Bajoria ready to fire legal salvo at Wadia
Sebi in no hurry to wrap up probe
Sensex dips below 3700 as FII selling continues
New auto policy to be free of export riders
Plan panel against steps stifling growth
HDFC first-half net profit up 20%
New Maruti incentive scheme
Cheap PCs Connect Nahata with Punjab
Foreign Exchange, Bullion, Stock Indices

Calcutta, Oct 17: 
Arun Bajoria, the man who stalks Bombay Dyeing with his stack of shares, is considering legal options to force open the Nusli Wadia citadel to financial scrutiny, and to overturn a Company Law Board (CLB) interim order that has stopped him from getting a berth on the board of India’s oldest business houses.

Bajoria told The Telegraph that he would seek legal opinion from a leading solicitor firm to find out whether the textile company is pulling the veil on alleged financial irregularities.

“I have a strong feeling that the present management has perpetrated a lot of irregularities in the company, which, otherwise, had tremendous growth prospects. I want to ferret out the accounts to assess the magnitude of such irregularities,” Bajoria said.

The city-based baron, who sent ripples of fear among family-owned companies and reminded them just how vulnerable they are to audacious raiders, said he would not hesitate to slap legal notices on the Bombay Dyeing management if it does not make detailed disclosures on its finances.

The move is seen as a clear attempt to counter the Bombay Dyeing management’s oft-repeated allegation that Bajoria violated the takeover code by picking up shares from the market.

Refuting the charge that he was on the wrong side of the takeover norm, the man with a reputation for reviving ailing jute mills, accused Wadia of trying to smear his image and undermine his worth by taking the matter ‘to the streets’

“Initially, I had nothing to do with Wadia or his company. I picked up Bombay Dyeing shares purely as an investor. But, the management has acted in a highly irresponsible manner and provoked me to take the legal step,” he said.

Bajoria said there was no question of selling the shares at less than Rs 250 per share, although he indicated that such a deal looks unlikely ‘in the current market conditions’.

He vehemently denied having held any negotiations with the Bombay Dyeing management through Nimesh Kampani of J. M. Morgan Stanley, as reported in a section of the press today.

“Neither the Bombay Dyeing management nor a third party has discussed anything with me ever since the matter was first reported in the media,” he said.

On the Company Law Board’s interim order, he said he would continue to fight for a berth on the Bombay Dyeing board. While he kept his cards close to the chest, one of his associates said they may move the court against the CLB order.

Bajoria says the investments in the textile company were made through his company, Megaresource. He claimed Bombay Dyeing and the bourses concerned had been intimated as soon as his purchases hit the 5 per cent limit. “If the management says I haven’t informed it, it is lying,” he said.

Meanwhile, Calcutta Stock Exchange executive director Tapas Datta confirmed that Megaresource had, indeed, informed it about the investments in March this year.

“We have apprised the Securities and Exchange Board of India of the details of the letter,” Datta said. Bajoria has also sent the information sought by Sebi on October 12.    

Mumbai, Oct 17: 
Unruffled by charges that its progress in the Bombay Dyeing-Bajoria spat has remained tardy, the Securities and Exchange Board of India (Sebi) today said it cannot be rushed into a decision on the bitter corporate tussle.

While the Wadias and Bombay Dyeing are keen to see investigations put on the fast track, Sebi chairman D R Mehta said the issue will be studied in all its dimensions. He told The Telegraph that the takeover code is free from structural flaws — something critics say has been thrown up in the controversy over the way Bajoria bought his stake.

Sources close to Bombay Dyeing have been critical about the slow pace at which Sebi is moving on the issue. They cite the example of the Company Law Board (CLB), which ordered freezing of Bajoria’s voting rights in the company.

Asked if shares in dematerialised form were responsible for the current stand-off — given that promoters have no control over the transfer of paperless scrips —Mehta said demat laws were framed keeping the interest of investors in mind.

Sources at the market regulator say a decision will take time. Mehta will be in New Delhi on Wednesday to attend a JPC meeting, after which he will be off to China on an official visit.    

Mumbai, Oct 17: 
Sustained selling pressure from foreign institutional investors (FIIs) and speculators, dragged the benchmark BSE index below the 3700-mark today.

Opening on a modest note at 3702.40, the sensex embarked on a slow but decisive southward journey to touch the day’s low of 3613.74 before settling at 3664.79, indicating a net loss of 63.88 points.

The decision of the Securities and Exchange Board of India to defer the introduction of rolling settlement in group A for the time being, also went relatively unnoticed.

Depressed sentiments prevailed as operators were discouraged by the lack of buying from FIIs for the past several days.

FIIs, who were net sellers for the last few settlement periods, reportedly pressed heavy sales in select heavyweight counters like Infosys, Reliance, Satyam and Zee Telefilms. Broking circles were abuzz with the talk that Janus — considered to be one of the long-term investors among the FIIs, was among the sellers.

“The fall indicates that there is something intrinsically wrong with the markets here,” said Rajesh Jain of Pranav Securities.

