Bold Sinha quells growth fears
ICICI suffers Rs 257 cr loss in 4th quarter
Sheths tighten grip on GE Ship
Poll holds up bids for IISCO
BSE defers decision on Tirodkar
Battle for custody of Big Bull Parekh
Ad industry sees 20% growth this year
Bates prepares for summer Sonata
Rs 5 crore lifeline for JK Dairy
Foreign Exchange, Bullion, Stock Indices

 
 
BOLD SINHA QUELLS GROWTH FEARS 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, May 3: 
Finance minister Yashwant Sinha today forecast a growth rate of over 6 per cent, saying the US slowdown will not hobble the country in its march to prosperity.

Speaking on the sidelines of the 17th annual session of Ficci Ladies Organisation, Sinha said annualised growth at the end of first quarter in the US stood at 2 per cent, double the forecast of 1 per cent. “It is likely to have a minimal impact on the Indian economy as we are not dependent on them.”

On the discussions he at the annual Fund-Bank meeting in Washington, Sinha said he made it clear that developing countries have to be given special consideration, and that new rounds would commence after the conventional issues are sorted out. “Developed countries are losing sympathy and if the developing countries can speak in one voice, we have a great chance.”

The minister described an open economy as India’s main asset and said he could not perceive a slowdown on any account. “The tempo of growth will be maintained this year.”

Taking on the doom-mongers who have warned of a tail-off in growth, the minister said there is more confidence in India’s growth potential abroad than at home. “It is worth noting that the world is confident, but we are not. It was regrettable that while people in other countries were buoyant about the prospects for the Indian economy, the same was not true within the country. Certain quarters always remain pessimistic about the economic outlook,” he said.

Sinha underscored the need to implement a voluntary code of corporate governance, saying initiatives in liberalisation or economic reforms will not mean anything if it does not become a habit with companies. “Legislation will do its duty, but the discipline should be voluntary,” he added.

He described proper corporate governance as a tool which will help alleviate poverty, generate employment and provide a life of dignity and honour to the people. “Growth is essential for these objectives to be achieved, but the concept of development is bigger than what finance ministry can provide.”

Sinha said companies must not only be profitable enterprises but should be steeped in sound ethical values if they want to tap the massive pool of savings with small investors.

No direct loans

The finance minister has scuttled a move which would have allowed states to negotiate for loans directly with the World Bank, saying the country’s Constitution does not allow it. According to officials, Sinha stuck to his guns that all multilateral funding would have to be channelled through the central government. The Bank wanted to base its country-lending programme on direct consultations with states.

   

 
 
ICICI SUFFERS RS 257 CR LOSS IN 4TH QUARTER 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, May 3: 
An increase in provisioning left leading financial institution ICICI Ltd bleeding in the fourth quarter of the 2000-01 fiscal, with a loss of Rs 257 crore for the period, against a profit of Rs 395 crore in the year-ago period.

The loss was largely due to a higher provisioning of Rs 813 crore during the quarter.

The increased provisioning saw net profit in the 2000-01 fiscal plunge 55 per cent to Rs 537 crore, against Rs 1,206 crore the previous year.

However, ICICI said as per its revised provisioning policy, it will achieve a 50 per cent provision cover against a non performing loan (NPL) in an accelerated time-frame of three years, as against the five-and-a-half year period prescribed under the current Reserve Bank of India (RBI) guidelines.

However, some confusion marked the institution’s results, since a communication issued to the exchanges said the loss during the fourth quarter was Rs 339.48 crore, with income from operations at Rs 2,633.39 crore (Rs 2,253.6 crore). Further, according to the notice, its profit plummeted to Rs 454.8 crore, down sharply from Rs 1,249.9 crore in the previous year. ICICI officials later clarified that these figures were arrived at after certain tax provisions of over Rs 82 crore made for the earlier years.

ICICI said its aggregate provisions and write-offs stood at Rs 1,421 crore in the fiscal year, including Rs 608 crore made as per the RBI guidelines and the accelerated provisions and write-offs of Rs 813 crore. While these provisions, it said, have been made conservatively, ICICI managing director and CEO, K. V. Kamath, told newspersons here today that net NPLs decreased to 5.2 per cent (Rs 2,982 crore) from 7.6 per cent (Rs 3,959 crore). Gross NPLs also fell to Rs 5,988 crore from Rs 6,018 crore in the previous year.

