FIs force vote on SWC resolutions
Sensex swings, sheds 61 points
Sterlite seals IFL deal
IDBI takes stock of Sahagunj plant
Reliance to pay 40% interim
Revision of phone tariffs deferred
SAIL ready for second round of price hikes
Philips to unwrap more Net gadgets
Iridium crash costs govt Rs 4 cr
Foreign Exchange, Bullion, Stock Indices

Calcutta, March 30 
The financial institutions led by Life Insurance Corporation (LIC) today forced a shareholders’ vote on two resolutions moved by the Shaw Wallace management — one seeking to keep chairman Manu R. Chhabria as a director in perpetuity and the other pertaining to the adoption of the audited accounts for the year 1998-99.

The FIs - LIC, Unit Trust of India, and General Insurance Corporation and its subsidiaries - hold about 25 per cent of the shares in the company.

Executive director P.L. Narsimhan, who chaired the 53rd annual general meeting, ordered the poll which was conducted immediately after the meeting. The results — a foregone conclusion since the management has a stake of a little over 50 per cent — will be announced tomorrow.

GIC representative Subuddhi said, “We were advised by our principals to oppose these two resolutions and demand a poll.

He said the managements of those companies in which the FIs hold a 10 per cent stake invite them to nominate representatives on the board. But the FIs were not represented on the Shaw Wallace board even though they had a 25 per cent stake.

“Under the circumstances, how can anyone expect us not to oppose a resolution which proposes to designate M.R. Chhabria as a director of the company not liable to retire by rotation,” asked Subuddhi. He said the resolution pertaining to adoption of the balance sheet for the year ended June 30, 1999 was opposed due to several adverse remarks made by auditors Lodha and Company.

This is the second time that the FIs are opposing resolutions moved by the management of a company controlled by Chhabria. Earlier, they had opposed a similar resolution in Dunlop India Ltd.

Narsimhan told shareholders that SWC planned to raise money from the market by issuing shares on a rights basis. He said the proceeds would be used to retire high-cost debts and inter-corporate loans that were taken a few years back to acquire a number of companies.

Regarding UB group Vijay Mallya’s offer to acquire the brands of Shaw Wallace for a sum of Rs 250 crore, Narsimhan said, “We don’t believe in selling brands; we believe in nurturing them.”

The executive director said the company had not thought of floating a rights issue till now because of the depressed conditions in the stock market. Even now, only the infotech scrips are going up. If a rights issue is not fully subscribed, it needs to be backed up and till now we did not not have that much of resources. But with the Foreign Investment Promotion Board (FIPB) clearing a Jumbo group proposal two days back permitting it to pick up the unsubscribed portion of the rights issue, the company could consider the option of a rights issue , he added. However, Narsimhan said the timing and price of the proposed issue would depend on market conditions.    

Mumbai, March 30 
The Bombay Stock Exchange (BSE) sensex today slid 61.38 points to 5041.08 in a volatile session after fears over the dizzy valuations of software scrips triggered an infotech selloff that clobbered most big names in the industry.

One-time favourite Reliance Industries soared to Rs 291.25 on expectations about a handsome interim dividend — the board later announced 40 per cent — and hopes that softening crude prices will improve the bottomline. Lever also notched up gains but Infosys tumbled Rs 667.10 to Rs 9,676.

Operators and institutions were net sellers with key scrips like Wipro, Global Tele, NIIT and Silverline locked in the lower circuit filters due to a 300-point downslide in the Nasdaq composite index over the last couple of days. Satyam Computer slipped by Rs 336.25 to Rs 4813.75, Zee Telefilms by Rs 24.45 to 1029.05 and DSQ Software by Rs 34.95 to Rs 1760.

Sebi chairman D R Mehta’s remarks at an Assocham conference in Delhi that the panel set up to review the current regime of margins could meet on April 7 appeared to have been ignored by operators.

Mehta also said the regulator would soon resolve the controversy over the appointment of Gujarat Ambuja Cement nominees on the board of Associated Cement Company (ACC). “We are consulting legal experts on the issue and will take a decision soon,” he told reporters on the sidelines of the Assocham seminar.

The controversy arose when Gujarat Ambuja appointed its nominees on the ACC board after it bought Tatas’ 7.2 per cent. “We have to see if the appointment amounted to a change of management,” the Sebi chief said.

Unit Trust of India (UTI) executive director Basudeb Sen predicted that the sensex will touch 5,900 points in three months. “The market seems to have bottomed out. We expect it to touch 5,900 points in three months,” Sen told reporters in Delhi.    

Calcutta, March 30 
Sterlite Industries has completed the acquisition of India Foils (IFL) after the Williamson Magor group company today allotted 1.1 crore equity shares and convertible warrants worth Rs 1 crore — amounting to a 55 per cent stake — to group flagship Madras Aluminium Company (Malco). Malco has been given the option of converting warrants into equity shares with a face value of Rs 10 each at a price of Rs 23.50.

