to public in early 2008.

The project was made public early this week when Vijay Mallya along with Irfan Razack, chairman and managing director of Prestige group which is partnering with UB group in promoting the mall.

It has been purely driven by the vision of Mallya, who calls it a value proposition,

said Irfan Razack, whose company Prestige Constructionois will hold the remaining 45% stake in the venture.

It will be an iconic landmark of Bangalore — like what the Petronas Towers is to Kuala Lumpur. It will be an opportunity to tap high networth individuals.

said Razack adding that the cost of the project will be around Rs.300 crore (US$ 76.26 million).

Other brands who have signed on for space in the 1.5 million square feet fully airconditioned mega mall are Gucci, Fendi, Mont Blanc, Van Cleef & Arpels, Zegna, Rolex and Omega. The Venetian-style project will include a 250-room JW Marriot hotel.

Source: Times of India

Microsoft has fired its chief information officer, Stuart L. Scott, for violations of company policies. Microsoft declined to give the exact reason for the dismissal.
‘Stuart Scott’s employment with Microsoft was terminated after an investigation for violation of company policies,’ a Microsoft spokesman, Lou Gellos, said, reading from a company statement.

Mr. Gellos said Mr. Scott was dismissed Friday. He would not elaborate.
According to Microsoft’s Web site, Mr. Scott was responsible for the information technology infrastructure at the company, the world’s largest software maker. He reported to B. Kevin Turner, Microsoft’s chief operating officer, who in turn reports directly to the chief executive, Steven A. Ballmer.

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Executives on Wall Street may be the latest victim of the subprime mortgage collapse and the tight credit market. Bonuses are expected to go down by at least 15 percent.
Wall Street is a city street in lower Manhattan in New York City in the United States. It runs east from Broadway downhill to South Street on the East River, through the historical center of the Financial District. Wall Street was the first permanent home of the New York Stock Exchange, and over time Wall Street became the name of the surrounding geographic neighborhood. Wall Street is also shorthand (or a metonym) for “influential financial interests” in the U.S. as well as for the financial industry in the New York City area.

Several major U.S. stock and other exchanges remain headquartered on Wall Street and in the Financial District, including the NYSE, NASDAQ, AMEX, NYMEX, and NYBOT.

‘It’s confusing,’ said Alan Johnson, managing director at Johnson Associates, a compensation consulting firm based in New York. ‘We’re in that ugly transition year. The last couple of years have been spectacular, this year is sideways at best and next year will be down a lot.’
Bonuses are the golden goose of Wall Street, constituting the bulk of compensation for bankers and traders and even for asset management professionals. Banks set aside about 50 percent of revenue to pay their employees, generally according to a combination of individual performance, group performance and overall institutional performance.
Bonuses are supposed to reflect performance over the last year, but shrinking compensation pools mean banks are looking ahead. ‘It’s not what they did,’ said one Wall Street veteran who is now at a large hedge fund. ‘It is what you think they can do next year.’
Through the third quarter, revenue at Bank of America, UBS and Merrill Lynch was down, compared with the period a year ago; at JPMorgan and Credit Suisse, it was up slightly. Morgan Stanley was up 29 percent and Goldman Sachs up 26 percent, according to Bank of America data.


Thousands of bankers and traders in mortgage-related businesses have been laid off, shrinking the compensation pool. But failing to reward so-called producers can result in high-level departures.
Michael Hecht, a research analyst at Bank of America, says the best places to be for bonuses this year (in order) are Morgan Stanley, Goldman Sachs and Lehman Brothers; the worst are Merrill and Bear Stearns.
‘We feel this year banks will use stock as a major currency to pay,’ said Michael Karp, chief executive of the Options Group. ‘We feel the stock totals will be as high as 60 or 70 percent,’ rather than the typical 50 percent.

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Robert E. Rubin, who was named Citigroup’s chairman after the departure of Charles O. Prince III, has moved quickly to deal with the turmoil that has engulfed the banking giant. He expressed the board’s commitment to Citigroup’s dividend, its existing strategy, and to tackling a raft of problems related to the subprime mortgage mess.
For now, the future of Citigroup rests with Mr. Rubin, who has had a celebrated career running Goldman Sachs and the Treasury Department. He is lending his credibility at a time when Citigroup is facing ballooning losses and a lack of trust.
But Mr. Rubin is also a controversial choice. He has been a top adviser to Mr. Prince and has helped shape the bank’s strategy as an influential director. In light of the recent problems, Wall Street analysts and bankers are asking several questions: What was Mr. Rubin’s role in steering the bank? Why isn’t the board holding him accountable?

