Meet to untie telecom knot flops
LIC sets new growth milestones
Centre, state to renegotiate pact with Dabhol
Clampdown on bank exposures
Lever to absorb two units
KPMG report on Haldia by mid-May
New twist to selection of Gail chairman
Sebi report on Rathi under wraps
Foreign Exchange, Bullion & Stock Indices

New Delhi, April 23: 
A meeting between cellular firms and basic operators, who want to offer the WiLL-based limited mobility service, ended in deadlock today, hours before the group of ministers on telecom and infotech (GoT-IT) sat down to discuss an issue that has divided the government and the telecom industry down the middle.

The Association of Basic Telecom Operators (ABTO) said it had failed to reach an agreement with the Cellular Operators’ Association of India (COAI), which stuck to its stand that it had exclusive rights to all types of mobility. Basic service companies argued in a letter to finance minister Yashwant Sinha, who heads GoT-IT, that limited mobility was part of their licences and, therefore, did not warrant a discussion.

The stalemate occurred amid reports that the basic operators’ association was divided between Tatas, Bharti and Hughes — which want basic licences but also have big cellular phone businesses — and Reliance, Shyam and HFCL, which have a small interest in the cellular business.

“The reason for the split among fixed phone companies was that Reliance, Himachal Futuristic Communications and Shyam Telecom wanted discussions only on the three questions of limited mobility, while Bharti Telecom, Tata and Hughes were pressing for a broader debate,” a source said. “Those who favoured a limited discussion were apprehensive that doing otherwise would have diluted the real issue. This resulted in a split and, as a result, Bharti, Tata and Hughes sent separate letters to GoT-IT,” the source added.

However, an ABTO spokesperson denied there was a rift, saying the representatives of all six members were present when its views were submitted to the ministerial panel.

Cellular operators countered the claim by basic service providers that their licences entitle them to offer mobility. They claimed that the WiLL-based mobility is a full-fledged service and the government would be discriminating between the two types of cellular players if it decides to introduce it.

“The telecom objectives of the country will be best met through free and fair competition. The de-regulation of the sector should be in tune with the National Telecom Policy 1999 and the Telecom Regulatory Authority of India Act,” COAI said.

Members of both associations held a meeting before submitting their views to Sinha. “We regret to inform you that no consensus could be reached because COAI said discussions should start from the point that all kinds of mobility should rest with those who have a cellular service provider,” ABTO said in its letter handed over to the group of ministers.


Mumbai, April 23: 
Life Insurance Corporation of India’s (LIC) performance was trail blazing last fiscal, creating new milestones and registering high growth rates in first premium income and sum assured under the new policies.

LIC sold more than 2 crore new individual policies, a growth of 16.29 per cent over previous year.

The sum insured under new policies crossed the landmark of Rs 1,00,000 crore to touch Rs 1,29,754.24 crore, registering 37.53 per cent growth. The first premium income, which showed an all time high growth of 64.98 per cent, amounted to Rs 6,262.39 crore.

LIC chairman G N Bajpai said with 60 per cent growth in 2000-2001, the corporation targets 40 per cent growth this fiscal. It’s joint venture with Nepal-based group will start operations in 45 to 60 days, he added.

LIC Mauritius Offshore Ltd, a 100 per cent subsidiary based in Mauritius, will cater to eight African countries.

Between December and February, LIC has completely divested its holdings in Himachal Futuristic. “We have zero holding now,” said a senior LIC official.

LIC has invested nearly 56 per cent of its Rs 1,92,000 crore investible corpus in the government securities. The market value of its equity portfolio is said to be around Rs 26,000 crore skewed heavily in favour of old economy stocks.

Sterlite Optical net soars 139%

Sterlite Optical Technologies Ltd (SOTL) registered a net profit of Rs 100.26 crore in the third quarter of the financial year ending March 31, up 139 per cent from Rs 41.93 crore in the previous corresponding quarter.

Net sales of the company grew 55 per cent at Rs 227.49 crore against Rs 146.60 crore in the previous year.

Aggregate turnover for the first nine months of the year increased by 49 per cent to Rs 754.3 crore while net profit increased by 115 per cent to Rs 246.9 crore, said the company.

Indo Gulf net up

Indo Gulf Corporation Ltd has posted a 19 per cent growth in net profit for the year ended March 31, 2001 at Rs 251.67 crore against Rs 212.21 crore in the previous fiscal. Net sales of the company grew 6 per cent to Rs 2198.80 crore over Rs 2071.36 crore registered in the previous year.

Kesoram net at Rs 46 cr

Kesoram Industries Ltd’s turnover was Rs 1,345 crore in 2000-2001, while gross profit stood at Rs 92 crore, an all time high in the company’s history, said S K Parik senior president. The net profit increased to Rs 46.45 crore from Rs 41.49 crore in the previous fiscal. Kesoram has announced 20 per cent dividend.

