Dalmia looks for fresh targets
Race hots up for ONGC top post
Maruti workers to picket showrooms
Recast plan for weak banks ready
Govt eases norms for Air-India bid
Convergence in the age of Net dhabas
Foreign Exchange, Bullion, Stock Indices

New Delhi, Nov 1: 
Abhishek Dalmia, who hit the headlines with his bid to take over the Sheth family-controlled Gesco Ltd, will continue to be on the prowl looking for soft targets.

However, Dalmia has no interest in Great Eastern Shipping which yesterday announced a share buyback plan to ward off a predatory attack after being spooked by the corporate raid on its sister concern, Gesco.

“We are businessmen. We will always be on the look out for opportunities in our own area as well as in diverse businesses,” Dalmia told The Telegraph

“We have no systematic plan for takeovers (and) we don’t intend to be hostile takeover artistes .though we will remain on the look out (for) good opportunities,” said Dalmia, managing director of Delhi-based Renaissance Estates which has mounted the raid on Gesco.

Dalmia, who qualified as a chartered accountant in 1992 before going into his family business, said Great Eastern Shipping which announced a buyback plan to hike its promoters’ stake, need not panic.

“I am not interested in Great Eastern Shipping. I held GE Shipping shares for two years and sold them off in July-August this year. It may be asset rich but it’s an underperforming company.”

But that does not mean other families controlling asset rich, undervalued companies can rest easy. Even as the corporate grapevine was buzzing with speculation about how the Sheths would defend their turf against Dalmia’s open offer to buy Gesco shares from the market and how Sebi would react to charges that he violated the takeover code, Dalmia and his cousins quietly flew down to Chennai to look at the possibility of taking over two software firms in that city.

“I decided against it eventually,” he said. His cousins may however eventually buy these two firms up. “That of course would not be this kind of a deal — they are unlisted companies.”

The Dalmia family scion admitted he had floated Rennaisance Estates Ltd partly with the very purpose of mounting takeover raids.

He sees his battle to control Gesco succeeding quite easily though. “There were rumours that the promoters would make a counter-bid for quite a high amount. But the market prices of Gesco shares which flared up for a while are again subsiding. That means the market feels there will be no strong counter offer,” he said.

The young Dalmia is a streetsmart financial whizkid, though a complex blend of the old with the new. He wears costly western style suits even as he sports a tiki, tuft of hair hanging loose from the pate which many conservative Hindus and Jains sport.

But obviously he is not into conservative takeover styles. He however claimed he has not finalised any of the buyout deals he has been negotiating for Gesco shares.

“I am talking to both the foreign institutional investors and the financial institutions which together control about 34 per cent of Gesco shares. They have shown interest. Nobody has said no as yet.”

Dalmia said he was willing to wait for his prey even if the Sheths, who have a 12.5 per cent stake in Gesco, come up with legal stratagems to block his takeover bid.

“They are arguing over facts with me. I feel I did not need to disclose my buying Gesco shares from people whose assets I have been managing as I eventually brought down my holding limit below 5 per cent within the stipulated period. They feel otherwise. Sebi, I am sure, will take a decision within a month at the most.”

The main reason why Dalmia junior is willing to wait is that he considers Gesco not only to be asset rich but also to be under-valued. “The book valuation is about Rs 150 crore but then all real estate companies are undervalued; their assets have far higher values.”

His decision to try grab Gesco, a real estate business spun off by Great Eastern Shipping, was however sparked off by a chance remark by its chairman Sudhir Mulji at an AGM meet where Mulji apparently said he would welcome a takeover bid. It all started, he said, when he got some free shares as a payoff for holding GE Shipping equity.

“I sold those shares off but I got a balance sheet, which convinced me this was a good buy,” Dalmia said. At an annual general meeting soon after, Dalmia recollected a small shareholder stood up to try and warn Mulji that with high assets and low promoter stake, Gesco was a prime takeover target.

“Mulji simply told the shareholder — ‘Why are you worried? A takeover bid will enhance equity value; that is to be welcomed’.”    

New Delhi, Nov 1: 
The exit of secretary S. Narayan from the ministry of petroleum and natural gas may change the fortunes of quite a few candidates in the race for the top slot in Oil and Natural Gas Corporation (ONGC).

Narayan had strong views about the calibre and personal integrity of some of the directors and was seriously looking for a suitable candidate outside ONGC.

Though Narayan must have recorded his views about the merit of each candidate, his successor may try to make a fresh assessment.

As the present incumbent Bikas Chandra Bora is to continue till April next, the Public Enterprises Selection Board (PESB) interview can wait for a couple of months.

Both minister Ram Naik and secretary Narayan were in favour of a strong executive, preferably a senior military official. What ONGC needs at this stage is a strong administrator and not a technocrat. Even Bora has the same opinion. If that view finally prevails with the new secretary P. Shankar, chances of any of the ONGC directors making it to the top post looks dim.

