Panel tightens investment rules for MF staff
Cellular players brace for legal bout
Vodafone quit signal
SAIL to sell surplus flats to raise funds
Infosys 3rd quarter net leaps 125%
India calls for new petro order
PowerGrid optic link by year-end
Maruti inks truce pact with workers
Foreign Exchange, Bullion, Stock Indices

Mumbai, Jan. 9: 
The B G Deshmukh committee today tightened the norms for personal investments by directors and employees of mutual funds.

The panel, formed by the Securities and Exchange board of India (Sebi) to review the regulations on mutual funds, simplified the format for half-yearly unaudited results in a manner which gives investors more relevant information.

�Mutual fund employees involved in research, customer dealings and investment decisions will have to seek permission 15 days before they actually do so,� chairman B G Deshmukh told reporters after the meeting of the panel here today.

The transactions of employees will have to be delivery based, and the securities purchased must be retained for at least 60 days. They have also been prohibited from trading in shares. Nor will they be allowed to indulge in short sales.

The directors of asset management companies would have to disclose their investments above Rs 1 lakh in the reports while employees working in the distribution and back-office operations will have to submit annual statements on their investments.

The committee has defined employees as those who are working in a mutual fund company, his or her spouse, dependent children and the Hindu Undivided Family, Deshmukh said.

Deshmukh said the curbs are necessary because employees are privy to classified information not available to the public.

In another significant decision, the committee has allowed mutual funds to charge up to 3 per cent from their investors for the expenses incurred on investments in overseas securities. At present, the limit is pegged at 2.5 per cent.

The time limit for the despatch of dividend warrants � one of the several issues on the agenda � was cut from 42 days to 30.

Sebi officials said the main objective behind today�s announcement was to prevent misuse of critical, price-sensitive market information available to employees. The meeting, held after three months, was expected to be a stormy affair, but sources in Sebi said it turned out to be a tame affair. The panel�s previous meeting was held after an eight-month gap.

The focus of the panel, Sebi officials said, was to devise ways in which possible front-running by employees could be curbed.

�The capital market watchdog will come out with a detailed set of guidelines soon. The norms are being made more stringent to increase public confidence and improve ethical standards in the mutual fund industry,� Deshmukh said.

Serial plans

The committee addressed the contentious issue of serial plans launched by mutual funds under their existing gilt, liquid/money market and debt schemes. These plans, with maturities ranging from three months to a year, are being peddled as part of the main schemes.

The committee decided these plans, which have characteristics different from the main scheme, should not be floated as part of an ongoing open-ended scheme, but as separate ones.


New Delhi, Jan. 9: 
Cellular firms miffed at Trai�s decision to allow basic operators limited mobility are likely to force an arbitration on the issue at the Telecom Disputes Settlement and Appellate Tribunal.

The Cellular Operators Association of India (COAI) has called a meeting of chief executive officers (CEO) tomorrow to chart the future course of action in the wake of the �discriminatory treatment� meted out to the industry.

They met CPM MP and chairman of the Parliamentary standing committee on telecommunications, Somnath Chatterjee today, and told him that Trai�s recommendations could have an adverse impact on foreign direct investment (FDI) in telecom.

�The papers to be filed at the appellate tribunal are ready. Once we agree on the contents, they will be submitted. We will discuss the issue tomorrow,� sources in COAI said.

The association says allowing limited mobility to basic operators will sound the death knell for cellular companies, and could cost the government Rs 3,000 crore in lost revenues.

The threat by cellular operators to contest Trai�s decision could derail the plans of Bharat Sanchar Nigam Limited and other fixed telephone operators to offer mobile service at the rate of Rs 1.20 paise for a three-minute call. The consumer, it appears, will have to wait longer for a low cost mobile service if cellular operators manage to get a stay.

COAI director general T. V. Ramachandran said implementing the proposals will spell doom for an industry that has attracted the highest FDI flows. More important, over 50 per cent of the foreign investment in telecom has gone to cellular firms.

�Most foreign telecom firms may be forced to review their current and future plans for India. Foreign investors and investment bankers feel Trai�s proposals have rendered the bidding process meaningless,� Ramachandran said.

COAI has expressed fears that fixed service providers who offer limited mobility in the short distance charging area will service the entire area within metros; small towns and centres within a circle may be covered as well.

�Fixed service providers demand state-wide full mobility. It has exposed their desire to get a back door entry into limited mobile services without paying any licence or entry fee, and under operating conditions which are more favourable compared with those of cellular firms,� COAI said in a statement.

ISP gateways

The government today allowed ISPs which set up gateways using satellites to provide international bandwidth to other ISPs. This follows the recommendations of the Group on Telecom, IT Convergence and the Strategic Management Group.


Calcutta, Jan. 9: 
Vodafone Airtouch, the UK-based telecom major, has decided to pull out of India. The company is in talks with BPL Telecom and Hutchison to sell its 22 per cent stake in RPG Cellular, the largest cellular service provider in Chennai.

