Maran blasts global patent regime
HDFC Mutual Fund to debut with 3 schemes
No privatisation of oil PSUs: Naik
Terms set for lower MTNL cellular rates
Satyam Computer’s Rs 1,700 crore ADS cleared
Sensex shoots past 4900, cement shares hog limelig
SAIL shortlists UK firm, Tata Steel for Salem
Dunlop drops wage-freeze plan
Foreign Exchange, Bullion, Stock Indices

 
 
MARAN BLASTS GLOBAL PATENT REGIME 
 
 
FROM OUR SPECIAL CORRESPONDENT
 
New Delhi, July 5 
Commerce minister Murasoli Maran today lambasted the industrialised nations, especially the US, for misusing the global patent regime to sneak in ‘technological protectionism’ and bio-piracy and called for a new international treaty to protect indigenous medical knowledge.

Maran, who was inaugurating the World Intellectual Property Organisation’s Asia-Pacific conference, here said “There are basic inequities, injustices and loopholes in the TRIPS pact ...Instead of helping the developing countries, the developed countries—the victors in the field—threaten the vanquished with sanctions.”

“With a gun pointed at their temple, the developing countries have no other go (way) but to fulfil the unreasonable obligations which they unwittingly undertook to perform during the Uruguay Round.”

The commerce minister, who is just back from a round of inconclusive trade talks with the European Union, pointed out that the patent regime brought in by the World Trade Organisation talks had allowed transnationals to “steal” the traditional medical knowledge existing in developing countries by simply patenting them.

Maran said India had proposed that patent applications should be required to disclose the source of origin of the biological material utilised in their inventions. This would allow indigenous communities who own traditional knowledge in their spheres to share profits with patent holders who commercially exploit or genetically engineer such knowledge.

The commerce minister claimed the “powerful US pharmaceutical industry was one of the most active and strong lobbies arguing for the need for an expansion and strengthening of the patent protection and is certainly a major beneficiary of the outcome of the Uruguay Round.”

He said industrialised countries were benefiting from the new intellectual property rights and the TRIPS agreement is being used as a policy of “technological protectionism” which allows the North to monopolise technology while forcing the South to be a mere market for goods and services.”

Maran’s point was that the developed world had extensively used reverse engineering and other methods of imitative innovation to industrialise. And after having succeeded they wanted to close the door on the developing countries by restricting them through the TRIPS regime, making it impossible for them to catch up technologically.    


 
 
HDFC MUTUAL FUND TO DEBUT WITH 3 SCHEMES 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, July 5 
HDFC today launched a mutual fund through its subsidiary, HDFC Asset Management Company, as part of its effort to capitalise on its treasury-management skills and retail network for bigger gains in asset management.

HDFC Mutual Fund, as it will be called, will launch an income scheme, a balanced fund and a pure growth scheme. Company chairman Deepak Parekh told reporters that the annual 40 per cent growth rate clocked by private mutual funds shows that there is enough space for HDFC’s new fund.

“Savings and deposits are growing at a fairly even rate of 18 percent on an annual basis with total bank savings and deposits in the country pegged at a whopping Rs 7,15,000 crore,” Parekh said.

HDFC Mutual Fund, in addition to tapping its 10.5 lakh depositors, will also tap the 8 lakh customers of HDFC Bank and the 3.7 lakh depository accounts being handled by the bank.

The company feels its ambition to become a major player in the mutual fund industry will be helped by its army of agents and a wide network of branches with HDFC Bank. Besides, its own housing finance business has a lot of organisational and human resources that can be tapped by its mutual fund arm. “It all adds up to a formidable number,” said Milind Barwe, managing director of HDFC Mutual Fund.

HDFC has tied up with Standard Life — the UK-based company with whom it plans to enter the insurance sector — to float its mutual fund outfit. The British insurer will pick up a 26 per cent equity stake in its asset management firm. Standard Life manages more than Rs 5,50,000 crore in assets. Its awesome financial clout can also be gauged from the fact that its share accounts for a staggering 2 per cent of the total market capitalisation of the London Stock Exchange.

According to Parekh, HDFC’s mutual fund foray has been prompted by the fact that the business meshes well with its existing line of operations, offering synergies and big cost advantages.

Meanwhile, HDFC is expected to record a 55 per cent growth in its individual retail business for the first quarter ended June 30. The corporate business looks less healthy, with a growth forecast of 35 per cent, Parekh said.    


