Hint of parent’s merger sets Fulford share afire
Dates for telecom bids revised
Subir Raha to head ONGC
Rupee slips on politics, petrol
Engine capacity adds power to auto survey
Centurion Bank offers highest rate to elders
Navratnas up for review
Claridges caught in sister act
India Carbon faces DCA ire
Foreign Exchange, Bullion, Stock Indices

 
 
HINT OF PARENT’S MERGER SETS FULFORD SHARE AFIRE 
 
 
FROM VIVEK NAIR
 
Mumbai, May 22: 
The Fulford India share has flared up on bourses in recent weeks, stoked by speculation that Schering-Plough Corp, its foreign parent with a 40 per cent stake, will be merged with prescription drug giant Merck and Co.

Fulford India, wracked by financial problems which even forced the closure of its production facility at Andheri in Mumbai, has seen its share price leap by more than 35 per cent since the first week of May.

Considering that it is one of the more illiquid shares, the spurt in value and buoyant volumes have left many in the capital market baffled.

Today, the scrip shot up 5 per cent over its previous finish of Rs 156.20 to close at Rs 164.30 on the Bombay Stock Exchange (BSE). Volumes were brisk with 14,301 shares changing hands in 307 deals compared with only 51 on Monday.

Sources say whispers about a possible open offer from Schering have fed the buying binge. The market grapevine has been abuzz for some time with stories that it would increase its stake from the current level of 40 per cent.

Analysts say a merger with Merck — which has an awesome product range and strong research muscle — will catapult Fulford to the top of the league, and place it alongside giants like Pfizer.

Speculation about the merger had intensified in recent weeks with reports that Schering-Plough, hobbled by a series of manufacturing problems at some of its important plants, could catch Merck’s attention.

The two companies already have an understanding under which they develop Merck’s Singulair, an asthma drug, and Schering-Plough’s anti-allergy product, Claritin, which is reckoned as a big revenue spinner.

Fulford India’s product range includes Top Nitro, a drug to treat cardiac diseases, Garamycin eye/ear drops and Tinaderm, which cures fungal infections. In addition, it has oncology drugs such as Drogenil, Intron and Leucomax.

Fulford, incorporated in 1948, was promoted by Schering Plough and the Shah family, which currently holds around 20 per cent in the company. In 1993, the company entered into an agreement to tap Schering’s research skills in exchange for a one-off fee of around Rs 1 crore and royalty payments worth 5 per cent of sales over a period of seven years.

Market circles expect investors’ interest in Fulford share to remain strong, but say much will depend on whether Schering’s merges with Merck and the likelihood of a hike in stake.

   

 
 
DATES FOR TELECOM BIDS REVISED 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, May 22: 
The communications ministry has rescheduled the dates for the bidding process following a pre-bid conference with prospective cellular operators. The government will give a detailed clarification on June 12, while the draft licence agreement will be issued on June 18. The tender document will be available only till June 22.

Communications ministry sources said: “A few senior officers dealing with the tendering process are on leave and are expected to join by early June. The issue was discussed with prospective operators and all of them were satisfied with the revised dates.”

However, industry sources claimed the dates were revised as “the government wants to resolve the limited mobility issue before distributing cellular licences.”

Under the revised dates, pre-qualification bids and earnest money bank guarantee will be opened on June 29 and the names of pre-qualified bidders will be announced on July 9. The first stage of financial bids will be undertaken on July 11, while the last date for submission and opening of second bids is July 16. Short-listed bidders of the second stage of financial bids will be announced the same day.

The third and final stage of submission and opening of financial bids, as well as announcement of the successful bidders, will all be done on July 19 itself. The successful bidders will have to deposit 20 per cent of the bid amount, which is the entry fee quoted by them, and pay the rest 80 per cent by July 30. The letter of intent will be issued next day and they will have to sign the licence agreements the same day.

Meanwhile, the working group on information technology (IT) today met to discuss an approach for the communication and infotech sector for the Tenth Five Year Plan (2002-07) and agreed to set up separate sub-groups for various segments.

   

 
 
SUBIR RAHA TO HEAD ONGC 
 
 
FROM R. SASANKAN
 
New Delhi, May 22: 
Subir Raha, 53, will be the new chairman of Oil and Natural Gas Corporation (ONGC). The Appointments Committee of the Cabinet today cleared his name for the post, and he is expected to assume charge in a couple of days.

