Court defangs telecom watchdog
Taxmen turn the heat on errant PSUs
Grasim software wing in alliance with US firm
Geometric Software to raise Rs 39 cr from market
PFC to buy back 20% from govt
Dunlop asked to clear workers’ dues
Bill on civil aviation authority under way
Pentafour renamed, net up 48%
Foreign Exchange, Bullion, Stock Indices

New Delhi, Jan 18 
The Delhi high court today quashed the Telecom Regulatory Authority of India’s (Trai) order under which cellular operators were asked to offer the facility of free incoming calls under the calling-party-pays (CPP) scheme. The court was hearing a petition filed by Telecom Watchdog, a consumer body which had challenged the validity of the CPP regime.

It also overturned Trai’s May 1999 revenue-sharing order on inter-connection charges between service providers. The department of telecommunications (DoT) and Mahanagar Telephone Nigam (MTNL) have always been opposed to this directive, saying inter-connectivity is an issue to be decided between two operators and, therefore, Trai has no jurisdiction in the matter.

A division bench comprising chief justice S N Variava and justice S K Mahajan, which had stayed the CPP regime on October 28 last year, held that telecom regulator had no powers to regulate inter-connection charges.

“Trai cannot lay down the terms and conditions for operators on the introduction of service, installation of equipment and technology,” the bench observed. The judges also upheld an earlier judgement passed by justice Usha Mehra of the same court which said Trai’s directives were only advisory in nature.

“Trai cannot impose its views on the government. Its powers in this regard are only recommendatory and the government is not bound to take its advice,” the bench observed.

In other words, the courts have said the regulator’s brief is to ensure that firms comply with the terms and conditions mentioned in the licences. It cannot, as the ruling says, regulate operators in a way that overrides key features of the licence.

However, the bench ruled that the regulator did have powers under section 11 (2) of the Trai Act of 1997 to notify rates for telecom services in the country. This, it asserted, is a specific power vested by the legislature.

On May 28 last year, Trai had fixed telecom interconnection charges and framed revenue-sharing norms to ensure effective linkup facilities between service providers.

Later, on September 17, it had amended its regulations to propose the introduction of the CPP system under which DoT and MTNL were asked to share 80 paise per pulse with cellular phone operators on a call made from a fixed phone to a mobile. The judges have now advised Trai to devise alternative schemes in place of the current CPP system after consulting all parties, including DoT and MTNL.

On the proposal to make incoming calls free for mobile phone subscribers, the court said the present revenue-sharing arrangement favours cellular operators at the expense of those who run fixed-line telephones, such as DoT and MTNL.

It also reminded the regulator that its ‘adjudicatory’ role in dispute between service providers could be invoked only when they fail to arrive at an agreement.    

Mumbai, Jan 18 
The income-tax department in Mumbai is considering whether it should proceed against public sector undertakings (PSUs) which it claims are under-stating profits to pay lesser taxes.

Rattled by large-scale manipulation of accounts by several PSUs to keep their losses low—some times even by hundreds of crores —the department has informed the Central Board of Direct taxes (CBDT) about the issue.

IT officials have asked board members to suggest ways in which they should deal with the errant companies, many of which are government-owned or controlled by it. The fact that they are state-owned makes the issue embarrassing and sensitive.

Letters have also been sent to chairmen of leading public sector corporations in view of the fact that there are less than three months to go in the current financial year.

“The extent of under-reporting by leading PSU majors is between Rs 50 and Rs 100 crore,” a senior income-tax official told The Telegraph. He refused to name the companies involved but said they are diverse in nature and straddle many key sectors of the economy. Explaining the modus operandi, the official said most PSUs have shown reduced profits in the first half by manipulating their book of accounts.

Corporate observers feel companies resort to evasion of taxes in an attempt to “build up their resources”. Income-tax officials, on the other hand, say the “window dressing of accounts” to show lower profits has assumed crisis proportions.

They regretted the fact that companies do not make full and fair disclosures in spite of the fact that tax rates were rationalised significantly in last year’s budget. Asked what would be the next course of action, the official only said enforcement would have to be tightened. The idea, he said, seems to be that their profits are not impressive and they have shown reduced figures in an attempt to build their own resources.

Significantly, the I-T action comes at a time when certain PSUs have been lined up for disinvestment by the government. Last year, the tax collected from companies and individuals from the city amounted to around Rs 16,000 crore.

In the current fiscal, the targets fixed for tax collections is Rs 13,500 crore for companies and Rs 6,500 crore for individuals and firms.    

