Zee goes hunting for partner, equity in hand
Slighted Godbole resigns, relents
Trai throws floor open for CPP debate
Postal vote on company resolutions
Rupee rallies to 46.98 as oil, political fears recede
Cisco plans 34 labs at $ 8 m in India
Foreign Exchange, Bullion, Stock Indices

 
 
ZEE GOES HUNTING FOR PARTNER, EQUITY IN HAND 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, May 23: 
Mumbai, May 23: Zee Telefilms (ZTL) is planning to induct a strategic partner, probably an international media major, which will widen its market access and help it expand its distribution network.

Zee Telefilms chairman Subhash Chandra said the partner will be given representation on the board. The selection, he said, will be based on several conditions.

The move comes after a review of the current market trends, and is designed to achieve higher growth apart from enhancing shareholder value. Chandra said he was not averse to a business alliance with either Star or Sony..

“The strategic partner which will be inducted in ZTL should be able to give us more opportunities to distribute our products globally, apart from giving us the required impetus to increase media assets, syndication revenues, technology advantages and access to capital markets,” he said.

Chandra said the amount of equity to be offered will be a mutual decision, and could be done through a preferential allotment or a dilution of promoters’ stake, which is now around 60 per cent.

Zee is currently identifying investment bankers, and the entire process is expected to be completed in five months.

According to industry watchers, there are seven international majors which could fit Zee’s bill. These include Walt Disney, Turner Broadcasting & Systems, Bertelsmann, Sony Corp, News Corp, Viacom and Vivendi-Universal. Sources say Australian media moghul, Kerry Packer, is also reckoned in industry circles as a possible candidate.

Chandra said Zee is unlikely to identify a company from India because none could provide it with the necessary strategic inputs.

Zee said its growth has been spearheaded by an entrepreneurial drive, and south Asia was one of the fastest growing regions. The company is in a position where it can command a lion’s share of the market in the region, helped by appropriate access to technology, distribution and finance.

“The ZTL executive committee has decided that partnership with an international media major can open up significant new opportunities for value creation and enhancement, be it in the area of syndication, distribution or content creation for international market,” he told reporters here today.

Chandra also mentioned that the group was still looking to divest part of its stake in Siticable.

Senior company officials later divulged that the company has put on backburner its plans for a foray into direct-to-home (DTH) broadcast due to regulatory problems.

Instead, they say and it has decided to focus on providing last-mile connectivity on the distribution front and on subscription revenues.

Investors, happy at the announcement, sent the stock soaring to Rs 131.45 at the close in a 6.74 per cent increase over its previous finish. Earlier in the day, it hit a high of Rs 133.80.

Media analysts termed the move as positive by pointing out that while Chandra could now look at sagging valuations to go up, it would have a positive impact on its huge content facility.

“Valuations of the stock will certainly go up. It now remains to be seen what comes out of this announcement,” an analyst pointed out.

It may be recalled that valuations of Zee have been on the wane over the past several months due to tough competition from rival channels like Star and Sony, coupled with its own disappointing performances.

Further, most of the ambitious plans announced by the company have not borne fruit.

   

 
 
SLIGHTED GODBOLE RESIGNS, RELENTS 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, May 23: 
The Maharashtra government today earned a major reprieve in its efforts to resolve the row with Dabhol Power Company (DPC) when Madhav Godbole, the head of a committee set up to renegotiate the power-purchase agreement (PPA) with the Enron-promoted project, withdrew his resignation after having quit earlier in the day over comments made by Nationalist Congress Party (NCP) leader Sharad Pawar.

The developments, which turned out to be a major embarrassment for the state government, had the potential of stalling moves to resolve the deadlock between the cash-strapped Maharashtra State Electricity Board (MSEB) and the Dabhol Power Company.

Pawar had said on Tuesday that ‘people leading the talks from the government’s side were working with a negative approach.’

His party shares power with the Congress in the coalition government.

The comments enraged Godbole, a former Union home secretary, who promptly resigned, citing the derogatory remarks made by the NCP leader.

The resignation came at a critical juncture as the renegotiating committee was scheduled to meet DPC representatives during the day to find a solution to the vexed issue.

The meeting was called off because of the resignation.

Godbole was adamant initially, but relented following requests from the state government.

He told The Telegraph late in the evening that he withdrew his resignation after chief minister Vilasrao Deshmukh wrote to him saying the state Cabinet had reposed full confidence in his ability to negotiate with DPC.

“They requested me to continue finding a solution to the DPC tangle. In view of his letter, I have decided not to go quit.”

He said requests from various key political figures and organisations made him change his mind. “He can make a comment on the committee, but if the remarks are of a personal nature, it affects the ability of a person to stay a job. If you have to renegotiate, you have to strengthen, not weaken my hands,” he added.

Sources said the meeting planned between DPC and the renegotiating panel, which was cancelled today, would now be held on May 29.

They added that the committee would continue to look at the PPA, and various terms and conditions of the entire deal.

The developments follow DPC’s preliminary termination notice issued to MSEB last Saturday under the power-purchase agreement.