Raha, currently director (personnel) of Indian Oil Corporation (IOC), outraced a few upstream veterans in the race for the post, which is almost on a par with the rank of secretary to the Government of India. In his capacity as the chairman of ONGC, he will be a rung above his present boss, M. A. Pathan, who enjoys the rank of an additional secretary. The government has been looking for a tough executive to head ONGC. Raha is perceived to be tough and hard working. Initially, the ministry was in favour of appointing Shiv Mathur of IBP, who is also considered a tough and competent executive.

Raha’s appointment was a rather smooth affair and he is unlikely to face resistance from within the ONGC ranks. Oil industry circles say Raha has a difficult task ahead as the success of an upstream company depends on fresh oil discoveries. The country has not had a major oil discovery for nearly a decade even as its key fields developed production snags.

Sources say Raha is unlikely to come under pressure either from the Prime Minister’s Office (PMO) or the multinational lobbies to enter into production-sharing contracts for Bombay High, the largest oilfield. With his predecessor, B. C. Bora, scuttling such moves, the PMO will not interfere in such matters now. ONGC has already launched a re-development plan for Bombay High, and the Neelam field has also been rehabilitated.

Raha had been perceived as the next chairman of IOC. Now that he has moved out to ONGC, there will be a stiff competition among his colleagues for the post of chairman when Pathan retires in March. The strong contenders from within are M. S. Ramachandran, director (business development), and P. Sugavanam, director (finance).

   

 
 
RUPEE SLIPS ON POLITICS, PETROL 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, May 22: 
Political jitters caused by the wavering of a key ally that supports the BJP-led coalition government and jangled nerves over the spike in crude prices pushed the rupee below the 47-mark against the dollar today. At its close of 47.00/01, the currency lost 3 paise over its previous finish as corporates scrambled for dollars amid fears that the pressure on the rupee will persist over the next few days.

However, analysts say much will depend on whether dollars retained abroad are brought in by companies and exporters, besides signals from Delhi that the government is safe.

Today’s finish is, therefore, just a shade above the rupee’s all-time closing low of 47.02 — a trough it plumbed on April 15. The currency had plunged to its intra-day low of 47.02/03 earlier in the day following a dash for dollars by firms nervous about the impact of the convulsions in Delhi and the possible impact of high crude prices in the global market.

Dealers said a US bank, and another state-run bank, were seen scooping up dollars that put pressure on the rupee. Things looked up in the post-noon session when exporters sold greenbacks. “The fall is likely to continue since the markets are worried about political uncertainty. In addition, the surge in prices of crude, which accounts for a third of the country’s imports, to $ 30 per barrel have piled pressure on the rupee,” said N Subramanian, senior dealer at e-mecklai, a local forex firm.

   

 
 
ENGINE CAPACITY ADDS POWER TO AUTO SURVEY 
 
 
FROM M RAJENDRAN
 
New Delhi, May 22: 
The Society of Indian Automobile Manufacturers (Siam) is restructuring the way it collates monthly automobile sales figures by grouping cars and two- and three-wheelers on the basis of their engine capacities.

The survey, to be released later this month, will group cars on the basis of the engine’s displacement capacity (reported in cubic centimetres) that gives an indication of how powerful the car or motorbike is.

This will be a maiden attempt by the apex association of the automobile sector to segment the passenger cars and motorbikes on the basis of a new benchmark.

Until now, Siam had been releasing the survey based on three heads—production, sales and exports. The vehicles were further categorised as medium and heavy commercial vehicles like trucks, light commercial vehicles such as tempos, cars and utility vehicles, multi-utility vehicles like jeeps, two wheelers, and three wheelers.

The new re-classification will enable easy, like-for-like comparisons. Under the new method, Maruti 800, Matiz and the Omni will be lumped together under the 800 cc together, while cars like Baleno and Ford Ikon will come under the category of 1500 cc and above.

The two-wheeler segment will be divided into categories ranging from 75 cc to 500 cc.

Sources in Siam said, “This is an attempt to improve the survey in a more scientific manner. We have responded to the suggestions from our members and also the general public to develop the survey on the basis of the power of the vehicle.”

