Coal Bill put on the backburner
ORG-Marg crisis blows over, VNU may hike stake
CESC cuts loss to Rs 71 crore
Fake items flood auto spare parts market
Nicco Uco set for insurance foray

 
 
COAL BILL PUT ON THE BACKBURNER 
 
 
FROM OUR SPECIAL CORRESPONDENT
 
New Delhi, April 29 
The government has agreed to keep the coal de-nationalisation Bill in abeyance for another six months to avert a nationwide coal miners’ strike which was slated to begin next month

The decision came at a meeting held here yesterday between minister for mines & minerals P.R. Kumaramangalam and leaders of the five central trade unions.

In a memorandum of understanding signed with the trade unions, the government said it would discuss the restructuring of coal industry as a whole during the next six months.

During this period the coal mines nationalisation (amendment) Bill 2000 would be kept in abeyance.

The government also agreed to hike coal mines’ provident fund (PF) contribution to 12 per cent from the present 10 per cent.

The coal department also promised trade unions that they would take up with the finance ministry the issue of low import duties on imported coal. At present, imported coal attracts duty lower than the various taxes imposed on domestic coal.

Following the assurance from the government, the trade unions decided to call off the strike.

Those who attended the meeting included minister of state for mines Rita Verma, senior coal ministry officials, trade unionists M.K. Pandhe of Citu, S.Q. Zama and M. D. Vishwakarma of Intuc, Shafique Khan of AITUC, B.K. Rai of BMS and Jayant Poddar of HMS.

Earlier this week, Kumaramangalam tabled the Coal (nationalisation) Amendment Bill, 2000 in the Rajya Sabha which was vociferously opposed by the Left parties.

Though a voice vote saw the Bill being introduced without much problem, the heated opposition voiced by Left members forced it to be referred to the standing committee for in-depth study.

The Bill seeks to open up mining and exploration of coal and lignite for private sector.

Till now besides the state-owned coal mining companies, the only private companies allowed to mine coal or lignite were power and steel companies which mined the minerals for their own captive consumption.

The proposed law will incorporate a provision to prescribe conditions in terms of location and maximum size of coal and lignite mine and licences will be issued to Indian companies registered under the Indian Companies Act.

The coal ministry has also drawn up plans for a separate Bill which will allow state-owned coal companies to take on private partners in forming coal joint ventures to exploit mines and coal bearing blocks which they own.

But Kumaramangalam had assured the House that there was no attempt to privatise or de-nationalise the coal industry and said there would be no retrenchment in this sector.

If the sector is de-nationalised through these twin measures they can be expected to give a fillip to the economy of eastern Indian states which are rich in coal deposits. New and re-vitalised old mines could be expected to generate jobs.    


 
 
ORG-MARG CRISIS BLOWS OVER, VNU MAY HIKE STAKE 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, April 29 
The crisis in the top echelons of ORG-Marg appears to have blown over with a compromise being reached between the warring factions under which the $ 2.8 billion Dutch publishing company VNU is expected to strengthen its hold over the country’s biggest market research outfit.

Confirming this, Ashok Das, joint president, ORG-Marg said: “We believe that it will end in a favourable way”. He was not willing to divulge any further details on the peace accord which is believed to have been brokered by HDFC chairman Deepak Parekh. Das said all the issues would be resolved by May 2.

“I don’t know anything about it and have no comments to offer,” said Vallabh Bhansali of Enam Financial Consultants, a leading investment bank which is said to have valued the firm at close to Rs 200 crore.

The crisis at market research firm erupted soon after the two joint presidents of ORG-Marg, Ashok Das and Amit Roy, supported by 21 top executives of the company, shot off letters threatening to resign if the Business India group, which has a 50.2 per cent stake in the company, brought in financial investors in place of VNU.

They argued that the association with VNU, which has a 35 per cent stake in the company, was crucial to the fortunes of the company because of the global expertise and linkages it offered. The compromise deal may now see the stake of the Business India group decreasing from its existing level of 50.2 per cent.

However, it is not known to what extent the group will be willing to reduce its stake. The deadline for finding new promoters to replace VNU ended on April 28.

