Tatas flash buy-Dabhol signal
Five cell firms pay Rs 1,633 cr for 4th licence
ED begins DSQ probe
Daewoo sets date to shed 237 employees
Bengal steps on gas to revive Hind Motors
CBI arrests Ketan in Madhavpurafraud case
Philips to put another unit in Calcutta on the block
Gilts catch investors’ fancy
Foreign Exchange, Bullion, Stock Indices

Mumbai, Aug. 10: 
The Tatas today whipped up waves in the corporate world when Tata Power Company, the largest private sector power utility in the country, announced that it will be interested in buying US energy major Enron’s stake in the $ 3-billion beleaguered Dabhol Power Company “if it makes sense for the company to buy.”

“We are watching Dabhol developments very closely and will conceivably think of buying it, if it makes sense for us,” TPC chairman Ratan Tata said at the company’s 82nd annual general meeting here today.

Tata’s statement assumes significance as Reliance Industries, its rival in the power sector, has already announced that it is not interested in picking up the 65 per cent Enron stake in DPC.

Tata said DPC’s project was based on liquefied natural gas which makes its tariff costlier. But somebody has to buy the project if its promoters are getting out of it, he added.

Tata was answering shareholders’ persistent queries and suggestions that TPC should take up Enron’s “at cost” offer and buy out the power plant which was ideally located near Mumbai.

Later, while speaking to reporters, TPC managing director Adi Engineer said, the power utility was “waiting in the wings” for a proper opportunity after which the company “will definitely look into buying the Enron stake in DPC”.

He said TPC will involve itself in this matter only after the imbroglio over payment of $ 48 million between DPC and Maharashtra State Electricity Board (MSEB) is sorted out.

“DPC’s asset is good. It is, in fact, a national asset which cannot be wished away,” Engineer said. The distressed project could be made viable if the government takes harsh decisions for it, he added.

Engineer admitted that the company is informally discussing the issue with interested parties over the possible buyout. However, he refused to elaborate further.

DPC moves court

DPC today moved Mumbai High Court requesting for an early hearing of their petition filed as per the Supreme Court order of August 6, challenging the Maharashtra Electricity Regulatory Commission’s jurisdiction to adjudicate in the $ 48 million dispute with its estranged partner MSEB.

Apart from the jurisdiction issue, DPC, in its petition, has contended that MERC cannot override the international arbitration agreement between itself and MSEB which was recognised by the Indian law.


New Delhi, Aug. 10: 
The government today collected Rs 1,633 crore as the total one-time licence fee from the winners of the licences for the fourth cellular operator in 17 circles.

The five companies, which paid the amount before the deadline closed today, will receive the letters of intent (LoIs) for the circles on Monday. The companies will get 30 days from the date of issue of LoIs to sign the licence agreement. However, the telecom companies will have to clear their outstanding dues before being allowed to sign the licence agreements. While signing the agreement, the companies will have to furnish a financial and performance bank guarantee along with a no-dues certificate that will be issued by the department of telecommunications (DoT).

The performance bank guarantee will have to be valid for a two-year period. This will be encashed in case the company fails to fulfil its licence obligations like connecting a number of cities within a stipulated period prescribed under the terms of contract.

In addition to the one-time licence fee, the guidelines state the licensee will have to pay a 17 per cent revenue share to the government, which hopes to complete the process of issuing licences by mid-September. The companies will also be required to submit a financial bank guarantee of Rs 50 crore for category A, Rs 25 crore for category B, and Rs 15 crore for category C licences before the date of signing the agreement.

The performance bank guarantee will be Rs 20 crore, Rs 10 crore and Rs 2 crore for category A, B and C telecom circles.

Meanwhile, the Bharti group’s proposal to pay up Rs 258 crore to clear the outstanding dues of JT Mobile with a corporate or bank guarantee is still pending before the communications ministry.

According to a senior official in the communications ministry, “Bharti’s proposal is still under review. It will be taken up soon by the Telecom Commission before a final decision is taken. We have also asked our legal and financial departments to examine the proposal.” “It will also need a clearance from the Cabinet Committee on Economic Affairs (CCEA). We are also awaiting the report from the attorney general on this issue,” officials added,

The Bharti group has to pay the government Rs 515 crore licence fee for the Punjab cellular circle. It had acquired this cellular circle from Evergrowth Telecom Ltd, a 100 per cent subsidiary of JT Mobiles, the licensee of 1994 bids.


Calcutta, Aug. 10: 
The Enforcement Directorate (ED) has started a probe into DSQ Software which may be extended to city-based brokers who had links with the Chennai-based group. The DSQ group had lent to a number of brokers in Calcutta. According to ED officials, they are, at present, probing the company’s controversial acquisition of Fortuna Technologies. DSQ Software had issued shares to three Mauritius-based companies and allegedly one Delhi-based company as consideration for the acquisition.

The Calcutta Stock Exchange (CSE) defaulter, Harish Chandra Biyani, had deposited with the exchange 10 lakh shares of DSQ Software to clear his dues. Investigations revealed that these 10 lakh shares were issued as part of the deal with Fortuna Technologies.

