Tatas to call the shots if A-I bid clicks
Directors of errant firms to be blacklisted
Portal in a box in two hours
Hotel Corp bids to be floated soon
Sebi may allow mutuals to invest overseas
Foreign Exchange, Bullion, Stock Indices

New Delhi, Oct 5: 
The Tata group will pitch for 26 per cent equity and management control in Air-India and give its foreign airline partner, which is allowed to bid for only a14 per cent stake under the terms of the divestment programme for the national carrier, a say on only operational issues.

“The Tatas will have a majority in the bidding consortium which is likely to include one more partner only — a foreign airline ... we would like to aim at a 26 per cent stake,” Tata group chief Ratan N. Tata told reporters here at an informal meet.

He made it clear that the Tatas would call the shots if the Tata-led consortium managed to buy up Air India. “Management control will be with the Tatas, control of day-to-day operations will be with the partner airline,” he insisted.

The Tata group’s announcement is obviously a bid to assuage fears sounded openly by various opposition political parties and even cabinet ministers privately on Air India remaining an Indian controlled entity after privatisation.

Tata admitted he was in talks with Singapore Airlines on forming a consortium though he said nothing was final yet. But he as much as hinted at tying up with SIA stating “it (the partner) should be a carrier which does not have (major) geo-political impact” in response to a query on whether he would pick a US, European or South East Asian airline as his consortium partner.

He said the Tatas needed a foreign partner simply because “the gap between where Air-India used to be and where it is now is too large” and an experienced modern airline was needed which could bring in technical expertise. But this did not mean he would hand over any kind of management control or veto powers to it, Tata indicated.

He, however, added the Tata group would not bid for Indian Airlines as it would be concentrating its resources on acquiring Air India. If its bid is successful, it will have to pump in more money into the national carrier beyond the initial buyout expense in order to modernise and expand it.

“Anyone who has Air India will have his hands full,” Tata said.

Air India was originally floated by his adoptive father J.R.D. Tata as Tata Airlines in 1932 and renamed Air India, after the government took over a 49 per cent stake in the airline in 1948.

The airline was eventually nationalised in 1953, though J.R.D. Tata was allowed to remain chairman.

Ratan Tata said the shape of final bids for Air India would obviously depend on the kind of powers the strategic shareholder will be given through the shareholders’ pact being drawn up by the government as also resolution of the tricky issue of bilateral rights — an agreement between two countries that confers equitable landing rights to their national carriers.

The government has made it clear that it considers unused bilaterals (landing rights that are not being exercised because of constraints in operating flights) that were allocated to Air India to be its property, which it can re-allocate at any time to Indian Airlines, the other designated national carrier.

As these bilateral rights have huge potential revenue generating possibilities, all bidders are keen that the government should allow Air India to retain these unused rights even after privatisation.

Tata, who has been a director on the Air India, said the national carrier has been allowed to become an ethnic airline and there “has to be substantial change quickly in the image of the airline.”

“Its planes are full in the back and empty in front, where all the high-yielding seats are,” Tata added.

He, however, quickly added that Air India management or employees should not be blamed for this. Tata also made it clear that as a prospective buyer he did not see Air India’s high employee to aircraft ratio as a hindrance. “Air India has shrunk; that’s why we see the flab. Once it expands, there will be less flab.”    

New Delhi, Oct 5: 
The department of company affairs is set to start a fresh round of cleanup drive against corporate malpractices.

This time the department is planning to circulate a list of directors of companies which do not comply with registration norms.

DCA secretary P.L. Sanjeeva Reddy said, “The registrar of companies (RoC) will have the power to thwart registration of companies which have such directors on their boards and can ask for replacement before registering them.”

This new clause will be part of the second amendment to the Companies Bill.

Few months back, DCA had launched a Company Law Settlement Scheme (CLSS) allowing companies which had to failed to file documents like balance sheets or profit and loss accounts to clean up their act. It had also offered an easy exit route to companies that got themselves registered but failed to take off.

According to Reddy, nearly 1.26 lakh companies have used the CLSS, but another 1.28 lakh have defaulted. “To bring these companies to book we will take stringent action like circulating the names of directors,” he added. The DCA has already identified such companies and will put the names on the website.

Reddy said the names of non-compliant companies and directors would be circulated to financial institutions too, so that they are warned of the risks while lending.

The Reserve Bank of India had also recommended a similar step that called for updating and circulating the names of current directors on boards of defaulting companies.

The DCA is also planning to launch a corporate index number code in the next few weeks for companies registering from December 1, 2000. Within the next six months, all the companies registered with the ROC would be given a similar number code. The investor will get details about the company, including an abridged balance sheet of the company.

The DCA has also constituted a study group to chart the corporate governance code for private limited companies. The DCA secretary is chairing the group.

Meanwhile, the DCA today issued a notification under Section 621 of the Companies Act 1956, conferring power on 12 officials of Sebi to punish companies for their mis-statement in prospectus, non-issue of prospectus, non-issue of shares and non payment of dividends of listed companies. With this notification the power to punish companies in the corporate sector will be exercised concurrently by both Sebi and DCA.    

New Delhi, Oct 5: 
Wannabe dotcommers never had it so good. They will soon be only Rs 10,000 and two hours away from realising their dreams of setting up a portal, thanks to ‘Jaldi In a Box.’

