Morning business round-up: Vodafone in India tax ruling


What made the business news in Asia and Europe this morning? Here's our daily business round-up:

The judgement could relieve pressure on other foreign companies facing similar tax investigations in India.

The case centred on Vodafone's $11bn acquisition of the Indian assets of China's Hutchison Telecommunications in 2007.

Vodafone said it did not owe tax on the deal, as the assets were held by a firm based in the Cayman Islands.

Meanwhile, Nippon Life Insurance has agreed to buy a 26% stake in India's second-largest fund manager, Reliance Capital Asset Management, in a bid to tap into the fast-growing Indian market.

The Japanese firm will pay $290m (£187m) for the stake.

The deal comes as India's economic expansion has seen substantial growth in the financial services sector, while Japanese firms have been facing a stagnating domestic market.

The heads of the IMF and World Bank have joined other influential figures in calling on countries to implement free trade, reform their economies and protect economic growth.

They warned that austerity programmes should "promote rather than reduce prospects for growth".

The warning came in a "call to action" in the run-up to the World Economic Forum in the Swiss resort of Davos.

Elsewhere in Europe, Swedish flat-pack furniture firm Ikea has unveiled a 10% rise in profits as emerging markets helped boost demand.

The firm said sales grew 6.9% to 24.7bn euros (£20.6bn; $31.9bn) in the year to 31 August, with Russia, China and Poland performing strongly.

The overseas growth, as well as cutting prices, helped profits rise 10.3% to 3bn euros.

China Investment Corporation (CIC), the country's sovereign wealth fund, has bought 8.68% of Kemble Water, the company behind UK utility group Thames Water.

It marks the fund's first acquisition in the UK and follows a visit to China this week by Chancellor George Osborne.

CIC was set up in 2007 to invest some of China's huge $3.18tn in foreign exchange reserves.

Media caption, Biz Heads

In other UK news, retail sales volumes rose by 0.6% between November and December, official figures show, after heavy discounting by stores.

The Office for National Statistics (ONS) also said that sales were 2.6% higher than December 2010.

Retailers, including Marks and Spencer, have said that they marked prices down sharply in the run-up to Christmas.

And former Royal Bank of Scotland chief Fred Goodwin's knighthood is under scrutiny, with a committee of senior civil servants considering calls for him to be stripped of the honour.

Opposition Labour leader Ed Miliband has said that, in retrospect, it was "clearly wrong" for the banker to have been knighted.

Sir Fred, heavily criticised over the bank's near-collapse, was honoured for "services to banking" under the previous Labour government in 2004.

The latest edition of the Business Daily programme looks at why many African countries are in the grip of fuel crises.

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