Mumbai, Jan 18 
The A.V. Birla group today joined hands with US-based Lawson Software to market and implement Lawson’s software products in the Asia-Pacific region.

The new entity created to support the alliance has been named Lawson Product Competency Centre. It will be a division of Birla Consultancy & Software Services (BCSS), the software division of Grasim Industries Ltd.

Briefing reporters here today, Kumar Mangalam Birla, chairman of the A.V. Birla group, said the tieup with Lawson was part of the group’s thrust in the services sector.

Birla said his group was in the process of restructuring its operations, and a greater emphasis would be given on financial services, retail brands and knowledge-based activities where software would be the thrust area.

He said the agreement with Lawson will increase Grasim’s revenue by around $ 50 million in the next couple of years.

The new centre will also provide technical support to Lawson’s subsidiaries, affiliates and customers, first in Asia Pacific and then across the whole world.

BCSS will deliver Lawson’s e-business applications and e-business advanced technology for business-to-consumer and business-to-business solutions. The applications include e-procurement, e-supply chain, e-human resource and e-customer relationship management.

Lawson, which is headquartered in the US, posted a turnover in excess of $ 270 million. Its client list include Fortune 500 companies such as McDonald Corporation, Warner Brothers, British Gas, Ralph Lauren Ince and Johnson & Johnson.

Ashok Sand, who will take over as CEO of BCSS from February 1, will oversee the operations of Lawson Products Competency Centre. Prior to joining the A.V. Birla group, Sand was with Baan.

HDFC Bank will take the plunge into e-commerce by signing up with the Singapore-based National Computer Systems Pte Ltd, reports UNI.

The agreement will be signed in the presence of the minister for information technology Pramod Mahajan in New Delhi tomorrow.

HDFC Bank and ICICI Ltd along with its banking arm, ICICI Bank, are among the private sector banks which are seizing the e-commerce opportunities thrown in by the internet.

With the internet subscriber base expanding at a rapid pace, web-banking is perceived to have an edge over brick-and-mortar branches in the next few years.    

Mumbai, Jan 18 
Geometric Software Solutions, a Godrej & Boyce group company, is entering the capital market with a public issue of 13.1 lakh equity shares of Rs 10 each at a premium of Rs 290 per share aggregating Rs 39.30 crore.

The company is offering 10 lakh shares to existing shareholders, while 3.1 lakh shares are being offered to the public.

The company will utilise the issue proceeds to part finance the setting up of a software unit at the Pune Information Technology Park at a cost of Rs 14 crore.

The issue opens on January 28 and closes on February 2.

Geometric was carved out of the electronics business equipment division of Godrej & Boyce in 1994.

It specialises and focuses on developing engineering software solutions to address the niche markets. The company undertakes infotech projects and develops technologies and products as well. Almost 38 per cent of the revenues in 1998-99 were contributed by technologies and products.

Geometric has successfully developed the feature recognition technology and has also developed several add-on, end-user applications based on this technology.

The company mainly exports development services and technologies/products to the US, Europe and Japan.

Geometric’s customer list includes 7 out of the leading 12 international CAD/CAM/CAE vendors of the world.

It has registered an annual growth of 45 per cent in revenues and 61 per cent growth in profit after tax for 1998-99.

For the year ended March 31, 1999, Geometric posted a profit after tax of Rs 5.10 crore, compared with Rs 3.16 crore in the previous year, and revenue of Rs 20.53 crore compared with Rs 14.19 crore in the previous year.    

New Delhi, Jan 18 
Power Finance Corporation (PFC) is likely to buy back 20 per cent of its equity from the government by the end of this fiscal.

The government, which has a 100 per cent shareholding in PFC, will get Rs 575 crore through the proposed buy back which will soon be placed before the Cabinet for approval. The PFC board has already cleared the buy back proposal. The evaluation of the 20 per cent equity would be at book value. The government’s total share in PFC is about Rs 2,710 crore at book value.

PFC has also amended its articles of association to give more powers to its board in taking decisions on investment and borrowing.

Udesh Kohli chairman and managing director of PFC said the “buy back would help us too. The shares will have good value at a latter stage which will benefit the company.’’    

Calcutta, Jan 18 
The Board for Industrial and Financial Reconstruction (BIFR) has directed Dunlop India Ltd to clear the dues of 7,500 odd workers before reopening its factories at Sahagunj and Ambattur on February 7. The board, at its hearing today, said the company’s proposal to discuss payment of the workers after one full year of operation is not acceptable. It insisted that the management should first clear workers’ dues. The board also categorically stated that it will not allow the company to sell the properties at Pune and Mumbai for clearing the dues, adding that the required funds will have to be brought in by promoter M.R. Chhabria. The payment could be made from the Rs 26 crore which the promoter had promised to bring in, it said.