 
 
NO PRIVATISATION OF OIL PSUS: NAIK 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, July 5 
Union minister for petroleum Ram Naik today ruled out any possibility of privatising the oil PSUs. He said no oil PSU, should be privatised as the country could ill-afford to depend on any private oil entity in case of war-like situations. “The government should have 51 per cent holding in all the public sector oil companies as they are of strategic importance to the country,” said the minister.

He added, “The Cabinet has to take a view on my request to accord strategic status to the oil sector. A decision on this issue is likely to be taken in the next meeting of the Cabinet.”

Meanwhile, the Cabinet committee on disinvestment (CCD) has decided to divest majority of government holding in IBP. Regarding this decision the minister said “CCD has given only an in-principle approval. There are many more procedures and clearances required before the final decision is taken.”

He felt that government should have majority control in oil PSUs because in emergency situations these companies primarily meet the defence and other essential requirements of the country.

“We should learn our lessons from the 1971 war when no private oil company had co-operated with the government,” he said.

Apart from this, the government has decided not to raise the prices of petroleum products including that of diesel immediately despite crude oil prices touching an all time high of $ 30 per barrel he said.

“The revision of diesel prices upwards is due. But there will not be an immediate increase in the prices of petroleum products. We are watching the movement of the global crude oil prices which have not stabilised even after the Organisation of Petroleum Exporting Countries’ (Opec) decision to increase crude production in June,” he added.

The minister, however, supported the decision of Saudi Arabia to further increase crude oil production to bring the prices at $ 25 per barrel.

Naik hopes prices of crude oil would stabilise in a few months and any decision to revise the prices of petroleum products would be taken then.    


 
 
TERMS SET FOR LOWER MTNL CELLULAR RATES 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, July 5 
The Telecom Regulatory Authority of India (Trai) today allowed Mahanagar Telephone Nigam Ltd to offer mobile cellular phone services in Delhi and Mumbai at rates lower than those of existing private cellular operators.

However, the telecom regulator has ruled that MTNL cannot cross-subsidise the new service with earnings from its existing basic telecom services.

The telecom watchdog plans to review tariffs charged by all telecom companies by the year end. It has already asked the department of telecommunications (DoT) to supply costing figures of basic telecom services.

Trai chairman M.S. Verma today said, “We would like to have a detailed review of the existing tariff structure for both basic and cellular services. We don’t want tariffs above the cost but we also don’t want it below the cost. The idea behind reviewing the tariff is to minimise the level of cross subsidisation.”

He said all telecom service providers can provide low tariffs to attract customers but there should be no cross-subsidisation.

“All service providers will be able to fix tariff depending upon their cost structure. As long as there is no cross-subsidisation and they maintain separate accounts for different services, Trai has no problem,” Verma said.

Trai is busy preparing the guidelines for separation of accounting procedures for service providers, which is expected to be ready in the next few months.

DoT officials said, “We would be sending the details and other information sought by Trai within a fortnight. We have already sent some information for review of telecom tariff for basic fixed line service and we would be sending for other services too.”

The final decision on the implementation of tariff recommended would be taken by DoT. “Once we get the recommendations from Trai we would discuss the final tariff and implement it,” DoT sources said.

Quality guidelines take effect

The Trai has set a 21-day deadline for telephone companies to install phones at customers’ premises in all areas where telephone companies claim they can sell phones on demand.

The deadline is part of the ‘Regulation on Quality of Services of Basic and Cellular Mobile Telephone Services, 2000’ that came into effect today.

The regulator, however, made it clear that this quality guideline was not enforceable and failure to comply would not attract any penalty. It would nevertheless try to persuade operators into action by publishing the customer perception of their service and making it public, Trai sources said.

Customers perception regarding telecom services would be determined through surveys to be conducted by the authority through an independent agency.

Releasing the regulation standards, Verma said, telecom service had not defined quality standards till now. The regulation effective from today would help in bringing about steady improvement in the performance of telephone networks.

Trai has also asked operators to announce the areas where telephone is available on demand and to widely publicise the same. It would also evaluate the network performance parameters like dial tone delay, grade of service and call completion rate on sample basis.    


 
 
SATYAM COMPUTER’S RS 1,700 CRORE ADS CLEARED 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, July 6 
The government today cleared 38 cases of foreign direct investment (FDI) aggregating Rs 1,797 crore with Hyderabad-based Satyam Computer Services Ltd’s Rs 1,700 crore American Depository Shares (ADS).