FIIs had been net sellers to the tune of Rs 653 crore in three sessions between October 11 and 13, followed by heavy selling yesterday.

Nine index-based scrips including heavyweights like HLL, Satyam Computer, Zee, SBI and Telco hit their 52-week lows. However, Ballarpur and GE Shipping touched their 52-week highs.

In the specified group, 100 counters including 25 index-based shares registered sharp to moderate losses while 39 others found a place in the gainers list.

Himachal Futuristic was the most active scrip with a turnover of Rs 620.88 crore, of the total business volume of Rs 4696.69 crore.

The market leader HFCL dipped by 16.80 to Rs 1001.95. Global was down by 9.05 at Rs 1092.55, Infosys Tech by 80.25 at Rs 6450.90, Satyam Computer by 26.05 at Rs 336.80 and Zee Tele by 19.45 at Rs 341.05.    

New Delhi, Oct 17: 
Foreign auto companies will have to meet their export obligations but new entrants will not be bound to this condition when they are allowed to set up shop in the country, Union heavy industries minister Manohar Joshi has said.

Speaking at the Economic Editors’ Conference here today, Joshi, said commitments made earlier will have to be fulfiled, and companies which have manufacturing bases in India but rely heavily on imports, must set it off with exports.

Auto companies have long been pressing for the waiver of the export-obligation clause, saying the removal of quantitative restrictions in March 2001 will lead to phase-out of the existing MoU policy under which these riders are imposed.

Joshi said the new auto policy will have built-in barriers to prevent imports of second-hand cars. “We will not allow second-hand car imports into the country. If they are permitted, it will create several problems for new car companies. We will prevent them by putting restrictions,” he added.

Officials said the government plans to erect tariff and non-tariff based barriers, including environmental norms, to staunch the possible flood of cheap used cars from abroad. The new auto policy, the minister said, will take a fresh look at the range of duties not only for automobiles, but for components as well. The new structure will be devised to promote greater research and development (R&D) in the industry.

At present, auto companies, including Maruti Udyog, import technology from their foreign partners, as a result of which the country lags behind in research and development activities. Joshi said the new auto policy will require companies to set R&D centres by setting aside a part of their total investment that will be mandated by the government.

A few years back, the government had crossed swords with Suzuki over the transfer of gear-box technology used in Maruti cars. The government felt it would increase the levels of indigenisation, but the Japanese partner in the country’s biggest car-making company was not in favour of the idea.

Moving away from the auto sector, Joshi told reporters that his ministry had prepared a white paper on public sector enterprises. It focused on ways to strengthen critical PSUs, divest the government’s stake in a few and identify the ones which have to be closed. He said the paper, now being circulated between ministries, will be considered by the Cabinet soon.

The government has shortlisted about 25 companies for disinvestment. In nine others, it is working out a strategy to strengthen them before the disinvestment process is started.    

New Delhi, Oct 17: 
Planning Commission deputy chairman K. C. Pant today cautioned the government against adopting a “hard anti-inflationary stand” which could “choke growth.”

Pant, who was speaking at the three-day Economic Editor’s Conference here, said, “We need to accept that relatively high oil prices will be an abiding feature of our economic environment and adapt to the new situation.”

This was read by many as an indication that the BJP government was not planning a major roll-back of petro-prices but merely a cosmetic one, to please the Trinamul Congress, its West Bengal-based coalition partner.

He also blamed the “significant shortfall in public investment, particularly in infrastructure,” as the single most important cause of the slow-down in industrial growth over the last few years.

Pant specifically blamed states for failing to spend enough on infrastructure. But he admitted even the Centre’s achievements fell far short of its targets. Central and state projects have been languishing due to lack of committed funds, he added.

Last year, the finance ministry cut the plan allocation by nearly 25 per cent and even this year, the finance minister has indicated he may not be able to meet plan fund requirements.

Read in that context, Pant’s analysis that slow growth in the past was caused was by lesser spending on infrastructure can be interpreted as a warning to the finance ministry to fine-tune its expenditure management, to avoid another recessionary bout.

Pant, however, said a 9 per cent GDP growth in the Tenth Plan was difficult to achieve.

“Under the present circumstances it will be difficult to achieve a 9 per cent growth rate in the Tenth Plan... It will be realistic to recognise it as a stiff target,” Pant said. However, he said that if the country wanted to drastically reduce poverty, it had to aim at high growth targets.    

New Delhi & Calcutta, Oct 17: 
The Housing Development Finance Corporation Ltd (HDFC) has posted a 20 per cent rise in net profit for the first six months of the current fiscal. Net profit rose to Rs 207.45 crore, compared with Rs 172.68 crore in the previous corresponding fiscal.

During the six-month period, the total assets of the corporation rose to Rs 15,663 crore against Rs 12,906 crore in the same period last year. The loan portfolio, including loans outstanding and investments in preference shares and debentures for financing real estate related projects, reflected under investments as on September 30, amounted to Rs 12,167 crore against Rs 9,547 crore, representing an increase of 27 per cent.