Raymond offers 30% dividend

The board of Raymond Ltd has recommended a 30 per cent dividend for the fiscal year ended March, 31, 2001. The company’s net profit was Rs 32.22 crore in the last fiscal as compared to Rs 31.71 crore recorded in the previous year.

However, gross turnover was lower by 11.21 per cent to Rs 1477.29 crore as against Rs 1663.88 crore in 1999-2000. The operating profit was lower by 60.88 per cent at Rs 25.24 crore (Rs 64.52 crore), said a press release.


New Delhi, April 23: 
A team comprising central and the Maharashtra government officials will renegotiate the controversial power purchase pact with Dabhol Power Company.

“The team will renegotiate the pact,” finance minister Yashwant Sinha told reporters after a meeting between him, power minister Suresh Prabhu, Maharashtra chief minister Vilas Rao Deshmukh, and Sharad Pawar, head of the Nationalist Congress Party which is part of the ruling coalition in Maharashtra.

The team to be set up within a week will talk tough with Enron on scaling back the cost of power purchased from Dabhol and how much power Maharashtra will consume. Currently, Maharashtra has to either consume or pay for all the power produced by Dabhol.

“We have to see if the state can use all the power generated and whether excess power can be wheeled out to needy states,” the finance minister said.

While the Centre will have one representative on the team, the state government will nominate the rest. “We hope DPC responds positively to this and do not take steps that will precipitate a crisis,” Sinha said.

US power giant Enron, which owns the Dabhol project, has already slapped arbitration notices on the Centre for non-payment of its power bills by the Maharashtra government which has been buying power from it.

The Centre had stood guarantor for the payments when Dabhol Power and MSEB signed a power purchase pact.

The finance minister added that a report filed by a state government committee — the Godbole Committee — “would form an important input for the negotiations.” The committee had ruled that the power purchase pact was loaded in favour of Dabhol Power and sought its renegotiation.

Responding to questions on Enron’s reported move to pull out of Dabhol Power, Sinha said, “We will cross that bridge when we come to it.”

The Centre had earlier decided it would not pick up the counter guarantee tab for Dabhol Power Company’s unpaid bills.

The Maharashtra government had earlier asked the Centre not to cough up the counter guarantee money as Dabhol Power owed the state some Rs 401 crore by way of penalty towards short supply.

Dabhol Power had demanded Rs 102 crore from the Centre stating the Maharashtra government had defaulted on its state electricity board’s December payment.

Maharashtra claims Dabhol had supplied a mere 154 mw of power against the contracted 657 mw to MSEB between October 2000 and January 2001.


Mumbai, April 23: 
Following the recommendations of the RBI-Sebi technical committee, the central bank today tightened the norms for banks’ exposure to stock markets, fixing a ceiling of 5 per cent and raising the margin on advances against shares and debentures to stock brokers to 40 per cent from the present 25 per cent.

The Reserve Bank said the ceiling will apply to the total exposure of a bank to stock markets in all forms and it will cover direct investment by banks in equity shares, convertible debentures and units of equity-oriented mutual funds, advances against shares and debentures, and guarantees issued on behalf of brokers.

It also ruled that each bank should fix, within the overall ceiling of 5 per cent, a sub-ceiling for total advances to all stock brokers and market-makers.

According to the new norms, the total fund based and non-fund based facilities sanctioned by a bank to a single stock-broking entity, including its associates/ inter-connected companies, should not exceed the prudential norm of 10 per cent of the sub-ceiling for total advances to all the stock brokers.

However, RBI clarified that it will be left to the boards of banks to fix the sub-ceilings on all stock brokers as well as a single stock broker (and connected undertakings).

The central bank said there should be a clear separation of responsibilities as regards decisions on actual advances against shares/investments in shares surveillance and monitoring of such advances.

RBI wants the chairman of a bank to monitor advances and that he shall not a member of the committee that will take decisions on investments in shares should to be made. The investment committee should be chaired by the executive director or a wholetime director or the next senior officer.

“The chairman should review the investments through weekly/fortnightly reports from the investment committee and ensure that actual investments and advances against shares are in accordance with the prudential norms prescribed by the RBI/bank’s board,” the central bank said.

In case of those banks whose present exposure to the capital market is above the overall ceiling of 5 per cent, RBI called for certain transitional provisions that included the formulation of a time-bound plan for gradually reducing their exposure to stock markets in line with the amended guidelines. This time-bound plan, along with data on exposures under various categories of advances/guarantees, should be submitted to the RBI by May 31, it added. Such banks were also directed not to make fresh advances and guarantees.