Efforts to contact Titoo Ahluwalia, the chairman of ORG-Marg, proved futile. Incidentally, Ahluwalia runs the company and has a 14.8 per cent stake.There was speculation that even Ahluwalia would have stepped out had financial investors come in place of VNU.

The crisis at ORG-Marg arose after the Business India group pledged their 50.2 per cent stake against a loan worth $ 22 million, guaranteed by VNU three years ago. Last year, the two parties had reached an agreement following a series of court injunctions that prevented VNU from taking control of the Advani shareholding.    


 
 
CESC CUTS LOSS TO RS 71 CRORE 
 
 
BY OUR SPECIAL CORRESPONDENT
 
Calcutta, April 29 
CESC Ltd has reported a loss of Rs 71 crore for the year ended March 31, 2000 on a total sales revenue of Rs 1774 crore. The company suffered a loss of Rs 128 crore in the same period last year on a sales revenue of Rs 1701 crore.

The RPG Group power utility could trim its losses primarily because of the revision in tariff in October 1998, maximisation of own generation and reduction in power purchase from outside sources. CESC officials said paring down of losses had been possible in spite of absorbing the interest cost of Rs 73 crore for the second unit of Budge Budge. The total interest burden of the company for the full year stood at Rs 381 crore compared with Rs 296 crore in the previous year.

During the year, CESC’s generation increased to 5378 million units (mu), a 14 per cent rise over 4715 mu in 1998-99. This had been possible because of the commissioning of the 250 MW second unit at Budge Budge in July last year. Power purchase from outside sources had been reduced to 1575 mu from 2135 mu in 1998-99, a drop of 26 per cent.

Losses had been primarily restricted in the fourth quarter of the year—CESC recorded a loss of Rs 17 crore as against Rs 32 crore in the third quarter.

The fourth-quarter results are, however, poor when compared with the corresponding quarter of the previous year when CESC had ended with a Rs 2 crore profit.

Pharma major Ranbaxy has recorded a net profit Rs 39.1 core for the quarter ended March 31, 2000 against Rs 48.5 crore in the same quarter last year, a fall of 19.4 per cent. The company’s turnover stood at Rs 375.6 core, an increase of 3.7 per cent over the corresponding period last year which was Rs 362.2 core. Export sales grew by 8.1 per cent at Rs 175.5 crore against Rs 162.4 crore during the same period.Sun Pharmaceutical Industries Ltd has posted a net profit of Rs 90.43 crore on the back of a sales of Rs 478.55 crore for the year ending March 31, 2000. Sun said its results were not comparable with previous year as Gujarat Lyka Organics Ltd was merged with it with effect from April 1, 1999.    


 
 
FAKE ITEMS FLOOD AUTO SPARE PARTS MARKET 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, April 29 
The auto spare parts industry in the country is increasingly getting worried about the menace of spurious items that is flooding the market. A report prepared by the the Automotive Component Manufacturers Association of India (Acma) shows that 37.5 per cent of the spare parts market is dominated by spurious items which is making a serious dent in the government’s revenue.

The non-availability of adequate number of OE (original equipment) components in the replacement market is one of the main reasons for the increase in spurious auto parts, the report says.

About 11 per cent of the respondents (traders) highlighted this as the main reason for a spurt in spurious auto parts, the study shows.

A higher ‘latent profit margin’ in the duplicate trade is also luring spurious traders. The report estimates that the profit margin on spurious components range from 17 per cent to 26 per cent as against 3 to 5 per cent in respect of OE brands at the retail outlets.    


 
 
NICCO UCO SET FOR INSURANCE FORAY 
 
 
BY PALLAB BHATTACHARYA
 
Calcutta, April 29 
The Nicco Uco Alliance Credit Ltd (NUACL) will foray into the insurance sector, via an e-commerce portal. The company recently appointed PricewaterhouseCoopers (PwC) to prepare the e-commerce site for the venture. Confirming the move, NUACL chairman Rajive Kaul said the company was in talks with three global insurance giants for this purpose.

“The company will primarily act as a distribution setup for the insurance products. But it may take a modest equity stake when its foreign collaborator sets up its Indian operation,” Kaul said. He, however refused to divulge the names of firms with whom the company has initiated talks.

NUACL director Abhijit Sen said the insurance business had a lot of synergy with the company’s main line of businesses.    

 

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