Markets mauled in Parekh backlash
Growth gloom deepens in 3rd quarter
Brokers bow out of CSE board
Dissent note in Rathi ruling
Bankers to take stock at April 30 meeting
Aviation fuel to be 15% cheaper
Exit bell rings for 200 Tata Steel officers
Uco operating profit set to top Rs 200 cr
RBI turns heat on bank officers
Foreign Exchange, Bullion, Stock Indices

Mumbai, March 30: 
The arrest of Ketan Parekh — who earned the moniker of Big Bull for his awesome clout on bourses —knocked 147 points off the Bombay Stock Exchange (BSE) sensex amid dire warnings of a selling avalanche next week.

Fears mounted that his troubles will keep the market on tenterhooks, and trigger a slump more brutal that ripped investors today. “Retail investors should forget about investing in the current circumstances and sit tight. We have entered choppy waters again and the arrest of Parekh will let the bears loose. Stocks are in for a whipping in the days ahead,” said Nikhil Vora, senior portfolio advisor,

Most brokers say the selloff will not be limited to the K-10 stocks —the Big Bull’s technology picks — and old-economy shares will be sucked into the vortex. “The markets are in a bad shape and precariously perched,” a broker said, adding Parekh’s speedy trial was the only way to keep it steady.

Early on, the sentiment was shattered when reports about Parekh’s links with the pay-order scam at Madhavpura Co-operative Bank surfaced. Then, there was a buzz that brokers responsible for the post-budget meltdown were also being rounded up, apart from stories about payment problems at a leading BSE brokerage, and the sale of shares by Morgan Stanley due to mounting redemption pressures.

The slump was hastened by end-account factors, the reluctance of domestic operators and speculators to carry forward positions in a choppy market and margins as high as 70 per cent.

The 30-share index opened weak at 3714.11, plumbed an intra-day low of 3589.93 before closing at 3604.38 against Thursday’s finish of 3751.56, a decline of 147.18 points or 3.92 per cent.

HFCL, Global Tele-Systems, SSI, DSQ Software, Zee Telefilms, Silverline, Pentamedia Graphics and Satyam Computers — all Parekh favourites — took it on their chin. HFCL and Global TeleSystems were frozen at their lower-end circuit filter of 16 per cent after they tested new 52-week lows.

Zee Telefilms, Digital Equipment India, SSI, DSQ Software, Mastek, Aptech, NIIT and Infosys Technologies were also roiled. ITC was the only sensex share to have closed with gains.

The volume of business was low at Rs 977.97 crore. Satyam clocked a turnover of Rs 124.21 crore, Infosys Rs 120.15 crore, Zee Rs 55.63 crore, Reliance Rs 52.09 crore and HFCL Rs 50.10 crore.

Satyam Computers dropped by Rs 10.85 at Rs 233.90, Infosys by Rs 328.30 at Rs 4082.90, Zee by Rs 12.05 at Rs 121.60, Reliance by Rs 5.10 at Rs 390.90, HFCL by Rs 30.20 at Rs 158.60, NIIT by Rs 53.80 at Rs 716.25 and Global Tele-Systems by Rs 28.70 at Rs 161.50.

Investor complaints

The government today announced a series of effective steps to expeditiously redress investor grievances, including fixing up of a time limit for disposal of complaints and computerisation of the activities of the department of company affairs (DCA). Under the new measures, relevant powers have been delegated to Sebi for expeditious settlement of investors complaints relating to listed companies. The time disposal for such complaints has been reduced to 90 days from 120 days, an official statement said today.


New Delhi, March 30: 
Another evidence of a slowdown, this time stronger and more ominous. The growth rate in third-quarter gross domestic product (GDP) has dipped to 5.7 per cent compared with 6 per cent in the same period of 1999-2000.

Figures released by the Central Statistical Organisation (CSO) today make the anaemic second quarter numbers look rosy. The growth rate in July to September was 6.5 per cent against 6.2 per cent during the same period of the previous fiscal.

In estimates based on constant (1993-94) prices, third-quarter manufacturing growth has been pegged at 6.1 per cent compared with 7.1 per cent in the corresponding period of 1999-2000. GDP at factor cost (current prices) was up 11.3 per cent against 8.2 per cent in the corresponding period of the previous year and 11.4 per cent in the second quarter.

A silver lining was the performance of the construction industry, where growth inched up to 9.6 per cent from 8.5 per cent in the same period last year.