DPC had said it was open to constructive discussion which could lead to a solution, but made it clear that the parties which have made a commitment to purchase the power generated by it either do so, or find others willing to buy power from its 2,184 MW plant.

The committee’s role had assumed added significance in view of the tough stance adopted by Enron.

However, the US energy major had later agreed to be a part of the meeting that was scheduled to be held today.

Earlier, the Godbole panel was jolted when three members opted out saying they did not have time.

   

 
 
TRAI THROWS FLOOR OPEN FOR CPP DEBATE 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, May 23: 
The Telecom Regulatory Authority of India (Trai) today released a consultation paper on issues relating to the introduction of Calling Party Pays (CPP) for cellular mobile services.

Under the CPP regime, cellular mobile subscribers will not have to pay for an incoming call. Instead a supplementary charge will be levied on the party making the call which will be passed on to the mobile operator.

The paper has thrown open to public a debate whether the CPP regime is desirable in the Indian context. The paper also asks whether CPP should be optional for both the operator and the subscriber and if it is to be made applicable to all calls to the mobile networks. The likely benefits of CPP to various stakeholders, especially consumers, is another crucial question that the consultation paper has raised.

The implementation of the CPP policy for cellular mobile will affect a large number of subscribers to both basic telecom services and cellular mobile services. The consultation process is expected to help Trai in formulating a policy on the introduction of CPP in India.

The paper has also brought out various techno-economic issues relating to the implementation of CPP. These mainly relate to the charging of calls from PSTN (fixed telephones) to mobile networks, roaming calls, international calls, as well as the cost-based methodology for fixing tariff.

The CPP issue first came to the fore in August 1999 when Command unilaterally introduced it in Calcutta. This sparked a furore and Trai immediately shot down the proposal. It was supposed to come into effect from November 1, 1999 but another round of bitter wrangling put paid to the issue. Nevertheless, most of the telecom companies have made incoming calls virtually free for their higher-end customers under their tariff packages but do not extend the facility to the lower end users.

CPP has been a hotly debated topic across the world with only a few Latin American and Caribbean countries introducing it. US telecom companies have the option to introduce this service. However, very few do so because of the bitter opposition by consumer interest groups who do not want fixed line telephone users to have to pay more for calls to wireless telephone subscribers. Last year, Singapore also shot down a proposal to introduce CPP.

The consultation paper is available with the New Delhi office of the Trai and also on the telecom regulator’s website.

BSNL move

Meanwhile, Bharat Sanchar Nigam Ltd (BSNL) has approached Trai, asking for a review of its decision to fix rentals for limited mobility services between Rs 450 and Rs 630.

BSNL sources said if Trai did not respond favourably then they would be left with no other choice but to approach the Telecom Dispute Settlement Appellate Tribunal.

   

 
 
POSTAL VOTE ON COMPANY RESOLUTIONS 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, May 23: 
Shareholders have been permitted to vote on company resolutions by postal ballot or through the electronic mode.

The decision, notified in the Gazette of India, restores to shareholders their right to be heard on issues that affect their interests even if unscrupulous managements hold annual general meetings at remote villages to pre-empt them from doing so.

The shareholder who cannot make it physically to the general company meeting can use the electronic mode or postal ballot to cast his vote. The notification has been issued under Section 192A read with clauses (a) and (b) of sub-section (1) of Section 642 of the Companies Act, 1956 by the Department of Company Affairs (DCA). In the case of special resolutions, the rules state the requisite majority will be attained if the votes cast in favour of the business is three times more than the votes cast against. In the case of ordinary resolutions, a simple majority will do.

The rules shall only apply to listed companies and in the case of resolutions relating to such businesses as are specified under rule 4.

The list of businesses in which the resolutions may be passed through postal ballot will cover alteration in the object clause of memorandum, alteration of the Articles of Association in relation to deletion or insertion of provisions defining private company, buy back of own shares by the company, issues of shares with differential voting rights as to voting or dividend or otherwise, change in place of registered office outside local limits of any city, town or village will automatically implement the regulation, sale of whole or substantially the whole of undertaking of a company, giving loans or extending guarantee or providing security in excess of the limit prescribed, election of a director, power to compromise or make arrangements with creditors and members and variation in the rights attached to the class of shares or debentures or other securities.

This notification will further ensure that the reports of annual general meeting reach the members in time for approval.

Abhishek Manu Singhvi, former additional solicitor general and senior advocate, Supreme court of India said, ‘This is a very welcome move in harmony with the global era. Moreover it is in keeping with this period of information technology. Thirdly, it values the true letter and spirit of corporate democracy.’’

Singhvi added, ‘In a global village that we encounter now, the shareholders cannot be expected to be in the same city, at the time of the meetings. This move will positively counter any proxy votes.’’

The company is required to notify the members below the notice of general meeting that consent of shareholders through postal ballot and e-mail will be acceptable. The board of directors shall appoint one scrutinizer, who is not in the employ of the company. He may be a retired judge or a person of reputation, according to the Board of Directors, who can conduct the meeting with transparency and fairness. The scrutinizer will be in position for 35 days from the date of issue of the notice for general meeting (excluding holidays).