Kamath pointed out that the period under review was marked by environmental concerns with a significant part of the year witnessing depressed capital markets and a volatility in interest rates.

During the year, the institution’s approvals increased by 29 per cent to Rs 56,092 crore as against Rs 43,523 crore in the previous fiscal, while disbursements rose by 24 per cent to Rs 31,965 crore, compared with Rs 25,836 crore the previous year. The fee income increased by 61 per cent to Rs 522 crore, from Rs 324 crore.

   

 
 
SHETHS TIGHTEN GRIP ON GE SHIP 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, May 3: 
Great Eastern Shipping Company has fixed a maximum price of Rs 42 per share for its second round of buyback and has earmarked Rs 100 crore to fund the programme.

During the first round of buyback, the price ceiling was the same.

The Sheths, who are the promoters of the company, are also examining the possibility of using the creeping acquisition route to enhance their stake in the company.

Talking to reporters here today, V.K. Sheth, managing director of Great Eastern Shipping, said the promoters holding would rise to 22.5 per cent from the present 19.5 per cent if the entire option is exercised.

GE Shipping had only recently completed its first buyback programme that was initiated in December last year. After the first round of buyback, the company’s equity capital got reduced to Rs 215.91 crore from Rs 258.84 crore. While the buyback was made at an average price of Rs 34.91 per share, it bought over 4.29 crore shares at an aggregate value of Rs 149.89 crore.

On the Bombay Stock Exchange today, the GE Shipping scrip finished lower at Rs 31.80 after opening at Rs 32.90 and rising to an intra-day high of Rs 33.

Record performance

The company today announced its highest ever profits following the bullish phase that the industry underwent in the previous financial year. Net profit during the year surged 66 per cent to Rs 177.40 crore against Rs 106.76 crore in the previous year. The total income from operations and sales during the year rose to Rs 1006.96 crore over Rs 914.46 crore in the previous fiscal.

   

 
 
POLL HOLDS UP BIDS FOR IISCO 
 
 
FROM JAYANTA ROY CHOWDHURY
 
New Delhi, May 3: 
The government will invite technical and financial bids for the privatisation of Indian Iron and Steel Company (IISCO) next month to prevent the issue from turning into poll fodder in the largely two-horse race for Bengal.

Top steel ministry officials said the timing was decided as part of a political agreement that Mamata Banerjee sealed with the NDA government. The Trinamool Congress supremo and former railway minister was assured that the ball for IISCO’s sale would not be set rolling until the assembly election.

The three shortlisted suitors — Russian heavy engineering firm Tyazpromexport, Japanese trading house Mitsui and Australian mining major BHP — wrapped up their due diligence of the company in March. Bids, which should have been called for immediately after, were deferred for political reasons, senior steel ministry officials said.

“Elections and selloff do not go together. That being the case, a political decision was taken not to invite final bids in the run-up to the elections,” they added.

Not that the sale of Steel Authority of India’s (SAIL) ailing subsidiary will be a smooth affair if it is carried out later, but officials reckon that it will be a hot potato if raised by parties in the countdown to the May 10 election. Burnpur, where the IISCO plant is located, is a turf where both the Left and Trinamool Congress are desperate to score electoral gains, and, in the pursuit of their objective, will not hesitate from provoking a backlash against the selloff.

However, the issue will figure in talks that the Russian foreign minister, Igor Ivanov, will hold with his Indian counterpart on Friday. Ivanov is expected to push TPE’s bid, saying the company has long been keen on taking over IISCO.

The minister is expected to renew Moscow’s demand that India allow TPE to use a part of the rupee-denominated debt it owes Russia, for the deal. TPE wants to use about Rs 600 crore from the rupee fund — Rs 400 crore as equity and Rs 200 crore in debt — and has said it would mobilise another Rs 200 crore from the domestic debt market.

The debt-bloated IISCO, which SAIL wants sold, suffered a net loss of Rs 210.37 crore on a turnover of Rs 918.06 crore in 1999-2000.

Technically, it remains sick in spite of the fact that it makes operating profits and has had much of its past loans written off through executive fiats. The 125-year-old company was taken over by the government in 1972 and attached to SAIL as its subsidiary six years later.

SAIL remains confident about selling IISCO but steel ministry officials are worried that none of the shortlisted bidders run steel mills.