Though CSE and Sebi are of the opinion that the shares were originally issued to the Delhi-based New Vision Investment Private Ltd, DSQ promoter Dinesh Dalmia says: “The shares were issued to one of the Mauritius-based promoters of Fortuna Technologies, which later transferred them to the Delhi-based firm.” He admitted that the Delhi-based company was not one of the promoters of Fortuna Technologies.


New Delhi, Aug 10: 
Daewoo Motors India Limited has decided to lay off 237 employees by August 25 under a one-time settlement—well before an August 31 deadline set by Jain Nyum, South Korea’s deputy prime minister for finance and economy, to resolve the welter of issues that have been holding up a deal under which General Motors of the US is expected to acquire the ailing Korean automaker.

Nyum has asked GM and a consortium of Korean banks led by Korean Development Bank to break the deadlock soon. Daewoo is one of Korea’s biggest automakers and the government has been keen to find a solution to its problems before the general elections which are coming up.

Nyum indicated that if GM and the banks are unable to sew up a deal, the Korean government will step in. Daewoo’s operation through Surajpur plant will have to be streamlined before the deadline issued by the Korean government.

DMIL officials said, “These 237 people have been sitting idle after the closure of Daewoo’s engine and transmission plant for 10 months. There is a Rs 3-crore-a-year drain on the company as a consequence.”

Sources said, “We had set up these plants with the vision of making India an export hub to Latin American countries. As of now, the plans have failed. The company wants to pay a one-time sum to these people and start afresh after the Korean deal is finalised.”

Y.T. Cho, MD and CEO in-charge of the Indian operations said, “Daewoo needs a fresh start. As a regional head, I am willing to accept anybody pumping in the money—be it the Korean government or GM. I will concentrate on the future vision that I have for Daewoo in India.”

His men and workers have voluntarily accepted a 10 per cent salary cut for this fiscal year. Even the 1,526 strong employees union has accepted the move. The company is hoping to pare costs by Rs 103 crore against this year’s target of Rs 85 crore.


Calcutta, Aug. 10: 
State commerce and industry minister Nirupam Sen has asked the Hindustan Motors (HM) management to submit a comprehensive plan for reviving the Uttarpara plant at Hooghly.

Writers’ Building sources said the HM management recently met the commerce minister to apprise him of the present situation at the factory.

“Sen told the management that the employees have consistently been co-operating with the management and the latter should now come up with a comprehensive plan for reviving the unit,” sources added.

Following representations from both Citu and Intuc, the minister is keen on knowing what steps the management is taking to turnaround the plant, senior ministry officials said. They further added the minister is also ready to come to the aid of the C.K. Birla company, provided it comes up with a concrete proposal.

Production at the Uttarpara factory has dwindled from 1,700 units in April to almost 1, 300 in July. The company is suffering a loss of Rs 7 crore per month and its inventory has risen to 850 cars. Moreover, 36 of the 106 working days between April to August 8 this year have already been declared non-production days.

The company had offered a voluntary retirement scheme that closed on July 31.

While HM had aimed to reduce staff strength by 600-1000 through the VRS, the scheme evoked a lukewarm response, with only 300 employees opting for it.

The company has stopped production both on Sundays and Mondays.

Employees feel the company may offer another round of VRS, since the earlier one failed to achieve the targeted figure.

The Uttarpara factory presently has a workforce of around 9,200.

Faced with the crisis at the Uttarpara factory, the Citu and Intuc unions have joined hands to oppose the management’s move to cut back on certain facilities provided to employees, which includes making them pay rent for accommodation provided by the company.

Santoshree Chatterjee, president of the Citu-affiliated HindMotors & Hyderabad Industries Workers Union said: “We will ask the chief minister to intervene in the matter. The management is coming up with several austerity measures for the employees and the latter don’t even get their salaries on time. They got their salaries for the month of June only at the end of July.”

The employees have also informed state labour minister Mohammed Amin about the present situation of the company, said Ajit Chakroborty of the Intuc-affiliated Hindmotors & Hyderabad Industries Employees Union.


Mumbai, Aug. 10: 
After being interrogated since early morning, the Big Bull, Ketan Parekh was today arrested by the Central Bureau of Investigation (CBI) in a case filed by Madhavpura Mercantile Co-operative Bank (MMCB) in Ahmedabad alleging fraud and misappropriation of public funds.

The stock broker is likely to be taken tonight to Ahmedabad and produced before a court there tomorrow.

may be recalled that on July 26, the Mumbai High Court had rejected Parekh’s plea for an anticipatory bail. However, the order was stayed until two weeks to enable him approach an appellate court.

On Thursday, the High Court rejected his petition praying for his production before a court in Mumbai in the event of his arrest in a case filed by MMCB. The court also turned down his plea to be lodged in police custody in Mumbai in the event of his being denied bail.

According to MMCB’s FIR, 19 companies had allegedly drained out Rs 800 crore from the bank through fraudulent means.