Mumbai, April 23: 
Hindustan Lever Ltd, the FMCG major, today informed the Bombay Stock Exchange that its board meeting on Tuesday will consider a proposal to absorb two of its units, International Bestfoods Ltd and Aviance Ltd.

The company said its plans to finalise the merger plan, including the share exchange ratio and other related and incidental matters.

Ahead of the results, the HLL counter today witnessed a flurry of activities. The share price touched an intra-day high of Rs 224, before closing the day at Rs 219.70, the same as previous day’s close.

Aviance Ltd, was set up last year mainly to manage its direct selling businesses. Today’s announcement caught HLL trackers by surprise.

IBL has already become a subsidiary of HLL. The board of IBL has already approved the transfer of 75.4 per cent of the equity of held by Best Foods of the US to HLL.


Calcutta, April 23: 
KPMG Peat Marwick, appointed by Indian Oil Corporation (IOC) to carry out a due diligence of Haldia Petrochemicals (HPL), will submit its report in the second week of May.

IDBI chairman S.K. Chakrabarti said the financial institution had been informed about it by Indian Oil. The public sector oil major agreed in December to pick up 49 per cent in HPL’s naphtha cracker unit that is proposed to be hived off into a separate entity. IDBI, that has lent Rs 1,000 crore to HPL at the rate of 17.5 per cent, is waiting for IOC to make up its mind before finalising a debt-recast plan for the Rs 5,170-crore HPL.

Addressing a seminar in the ‘Indian industry in the global economy — opportunities in West Bengal’ organised by Bharat Chamber of Commerce here today, Chakrabarti said his institution is open to funding projects in the state if it gets good proposals.


New Delhi, April 23: 
The government may scrap the list of candidates recommended for the post of chairman and managing director of Gas Authority of India (Gail) by the Public Enterprises Selection Board (PESB).

Senior government officials say this appears probable because PESB has decided to interview Prasanta Banerjee, whose name figures on top, for the post of marketing director in Indian Oil Corporation (IOC).

Banerjee, now executive director (marketing) in the company, was interviewed for the Gail top post six months ago. He would have lost the race for the IOC job as the file containing the proposal is stuck in the petroleum ministry. To accommodate him, the interview for IOC’s marketing director was postponed to April 25.

The PESB rules stipulate that candidates recommended for one job cannot appear for another interview within six months. Sources say the petroleum minister, Ram Naik, and IOC chief M. A. Pathan advised Banerjee to appear for the IOC interview.

Banerjee was considered as a successor to the present marketing director, Onkar Nath Marwaha.

However, becoming the Gail chief would have enabled him to catch up with his batchmates, Subir Raha and M. S. Ramachandran — all part of the marketing cadre.

Raha is being appointed ONGC chairman and Ramachandran, director (business development), has emerged as a strong contender for IOC’s top job when Pathan retires in March next year.

Banerjee is perceived to have an edge over the candidates who are vying for the IOC marketing director’s slot. His main rivals in the race are Praveen Aggarwal, executive director (OCC) and Arun Jyoti, executive director (lubes).

If he is chosen, the ministry can scrap the names listed for the Gail top job. J. K. Jain, the other recommended candidate, has not been cleared by the vigilance yet.


New Delhi, April 23: 
The Securities and Exchange Board of India (Sebi) today finalised a report on alleged insider trading by Anand Rathi, which will help the Mumbai high court decide whether the charges levelled against the former Bombay Stock Exchange (BSE) president are true.

Sebi chief D. R. Mehta said the document is ready, but refused to disclose anything on the ground that the matter is sub-judice.

The court is hearing an appeal filed by Rathi in which he has challenged a Sebi order that suspended his broking firms. The regulator had stopped his brokerages from undertaking fresh business after a barrage of allegations that the BSE chief misused privileged information to indulge in insider trading.

Today’s board meeting focused on a report submitted by Sebi investigators who had indicted Rathi on the basis of a taped conversion. Sources say the market watchdog has gathered conclusive proof that Rathi had gained price-sensitive information and had passed it on to a cartel of bears.

Rathi has denied any wrong doing and has countered allegations by saying he was within his rights to seek information on a few scrips as the chief of a stock exchange.

The BSE chief had resigned from his post early last month after bear cartel hammered the sensex within days of the union budget. He had said that he was quitting to “maintain the dignity of the office and to uphold the high standards of credibility.”

ASE defaulter

The Ahmedabad Stock Exchange has declared Madhur Shares and Stocks — a brokerage part owned by family members of former chairman of Madhavpura Mercantile Co-operative Bank, Ramesh Parikh — as a defaulter for being unable to take its responsibility for settlement numbers 51 and 52.    



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