The scrutinizer shall maintain a register to record the consent or otherwise received, including votes through the electronic mode, which will mention the particulars of name, address, folio number, number of shares, nominal value of shares, their voting rights, differential voting or non-voting rights.

Records of any defaced or mutilated postal ballot will also have to be kept. The documents will be in the safe custody of the scrutinizer until the chairman sets the dates and time of meeting.

Thereafter the papers will be transferred to the company for safe custody till the concerned resolution is passed. The related issues will be kept secret from the other shareholders.

But there could still be room for some malpractices. Senior Supreme Court counsel Biswajit Bhattacharya, said, ‘This can still leave room for malpractice. Electronic media too can be forged as systems are still not secure.’’

He added, ‘The idea is good but we will have to see how fool-proof it is in practice.’’

   

 
 
RUPEE RALLIES TO 46.98 AS OIL, POLITICAL FEARS RECEDE 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, May 23: 
With concerns on the political and crude oil fronts subsiding, the rupee today posted a recovery to close at Rs 46.97/98 to a dollar.

The recovery came even as the rupee opened at the crucial level of 47.00/01 to a dollar. However, with follow-up buying support for the dollar not coming in at this level, the Indian currency staged a mild rally in early morning trading, as exporters resorted to dollar sales and banks unwound long dollar positions.

Forex dealers added that supplies of the greenback were adequately available and some companies that had recently tapped the US markets were believed to have brought their proceeds into the country. News about easing of the political problems at the Centre, as the Samata party toned down its earlier threats of withdrawing from the ruling coalition, helped the rupee stage a sharp rally. The domestic currency was also comfortable due to the relatively stable global oil prices.

Reports said that Brent crude oil was quoted at $ 29.15 per barrel today, below the crucial $ 30 a barrel on Monday. The rupee had breached the 47-dollar barrier on Tuesday, driven-down by concerns of rising global oil prices and political uncertainties.

Thereafter, the rupee was seen hovering in a narrow range, before it finally closed at Rs 46/.97/98, sharply higher from the previous finish of Rs 4700.50/01 against the dollar yesterday. A similar trend was also witnessed in the forward markets, with the six-month forward premia on the dollar finishing at 5.01 per cent, against the previous close of 5.08 per cent.

Dealers added that though concerns about the global oil prices still remain, the rupee could trade in a tight zone with a tendency to dip in the event of a sudden spurt in demand for dollars. They however, add that fall of the currency is likely to be restricted as supplies are likely to emerge at this juncture. “I feel that in view of the current circumstances, the rupee should trade in the range between 46.98 to 47.02 on the downside,” said an analyst.

Sources state that the forex markets would also look out for developments emerging at the centre and the behaviour of the FIIs in the equity markets. It has been feared that FII investments in the bourses could dry up due to India’s weightage being brought down in the recent recast announced by MSCI.

   

 
 
CISCO PLANS 34 LABS AT $ 8 M IN INDIA 
 
 
FROM OUR CORRESPONDENT
 
Bangalore, May 23: 
Cisco Systems, a global networking major, has embarked on a massive plan to train as many as 100,000 networking professionals in India in the next four years.

The company will set up 34 laboratories at an investment of $ 8 million across the country for grooming engineering graduates into networking professionals, said Manoj Chugh, president of Cisco Systems India.

He said that these labs will act as regional network academies at the state level. Apart from this, there will be several local network areas functioning under these regional network academies.

The networking programme will teach students how to design, build and maintain computer networks.

These networking professionals will be absorbed by the telecom service providers, enterprises and telecom network companies. “It is a new model for learning and accountability. It involves private and public partnership for addressing the needs of technology education,” he said.

Chugh declined to comment whether the global layoffs by the company included retrenchment in India. “We do not give geographical details on layoffs as in the case of revenues,” he said.

Cisco was one of the first companies to layoff software professionals in the wake of the technology slowdown in the US.

   

 
 
FOREIGN EXCHANGE, BULLION, STOCK INDICES 
 
 
 
 

Foreign Exchange

US $1	Rs.46.98	HK $1	Rs. 5.95*
UK £1	Rs.66.87	SW Fr 1	Rs.26.25
Euro	Rs.40.41	Sing $1	Rs.25.65*
Yen 100	Rs.38.75	Aus $1	Rs.24.15*
*SBI TC buying rates; others are forex market closing rates

Bullion

Calcutta			Bombay

Gold Std (10gm)	Rs.4675		Gold Std (10 gm)Rs.4595
Gold 22 carat	Rs.4415		Gold 22 carat	Rs.4250
Silver bar (Kg)	Rs.7600		Silver (Kg)	Rs.7565
Silver portion	Rs.7700		Silver portion	Rs.7570

Stock Indices

Sensex		3674.54		+ 33.94
BSE-100		1792.06		+ 18.35
S&P CNX Nifty	1179.10		+ 11.00
Calcutta	 122.41		+  0.49
Skindia GDR	 663.31		-  4.95
   
 

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