The company, which has a presence in 25 countries with over 78.7 million subscribers, has already sold its 49 per cent stake in RPG Cellcom, the cellular licensee for Madhya Pradesh.

Sources say Vodafone wants to pull out since it does not see much prospects in the cellular business here with the government deciding to offer licences to a fourth operator.

The enterprise value of RPG Cellular, sources say, has been pegged at around $ 150 million. The deal is being brokered by Rabo Bank.

While Vodafone is keen to quit the country, it has renewed interest in Japan where it acquired a 15.1 per cent in Japan Telecom last week.

The company has also acquired a 34.5 per cent stake in Grupo Lusacell S.A. de C.V., the second largest wireless operator in Mexico.

�There are several places we plan to enter, but in India we find ourselves a little out of place,� sources said.

The RPG group is also in talks to divest 17 per cent of its holding in RPG Cellular Services (RCS).The group currently has a 68.5 per cent stake in RCS. The RPG spokesman said the group might offload part of its stake in the company but it would definitely retain management control. Apart from Vodafone, another UK company, Cell Phone has a sizeable stake in RPG Cellular.


Calcutta, Jan. 9: 
Steel Authority of India Ltd (SAIL) has decided to sell its surplus quarters in all its four steel townships to garner funds which will be used to part-finance the company�s future investment programme.

A senior SAIL official said here today that a committee has been set up to identify the non-performing assets in the form of real estate and quarters.

The public sector steel company, which has been in desperate need of funds to pay off its heavy debt burden, has over one lakh quarters in Durgapur, Rourkela and Bokaro.

Since the company stopped fresh recruitment and also offered a voluntary retirement scheme, there is now a mismatch between the number of employees and the quarters needed.

�We have over 10,000 vacant quarters which can be sold either to the employees or to outsiders,� the official said.

In Durgapur alone, the company has over 3000 vacant quarters which could be put on the block.

This will not only bring in the much-needed funds, but the sale will also free Durgapur Steel Plant from the hassle of maintaining them.

The official added SAIL has performed very well in the third quarter of the current financial year, thanks to the upturn in sales in the domestic market.

�Our aim is to contain the losses to Rs 300 crore, compared with the projected Rs 500 crore,� he said.

The company is also planning to offer a fresh voluntary retirement scheme from February 15 for a period of one month. SAIL is expecting to trim its workforce by 10,000 through this scheme, he said.

The company will take a decision on the VRS in its board meeting on January 31.


Mumbai, Jan. 9: 
Infosys Technologies Ltd today reported a net profit of Rs 166.33 crore for the third quarter of the current fiscal ending December 30, recording a 125.40 per cent gain over Rs 73.79 crore in the same period of the previous year.

However, the company wrote off its entire investment of Rs 13.08 crore in EC Cubed Inc, a US-based provider of B2B e-commerce solutions which has filed for liquidation. The Bangalore-based IT major has now decided to reduce its exposure to dotcom and venture-funded clients and substitute it with its traditional business segments.

The results were thus in line with analysts� expectations of a net profit of at least Rs 165 crore. Even fears about Infosys providing for some write-offs proved to be correct.

However, the Infosys scrip finished lower on the Bombay Stock Exchange at Rs 5923.20 after opening at Rs 6024 and rising to an intra-day high of Rs 6097.70. This peak could not be sustained as selling in the counter brought it down to a close of Rs 5923.20, lower by Rs 83.95 from the previous close.

Attributing the �strong results� to its �unique business model and continued focus on de-risking,� Infosys said while export income from software development services and products rose to Rs 529.24 crore (Rs 224.41 crore), the domestic income stood at Rs 7.83 crore for the quarter (Rs 2 crore).

With interest and others accounting for Rs 11.03 crore (Rs 7.72 crore) and exchange differences Rs 3.44 crore (Rs 0.61 crore), total income during this quarter was placed at Rs 551.54 crore (Rs 233.52 crore), showing a rise of 136.18 per cent.

For the nine-month period, total income stood at Rs 1387.86 crore (Rs 635.47 crore), displaying a rise of 118.40 per cent, while net profit was at Rs 447.14 crore (Rs 200.10 crore), an increase of 123.46 per cent.

However, Infosys did not come out with any earning warnings as feared by some in the industry.

Infosys chief N. R. Narayana Murthy said, �While we intend to grow at rates compatible with the software export industry in India, the organisation is fully prepared to tap larger market opportunities and meet the consequent growth challenges.�

Commenting on the recent earning warnings issued by many US firms, Nandan Nilekani, managing director and COO said, �We believe the trend in infotech spending will work in our favour. Most of our clients have expressed a desire to expand the scope of their relationship with Infosys. This puts us in a position to grow at industry-compatible rates.�

During the quarter, revenues from e-business dwindled to 28.3 per cent of the revenues from 31.4 per cent on September 30, 2000. The majority of these engagements, Infosys added, involved building robust e-commerce infrastructure for Fortune 1000 companies.