Loan approvals during the period, amounted to Rs 3,165 crore, showing a growth of 33 per cent, while disbursements for six months amounted to Rs 2,484.66 crore. HDFC added that retail growth during the first half of the year has been robust as a result of the increase in the distribution outlets and enhanced tax incentives provided to the retail customer in the last budget. Approvals and disbursements in respect of individual loans were higher by 55 per cent and 52 per cent respectively.

Dr. Reddy’s sales up

Dr Reddy’s Laboratories has posted a 46 per cent growth in sales to Rs 1654.57 million in the second quarter of the 2000-01 fiscal (July-September), from Rs 1135.70 million in the previous corresponding quarter. While the finished dosages business contributed 68 per cent of the revenues, bulk actives area contributed 30 per cent, with diagnostics contributing the rest.

Cheminor Drugs, a Dr. Reddy’s group company, recorded a 32 per cent decline in domestic bulk sales for the second quarter, at Rs 96.72 million against Rs 142.13 million in the previous corresponding period. Total sales of the company decreased marginally by 2.42 per cent to Rs 556.2 million.    

New Delhi, Oct 17: 
The management of Maruti Udyog Ltd (MUL) today signalled a truce with its agitating workers’ union, announcing a new incentive scheme whereby the average monthly cost to the company per employee has been raised to Rs 33,767 from the previous Rs 22,000.

The new incentive scheme comes into effect from November 1. “The new incentive scheme gives incentives on increased productivity and has also brought in the element of the quality of production,” the company said.

However, the management’s offer appears to have failed to appease the employees union.

Mathew Abraham, general secretary, Maruti Udyog Employees Union said, “We are not aware of a new incentive scheme. If our demands are accepted, it will mean that the income of a Maruti employee goes up by Rs 2300 per month for this year. This has not happened. The management is juggling with figures to show higher cost per employee.”

Adding to the car major’s woes, the ministry for heavy industries, the nodal ministry for Maruti, is not in a mood to take immediate action.

Speaking at the Economic Editors Conference, minister for heavy industries Manohar Joshi had earlier said, “The board is looking into the issue and the managing director will take a decision. The government will intervene in the matter only when the company seeks government help.”    

Chandigarh, Oct 17: 
HFCL Infotel Ltd, the basic telecom licencee for Punjab, is offering its internet subscribers fully-configured low cost computers.

Assembled by HFCL, the computers, which will be priced below Rs 20,000, will enable its subscribers to use broadband multimedia services.

HFCL will sell these low cost personal computers under the ‘Connect’ brandname.

The effort is expected to enable the spread of information technology in the state, said HFCL group chairman Mahendra Nahata. The company is also planning to set up an international gateway in Chandigarh.

HFCL will launch an internet access provider next week in the state. This will be complemented by a Punjab-specific portal that will focus on local issues like weather and commodity prices.

The company has also developed a franchising model, by which the local entrepreneurs will invest in setting up the network in small locations in the state. They will be responsible for running the local area network and also for its maintenance.

Launching the commercial services in the state today Nahata said, “The broadband service will accommodate both voice and video data. We will set up STD and ISD public call offices and internet access kiosks all over the state, with a special focus on rural areas.” The services, initially launched in Chandigarh and Mohali, will soon be expanded to Ludhiana, Patiala, Jalandhar and Amritsar by the year-end.

“We are adopting the franchise model as it will enable faster expansion and allow us to cover the entire state in lesser time. The maintenance of the network would be sourced to service agents, who will not be HFCL Infotel employees,” said Nahata.

HFCL Infotel will train these service agents and appoint one agent for every 7500 telephone lines, spread over 3 sq kms.

HFCL, which acquired the licence to offer fixed line services in Punjab from Essar Comvision in January this year, is likely to offer full-fledged commercial services in a record period of six months, said Nahata.

According to K. B. Lal, chief executive officer, “Discounts of up to 20 per cent would be offered to high-end users. Further, we may package our internet tariffs with fixed line call rates. We may also offer free net surfing during the lean hours and at night.”

HFCL is completing a state-of-the-art broadband network which includes 2000 km of fibre optic cable connecting all major cities and towns of the state. “We aim to attain a customer base of 3 lakh by 2003 and will be heavily focused on the rural areas,” added Nahata.    


Foreign Exchange

US $1 Rs. 46.32 HK $1 Rs. 5.85*
UK £1 Rs. 66.60 SW Fr 1 Rs. 25.75*
Euro .Rs. 39.38 Sing $1 Rs. 26.10*
Yen 100 Rs. 42.86 Aus $1 Rs. 23.85*
*SBI TC buying rates; others are forex market closing rates


Calcutta	Bombay
Gold Std (10gm) Rs. 4565 Gold Std (10 gm) Rs. 4565
Gold 22 carat Rs. 4310 Gold 22 carat Rs. 4220
Silver bar (Kg) Rs.8000 Silver (Kg) Rs. 8100
Silver portion Rs. 8100 Silver portion Rs. 8105

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