Also, two of them appear to be more keen on the huge iron ore reserves at IISCO’s Chiria mine.

   

 
 
BSE DEFERS DECISION ON TIRODKAR 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, May 3: 
The governing board of the Bombay Stock Exchange (BSE) today deferred its decision on the termination of services of A. A. Tirodkar, former director surveillance of the bourse.

The board today gave him a personal hearing on his alleged involvement in leaking price-sensitive information that led to a massive fall in stock prices and the resignation of former BSE president Anand Rathi, but postponed a decision on the issue.

Tirodkar was charged by the BSE of passing on sensitive information to select bulls and of seeking sensitive information from his subordinate.

Following the allegations, the governing council had, on April 18, tentatively recommended termination of Tirodkar’s services for “loss of confidence,” subject to a personal hearing of submissions.

The BSE board, comprising only independent directors, met Tirodkar today to give him an opportunity to explain, a board member said.

The BSE governing body will hold its next meeting on May 23, sources said, adding a decision is likely to taken on that day.

The Securities and Exchange Board of India’s (Sebi) surveillance director, L. K. Singhvi, a nominee on the BSE board, also attended today’s meeting.

   

 
 
BATTLE FOR CUSTODY OF BIG BULL PAREKH 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, May 3: 
The Gujarat police today requested a city court to hand over Ketan Parekh from the custody of the Central Bureau of Investigation (CBI) to its detention cell.

In a dramatic twist to the Big Bull’s legal battle, the Gujarat police moved a petition before the special court hearing the Madhavpura Mercantile Co-operative Bank (MMCB) payorder scam to transfer Parekh and Devendra Pandya, the managing director of the tainted bank, to its custody from the CBI. According to the complaint filed in a Gujarat court, MMCB chairman Ramesh Parikh, branch manager J B Pandya and the managing director had allegedly siphoned off public money to the tune of Rs 1,050 crore to favour Ketan Parekh and his associates. This had led to a Rs 137-crore pay order scam at Bank of India.

Inspector A M Mansoori produced warrants issued by the chief metropolitan magistrate of Ahmedabad to transfer Ketan and Pandya from CBI to Gujarat Police for investigations in a case filed by Madhavpura Bank’s administrator, S Ramachandran.

The Gujarat police said the case lodged by the bank’s administrator and the judicial order that followed it have given it the right to try offenders in its courts.

The special court said it will resolve the issue on May 9 because a public interest litigation filed in the Gujarat high court has sought the transfer of the probe from the state’s criminal investigation department (CID) to the CBI. However, the court today remanded the Big Bull, his cousin Kartik and manager of the Madhavpura bank’s Mandvi branch, who face charges of defrauding Bank of India to the tune of Rs 137 crore in a payorder scam, in judicial custody till May 9.

The special court judge, A R Joshi, did not consider the MMCB chief’s oral bail plea and directed his counsel to file a written plea for liberty at the next hearing. The special judge asked the Gujarat cops to transfer the Madhavpura MD to CBI’s custody.

   

 
 
AD INDUSTRY SEES 20% GROWTH THIS YEAR 
 
 
BY A STAFF REPORTER
 
Calcutta, May 3: 
The cassandras may cavil, but there are a few straws in the wind that raise the sliver of hope that the economy will soon be over the hump.

The Rs 8,500 crore ad industry expects a robust 20 per cent growth in business this year, up from the 15 per cent it recorded last year. The ad industry, which is one of the first sectors to buckle whenever there is a downturn in the economy, is hoping that the telecom, insurance and healthcare sectors will provide the ballast to revive its bottomline.

“The existing sectors will contribute as usual. But it is these sectors from where growth is expected to come,” says Ramesh Narayan, president of the Advertising Agencies Association of India (AAAI).

The association is the apex forum of advertising agencies in the country and 80 per cent of the total ad spend in the country is routed through its members.

“Ten years ago when we registered a Rs 1,000 crore business, we thought a lot had been done. But now we feel that a lot remains to be done,” said Narayan.

There are some definitive trends that are emerging in the ad industry, says Narayan. The focus of advertising agencies has started shifting from national to regional campaigns depending on the needs of the corporates. Forty per cent of the current ad spend is routed to the electronic media and the rest goes to the print media. In the print media too, there is a distinct shift of advertisement from the national dailies to the regional ones.

