Enron signal to switch off Dabhol Power
Limited mobility issue lobbed into PM’s court
VSNL compensation plan shot down
Strife threatens Lever unit closure
Coke uncorks Hrithik-Ash fizz
K-10 stocks whipped, Big Bull refused bail
Lego toys with big plan
Hindalco net profit up 11%
Goenka is new CII president
Foreign Exchange, Bullion, Stock Indices

 
 
ENRON SIGNAL TO SWITCH OFF DABHOL POWER 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, April 26: 
Enron today took the first decisive step out of the controversy-ridden Dabhol Power Company when it won an authorisation from the company’s board to stop sale of power to Maharashtra State Electricity Board (MSEB).

The meeting of the company, of which the Houston-based energy giant holds 65 per cent and the MSEB 15 per cent, was attended by state energy secretary V M Lal and MSEB technical director P Paunikar and it came days after its lenders discussed payment problems and a possible termination.

The Centre’s liability, if Enron decides to snap the agreement, will be a year’s power bill and a termination fee of $ 300 million. However, the company will have to wait for six months from the day it serves the notice before it pulls the plug.

The Centre shrugged off the move, saying there would not be any adverse effect on foreign investment in power if Enron walks out. “We do not see FDI inflows into the power sector being hit,” power minister Suresh Prabhu said.

MSEB officials said the ball is now in the court of DPC, which said its corporate policy did not allow it to comment on proceedings at board meetings. The decision coincided with a Rs 134-crore ‘protest payment’ by the cash-strapped power board as part of the March bill worth Rs 146.64 crore.

There was speculation that MSEB coughed up the amount to cool frayed tempers at Enron’s hub in Houston, and because it was rattled by the sudden turn of events in the past few days during which the dispute had come to a head. MSEB officials brushed away the allusions, saying the cheque was ready on Wednesday but could not be handed over to DPC because of the state-wide bandh.

“We have a disputed payment of Rs 12.64 crore, which will be taken up at the dispute-resolution forum,” a board official said. Last week, DPC told the state government and MSEB it would no longer accept protest payments in a move to fortify its legal position.

MSEB officials say Bechtel and General Electric, the other partners who hold around 20 per cent in DPC, are willing to go along with Enron Corp in terminating the deal but financial institutions such as IDBI are not game because it puts their loans at risk. Investments made by Indian institutions are not covered under the Centre’s and state’s counter-guarantees, unlike those made by international lenders.

Maharashtra chief minister Vilasrao Deshmukh called Enron’s decision unfortunate. “We had told state government officials attending the Enron board meeting to stop the company from winding up its operations in the state as it will harm both parties.”

   

 
 
LIMITED MOBILITY ISSUE LOBBED INTO PM’S COURT 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, April 26: 
Prime Minister Atal Behari Vajpayee today received the report on limited mobility from the Group on Telecommunications and Information Technology (GoT-IT) and will send his recommendations to the communications ministry tomorrow.

Information technology minister Pramod Mahajan said, “Prime Minister will examine the recommendations made by the GoT-IT and is likely to send it to the department of telecommunications. The recommendations will be released by DoT secretary Shyamal Ghosh by tomorrow afternoon.”

According to Mahajan, there was unanimity on the report and all the members of GoT-IT have signed the report. The report to be released tomorrow will also have comments of the Prime Minister.

“DoT will implement the report if Prime Minister agrees with GoT-IT recommendations. If he does not then he may reject it,” the minister added.

Sources in communications ministry said the terms of references proposed by the Prime Minister have been fully accepted. However, a few aspects on tariff and interconnection still require Prime Minister’s advice.

Meanwhile, in a surprise move Sterling Infotech Group chairman, C. Sivasankaran, today offered to pay Rs.2, 500 crore for 5 megahertz of WiLL spectrum.

“We are offering to acquire 5 MHz of WiLL spectrum in the 800/900 MHz band for all circles for a fee of Rs 2, 500 crore, so that the 20 MHz offered to WiLL would fetch the government a total sum of Rs 10, 000 crore, instead of the same going free of cost to basic service operators,” said Sivasankaran in a letter to Telecom Commission chairman Shyamal Ghosh.