The company divulged that during the third quarter, it added around 26 new clients as against 27 in the last quarter. Similarly, while revenue from top 5 clients was at 28.1 per cent (24.9 per cent), it stood at 42.5 per cent (38 per cent) for the top 10 clients. For the period under review, the total employee strength of Infosys stood at 8,910, up from 7,925 on September 30, 2000.


New Delhi, Jan. 9: 
Minister of petroleum and natural gas Ram Naik has called for a better petroleum economic order which will ensure mutually beneficial economic and trade relations among oil producing and consuming countries.

Naik was inaugurating the Petrotech-2001, the fourth international petroleum conference and exhibition.

He did not elaborate his concept of a better petroleum order nor did he spell out the strategy to achieve it.

According to Naik, the award of seven deep water blocks is a stepping stone in the pursuit of oil exploration in India�s promising vast frontier basins.

He claimed that India is self sufficient in refining and could do without direct import of finished products.


New Delhi, Jan. 9: 
Power Grid Corporation of India (PGCIL) will implement by the year-end a Rs 1,202-crore fibre optic cable project which will be used to offer value-added services, besides being leased out to telecom companies.

The company will announce the plan in Mumbai on Saturday at a function, which will be inaugurated by the minister of state for power, Jayawantiben Mehta. �We are about to complete the formalities. The laying of the cables will enable us to offer value-added services such as internet links. It will also be leased out to telecom companies. The final schedule will be announced this week,� sources in the company said.

The telecom network will provide additional high-capacity telecom connectivity to Delhi, Chennai, Kolkata and Mumbai, apart from smaller towns. The project is expected to cost Rs 1,202 crore, and the payback period is assumed at three to four years.

PowerGrid�s transmission network offers excellent connectivity among state capitals, major towns and smaller urban centres. It will offer a right-of-way for installation of overhead optical fibre cables which will carry high-speed audio, video and data signals.

The facilities can be provided at low operating costs. As a part of its systems co-ordination and control projects, PowerGrid can offer a complex hybrid communication network, which includes optical fibre transmission systems.

Meanwhile, the company has deferred its plan to enter the entertainment media business through a separate subsidiary. Sources said the matter has not come up for discussion at the board meetings. �It is unlikely to be considered in the current year. Telecom remains our priority, in addition to our long-standing plans to complete the National Grid.�

PowerGrid had said last year it would seek board approval for the foray. �The plan is at the stage of conception. Board approval will be required to execute it. We will finalise the structure and move ahead with the new business after we get the clearance from the board,� PowerGrid chairman and managing director R. P. Singh had said last year.

The department of telecommunications (DoT) did not want PSU networks to be opened to commercial exploitation, but the new national telecom policy allowed them to do so.


New Delhi, Jan. 9: 
The three-month-old strike at Maruti Udyog Ltd ended on Tuesday after the employees� union accepted the management�s incentive scheme and agreed to sign an undertaking.

The accord paved the way for the resumption of duty by about 4000 agitating workers.

According to the agreement signed between the Maruti management and the union on Monday night, of the 80 workers who were suspended or terminated by the management 39 dismissed and suspended for misconduct will not be taken back and that the �law will take its course.�

The union and its members will sign an undertaking to abide by the rules of conduct as specified in the certified standing orders of the company as against the earlier proposal of individual good conduct undertaking proposed by the management. The remaining 41 employees, including the 21 trainees, will have to sign individual bonds of good conduct before they are let in.

The agreement will end a prolonged period of unrest in Maruti, during which the workers� union demanded that the management review its incentive scheme, revoke all suspensions and dismissals and allow workers to enter the factory premises without an undertaking of good conduct.

The company had claimed that it maintained normal production in November and December despite the unrest.

According to the agreement, the union has agreed to co-operate fully with the management in restoring normalcy and improving productivity and competitiveness. �It will not be possible to take back 39 employees who have violated the discipline. But the rest 41 employees, including the 21 trainees, can join duty anytime. We expect the full work force at the factory to be in place soon,� Maruti managing director Jagdish Khattar said.

Mathew Abraham, general secretary of Maruti Employees Union said, �We have accepted the incentive scheme and the law will take its own course for the workers who have not been taken back on duty.�

Last year in October the management of Maruti Udyog Ltd notified a new incentive scheme whereby the average monthly cost to the company for a Maruti employee would increase to Rs 33,767 in next two years, up from Rs 23,008 at present. The new scheme came into effect from November 1 last year.

The employees� union resorted to an agitation to pressurise the management to accede to their demand regarding the revision of incentive scheme which would increase the cost to the company per employee from the present Rs 23,008 to Rs. 42,599 per month.



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