Narayan is not upbeat about advertising on the Net in the immediate future since the PC penetration is not very high in India.

Advertising celebrity Bharat Dabholkar, who created the famous Amul butter ads, said there were two reasons for the regionalisation of advertisements — the companies save expenses and secondly they can purposefully utilise their distribution network.

“India is a different ballgame altogether. The international companies feel that a national campaign will help them to achieve their targeted sales. But it’s not so. Indians want value for money. So they too have decided to launch regional advertisements which are target specific,” he said.

Dabholkar lamented that the one-to-one interaction with the clients nowadays is gradually taking a backseat. “Creativity is being replaced by mechanisation, which is unwanted in this profession.”

Talking about AAAI, Narayan said, “We are now testing the waters in the East. And we have received encouragement from the ad people here.” AAAI is organising a workshop here to help the people in the industry share their experience and get some training.

   

 
 
BATES PREPARES FOR SUMMER SONATA 
 
 
BY A STAFF REPORTER
 
Calcutta, May 3: 
Bates India (formerly Clarion) expects to achieve a 43 per cent growth in its business from Rs 140 crore in 2000-01 to Rs 200 crore in the current financial year, according to Madhukar Kamath, CEO and managing director of the company.

The advertising agency handles accounts like Hyundai, Dabur, Aptech, Kaun Banega Crorepati, Duncans, Morepen Laboratories, Le Meridien and others.

“We have bagged an assignment for Hyundai’s premium car Sonata and we will be shortly launching the campaign for the car,” Kamath said.

He is upbeat that 141 India which specialises in diversified marketing and offers solutions for sales promotions, direct marketing, event marketing, merchandising, design and interactive marketing will be able to contribute substantially to their business. 141 India is a wholly-owned subsidiary of 141 Worldwide. 141 Worldwide is a part of the Cordiant Communications Group.

“With our recent acquisition of Healthworld, we will also launch healthcare communications soon in India,” Kamath said.

Kamath said there would not be major changes in the functioning of the agency. He added that the agency was now engaged in bringing in talent from Bangalore, Mumbai and Delhi to strengthen their operations.

Bates India’s Calcutta office recently walked away with the eastern regional business of Coca-Cola. “That was a major contract for us,” Kamath said.

   

 
 
RS 5 CRORE LIFELINE FOR JK DAIRY 
 
 
FROM RAJA GHOSHAL
 
New Delhi, May 3: 
JK Corp, promoter of the loss-ridden JK Dairy and Foods Ltd (JKDFL), will be making fresh investments to try and pull it out of the doldrums.

JK Corp officials were tightlipped about their total package for JK Dairy, but said they will immediately inject Rs 5 crore to help the dairy company build up its brands. JK Dairy’s brands include Dairy Top, a sweetened skimmed milk powder and White Magic, the creamy skimmed milk powder launched last year.

R. C. Periwal, director JKDFL told The Telegraph that seven vending machines will be installed within 10 days in Delhi to test-market the flavoured milk. Ultimately, however, the product will be sold through powder pouches.

Though eastern India is a major market for its skimmed milk powder, yet, for flavoured milk, the company is planning to hit markets in the north. JK Dairy suffered a loss of Rs 141 crore last year and this year it is estimated to exceed that figure, said Periwal.

   

 
 
FOREIGN EXCHANGE, BULLION, STOCK INDICES 
 
 
 
 

Foreign Exchange

US $1	Rs. 46.83	HK $1	Rs.  5.95*
UK £1	Rs. 66.67	SW Fr 1	Rs. 26.80*
Euro	Rs. 41.74	Sing $1	Rs. 25.45*
Yen 100	Rs. 38.60	Aus $1	Rs. 24.05*
*SBI TC buying rates; others are forex market closing rates

Bullion

Calcutta			Bombay

Gold Std (10gm)	Rs. 4410	Gold Std(10 gm)	Rs.4325
Gold 22 carat	Rs. 4165	Gold 22 carat	Rs.4000
Silver bar (Kg)	Rs. 7400	Silver (Kg)	Rs.7425
Silver portion	Rs. 7500	Silver portion	Rs.7430

Stock Indices

Sensex		3494.48		-43.94
BSE-100		1693.81		- 4.58
S&P CNX Nifty	1122.05		-15.15
Calcutta	118.38		- 0.35
Skindia GDR	 NA		-
   
 

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