Ashok Pal, vice-president of the Citu-affiliated Dunlop Workers Union said, “BIFR has said that it is not against the idea of lifting the work suspension, provided the management clears the workers’ dues. The revival scheme will be implemented side-by-side.”

The management, represented by chief operation officer Y.C. Lumba, had also asked that they may be allowed to sell the properties.

The board observed that property sale can be allowed as a means to part finance the revival scheme provided the bankers, workers, state governments and other creditors agreed to the proposal. The bankers, led by UBI, once again reiterated that they are not ready to increase the exposure in the company since they have no confidence in the company.    

New Delhi, Jan 18 
A Bill to set up a civil aviation authority, drafted by a high-powered task force on infrastructure, is being sent for the law ministry’s consideration, prior to being taken up by the Union Cabinet.

Briefing reporters on the issue after a meeting of the task force, Planning Commission deputy chairman K. C. Pant indicated that the final Bill will be placed before Parliament in the post-budget session.

The proposed civil aviation authority will regulate the aviation sector, setting standards and tariff rates. The setting up of such an authority is necessary in the light of private players entering this segment.

The task force also discussed the procedures involved in leasing five metro airports to private parties. “Tenders will be floated for inviting bids in August. We would like to award lease contracts to private parties by the end of the calendar year,” PMO secretary N.K. Singh said.    

Mumbai, Jan 18 
Pentafour Software & Exports today announced a 48 per cent increase in its third-quarter net profit at Rs 35.1 crore from Rs 24.11 crore in the same period of 1998-99.

The company has now been renamed PentaMedia Graphics. The Chennai-based firm has declared that it will now fine-tune its operations in the core areas of films/broadcasting, video, CD/DVD and Internet entertainment.

For the quarter ended December 30, turnover stood at Rs 106 crore, up 46 per cent from Rs 72.6 crore at the end of December 1998 while turnover for the nine-month period rose to Rs 283 crore from Rs 182 crore over the same period.

The company’s net profit for the nine-month period jumped 69 per cent to Rs 83 crore as against Rs 49 crore in the corresponding period of the last financial year. Gross profits for the third quarter was Rs 50 crore, up from Rs 29 crore. For the nine-month period, the gross profits were pegged at Rs 127 crore compared with Rs 68 crore, indicating an increase of 86 per cent.

Investors were, apparently, not happy with the company’s performance in the third quarter. This resulted in the scrip slipping to an intra-day low of Rs 1150 after it opened at Rs 1190. The share shot up to an intra-day high of Rs 1,224 but finally closed marginally lower at Rs 1,185.

The software technology park near Chennai will now be an exclusive entity for the development of multimedia content and services, it said.

Multimedia operations will be carried out from India while the company will continue with its front-ending offices in Hollywood, Singapore, Manila and London.

PentaMedia also announced a few changes in its top management. S Ranganathan, chief finance officer, has been promoted as the finance director. V S Sunderrajan, director on board PentaMedia Graphics, will now spearhead the company’s US operations.

The company had secured shareholders’ approval for its plan to hive off the business software segment as an on-going concern to Pentafour Communications at the January 6 extra-ordinary general meeting.

The areas demerged include on-shore and off-shore products, transfer of human resources associated with software, brand value, assets and compensation for non-compete and non-marketing agreement in the provision of existing software services.    

Foreign Exchange
US $1	Rs 43.58	HK $1	Rs. 5.50*
UK £1	Rs 71.20	SW Fr 1	Rs. 27.85*
Euro	Rs 43.98	Sing $1	Rs. 25.65*
Yen 100	Rs. 41.45	Aus $1	Rs. 28.50*
*SBI TC buying rates; others are forex market closing rates


Calcutta		Bombay
Gold Std (10gm)	Rs. 4565	Gold Std (10 gm)	Rs 4525
Gold 22 carat	Rs. 4310	Gold 22 carat	Rs 4185
Silver bar (Kg)	Rs. 7975	Silver (Kg)	Rs 8075
Silver portion	Rs. 8075	Silver portion	Rs 8080

Stock Indices

Sensex	5464.51	+60.44
BSE-100	2781.55	+15.66
S&P CNX Nifty	1606.70	-4.90
Calcutta	146.91	+0.69
Skindia GDR	1217.46	+4.24

Maintained by Web Development Company