An official assessment of internal candidates put finance director I.N. Chatterjee on top. But he lacked the toughness the ministry was looking for. Atul Chandra, the boss of ONGC-Videsh, did not enjoy a good equation with Narayan. With his exit, Chandra’s chances have improved. But his main rival is Avinash Chandra of Directorate of Hydrocarbons who is making an all-out effort to get the post. His main weakness is lack of adequate field experience. The Andaman fiasco is also held against him by his detractors (he was the author of the theory that Andaman was floating on gas which he could not prove even after the government financially backed him).

The emergence of Subir Raha, director (personnel) of IOC, as a possible candidate has created panic among the aspirants from the upstream sector. Raha is unlikely to offer himself as a candidate unless asked by the ministry. Here again, it remains to be seen whether Shankar shares Narayan’s perception about Raha. When contacted, Raha said he had applied for the post. Raha is rated a tough executive, a quality the ministry is looking for.

At one stage, oil industry circles rated S.N. Mathur of IBP Ltd as a possible successor to Bora. He has been rated quite dynamic and was recommended for the chairman’s post of Hindustan Petroleum by the PESB. But the marketing lobby of the company with the help of dealers scuttled his chances. He was persuaded to take up the leadership of IBP Ltd on the promise that he could move to IOC later. The ministry did not honour its commitment. Mathur still could be considered as a candidate for ONGC.

The interview is now scheduled to be held by end of November but it may be postponed to December.    

New Delhi, Nov 1: 
Maruti Udyog is bracing for a long winter, with no solution in sight to the month-old agitation.

Adding a fresh twist to the stalemate between the unions and the management, striking Maruti employees hardened their stance today, threatening to picket all Maruti showrooms even as the government indicated it may intervene to end the stalemate.

Mathew Abraham, general secretary of Maruti Udyog Employees’ Union (MUEU) said, “We will start picketing all the Maruti dealers all over the country if the management does not resolve the issue within a week.”

“We were not on strike nor are we interested in resorting to a tool-down agitation to get our demands met. It is the management which pushed us to resort to such methods. We are ready to go back to work, but without signing the ‘good conduct undertaking’,” he added.

MUEU leaders along with members of the central trade unions today met the minister for heavy industries Manohar Joshi, who assured them that the government will look into the matter.

“The minister said that he has called a meeting of government nominees on the Maruti board and the heavy industries’ secretary to sort out the matter,” said Abraham.

Earlier, Joshi told reporters he had briefed Prime Minister Atal Behari Vajpayee on the current scenario at Maruti Udyog.

Meanwhile, the management of Maruti Udyog (MUL) today claimed that it will reach its regular production level of 1,200-1,400 units per day in the next couple of days.

Khattar claimed that Maruti dispatched 1462 units and produced 1107 units today. However, Abraham claimed that most of the cars which were despatched today included four-month old Esteems and Wagon-Rs which the company itself had declared as non-saleable. He also claimed that only 3,600 employees out of the total 5,800 are reporting for work at the factory.

Meanwhile, former chief executive of Maruti Udyog, R.S.S.L. N . Bhaskarudu today advised both the MUL management and agitating employees to sort out contentious issues like incentive and pension schemes amicably through dialogue while denying any role in the labour unrest in the auto company.

When contacted about media reports that he was encouraging unions for prolonged agitation, Bhaskarudu told PTI that he had left MUL 15 months ago and since then he had no part to play in the company directly or indirectly.    

New Delhi, Nov 1: 
Union finance minister Yashwant Sinha said the government would set up a financial restructuring authority to deal with the problems of weak banks on a continuous and long term basis.

Addressing the members of the consultative committee of finance, Sinha said, the restructuring plan of weak banks has been finalised. The boards of these banks are being reconstituted with professionals and the government will do its best to revive them.

He said, a credit information bureau is being set up so that banks and financial institutions (FIs) can share information about borrowers. Similarly, steps are also under way to replace Sick Industries Company Act and put in place new Bankruptcy Laws.

Regarding the proposal to bring down government’s equity in nationalised banks from 51 per cent to 33 per cent, Sinha clarified that there is no proposal for disinvestment of government equity and the public sector character would be retained.

However, as per the Narasimham Committee report, the capital adequacy ratio is likely to be increased from 9 per cent to 10 per cent. Hence, some banks would have to raise capital to meet these norms.

The government proposes to bring the necessary legislation in the ensuing session of the Parliament which will facilitate nationalised banks to raise capital from the market.    

Mumbai, Nov 1: 
Domestic bidders for Air-India can now breathe easy with the inter-ministerial group on disinvestment clarifying that interested parties can submit individual expressions of interest.

Merchant banking circles aver that the clarification to allow individual expressions of interest will give interested parties more time to strike alliances with global majors.

Further, the inter-ministerial committee on disinvestment has clarified that the provision which allows FIs to acquire a 10 per cent stake in A-I does not include foreign financial institutions. This effectively bars foreign banks and multilateral agencies from acquiring a stake in A-I.