Electricity, gas and water supply taken as a sector has done well too, clocking 7.7 per cent against a poor 2.9 per cent during the second quarter of the current fiscal.

Growth in agriculture, forestry & fishing has been estimated at 1.2 per cent against a negative 1.1 per cent while that in mining and quarrying sector 4.3 per cent compared with 0.9 per cent.


Calcutta, March 30: 
The eight elected committee members of the Calcutta Stock Exchange (CSE) today resigned from the board, capping three weeks of turbulence set off by the worst-ever payment paralysis in the life of the 100-year-old bourse.

Executive director Tapas Datta confirmed the resignations, and said the board will continue to function with six public representatives and three nominees from the Securities and Exchange Board of India (Sebi), apart from himself.

Asked whether the members had been told to put in their papers by the Securities and Exchange Board of India (Sebi), Datta said he was not aware of such a development. Those who quit today are J.M. Choudhury, Girish Mehta, Ajit Khandelwal, Raju Bachhawat, Rajendra Agarwal and Bipin Dewra, besides vice-president K.K. Daga and president Kamal Parekh. Dinesh Singhania, declared a defaulter, had resigned earlier.

A senior CSE official said the exchange is waiting for orders from the regulator, which will have to be consulted when the governing committee of the exchange is reconstituted.

Sebi chairman D.R. Mehta said CSE would continue to function without broker-directors on its board for the time being. He saw no problems in the interim arrangement, where the executive director would be the administrative head.

He made it clear that the existing system would continue till the regulator takes a decision, and ruled out any fresh induction.

Dutta said the resignation of broker-directors would not affect the bourse, which would be able to manage with its truncated governing committee of 10 members.

The term of the present board would have ended in August.

Brokers, who are mostly happy with the resignations, have already started regrouping in view of mid-term polls, sources said. They feel the new elected members should be young and competent enough to deal with the situation on the exchange.

The communication gap seen between the present directors and the members should not be allowed to recur.

“However, broker-directors are needed since the public nominees, many of whom have no experience in the way the market operates and do not understand the brokers,” they said.


Mumbai, March 30: 
Sebi today stuck to its earlier decision, restraining former BSE president Anand Rathi and his firms from trading on the bourses. The ruling, however, was marked by a dissent note from Jayant R. Varma, senior member of the panel. The market regulator’s ruling came in the wake of a directive from the Mumbai High Court and Sebi officials said a copy of the order was delivered to Rathi. Three members of the five-man panel, D.R. Mehta, Rakesh Mohan and S.P. Talwar, stood by the decision not to allow Rathi to conduct business.

However, Jayant Varma gave a dissenting note saying that there “was no need for preventing him from conducting business.” Another member Kumar Mangalam Birla did not attend today’s meeting.


Mumbai, March 30: 
Worried bank managers will meet on April 30, under the aegis of the Indian Banks Association (IBA), to discuss and find solutions to problems arising out of stock market crisis.

IBA chairman S. S. Kohli, who also heads Punjab National Bank, which has been affected by the pay-order scam, said though prudential norms relating to banks have been tightened by RBI, there are certain “problems relating to the system” which need to be looked at.

The IBA chief pointed out that public sector banks have not been hit by lending to the stock markets, but more by non-payment of pay orders.

The RBI is also learnt to be getting its act together in the pay-order scandal. Sources say the central bank is set to investigate the damage caused to commercial banks that have been hit by the non-payment of pay orders. The investigation is likely to begin after the completion of preliminary investigations into the Madhavpura Bank affair.

Though estimates vary, it is projected that commercial banks, led by the Bank of India, State Bank of India (SBI) and many others have taken a beating to the tune of Rs 300-500 crore.

PNB weighs legal action

PNB, which has been affected to the tune of Rs 17 crore in dealings with two co-operative banks, is likely to take legal action for recovering the amount from these banks. Kohli said the bank is considering legal action against these co-operative banks.

In the first instance, while a Rs 7 crore pay-order was not honoured by Classic Co-operative Bank, PNB has been set back by Rs 10 crore in a dealing with Madhavpura Bank, relating to the call-money market. Among the various nationalised banks, State Bank of India is reported to have taken legal action against Classic Co-operative Bank.


New Delhi, March 30: 
The government today announced that aviation turbine fuel (ATF) will be decontrolled from April 1 and reduced the prices by about 12 to 15 per cent.