‘Jaldi In A Box,’ Asia’s first shrink-wrapped e-commerce solution, which promises to pop up in a flash to the rescue, was launched by KLG Systel, promoter of online shopping portal Jaldi.com. It promises to be a one-stop shop for setting up an e-commerce site and handles domain name registration, web space, web page design, an e-commerce engine, credit card clearing and logistics.

“With Jaldi In A Box, we aim to share our domain experience on Jaldi.com with India and the world. Through this unique packaged software we want to put the power of the internet in the hands of individuals, traders, companies, manufacturers and in fact anyone headed for business on the Web,” said Kumud Goel, managing director, KLG Systel Ltd.

Jaldi In A Box is targeted at those looking to set up online shops and provides a unique service through customisable templates, built-in security features, access to leading payment gateways and host server space.

The product developed on Microsoft DNA architecture has been designed to streamline the creation of online shopping sites that will facilitate business-to-consumer or business-to-business e-commerce.

The product, priced at Rs 9999, will be available through traditional software retail channels.

KLG Systel has also tied up with leading Indian logistics and finance companies such as DHL and HDFC to provide logistics and payment gateway facilities to users.

Customised sites can be built using site construction features such as cataloguing and search. The most significant feature of Jaldi In A Box’ is that the site once constructed, will be in a ‘ready-to-transact’ mode as a result of the built-in technical and logistical support services provided by KLG Systel as part of the product’s core offering.

Key benefits with Jaldi In A Box include free web address at www.yourname.com for a year, an additional web identity on Jaldi.com, location and category listing on the Jaldi online retail marketplace, web space for hosting one’s website with up to 2000 product items, besides online advertising on Jaldi.com.

It also offers other benefits like access to Jaldi.com’s B2B market place, credit card authentication facility from HDFC Bank or from Easy Netcom.

Jaldi In A Box is based on Microsoft’s DNA architecture and uses MS Access/ MS SQL Server 7.0 as the RDBMS platform. “Microsoft has partnered with KLG Systel in its effort to deliver cutting edge technology solutions,” said Rajiv Kaul, director, marketing and e-commerce, Microsoft India.    

New Delhi, Oct 5: 
Air-India today announced it will be soon be inviting bids for selling off its wholly- owned subsidiary Hotel Corporation of India.

Jardine Fleming is the advisor for the selloff.

Bids are being invited for HCI’s individual properties to maximise buyers’ interest although the buyers will be given the opportunity to bid for the corporation in its entirety.

Apart from two flight kitchens at Delhi and Mumbai, HCI has four five star Centaur hotels at Mumbai (two hotels with 656 rooms), Delhi (376 rooms), Srinagar (242 rooms) and a four star hotel at Rajgir in Bihar (26 rooms).

At its recent meeting in Delhi, the airline board cleared various “outstanding issues that are required to be sorted out prior to the disinvestment,” AI said in a press release.

The disinvestment is expected to fetch substantial sums of money before March 31, 2001 to the airline.

Air India will shortly issue an advertisement relating to expression of interest (EOI) for divesting its stake in HCI.    

Mumbai, Oct 5: 
The Securities and Exchange Board of India (Sebi) is considering the possibility of allowing overseas investments by mutual funds as part of an incentive package that will include making them company-like in their structures, and asking for balance sheets from asset management companies (AMCs) that work in the form of private limited firms.

Disclosing this at the annual seminar of the mutual fund industry organised by the Unit Trust of India (UTI) here today, Sebi chairman D R Mehta said other measures like bringing out a code of conduct, developing the best practices in the industry and standardisation of portfolio disclosures were also being discussed as part of the initiative.

The market regulator is planning to reduce to 42 days from 90, the period during which an public offering remains open. A decision on these issues, now being debated by the B G Deshmukh committee, is expected on October 16.

The mutual fund industry is currently allowed to invest not more than $ 50 million in American Depository Receipts and Global Depository Receipts, a Sebi official said.

According to the Sebi chief, gross collections by mutual funds have touched Rs 30,625 crore, raising hopes that the year-end tally will surpass the Rs 61,241 crore mopped up last year.

Finance minister Yashwant Sinha told the seminar that he was looking forward to specific proposals from the Reserve Bank and Sebi on ways to create a level-playing field for the mutual fund industry vis-a-vis the foreign institutional investors (FIIs).

The finance minister said mutual funds have to make greater efforts at investor education, inform those who put their money in schemes about their perception of the market and developments that could occur in the medium and long terms.

Citing the example of Life Insurance Corporation, which was getting more business from rural areas than in urban areas, Sinha asked MFs to tap that market more effectively. Besides improving the depth of the market by increasing the household investor base of stock markets from under 8 per cent at present, the move was also in line with the national objective of increasing the savings rate in the country to over 30 per cent of the gross domestic product (GDP).

Reserve Bank of India governor Bimal Jalan, however, expressed his uneasiness with assured-return schemes. He urged mutual funds to build risk-management systems that could create a healthy asset-liability match in the portfolio, after taking into account the maturity profile of the scheme.

Limited oil spillover

The finance minister today said the recent hike in oil prices would not have any major impact on the country’s economy, except a percentage point rise in the inflation rate.

Talking to reporters on the sidelines of the seminar, he said: “It will not have much of an impact on the economy. Only, the inflation rate may rise by one percentage point.” He refused to comment on whether the government will roll back the increase.

The RBI governor ruled out any significant policy changes — in specific terms, revisions in the Cash Reserve Ratio or the Bank Rate — in the monetary and credit policy. Officials of the central bank have already said the forthcoming policy will be limited to a review of the developments in the economy,.including those in the financial and forex markets since April.    


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