Aug. 10: 
Philips India Limited (PIL) today announced plans to sell its Enabling Technologies Group (ETG) division at Beliaghata in the city.

Ramesh Mitragotri, head of corporate communications said: “This is not a downsizing or restructuring exercise. We will sell it as a going concern and the main consideration is continuity of business.”

The ETG division manufactures moulds, injection-moulded plastic components and metal plants. The company has two such factories — one at Calcutta, set up in 1956, and another at Loni-Kalbhor in Pune, set up in 1951. PIL is, however, not interested in selling off the Loni unit.

Philips has informed the Bombay Stock Exchange (BSE) that the ETG division at Calcutta contributes less than 1 per cent of its annual turnover. The company said demand for parts from this unit have declined substantially over the last two years and is not expected to improve in the near future. It further added the Pune factory is capable of meeting its requirements. “In view of this, the company is evaluating options for the ETG Calcutta factory, including a possible sale,” it informed the BSE today.

The total turnover of the Calcutta factory is about Rs 11 crore. The unit employs about 120 people and the company expects to ensure its employees retain their jobs.

Philips, in its latest annual report had stated, “The business being restructured and we are confident that the measures being taken will yield results over the coming 18 months,” but nowhere does it indicate plans to sell off the Calcutta factory.

Reacting to the move, employees said, “This is nothing new. The company will gradually get out of Calcutta and Pune will become their focus. But in the long run we feel Philips will become a trading company.” Earlier, in 1999, the company sold its Salt Lake CTV manufacturing unit for Rs 9 crore to Videocon.


New Delhi, Aug. 10: 
After the letdown by equities, gilts are now the rising stars on the horizon.

In fact, while the bloodbath on the bourses, the poor showing by equity funds and the Unit Trust of India (UTI) mess has badly shaken investor confidence, the debt market is looking up, particularly the government securities (G-Sec) market which is expected to post a turnover of more than Rs 11,00,000 crore this fiscal.

“Turnover in the G-Sec market has shot up from 1,87,531 crore in 1998-99 to Rs 4,56,515 crore in 1999-2000. We expect this to cross over Rs 11,00,000 crore this fiscal,” PNB Gilts managing director Arun Kaul said.

Apart from providing solace to retail investors badly burnt by both the equity market and mutual funds, the G-Sec market gives a reasonably high yield combined with the sovereign backing of the government.

G-Secs, earlier traded only in the wholesale segment, are now available in the retail segment following the Reserve Bank of India’s approval.

PNB Gilts, which launched its retail G-sec products in January this year, is now marketing two G-sec issues — the 12 per cent GOI 2008 and the 11.83 per cent GOI 2014. Both these issues generated annualised returns of 20 per cent per annum to retail investors who entered between January-April this year and sold them off in July end.

“At today’s rate, these two securities are giving an annualised return of 9.04 per cent and 10.11 per cent respectively, which is higher than most debt market mutual funds. Besides, individuals can now avail of additional income tax benefit under section 80L of Income Tax Act and no tax is deducted at source” Kaul said.

He said G-Secs are being traded by five branches of Punjab National Bank and five of PNB Gilts in 10 cities, with a minimum lot size of Rs 25,000 in multiples of Rs 1,000.

“Given the attractiveness of G-Secs as a solid investment proposition, we are planning to open more branches for retailing G-Secs. However, lack of investor awareness, easy availability and demat requirements are some of the major obstacles before the development of industry,” Kaul said.

Kaul added that the slump in the capital market following the stock scam and the UTI crisis has meant that investors will be looking for a reasonably attractive investment avenue with minimal risks, and G-Secs completely fit the bill.

“The yields on G-Secs is driven by inflation rates — present and expected — money supply in the system, fiscal deficit and level of government borrowings,” Kaul said.

The other factors affecting the market are forex reserves, foreign trade situation, global finance development, cyclical trends in the economy, the RBI’s monetary policy, tax revenues, yield spreads, political factors and market expectations.

Kaul added that the proposed entry of more players after the setting up of the Clearing Corporation and Real Time Gross Settlement System by the RBI is further expected to boost the fortunes of the G-Secs market.



Foreign Exchange

US $1	Rs. 47.12	HK $1	N.A.*
UK £1	Rs. 67.16	SW Fr 1	N.A.*
Euro	Rs. 42.11	Sing $1	N.A.*
Yen 100	Rs. 38.54	Aus $1	N.A.*
*SBI TC buying rates; others are forex market closing rates


Calcutta			Bombay

Gold Std (10gm)	Rs. 4480	Gold Std(10 gm)	Rs.4440
Gold 22 carat	Rs. 4230	Gold 22 carat	N.A.
Silver bar (Kg)	Rs. 7100	Silver (Kg)	Rs.7190
Silver portion	Rs. 7200	Silver portion	N.A.

Stock Indices

Sensex		3316.21		-  3.40
BSE-100		1554.65		-  5.63
S&P CNX Nifty	1071.15		-  0.50
Calcutta	 114.88		-  0.30
Skindia GDR	  N.A.		   -

Maintained by Web Development Company