Petroleum minister Ram Naik, announcing the decontrol measure, said that ATF, which used to be priced higher to help cross-subsidise cooking gas and kerosene, would now be determined by the market.

“The government has decided to decontrol the pricing of ATF with effect from April 1,” Naik told newspersons here.

Naik said ATF prices would come down by about 15 per cent varying slightly between cities due to differing sales tax rates.

While the fuel which powers aircraft will cost Rs 17.55 in Delhi down by over Rs 3 from the current price of Rs 20.78 a litre, it will cost Rs 17.89 in Mumbai down from the current price of Rs 22. In Calcutta it will be come down from Rs 22.81 to Rs 19.63 and in Chennai from Rs 22.19 to Rs 17.74 a litre.

Naik said the government would adhere to the phased programme for dismantling the administered price mechanism (APM) of other petroleum products which was kicked off in 1998. It is expected to end by March 31, next year. “APM will be phased out by March 31, 2002, by gradually doing away with subsidies in the consumer prices of petroleum products and rationalising customs and excise duty structure,” he said.

As a direct fall-out of the dismantling process, kerosene and cooking gas would no longer be cross-subsidised by other fuels. Instead, from next year, the central government would pay direct subsidy on these fuels at the rate of 33.3 per cent of the global market price for kerosene and 15 per cent for cooking gas.

As a pre-requisite for decontrolling ATF pricing, the government earlier brought a legislation exempting ATF sales to foreign airlines from levy of the state sales tax.

Naik said the Bill could not be passed during the ongoing budget session of Parliament due to the impasse over armsgate exposure. But he hoped smooth sailing of the Bill once Parliament reassembles after a three-week recess on April 16.

The amounts of sales tax paid to the state governments on the sale of ATF to foreign airlines would, pending enactment of the legislation, be reimbursed to the oil marketing companies from the oil pool account, he added.

The airlines welcomed the government move to decontrol ATF.

“Our fuel bill is about Rs 750 crore a year, a 12 per cent cut in prices would mean saving nearly Rs 90 crore,” said Robin Pathak of Indian Airlines. It could mean the difference between profit and loss for the country’s three domestic carriers.


Jamshedpur, March 30: 
In its relentless endeavour to get the competitive edge, Tata Steel will shed 200 of its 4,500 top-rung officers from May 1 as part of a plan to trim its workforce to size.

The move comes on the heels of Professional Ethics Programme (PEP), a drive that aims to reduce the layers within the organisation and decentralise its functioning. It also seeks to encourage meritocracy and a system where impact level and designation drive hierarchy and compensation.

“PEP will reduce the layers of officers from 14 to five. The immediate effect will be felt in the top three rungs (IL 1, IL2 and IL3), where 200 of the 1,100 officers will start leaving from May 1,” managing director Jamshed J Irani said here today.

Those who will be asked to hang up their boots early have already been selected through a rigorous process. These officers will be given benefits handed out to the 18,000 employees who have opted for the early-separation scheme. The company will also help them find alternative jobs.

Later, the steel major will examine whether jobs in the IL4 and IL5 cadres, which form a big chunk of the total number of officers, can be axed. “The cuts will continue till we attain a size that is accepted internationally,” Irani added.

The Tisco MD said the scope for reducing the number of officers was less than it was in the case of workers, whose strength has come down from 78,669 in 1993 to 48,500 in March.

The professional ethics programme requires the company to delegate financial powers to lower rungs and to see that it is seen as an ‘employer of choice’. The plan, once completed, will help lure managerial and engineering talent it has been losing to other industries by offering attractive salaries.

On the Gopalpur project, managing director-designate B. Muthuraman said his company will not build a steel plant because the infrastructure is poor and there is not much of a market for the products which would have been made there.

“We are thinking of turning the land into a special economic zone,” he said, adding talks with the Orissa government to go ahead with the plan are under way. “The industrial development corporation of Orissa has received the Centre’s clearance to develop the place. Tata Steel’s land will be developed by the state government and other agencies.”

Though Tata Steel will have no stake in the zone, but Muthuraman said his company could offer its expertise to industries that set up shop there.

“Companies which want to operate out of the special economic zone will have to buy land from us. However, the plan is still in its infancy,” he added.


Calcutta, March 30: 
The city-based Uco Bank will achieve an operating profit of more than Rs 200 crore in the financial year ending March 31, 2001, chairman and managing director V. P. Shetty said.

Speaking to The Telegraph, Shetty said, “The operating profit will be more than Rs 200 crore.” However, he declined to comment on the net profit figure.