The IFL board has also been reconstituted. All existing board members, other than A. Khaitan, P.K. Basu, an ICICI nominee and A Roy, have resigned along with the managing director. Four Malco nominees — Naveen Agarwal, Tarun Jain, S.C. Krishnan and Agnivesh Agarwal — have joined the board.

With the acquisition of IFL, Sterlite has made a significant expansion of its aluminium downstream business. “We will grow and integrate our aluminium business progressively. The emphasis will be on value-creation for our customers and shareholders,” Sterlite chairman Anil Agrawal said.    

Calcutta, March 30 
IDBI, the operating agency appointed by BIFR to draw up a revival plan for Dunlop India Limited (DIL), has inspected the facilities of the Sahagunj plant and exchanged views with the state government on various aspects of the company.

Sources said IDBI officials have discussed the company’s product profile with the Dunlop management, inspected the machinery at Sahagunj and reviewed the company’s stock position.

IDBI officials have also sought the opinion of the industrial reconstruction department of the West Bengal government, the sources added. IDBI is yet to finalise the revival plan for the company.

In the meantime, Tata Consultancy Services (TCS), which has been appointed by IDBI to do a techno-economic study of Dunlop, has submitted its report.

Meanwhile, sources were sceptical of the possibility of a trial run at Sahagunj next week , though Dunlop president M.D. Shukla said work was going on schedule.

“We are on schedule. The dry run has already begun. The DM plant may take some more time. But we are confident that production will begin in April,’’ Shukla said.

A section of workers feel production, which has been slated to begin in mid-April, may not start on time due to the slow pace of maintenance work.    

Mumbai, March 30 
Reliance Industries Ltd (RIL) today declared an interim dividend of 40 per cent (Rs 4 per equity share) for the financial year ending March 2000, resulting in a payout of Rs 427 crore ($ 98 million) to the company.

RIL has declared an equity dividend of 37.5 per cent in the previous year, and the payout was Rs 350 crore ($ 82 million).

RIL joins a long list of companies which have announced interim dividends to avoid paying the higher rate of dividend tax announced in this year’s union budget. The decision on interim dividend of 40 per cent was taken today by the board of directors of RIL. The Reliance scrip hit the upper circuit filter on the BSE today. It opened at Rs 268.50, fell to Rs 258.50 before closing at Rs 291.25.

SBI to pay 25%

State Bank of India has declared an interim dividend of 25 per cent — Rs 2.50 per share of Rs 10 face value — for the year ending March 31, 2000. The decision was taken by the board in a meeting today, the company said in a statement here.

Asian Paints also declared an interim dividend of 60 per cent (Rs 6 per share) for the current fiscal. This is the company’s second interim dividend for the year, taking the total dividend announced so far to 100 per cent.

The company’s scrip fluctuated heavily. After opening at Rs 415 it rose to an intra-day high of Rs 435 but fell to a low of Rs 413. However, it bounced back from this level to finish at Rs 429.85.

Meanwhile, NTPC today paid an interim dividend of Rs 300 crore to the power ministry.    

New Delhi, March 30 
The Telecom Regulatory Authority of India (Trai) today deferred the implementation of the second phase of the Telecommunication Tariff Order (TTO) 1999, till July 31, 2000.

Consequently, the existing rates for telephone rentals, airtime, and the pulse rate will continue to be effective till July 31. The reconstituted telecom regulatory body headed by chairman Maya Shankar Verma in its first order has decided to review the TTO 1999, on the basis of data for the entire financial year 1999-2000.

The TTO 1999 had rebalanced the tariffs, increasing the telephone rentals with a reduction in call charges for subscriber trunk dialling (STD) and international subscriber dialling (ISD). This had resulted in a change in the revenue pattern for existing operators including the Department of Telecom Services (DTS) and Mahanagar Telephone Nigam Ltd (MTNL).

According to Trai, “In view of this review, implementation of the second phase of tariff rebalancing that was to begin from April 1, 2000, to March 31, 2001, has been deferred by four months. Tariff/pulse rates/charges specified for the period April 1, 1999 to March 31, 2000 shall continue to apply till July 31 2000.”

As the TTO 1999 prescribes further reduction in long distance charges from April 1, 2000, DTS had requested Trai to review it, so that it does not face a further loss of revenue curtailing its capability to finance further expansion programmes.    

Calcutta, March 30 
The Steel Authority of India Ltd (SAIL) is set for a second round of an across-the-board price hike for its products in the current calendar year with effect from April 1. The last price rise was effected on January 1.

The average price rise will be in the range of 5-7 per cent. A senior SAIL official said the hike would be around Rs 1000 per tonne for the flat products and Rs 500 per tonne for the long products.