Bidders who qualify and sign a confidentiality agreement will be provided a package comprising an information memorandum, agreements and terms of reference. The shortlisted bidders will then have to submit an initial technical proposal with their comments on the business plan being developed by Air-India and areas where they can add value.

Those who make it to the final stage following an evaluation of these proposals, will be allowed access to the data rooms and will have to submit a final technical and financial bid.

Players planning to go it alone initially before they sew up a foreign alliance will, however, have to fulfil the net worth criteria of Rs 1000 crore. “The joint venture/consortium will have to be formed before the initial technical proposal,” the airline said.

The government had called for an ‘expression of interest’ from prospective suitors on September 28, for taking a 60 per cent stake in the country’s national flag carrier. The bidders were required to submit an expression of interest by November 10.

However, after it invited the ‘expression of interest,’ the government found that several grey areas in the notice needed clarification.

The government’s first major disinvestment proposal is being followed closely by global airline majors.

The IMG has also clarified that even a company where Indian nationals have a majority stake, but do not have management control will not be eligible.

“It will have to be both owned and effectively controlled by Indian nationals.”    

New Delhi, Nov 1: 
In May this year, Pavan Nigam, chief technical officer and co-founder of Healtheon Corporation, a Silicon Valley, US, firm was here to address a seminar. His topic: Creativity in the era of convergence.

But that was 2000 Nasdaq points ago.

Nigam was back today for another chat session. This time his topic was: “Surviving in the era of convergence.”

In the time that Nigam left for Silicon Valley and then returned to India, even Failures.com, a firm that made a business out of listing sunk and sinking companies, filed for bankruptcy.

The reality check in the internet world has been so bitter that Nigam and friends are calling it the “Revenge of the Notcoms” for it was beginning to look like the predictions of the doomsayers — brick and mortar faithfuls who never set much in store by the New Economy — were beginning to come true.

Their counterparts in India are looking to them for answers — the reason why Nigam was invited to attend a FICCI seminar on convergence — and draw lessons on how to cut through the web jungle. Nigam does not have quick-fix solutions but he has drawn up a list of seven myths and realities.

Sample three:

Myth: The Internet will change the world

Reality: The Internet is only an enabling technological infrastructure — it will impact some business models a lot, many a little and still many not at all

Myth: Industrial transformation will happen in Internet time.

Reality: Creation happens in phases; adoption in stages

Myth: New Economy companies are not subject to Old Economy rules

Reality: Laws of economics don’t make exceptions; they only sometimes allow brief honeymoons.

For Indian ‘netrepreneurs’, the reality check has been harsher still. Even NASSCOM chief Dewang Mehta, the high profile software industry spokesman, has added “bijli” (electricity) to his slogan of roti, kapda, makaan and bandwidth.

“It’s all here. Its possible for us to turn into absolute computer-driven zombies. The mobile handset or the television remote can adjust the airconditioning, tune the TV to your favourite programme, book your airline ticket, seamlessly transport you from one part of life to another with almost no application of mind. But it’s not going to happen just now. Outside the domains of technology geeks and nerds, convergence has not really happened,” says Siddhartha Ray, managing director of Delhi-based Data Access (India), which describes itself as “A Pacific convergence corporation company”.

In India, it would seem, technological feasibilities turn nastily into sociological impossibilities. Divergence rules where convergence might. But the great Indian bazaar can actually distill from conventional beliefs its own logic of survival.

At the FICCI meet on convergence, an NGO, Development Alternatives, gave a glimpse of how this could be done. Development Alternatives, run by Ashok Khosla, who used to co-host an environment programme on television with Maneka Gandhi, is launching a portal, TARAhaat.com, that has targeted a Nasdaq listing.

“There are limits to convergence,” says Khosla. “We need to look at convergence in many different ways, only one of which is technological.”

TARAhaat is targeting the rural market. “750 million people, 150 million households, 550,000 villages,” expounds Khosla. His formula, he says, is the same that revolutionised brand marketing in rural India when shampoos were sold from 1992 in satchets with the result, says Khosla, that the consumption of shampoos in the country is “nearly equal to the consumption of shampoo in France.”

Khosla claims his “internet-in-a-satchet” will make the web available to the illiterate, too. TARAhaat is setting up kiosks — called TARA dhabas — that will be connected through TARAdish satellite connections (that will eliminate the need for telephones). For power supply, the TARA dhabas will have solar power. TARAhaat will deliver goods through a fleet of vehicles called TARAraths. Basically, TARAhaat will be a vehicles for transporting goods, transactions for which will be through the net, to and from villages. It will also provide rural users information relevant to them.

A test project is currently in operation in the Bundelkhand region, near Jhansi. TARAhaat’s strategic partners include Hughes Escorts Communications (for satellite dishes), Sankhya Vahini (for terrestrial connectivity), IGNOU (for distance education), James Martin and Company (for software) and the National Youth Cooperative. Half of TARAhaat’s equity will be owned by the NGO. A consortium of venture capitalists (‘angels’) have offered startup funds and matching funds will be provided by USAID.    


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