Ramalinga Raju promoted Satyam Computer’s issue is likely to be one of the largest overseas issue by an Indian company. The issue will fund the expansion plans of the firm.

Union minister for commerce and industry Murasoli Maran approved the proposal of Max GB Ltd to increase the foreign equity from 50 per cent to 74.9 per cent by infusing Rs 25.31 crore, an official release said.

Gist Brocades of the Netherlands would raise their stake in the joint venture with Analjit Singh’s Max India through conversion of debentures into equity.

The proposal of Saloman Brothers was cleared today. It plans to have non-banking financial activities with 75 per cent foreign investment amounting to Rs 2.15 crore.

South African Breweries have been permitted to set up a holding investment company in the brewery sector for downstream investment.

Rupert Murdoch promoted News Television (India) Pvt Ltd has been given permission for sourcing and exporting of commercial/television programme, software, cinematograph films with an investment of Rs 11 crore.

Turner International has been allowed to engage in trading activities for accessing the vast library of Turner and Time Warner group films in India.

Samsung India has secured the permit to expand its activities which include manufacturing of washing machines, airconditioners etc.

In the telecom sector, Hughes Ispat Ltd and Bharati Cellular Ltd have been allowed to expand their activities. Hughes Ispat has been allowed to include an additional subscriber of the foreign equity.    


 
 
SENSEX SHOOTS PAST 4900, CEMENT SHARES HOG LIMELIG 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, July 5 
The Bombay Stock Exchange (BSE) sensex today shot past the 4,900 mark to close at 4912.11 in a 25.05-point gain on a day when cement shares zoomed into in the spotlight.

The day began on a dull note with the 30-scrip index opening marginally higher at 4898.15. It moved in a narrow range of 4940.38 to 4881.15 due to bouts of selling and buying by operators but closed the day at 4912.11 compared with Tuesday’s close of 4887.06.

The BSE-100 Index, however, dropped 4.60 points to 2491.51 from its previous close of 2496.11. The BSE-200 index and the dollex were quoted marginally lower at 534.20 and 199.06 compared with their previous close of 535.07 and 199.43 respectively. The BSE-500 index also declined by 3.91 points to 1601.59 compared with its previous close of 1605.50.

The renewed interest in cement shares was attributed the onset of monsoons in many parts of the country and the fact that the L&T board cleared on Tuesday a plan to demerge its cement business.

Infotech shares were under pressure due to heavy selling by foreign institutional investors (FIIs). These funds were reported to be net sellers in the index heavyweights such as Infosys Technologies and Satyam Computers. The losses in these shares pruned gains in the sensex to a modest 25 points.

Technical analysts say the present level of 4912 is a strong resistance level for the sensex. Dealers echoed a similar sentiment, saying if the sensex remains above this level for the next two sessions, it could set the stage for a sustained rally.

Even pharmaceutical scrips, many of which had notched up sharp gains on Tuesday, suffered a setback in the wake of profit booking by financial institutions and local operators.

In the specified list, 64 counters registered sharp to moderate gains while 71 suffered losses. Reliance was the most active scrip with a turnover of Rs 476.03 crore on a total volume of Rs 4154.59 crore. Other top traded shares were Satyam Computer (Rs 445.26 crore), HFCL, Zee Telefilms and Global Telesystems.    


 
 
SAIL SHORTLISTS UK FIRM, TATA STEEL FOR SALEM 
 
 
OUR BUREAUX
 
July 5 
The Steel Authority of India Ltd (SAIL) has shortlisted Avesta Sheffield and Tata Steel-Unisor combine as possible buyers for its ailing Salem Steel Plant. The shortlisitng was made on the recommendation of J.M. Morgan Stanley.

Altogether four parties showed interest in SAIL’s sole stainless steel maker. Besides Avesta and Tata Steel, the two others were Jindal Strips and Shah Alloys. While Shah’s bid had been discarded, Jindals Strips had been asked to clarify certain technical queries and might also be shortlisted, SAIL officials said.

SMS Demag of Germany, which had initially decided to submit bids, subsequently did not show any interest. The last date of submission of the proposals was February 18.

The shortlisted companies will soon be allowed to go ahead with a due dilligence of the plant.

It is learnt that Jindal Strips has been pursuing a separate proposal to use Salem’s excess capacity to roll its steel slabs into stainless steel ahead of the sell-off.

SAIL brass was reportedly interested in this deal, though Salem unions and officers’ associations had been up in arms against this proposed plan. They termed it as a backdoor bid to hand over Salem to Jindals.

