SAIL turns the heat on Durgapur Steel
BSES okays share transfer to Reliance arm
Three-year wage pact at Hind Motors
DCA gears up to book defaulters

Calcutta, July 22 
The Steel Authority of India Ltd (SAIL) has threatened to close the loss-making Durgapur Steel Plant if the employees stall the sale of the captive power unit. Durgapur Steel, which has an accumulated loss of Rs 3600 crore, has over 21,000 employees with a salary overhead of around Rs 360 crore a year.

The DSP management circulated a letter last week saying “the critical financial position will affect even the payment of our salaries.”

“We may not be able to meet even our operating expenses. This may lead to a forced closure of the plant,” the letter, which was circulated in every shop-floor, said.

The letter has clearly indicated that it will not be possible for SAIL to fund the modernisation of blast furnace-II which will go out of operation early next year. “Unless the asset restructuring takes place immediately, SAIL would not be in position to fund any capital expenditure,” the letter said.

A senior SAIL spokesman said blast furnace-II, in which the dismantling process has already started, will need Rs 90 crore to be overhauled.

“The situation has reached such a stage that if the business restructuring is not carried out immediately, the plant, which suffered a loss of Rs 600 crore last year, will face closure,” he added.

At present, the plant has three blast furnaces—I, II and IV—operating while blast furnace-III is awaiting overhauling.

The sale of the captive power plant, which is part of the SAIL business restructuring plan approved by the government, had been stalled by the central trade unions led by the Centre of Indian Trade Union (Citu).

The Citu leadership had argued that the financial condition of Durgapur Steel would go from bad to worse if the power plant, which is providing power at a negligible rate, was sold.

“The SAIL authorities are trying to create panic among the employees of DSP to force them to accept the sale of the captive power plant. The sale may solve financial problems for the current year, but it is going to kill the plant in the long run,” says Shantu Debroy, Citu joint secretary.

Countering this argument, the SAIL management said the captive power unit would be spun off into a joint venture in which the steel major would have a stake.

“There are certain apprehensions about the restructuring which are not based on facts. SAIL, which will be a partner of the joint venture company, obviously will have the interest of the employees uppermost in its mind,” the management said.

The letter further stated that the proposed restructuring of assets was an absolute necessity to meet the cash deficit and provide for the cash requirements of loan repayments and capital expenditure.

“The failure to repay loans will make us defaulters which will spell doom for the company,” it added.    

Mumbai, July 22 
The BSES board today approved the transfer of 11.8 per cent equity in favour of Reliance Power Ventures Ltd, the power generation and distribution arm of Reliance Industries Ltd (RIL).

Reliance Power Ventures and Reliance Industries had secured these shares through an open offer made recently to BSES shareholders.

Speaking to The Telegraph, BSES chief R V Shahi confirmed that the shares were lodged before the board for approval.

BSES today reported a net profit of Rs 86.38 crore for the first quarter of this fiscal compared with Rs 87.61 crore recorded in the corresponding period of the previous year. Total income stood at Rs 614 crore as against Rs 689 crore last year.

According to BSES officials, 1.67 crore shares in the dematerialised form and 1.82 lakh shares in the physical form were sent for transfer by the Reliance subsidiary

Century in black

Century Textiles and Industries Ltd has posted a net profit of Rs 6.68 crore in first quarter ended June 30 against a loss of Rs 13.97 crore recorded during the same period of previous year. Income from operations for the reported quarter stood at Rs 553.29 crore as against Rs 528.92 of last year.

AllBank net dips

The net profit of Allahabad Bank has dipped by almost 50 per cent at Rs 70 crore for the financial year 1999-2000 compared with Rs 135 crore in the previous year. During 1999-2000, net non performing assets fell to 12.24 per cent from 12.54 per cent in the previous year. The bank’s capital adequacy ratio increased to 11.51 per cent from 10.83 per cent in 1998-99.    

Calcutta, July 22 
The management of Hindustan Motors has signed a three-year wage agreement with the Citu leadership yesterday that would put an additional annual burden of over Rs 10 crore on the beleaguered car maker. Hindustan Motors suffered a net loss of Rs 36.2 crore for the first quarter of the current fiscal after a Rs 62.3 crore loss last year.

Sales of Hindustan Motors dipped by over 15 per cent to Rs 316.7 crore during April-June 2000. Production of cars in July has been pegged at around 50 a day showing no signs of improvement in the company’s performance.

The Citu leadership and over 10,000 workers of the Uttarpara plant were under constant pressure because of lacklustre performance of the company. They heaved a sigh of relief following the wage increase effective from April 2000.

The agreement on Friday marked abolition of the budli system. The union leaders said the management has made over 600 budli workers permanent.    

Calcutta, July 22 
The government has decided to get tough with companies which have failed to respond to the amnesty scheme (Company Law Settlement Scheme 2000) launched on June 1. A miffed department of company affairs (DCA) is now planning to take the help of revenue departments to haul up errant promoters and directors.

The department is planning to ask income tax, customs and central excise authorities to initiate action against those companies which fail to comply with the settlement scheme by August 31.

The scheme allows the companies that have defaulted in filing their balance sheets, profit and loss accounts and annual returns with the registrar of companies (RoC) in the past, to do so through a one-time declaration and settlement. The scheme assures immunity from prosecution.

The government has said if the companies do not comply then it will direct the RoC to prosecute these companies.    


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