DCA for strict allotment norms
Tata Finance suffers net loss of Rs 117 crore
BOC plant for Tisco
Jay Shree Tea partners with IBM for IT debut
BoP surpluss urges to Rs 30,063 cr

New Delhi, June 29: 
The Department of Company Affairs (DCA) is in talks with the Securities and Exchanges Board of India (Sebi) to tighten norms relating to preferential allotment of shares in the wave of serious irregularities that have been detected in such allotments in the past.

The DCA has held preliminary discussions with the Sebi to amend norms relating to pricing of preferential share allotments and the modus of determining whom the shares should be allotted to. The proposed changes include valuation of the shares to be allotted vis-à-vis the present Sebi pricing norm.

Inaugurating the National Accounting Convention organised by the Associated Chambers of Commerce and Industry of India, DCA secretary V.K. Dhall said the Sebi norms for allotment of preferential shares were “very simplistic” and lent themselves to manipulation by unscrupulous managements. He said the norms for pricing of shares and determination of allottees have to be revised to make the new accounting standards meaningful.

He said preferential allotments were allowed to enable promoters to induct any new shareholder without incurring the major expense of floating a public issue. “But we have come across instances where such allotments have been made at prices significantly lower than the prevailing market prices, not to shareholders but to brokers,” he said. ”Such allotments generally lead to a nexus between the broker and firm’s promoters so that the two can manipulate prices in the market.”

The Sebi regulations stipulate that the preferential allotment should be priced at an average of the stock price over the last six months or the last 15 days whichever is higher.

The DCA believes that this is too simplistic. “It leaves a lot of room for price manipulation and so we need to amend the preferential allotment pricing norms,” Dhall said.

He also said the government is contemplating major changes in the Companies Act by arming the DCA with greater prosecution and punitive powers, random scrutiny of accounts, inspection of accounts by professional bodies and a sizable increase in penalties to nip accounting malpractices and incipient signs of fraud in the bud.

DCA is devising norms for audit committees of firms so that these become more responsible and effective, he said. The government had specific information on malpractices and falsification of accounts by Indian companies, he added.

The DCA secretary said that simultaneously the accounting standards were being harmonised with global accounting practices. “We will bring about a qualitative change in the Companies Act to ensure that liberalisation does not become a licence and are moving towards greater regulation in a transparent and non-biased manner,” he said.


Mumbai, June 29: 
Tata Finance Ltd continued to be in the red with a net loss of Rs 44.41 crore for the fourth quarter ended March 2002 compared with a net profit of Rs 4.42 crore in the previous corresponding quarter.

During the quarter under review, total income decreased to Rs 108.95 crore from Rs 145.77 crore in March 31, 2001.

In a communication to the stock exchanges today, Tata Finance said that it has suffered a net loss of Rs 117.45 crore for the financial year 2001-02 (comprising nine months) compared with a net loss of Rs 395.56 crore in the previous financial year.

The total income for the year stood at Rs 344 crore as against Rs 545.85 crore in the previous year.

The company added that extra ordinary items for the year is at Rs 111.63 crore which represents provision against exposure on inter corporate deposits, permanent diminution in value of long term investments and refund of dividend to an erstwhile subsidiary.

Tata Finance Ltd has changed its accounting year to end on March 31, and as such the figures for the period ended March 31, 2002, are for nine months. Hence, these are not comparable with those of the previous year, it noted.

It may be recalled that in October last year, the board of Tata Finance Limited was recast with Ishaat Hussain, finance director of Tata Sons Limited, taking over as the new chairman.

The other members of the board are N A Soonawala, vice chairman of Tata Sons, K A Chaukar, managing director of Tata Industries Ltd, Francis J DaCunha, executive director and U Mahesh Rao, director.

At that time Tata Finance had revealed that the Tatas have initiated discussions with select international corporations who have expressed interest in participating in the re-structured capital of the company.

The Tatas were planning to re-structure Tata Finance’s capital, thereby increasing its capital adequacy ratio. The group has also affirmed that it will safeguard the interests of all depositors and lenders of Tata Finance.

The company was in the news last year following a controversy regarding the investment decisions made by the earlier management.


Calcutta, June 29: 
BOC India Ltd will invest Rs 30 crore in setting up a 225 tonne per day plant in Jamshedpur, which will supply oxygen exclusively to Tata Steel.

The plant will be commissioned in July 2003. BOC’s managing director Sanjiv Lamba said the new plant would be generating Rs 30 crore in revenues every year when operating in full swing.

BOC has a bigger plant in Jamshedpur, which can produce up to 1,290 tonne of gas per day. It was commissioned three years ago. Lamba said such plants had a gestation period of five years, implying that the cash flows from the plant would be positive in a couple of years.

BOC is pitching for few other contracts. “If all of them mature at the same time, we will have to invest in excess of Rs 100 crore in setting up the plants,” he added.

BOC expects to achieve an 8-10 per cent growth this year. In 2001-02, the company posted a turnover of Rs 303.79 crore and a net profit of Rs 2.57 crore. The management sees petroleum refining, pharmaceuticals and food processing among others, to drive its growth.


Calcutta, June 29: 
Jay Shree Tea & Industries has joined hands with IBM for its foray into the information technology business.

Chairman B.K. Birla said: “We have tied up with IBM for setting up a 60-seat international call centre at Salt Lake. The total cost of the project is Rs 4.50 crore.” He was speaking at the company’s 56th annual general meeting here today.

The company will provide specialised application software and consultancy services to different sectors like tea, education and healthcare.

Jay Shree Tea is also planning to sell or lease out the property developed in Bangalore. Efforts are on to sell the property in Calcutta held by its subsidiary.

Managing director D.K. Jain said that the results for 2001-02 have been affected by the sharp erosion in tea prices, oversupply of tea and weak sentiments in the market.

He said, “To mitigate the losses we will focus on marketing packaged tea.” The company also plans to sell more tea directly from the gardens.


Mumbai, June 29: 
The country’s balance of payment (BoP) surplus climbed to Rs 30,063 crore for the fourth quarter of the fiscal ended March 31, 2002, against Rs 17,389 crore recorded in the quarter ended December 31 in the same year.

This resulted in a total current account surplus of Rs 56,592 crore for the entire year, up from Rs 27,662 crore for the year ended March 31, 2001. According to the figures released by the Reserve Bank of India (RBI) today, in dollar terms, India’s BoP surplus in the January-March quarter was $ 6.19 billion against a surplus of $ 3.12 billion in the corresponding period previous year. For the year ended March 2002, the balance of payments surplus was $ 11.76 billion versus $ 5.86 billion 2000-01.

As per the figures, foreign investment in the country inclusive of foreign direct investment (FDI) and portfolio inflows rose to Rs 9,085 crore during the reporting quarter which included FDI of Rs 5,791 crore and FII investments of Rs 3,294 crore. For the year as a whole, foreign investments in the country stood at Rs 25,246 crore against Rs 20,890 crore in the previous fiscal.

According to the RBI, current account surplus for the year was at Rs 6,719 crore against a deficit of Rs 11,431 crore during the year ended March 31, 2001. For the fourth quarter, India’s current account surplus was at Rs 9,797 crore.


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