However, officials in DoT clarified that spectrum is not given free either to basic or cellular operators. Both the service providers are charged two per cent of the total revenue under the revenue sharing formula of National Telecom Policy 1999.

   

 
 
VSNL COMPENSATION PLAN SHOT DOWN 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, April 26: 
The Centre has shot down a proposal from the Videsh Sanchar Nigam Ltd (VSNL) for a compensation package ranging between Rs 2,600-3,000 crore to offset the losses it is expected to suffer when it loses its monopoly over handling international calls. It is learnt that the government has informed VSNL that the compensation will be only on the lines of the package announced late last year. Under this package, VSNL will be reimbursed the Rs 100 crore entry fee per call and granted a licence to offer domestic long distance call services.

The Centre has also decided to waive the Rs 400 crore performance bank guarantee and granted it a category A licence as an internet service provider (ISP). The government had then also said it would pay VSNL a licence fee for a period of five years commencing from April 1, 2000 net of taxes. However, the government’s package has come under criticism and many have feel that it is not fair to the communications giant.

The government’s communication had come in the form of a letter earlier this year where it had asked for an extra-ordinary general meeting to enable the shareholders to approve the government’s compensation package. VSNL has called the EGM on May 2 where small shareholders are expected to protest the compensation package.

Last September, the government had decided to terminate on March 31, 2002 VSNL’s monopoly over international voice traffic and subsequently mooted a compensation package to offset the losses. However, VSNL was disappointed with the package and the company’s board urged the government to revise the package based on an assessment by an independent agency.

   

 
 
STRIFE THREATENS LEVER UNIT CLOSURE 
 
 
BY A STAFF REPORTER
 
Calcutta, April 26: 
Labour unrest threatens to force the closure of Hindustan Lever’s factory at Garden Reach where picketing workers have blocked raw material supplies to the factory.

The workers owing allegiance to the Citu-affiliated Thika Shramik Union have been staging a demonstration outside the factory demanding a wage settlement. The strife broke out yesterday when seven contract labour were barred from entering the factory.

“Two plants in the factory have already been shut down,” said Hindustan Lever’s corporate communications manager Debashis Roy over the phone from Mumbai. “Two other plants have raw materials sufficient for only a few hours of operation.” Roy said the factory which employs 1200 workers will be automatically shut down if the workers do not withdraw the blockade. “We have taken up the matter with the West Bengal government and we hope that they will intervene,” Roy said.

The factory, which is undergoing a Rs 8.5 crore modernisation, produces detergent powder, soaps and personal care products from its four plants. A union leader said the management had refused to discuss a charter of demands drawn up by the Citu-led union on behalf of the contract labour.

The factory has one union for the permanent workers which is led by the Shramik Sangram Committee. It has two unions for the contract workers — one led by the SSC and the other affiliated to Citu. The permanent workers’ union — HLL Shramik Karmachari Union — has also served a strike notice to protest the delay in reaching a wage deal overdue since January. HSKU president Kamal Tiwari said the company wants to axe500 workers and has set it as a precondition for talks.

   

 
 
COKE UNCORKS HRITHIK-ASH FIZZ 
 
 
FROM RAJA GHOSHAL & SHASHWATI GHOSH
 
New Delhi April 26: 
Elections may be round the corner, but the cola war is the battle to watch. This time around, both Coke and Pepsi are busy roping in the biggest names in Bollywood to add more fizz to their ad campaigns.

So, while Coke says Kaho na pyaar hai, Pepsi is out to secure the consumer with Zanjeer. In other words, its now Hrithik Roshan versus Amitabh Bachchan.

While Coke today unveiled an ad film which has heartthrob Hrithik Roshan and the ethereal Aishwarya Rai sipping the ‘enjoy’ drink, Pepsi seems unlikely to settle for anything less than getting the Big B to lend the baritone to the ‘Dil maange more’ catchline.