The other steel majors, Tata Iron & Steel Company (Tisco), Essar Steel and Ispat are also expected to hike the prices of their products next month.

The new prices for SAIL’s hot-roll (HR) coils would be around Rs 18,000 to Rs 20,000 per tonne, depending on the different grades while the light and medium structurals would be priced in the range of Rs 12,000 to Rs 15,000 per tonne.

SAIL’s integrated plants at Rourkela and Bokaro will largely benefit from the price hike as both of them manufacture flat products. However, the other two plants at Bhilai and Durgapur will not gain much from the hike, as they produce mostly long products where the increase is not significant.    

Mumbai, March 30 
Philips India, keen to grab a slice of the market for internet devices, has decided to expand its range of products and equipment used to access the information highway.

Senior vice-president (consumer electronics) Rajeev Karwal told The Telegraph that his company has drawn up aggressive plans to use the strengths of parent, Dutch electronic giant Philips AG, to give customers greater choice in internet gadgets.

“Our parent is a pioneer in this field. We will introduce Web-enabled products in the market this year,” he said, adding most of these products will come with new features. “For instance, many set-top boxes that provide Internet connections are not fully Java-enabled. Philips India will bring in boxes which are fully Java-enabled — something that will help users navigate the internet better,” Karwal said.

Philips India expects internet-related devices to contribute about 50 per cent to its total turnover over the next five years. Other firms in the sector such as Videocon International already have an array of gadgets that help customers access the Net.

Karwal said he is looking at a growth of 10 per cent in audio sales and 15 per cent in colour televisions.    

New Delhi, March 30 
When Iridium formally downs shutters in India tomorrow, the government will stand to lose a neat Rs 4 crore, simply because the Iridium handsets that will be in its possession can no longer be put to use in the country.

While the central and state governments bought about 300 handsets, the media and other private bodies had bought about 100. Each handset costs about Rs 1.2-1.5 lakh. In addition to the loss on the handsets, they are unlikely to get back their airtime and other advances paid for availing of the service.

Of the 300 sets bought by the Centre, the army has 35 handsets, railways 25, the Intelligence Bureau 2, while various media companies have about 50. The rest have been purchased by the state governments and allied bodies like flood control.

Executives in Iridium India Telecom Ltd (IITL), said, “We are yet to get information on the course of action to be followed when customers approach us for a refund for their handsets. A few individual customers have already approached us for a refund.”

According to a railway official in charge of communications, “The order for Iridium phones was given during the tenure of former railway minister Nitish Kumar, which has been implemented by Mamata Banerjee. Initially the Railways had planned to procure 70 such phones but restricted it to 25. In fact in the second phase it was to be increased to 150. However, we are in a spot. If we do not get a refund for the handsets and the airtime, we could lose about Rs 50 lakh.”

Sources in IITL said, “The individual customers are likely to be the worst affected. An investment of Rs. 1.2 lakh on the handset and the advance for an airtime rate of Rs 150 per minute (it offered a package of Rs 50 per minute for the first 500 minutes) may not be returned.”

However, while most telecom experts have ruled out any use for the handsets once the Iridium services are shut down, a senior engineer in Videsh Sanchar Nigam Ltd (VSNL) said, “There is a possibility that it may be compatible with the Global System for Mobile Communications (GSM) technology, which is used by the cellular operators.”

Iridium had launched its service world-wide on November 1, 1998. The system functioned with 66 low earth-orbiting satellites with the support of terrestrial cellular networks. However the venture proved to be unprofitable, both in India and abroad, due to prohibitively high prices and the weight of the handsets.

Last year Iridium announced its inability to meet its obligations on loans worth $ 1.5 billion. It also failed get protection from its creditors under bankruptcy laws.

While VSNL, which had provided the gateway to Iridium will not be affected, financial institutions like IDBI, IL&FS, Exim Bank, State Bank of India, ICICI and a few others are unlikely to get back their investments. The FIs are likely to lose about Rs 400-500 crore.    

Foreign Exchange
US $1	Rs 43.60	HK $1	Rs. 5.55*
UK £1	Rs 69.33	SW Fr 1	Rs. 25.75
Euro	Rs 41.77	Sing $1	Rs. 25.05
Yen 100	Rs 41.58	Aus $1	Rs. 26.30*
*SBI TC buying rates; others are forex market closing rates


Calcutta		Bombay
Gold Std (10gm)	Rs 4440	Gold Std (10 gm)	Rs 4400
Gold 22 carat	Rs 4190	Gold 22 carat	Rs 4070
Silver bar (Kg)	Rs 7750	Silver (Kg)	Rs 7900
Silver portion	Rs 7850	Silver portion	Rs 7905

Stock Indices

Sensex	5041.08	-61.38
BSE-100	2975.77	-95.75
S&P CNX Nifty	1549.50	-8.75
Calcutta	123.84	+2.07
Skindia GDR	1237.74	-21.92

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