“In future, we plan to segment the categories on the basis of eco-friendliness. In Europe, the vehicles have been categorised on the basis of CC and eco-friendliness. Our attempt is to improve upon the existing method and to meet global standards while computing the survey,” sources added.

At present, Siam is focused on issues relevant to sustainable development of the industry. “The Indian automobile industry has an agenda for the future and Siam hopes to be the catalyst in this endeavour by influencing the change towards creating an internationally competitive automobile industry,” said a senior Siam executive.

“The attempt to categorise the vehicles on the basis of eco-friendliness will be debated within the organisation before we start the process,” they added.

   

 
 
CENTURION BANK OFFERS HIGHEST RATE TO ELDERS 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, May 22: 
Privately-owned Centurion Bank today announced special interest rates for senior citizens, offering them the highest rate on fixed deposits so far.

The 11.25 per cent interest rate for one-year deposits, on an average, is 1 per cent higher than the prevailing market rate. At present, the normal rate varies between 9.5 per cent and 10 per cent.

The State Bank of India (SBI) is now offering senior citizens a 1 per cent higher rate over the normal 9.5 per cent, which is 10.5 per cent.

Punjab National Bank offers only a 0.5 per cent higher rate than the market, at 10 per cent.

Along with this, Centurion Bank also offers several other incentives to its customers. Privileged customers will be allowed to maintain a savings bank account with a minimum average quarterly balance of Rs 1000.

Senior citizens will be given a Vantage-24 ATM card which can be used at any of the ATMs across the country. Besides, they will be provided internet banking and overdraft facilities up to 90 per cent on the fixed deposit value.

Centurion Bank has a network of 100 ATMs, 50 branches and 8 extension counters across India.

BoB hikes rates

Bank of Baroda said today that it has increased the interest rate on fixed deposit of senior citizens by 0.5 per cent with immediate effect.

A statement issued by the bank said that senior citizens over the age of 60 years of age will be eligible for this benefit, which can be availed by producing SSLC certificate/ LIC policy/ voter ID card/ PPO/ passport or birth certificate by any competent authority for verification of age.

   

 
 
NAVRATNAS UP FOR REVIEW 
 
 
FROM OUR SPECIAL CORRESPONDENT
 
New Delhi, May 22: 
The Cabinet today decided to order a review of public sector companies enjoying navratna and mini-ratna status.

A committee of secretaries headed by the Cabinet secretary will review the navratnas, while another headed by secretary public enterprises will review mini-ratna companies.

The move, prompted by the poor showing by several key navratna companies like SAIL, had come up before the Cabinet earlier this year, but had been shelved after conflicts erupted over who would have the power to conduct the review, with the industry ministry vying for the job.

A group of ministers headed by finance minister Yashwant Sinha, set up to look into the matter, worked out a compromise—entrusting part of the job to the Cabinet Secretariat and leaving the industry ministry to do the rest. The reviews will be taken up every three years.

PSUs which have been lagging behind in meeting performance targets could be stripped of their status and the freedom they enjoy as ratna companies.

Meanwhile, the Cabinet Committee on Economic Affairs, approved the Antyodaya Yojana launched last year. The scheme, which gives 25 kilos of grain at highly subsidised rates to one crore families identified as the poorest of the poor, will cost the exchequer about Rs 2,315 crore.

A more ambitious scheme of extending this benefit to all poor families has, however, been put on hold, following objections from the finance ministry.

The scheme, which is estimated to cost an extra Rs 1,039 crore, would have given all 36 crore people living below the poverty line rice at Rs 3 a kilo and wheat at Rs 2 a kilo, the price at which Antyodaya beneficiaries are being given food.

Sources said a group of ministers may be set up to look into the proposed deal. The BJP leadership has been pressing for this move which they feel could help their electoral prospects in the future.

The CCEA also cleared a proposal of the Petro Energy Products Company Ltd, revising its project cost to Rs 2,652 crore from an originally estimated cost of Rs 500.25 crore. The company plans to set up a export oriented refinery at Kakinada in Andhra Pradesh.

The company was also allowed to restructure its equity base, giving NRI shareholders a 95 per cent stake and overseas corporate bodies the remaining 5 per cent. Earlier, foreign partners held 29 per cent while NRIs held 11.5 per cent.