Pepsi, which has already been using Amitabh Bachchan for the Mirinda commercial for some time now, will unleash him by May-end or early June, to counter the deadly Hrithik-Ash cocktail.

Apart from endorsing Mirinda, Bachchan had been promoting the Pepsi brand in functions as part of campaigns in Ahmedabad and Hyderabad in the recent past.

But for now, Coca-Cola has done what Bollywood is yet to—brought the hottest stars together.

Coke’s latest commercial, set in campus life, has best friends Hrithik and Aishwarya opposing each other in college elections. Though they tried to outdo each other in campaigning, ultimately each goes out of the way to ensure the other wins. While Rohit (Hrithik) votes for Tina (Ash), she draws away one of her own votes from the counting.

Speaking after a preview of the ad, Shripad Nadkarni, vice-president (marketing) Coke, said: “We have tried to bond the youth, Hrithik and Aishwarya together. The ad has been broken up into 90/60/40 second time span to suit all slots.”

   

 
 
K-10 STOCKS WHIPPED, BIG BULL REFUSED BAIL 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, April 26: 
K-10 stocks — Ketan Parekh’s picks — were whipped in a selloff that sent the Bombay Stock Exchange (BSE) sensitive index sliding 43.64 points to 3557.19.

Himachal Futuristic, Global Telesystems, Satyam, DSQ Software, SSI Ltd, Pentamedia Graphic, Aftek Info and Silverline — all Big Bull favourites in his high-stakes share gamble — took it on their chin as speculators and institutional investors flitted out of these stocks on a day the fallen broker’s remand was extended till May 3 by a special court in the Rs 137-crore Bank of India payorder scam.

Dealers blamed the selling on reports that the Securities and Exchange Board of India (Sebi) abolished the present set of carryforward instruments. “Approved deferral products like ALBM, BLESS, MCFS, CFRS, ALBRS, CNS should cease to be available for all scrips from July 2,” a Sebi release said later in the evening.

Meanwhile, the chief of Madhavpura Mercantile Co-operative Bank, Devendra Pandya, accused of being involved in the payorder scam, was arrested earlier in the day. On the run after the scam erupted, he is the second official, after chairman Ramesh Parekh, to have been rounded up.

   

 
 
LEGO TOYS WITH BIG PLAN 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, April 26: 
Danish toy giant, Lego, has ambitious plans to expand its distribution network in India through a marketing tieup with Mahindra Intertrade, a subsidiary of auto major Mahindra & Mahindra.

The edutainment toy company, which has been marketing its products in the country through a Danish marketing firm, will now use the distribution muscle of Mahindra, John Ungermand, a Lego official, said.

The company has been present in India for about five years.

He added this would help it increase its presence to about 600 outlets by the year-end from the current 50 upmarket stores.

This will be in addition to sales through swanky retail outlets like Shopper’s Stop and Pantaloons, which are its key accounts. The total number of key accounts will be taken to 30 by the year end, said Parag S. Dani, head, marketing services, Mahindra Intertrade.

The relatively smaller stores comprise the non-key accounts. While the key accounts will be handled directly by Mahindra Intertrade, it has also identified and appointed five service partners in agreement with Lego, to make the company’s toys available in smaller stores.

The marketing services arm of the two-year old Mahindra Intertrade has been launched specifically to handle the marketing of branded products, the first being Lego.

The entire portfolio of Lego toys will be available in India. The prices of its products range from Rs 60 to Rs 17,000, and the target consumer segment is from age 0-16, though Lego is almost synonymous with the building blocks.

   

 
 
HINDALCO NET PROFIT UP 11% 
 
 
OUR BUREAUX
 
April 26: 
Hindalco Industries Ltd has posted a 11 per cent rise in net profit at Rs 678.1 crore last financial year as against Rs 612.3 crore recorded in the previous fiscal.

Net sales last year was up by 12 per cent to Rs 2,275.4 crore over previous year’s Rs 2,031.2 crore. The company is planning to raise aluminium smelter and alumina refining capacity.