Salem Steel Plant, commissioned in 1981, has hot rolling steckel mill (2,00,000 tpa), cold rolling sendzimir mills (70,000 tpa) and blanking line for 3,000 tonne of coin blanks.

While Salem Steel has the most sophisticated rolling mills in the country for stainless steel, it does not not have captive steel making facilities.

SAIL is trying to flog its stainless steel plant at Salem along with several other units elsewhere in a bid to get out of the red.

Earlier this year, the Union cabinet gave the go-ahead to SAIL to disinvest in the Durgapur-based Alloy Steels Plant (ASP), Salem Steel Plant, Visveswariya Iron, Karnataka and Indian Iron and Steel Company (IISCO). It also decided to sell its captive power plants at Bokaro, Durgapur and Rourkela, the second oxygen plant at Bhilai besides a fertiliser plant at Rourkela.

SAIL expects to earn about Rs 3,000-3,500 crore from the selloffs which it wants to utilise to retire its Rs 15,000 crore debt burden.    


 
 
DUNLOP DROPS WAGE-FREEZE PLAN 
 
 
BY A STAFF REPORTER
 
Calcutta, July 5 
Dunlop India today abandoned a proposal to freeze wages and deferred the introduction of a voluntary retirement scheme by three years under a memorandum of understanding (MoU) signed with the unions today.

The three-year agreement rules out immediate retrenchments at the crisis-ridden tyre maker.

The MoU is also important for the Dunlop India, which was directed by Industrial Development Bank of India — the operating agency — and the Board for and Financial Reconstruction (BIFR) to get written evidence that workers have confidence in the company’s management.

The MoU signed today centres on three points: voluntary retirement scheme and the payment of salaries and arrears. The management had said earlier that it would like to offer VRS to 905 people but it has now decided that it will launch the scheme after the number of people retiring in the normal course is clear.

However, this does not appear to have convinced all employees: While Citu union has not commented and refused to accept the fact that the VRS scheme has merely been postponed, the Intuc union has said it can consider the matter.

The company has also agreed to increase salaries in the way they are done now, reversing its earlier stand that it will freeze wages.

On the issue of arrears payments, the management said it will stick to the terms of the revival plan submitted to BIFR. Under this, it had promised to clear the arrears by March 31 next year. However, if BIFR rejects the plan, the amount would be paid on the basis of an agreement reached after discussions with the two unions.

The board, at its meeting held on June 23, had asked the management to submit a fresh revival plan within 15 days after an earlier blueprint was found to be sketchy.

The management has to pay the salaries for the three that led up to the suspension of work at its Sahagunj and Ambattur factories in February 1998 . In addition, the bonus of 7,500 odd workers have to be paid.

Today’s pact is an indication that the Dunlop management has been able to win the confidence of workers but banks, led by United Bank of India, are still sceptical about the repayment of their loans. “Dunlop should first clear our dues. Only then we can rethink about that company,” a senior UBI official said.

“The management had asked workers to make sacrifices. We had told them that they cannot do so.

The management has now accepted our proposal. We have signed the MoU because it does not compromise the interest of workers,” Chittabrata Majumdar, Citu general secretary said in response to the signing of today’s agreement.

Meanwhile, the salaries of workers for June are yet to be cleared. The company had paid wages for May on June 30. Company sources said the management is till holding talks on the MoU with unions at Ambattur and hopes to wrap it up soon.    


 
 
FOREIGN EXCHANGE, BULLION, STOCK INDICES 
 
 
 
 
Foreign Exchange
US $1	Rs 44.68	HK $1	Rs 5.65*
UK £1	Rs 67.68	SW Fr 1	Rs 27.05*
Euro	Rs 42.70	Sing $1	Rs 25.40*
Yen 100	Rs 41.42	Aus $1	Rs 26.30*
*SBI TC buying rates; others are forex market closing rates

Bullion

Calcutta		Bombay
Gold Std (10gm)	Rs 4670	Gold Std (10 gm)	Rs 4575
Gold 22 carat	Rs 4410	Gold 22 carat	Rs 4200
Silver bar (Kg)	Rs 7925	Silver (Kg)	Rs 8005
Silver portion	Rs 8025	Silver portion	Rs 8010

Stock Indices

Sensex	4912.11	+25.05
BSE-100	2491.51	-4.60
S&P CNX Nifty	1526.05	+14.75
Calcutta	135.92	+1.91
Skindia GDR	931.34	+13.84
   
 

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