Or perhaps, Mr. Kass said, ‘the bank didn’t know how severe the problems would be.’
Among Mr. Rubin’s tasks has been to help lure top executives. Mr. Rubin played a role in attracting Vikram S. Pandit, a former Morgan Stanley investment banker who has taken over Citigroup’s investment banking unit, The Times said. But many suggested that $800 million was too much for Old Lane Partners, the hedge fund the bank bought to bring Mr. Pandit to Citigroup.

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Visa is to pay $2.1 billion to its credit card rival American Express to settle damages relating to a 2004 antitrust lawsuit. The Visa International Service Association or VISA of San Francisco, California, USA, commonly called VISA, is an economic joint venture of 21,000 financial institutions that issue and market Visa products including credit and debit cards.

The settlement, believed to be the largest amount ever paid to resolve an antitrust matter, was announced yesterday. It comes nearly three years after the Supreme Court ruled that Visa and MasterCard had violated antitrust rules by barring their member banks from offering their customers credit cards that could be used on rival payment networks.

The agreement resolves American Express’s claims against Visa’s members, including some of the industry’s biggest issuers, like JPMorgan Chase, Capital One, Washington Mutual and Wells Fargo. Visa will pay American Express $945 million now and an additional payment by the end of next March, its statement said. It will then pay American Express $70 million each quarter until the full settlement is paid.

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It has been the norm of the Indian auto industry to import completely knockdown kits (CKDs) from countries like Japan, Germany, Italy etc and assemble them here for the local market. It was only Japanese automaker Suzuki who entered into India in a collaboration with the Union government to manufacture cars for the local market. This was the scenario in the late 1980s and early 1990s. But now with India emerging as one of the fastest growing economies. Every automaker in the world from Honda to Mercedes wants to set up shop in India.

Ford Motor Company, which made a whopping $12 billion loss last year and has mortgaged its assets, including its blue oval logo to fund its turnaround is looking to its workers to regain back its position. The workers of the company are expected to vote a landmark tentative contract this week with the United Auto Workers that might help the ailing automaker.

The contract, which needs to be approved by the workers require Ford to contribute $13.2 billion to a union-run trust towards the company’s $22 billion in retiree health care liabilities. An entry-level worker will be given a lower compensation. New hires will be paid a starting rate of $14.20 per hour down from the previous $28.88 per hour starting pay for the average Ford hourly worker.

In exchange of the wage cut the automaker will not close any of its existing plants beyond those it had already promised to close. Ford’s share in the US market has fallen from 19% to 15% since 2003.

Similar contracts had earlier helped many companies to survive. Workers of General Motor Corp and Chrysler LLC had earlier ratified similar contracts.

Source:yahoo
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Starting 2008, Time Warner will have a new CEO as Jeff Bewkes takes the highest post of the world’s largest conglomerate as recently confirmed by the company.

Citigroup Incorporation might still retain the dignity of being the largest financial institution in the United States of America but, there’s little doubt that the bank is spiraling down into disgrace! The resignation of the Citigroup’s CEO Charles Prince comes at a time when the bank is contemplating moves to increase it profits which have gradually been winding down.

Mr. Prince’s departure is neither premature nor unexpected. Citigroup is in its third-quarter turmoil and is planning on some sweeping changes to boost up profits.

The Western Banks are finding themselves in trouble with one of the worst fall in the prices of banking stocks pulling down the European and US equity markets to a five-year low on Thursday, 1, November. Global investors are nervous about the severe financial crunch, which the financial sector might face following a troubled US mortgage market.

The S&P 500 index fell to 1,508.44, its worst day since August 9, The London FTSE 100 index lost 135.5 points to close at 6,586.1. Similar was the trend with the German and French indices too.

The reaction of the investors was a reaction of the US central bank, Fed’s addition of $41 billion in temporary reserves to the banking system, its biggest single day infusion since September 2001. As a reaction to Fed’s move, the yield on two-year Treasury note declined by 16 basis point to 3.77% after having risen as much following the cut in the Fed rate on Wednesday.

The biggest reason for the tumbling banking equities is revival of the worries that the big banks of Europe and US will go for further credit write-offs.

Another reason for the falling stocks involve the rising problems of the smaller specialist insurers that provide credit guarantees to lenders and investors, a rather lesser known pillar of global financial system. Share prices of Radian a private mortgage insurer fell by 19% due to mortgage related problems. Similar has been the fate of MBIA and Ambac, the two biggest bond insurers in the US. Analysts, fear that as subprime linked problems worsens the top credit rating of these institutions might suffer. The companies insure both complex securities backed by mortgages and less risky municipal bonds. It is feared that the current crisis would cut the price of bonds they had insured. Meanwhile the rate of delinquencies among US mortgage borrowers has doubled from the same period last year.

The cost of insuring monocline debt against default is also rising sharply. The Western Banks are facing some real trouble.

Source:ft
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