   

 
 
CLARIDGES CAUGHT IN SISTER ACT 
 
 
FROM SHASHWATI GHOSH
 
New Delhi, May 22: 
The tussle for control over The Claridges, the troubled hotel chain with properties in Delhi and Mussoorie, has taken a new turn, with a split in the ranks of the five daughters of T. N. Khanna, co-owner of the hotel chain.

T. N. Khanna is already fighting a case before the Company Law Board against brother S. K. Khanna. Both are equal partners in the hotel chain which has seen its turnover tumble by over 40 per cent from Rs 32 crore in 1997 to Rs 19 crore in 2000.

But now, the five daughters of T.N. Khanna — who are respondents in the earlier CLB case — have split, with one of the daughters, Rekha Chandok, offering to buy out the share of the other four.

Chandok, who is a US citizen, has the support of two sisters and her mother, but is bitterly opposed by her father, the other two sisters and their husbands.

Trouble erupted recently when the two sisters opposed to Chandok allegedly entered into talks with a third party to sell their stake in the hotel.

T. N. Khanna’s 50 per cent stake in The Claridges is routed through holding company Debraha. Khanna had divided his 75 per cent stake in Debraha among his five daughters.

Abhishek Manu Singhvi, senior advocate and former additional solicitor general, who is representing Chandok and her mother, said: “My client and her mother have been treated very shabbily by two of her sisters and their husbands. Together with her allies, she should be allowed to buy out the other two sisters.”

Chandok has already offered a complete buyout of all the other shareholders in the T. N. Khanna camp. In case the others cannot pay up, she has offered to deal independently with the S. K. Khanna group.

“My client is not restricted from holding shares in India under any RBI or Fera rules or visa requirements. She will be able to manage the affairs of the hotel chain through her two sisters and by frequent visits to the country.”

Singhvi said all the earlier orders issued by the CLB should be modified in the light of the latest developments.

“My client is interested in the hotel not because of its commercial value but because of its sentimental value as a family heirloom,” Singhvi said.

Earlier, ‘The Claridges’ chain comprised ‘Holiday Inn’ in Mumbai and ‘Majorda Beach’ in Goa. Family problems saw a division of these properties and the chain now has two hotels in New Delhi and Mussoorie.

A hotel official however said none of the owners are concerned about the low occupancy rate it has witnessed over the past few years.

“At one time, this hotel used to have 90 per cent occupancy even during the lean summer months. Guests were requested to shift to other hotels. But now the role is completely reversed,” he said.

The case will come up for hearing again before the CLB on July 10.

   

 
 
INDIA CARBON FACES DCA IRE 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, May 22: 
The department of company affairs (DCA) has ordered prosecution against India Carbon Limited, a Calcutta-based company, for excess transfer of profits to reserves and not informing the shareholders about it.

The prosecution against the firm and all the directors and officers will be for violating the provisions of Sections 205 (2A) and 205A (6) of the Companies Act, 1956.

Prosecution for violation of section 256(2) of the Companies Act, 1956, has also been ordered for non-retirement of directors by rotation as per the provisions of the section.

The company has not complied with the provisions of sections 211, 211(3) and 209(3)(b) of the Companies Act.

   

 
 
FOREIGN EXCHANGE, BULLION, STOCK INDICES 
 
 
 
 

Foreign Exchange

US $1	Rs.47.01	HK $1	Rs. 5.95*
UK £1	Rs.67.49	SW Fr 1	Rs.26.45*
Euro	Rs.40.92	Sing $1	Rs.25.65*
Yen 100	Rs.38.18	Aus $1	Rs.24.45*
*SBI TC buying rates; others are forex market closing rates

Bullion

Calcutta			Bombay

Gold Std (10gm)	Rs.4665		Gold Std(10 gm)	Rs.4600
Gold 22 carat	Rs.4405		Gold 22 carat	Rs.4255
Silver bar (Kg)	Rs.7600		Silver (Kg)	Rs.7550
Silver portion	Rs.7700		Silver portion	Rs.7555

Stock Indices

Sensex		3640.60		+  0.50
BSE-100		1773.71		+  7.35
S&P CNX Nifty	1168.10		-  1.35
Calcutta	 121.92		-  0.02
Skindia GDR	 668.26		-  0.64
   
 

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