Its brownfield expansion plan will enhance the smelter capacity by 1 lakh tonnes and the alumina refining capacity by 2.10 lakh tonnes. Hindalco will not raise aluminium prices in the near term.

Cadbury net at Rs 12cr

Cadbury India Ltd’s net profit for the quarter-ended March 31 has increased by 18 per cent to Rs 12.39 crore as against Rs 10.50 crore earned in the previous corresponding quarter.

Despite sluggish market conditions, the company registered 7 per cent growth in domestic business and 41 per cent growth in exports market.

Net sales during the quarter under review rose to Rs 149.91 crore against Rs 139.34 crore in the same period last year.

Aptech Q1 net up

Aptech Ltd has reported 35.17 per cent jump in its net profit at Rs 2.72 crore during the first quarter ended March, as compared with Rs 2.01 crore in the corresponding previous quarter. Global revenue of the company shot up by 21.40 per cent to Rs 104.28 crore from Rs 85.89 crore in the corresponding previous quarter. Income from the Indian operation is Rs 66.98 crore. Aptech’s other income stood at Rs 2.73 crore.

Siemens net dips

Siemens Ltd has reported a 24.31 per cent fall in net profit at Rs 22.72 crore for the second quarter ended March 31, compared with Rs 30.02 crore in the same period last year, despite a rise in net sales.

Other income in the reporting quarter declined to Rs 11.23 crore as against Rs 21.85 crore in the second quarter of last year, the company said in a notice to Bombay Stock Exchange.

Cipla net soars

Cipla Ltd has posted a 34.08 per cent increase in net profit at Rs 178.42 crore for the year ended March 31, 2001 as against Rs 133.06 crore in the previous fiscal.

The total income for the year stood at Rs 1,087.25 crore as compared with Rs 795.49 crore in the corresponding previous fiscal.

EIL turnover up 28%

Engineers India Ltd (EIL) has recorded 28 per cent rise in turnover to Rs 787.3 crore in 2000-01. Profit during the year stood at Rs 127.17 crore.

Addressing a press conference, chairman and managing director Keshav Saran said, EIL successfully met the challenges posed by a growing preference in oil and gas industry for implementing projects on turnkey mode of contracting. About 45 per cent of the turnover came from such projects.

EIL plans to diversify into power, highways and bridges, IT, airports, mass rapid transport system, ports and terminals. Power projects will be priority for EIL.

   

 
 
GOENKA IS NEW CII PRESIDENT 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, April 26: 
Sanjiv Goenka, vice-chairman of RPG Enterprises, today took over as the new president of Confederation of Indian Industry (CII) while Ashok Soota, chairman of Mind Tree Consulting, was elected as the vice-president.

Goenka is the youngest president of CII. He has been the past chairman of the CII (the eastern region). Goenka is also a member of the Prime Minister’s Council on trade and industry.

Ashok Soota, is an engineer and MBS from Asian Institute of Management, Phillipines. He joined the Shriram group in 1965 and later took over as president of Wipro Infotech in 1984.

   

 
 
FOREIGN EXCHANGE, BULLION, STOCK INDICES 
 
 
 
 

Foreign Exchange

US $1	Rs. 46.85	HK $1	Rs.  5.95*
UK £1	Rs. 67.41	SW Fr 1	Rs. 27.05*
Euro	Rs. 42.05	Sing $1	Rs. 25.40*
Yen 100	Rs. 38.25	Aus $1	Rs. 23.45*
*SBI TC buying rates; others are forex market closing rates

Bullion

Calcutta				Bombay

Gold Std (10gm)	Rs. 4390	Gold Std (10 gm)Rs. 4295
Gold 22 carat	Rs. 4145	Gold 22 carat	Rs. 3975
Silver bar (Kg)	Rs. 7400	Silver (Kg)	Rs. 7410
Silver portion	Rs. 7500	Silver portion	Rs. 7415

Stock Indices

Sensex		3557.19		-43.64
BSE-100		1706.33		-22.76
S&P CNX Nifty	1143.75		-11.60
Calcutta	 120.97		- 1.46
Skindia GDR	  NA		  -
   
 

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