The bank posted a net profit of Rs 38 crore in 1999-2000. Operating profit in the last financial year went up by more than three-and-a-half times from Rs 38 crore to Rs 177 crore. This had come from both fund-based and non-fund based business.

Though the Uco chairman remained silent on the bank’s profitability, he had earlier said the bank expected to post a net profit of Rs 79 crore by the end of 2000-01. Out of the Rs 79 crore, overseas operations would contribute Rs 40 crore.

The bank has also been able to make a cash recovery of its non-performing assets to the tune of Rs 300 crore in the current fiscal. “Net NPAs have come down below 8 per cent, which is a major achievement for us,” Shetty said. The gross NPAs of the bank as on March 31, last year stood at Rs 1,650 crore and net NPAs were a little below Rs 700 crore.

Under the restructuring plan submitted to the government, gross NPAs will have to come down to Rs 1352 crore by 2003 and net NPAs will have to be maintained at Rs 629 crore.

The bank has also got six new directors on its board. Shetty said these posts were vacant for quite some time. The new directors are A. Sakthivel and Mahesh Kumar Bhagchandka, both businessmen, Bhalachandra Mahadev Bhide, retired deputy managing director of the State Bank of India, Sanat Kumar Dattga, a chartered accountant, Ram Avtar Yadav, a professor at Delhi University and Mousumi Ghosh, professor of Indian Institute of Management, Calcutta.

Talking about the bank’s Rs 50 crore bond placement, which has a greenshoe option of Rs 50 crore, to raise the tier-II capital, Shetty said, “The bond has received overwhelming response and has been oversubscribed.”


Calcutta, March 30: 
The Reserve Bank of India will get tough with officers who do not attend office on April 1, a Sunday, for the annual closing of bank accounts.

The central bank has unofficially communicated to all banks that they can show-cause officers who will not be present on the day. There are about 2.5 lakh officers in the entire banking industry.

When contacted, the RBI spokesperson said from Mumbai, “The RBI is sticking to its earlier directive that banks will have to close their accounts on April 1. Banks will now have to take their own decision. We do not like to interfere in employer-employee relations.” The banks are however, aware that they can take action against officers who do not attend office on April 1, the spokesperson added.

The week beginning April 2 has a series of holidays. While Ram Navami falls on April 2, Muharram is on April 5 and April 6 is a holiday for Mahavir Jayanti. So practically, banks will remain open only on April 3 and 4. However, officers of SBI have called a strike on April 4, which has been supported by the staff.

The All India Bank Officers Confederation has decided to stay away from work on April 1. They have been supported by the All India Bank Officers Association, Indian National Bank Officers’ Congress and National Organisation of Bank Officers.

AIBOC representatives said that they will stick to their stand and the officers will not attend office that day.

A top-level official from the Indian Banks’ Association told The Telegraph from Mumbai, “We had an hour-long meeting with the RBI officials today on the matter. We discussed how the situation can be handled if the officers stay away from work on April 1. However, IBA cannot take any action against the employees.”

Officers said the RBI should have taken such decisions several months earlier, when the state governments notified and declared their respective calendars of public holidays for the next year. These public holiday notifications by the state governments were issued in the last quarter of the year 2000.

Tarakeswar Chakroborti, general secretary of All India Bank Employees’ Association said, “We fully support the officers’ standpoint. Since the award staff are to be paid overtime, they shall go to the bank but will not undertake any officers’ work.”



Foreign Exchange

US $1	Rs.46.63	HK $1	Rs.  5.90*
UK £1	Rs.66.49	SW Fr 1	Rs. 26.50*
Euro	Rs.41.11	Sing $1	Rs. 25.55*
Yen 100	Rs.37.26	Aus $1	Rs. 22.50*
*SBI TC buying rates; others are forex market closing rates


Calcutta			Bombay

Gold Std (10gm)	Rs.4310		Gold Std(10 gm)	Rs.4225
Gold 22 carat	Rs.4070		Gold 22 carat	Rs.3910
Silver bar (Kg)	Rs.7375		Silver (Kg)	Rs.7270
Silver portion	Rs.7475		Silver portion	Rs.7275

Stock Indices

Sensex		3604.38		-147.18
BSE-100		1691.71		- 74.59
S&P CNX Nifty	1148.20		- 46.90
Calcutta	 121.40		-  2.72
Skindia GDR	 632.62		-  7.24

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