Tax swoop on big-gun brokers
Sonia sets weekend tea table for Mamata
Match-fixing axe on Sharjah tour
Stung party to foot Basu bill
PF interest rate set to be cut to 10.25%
Calcutta Weather

Mumbai, March 23: 
Tax sleuths today swooped down on the premises of Big Bull Ketan Parekh, former Bombay Stock Exchange president Anand Rathi and a cartel of bear operators whose shenanigans sent the sensex on a perilous roller-coaster since March 2, lopping over 18 per cent of the value of all stocks listed on the country�s oldest bourse.

About 120 income-tax officers, accompanied by CBI officials participating as observers, began their search operations at 3 pm. Besides Parekh and Rathi, the sleuths raided First Global�s husband-and-wife duo of Shanker Sharma and Devina Mehra, the reclusive Nirmal Bang who has four broking cards on Dalal Street, a leading bear operator Rakesh Jhunjhunwala and R.S. Damani, the man who launched a hostile bid for VST Industries, thereby taking on global tobacco major BAT plc and its local affiliate, ITC Ltd.

First Global, which has a 15 per cent stake in Tehelka, has also been at the centre of an attempt by a pack of marauding bears who hammered the value of stocks and thus trapped bulls like Parekh. Bears bet that a stock will go down, while bulls reckon they will surge.

The huge search operation targeted 16 firms covering 50 premises. One IT official said they had sought the help of the CBI �in case there were any violations of the law�. The raids will continue through the night. An official said the operation could last another 24 to 30 hours.

Sources said they were instructed to hold off on the raids till 3 pm so as not to precipitate another bloodbath on Dalal Street. Nevertheless, as soon as news of the raids hit the market, there was an avalanche of selling that sent the sensex reeling to close at 3635.28, a fall of 78.69 points.

It was learnt that the tax sleuths were focusing on stock transactions over the past six to eight weeks. The operation may cover a couple of more brokers, an official said. The director-general of income tax, G. Sharan, was not willing to talk to reporters.

At Parekh�s residence, a senior tax official, who came on the line, told The Telegraph: �The six brokers are suspected to be responsible for several irregular deals on the market. While Ketan Parekh may not have been a member of the bear cartel, there are grounds to suspect that he was behind a price rigging operation and had used insider information.�

Parekh has built up a reputation for being able to sniff out winners on the market and had built up a strong portfolio of telecom and infotech stocks. Last year, he was instrumental in sealing a three-way deal under which Australian magnate Kerry Packer picked up a 10 per cent stake in Himachal Futuristic Communications Ltd � one of the key stocks in Parekh�s portfolio which has since been clobbered by the bears.

A member of Anand Rathi�s family refused to talk about the raids. �We cannot talk to you now,� he said.


New Delhi, March 23: 
Sonia Gandhi has called off her visit to Amethi and kept the weekend free, anticipating a t�te-�-t�te over tea with Mamata Banerjee.

Kamal Nath, the AICC general secretary in charge of Bengal, worked through last night and most of today to iron out differences with Mamata. The Trinamul leader said she wants one-to-one talks with Sonia.

10 Janpath sources said that the seat-sharing issue will be discussed in consultation with Kamal Nath and Bengal Congress president Pranab Mukherjee.

The two leaders had a long meeting in Delhi where they decided that the stage was now set for a Sonia-Mamata �summit�.

Sources admitted that there were �elements� on both sides who were planning to sabotage the Congress-Trinamul tie-up. �We will not let them succeed. Once Soniaji formally speaks to Mamata, there will be no scope for misunderstanding,� an AICC general secretary said.

Somen Mitra, the former state unit chief who was against a pact with Mamata, appears to have fallen in line with the high command�s diktat. �We want an electoral pact with Trinamul to defeat the communists,� he said in Calcutta.

Congress leaders said Mamata was prepared to give between 40 and 50 seats to the party. �But a lot depends on the seats she is willing to give,� an AICC functionary said.

Sources said Trinamul was opposed to the renomination of a few Congress legislators like Atish Sinha (Kandi), Sailaja Das (Contai), Sanjib Das (Serampore) and Tarak Banerjee (Asansol) because the party feels its nominees have �greater prospects of winning these seats�. Mamata intends to offer the lion�s share of seats in Malda, Berhampore and Raigunj to the Congress.

While Sonia is keen to host a tea party for Mamata, some Congress functionaries are reluctant to describe it as one, pointing out that a similar function on April 2, 1999, had proved disastrous for Sonia and ADMK leader Jayalalitha.

Sonia had planned a visit to her Amethi constituency but called it off in view of the more important engagement with Mamata. Officially, the party is maintaining that she has put off the trip because of the higher secondary exams, but there are few takers for the argument.

Spurned by Trinamul, BJP leaders have begun negotiations on seat-sharing with other NDA partners. �We will have seat adjustments with Jana Lok Shakti of Ram Vilas Paswan, Samata Party and Democratic Republic Party of India,� state BJP vice-president Muzaffar Khan said.

Trinamul expects the BJP to accept its possible tie-up with the Congress. �The BJP has to choose between Mamata and the CPM,� a Trinamul leader said. �The BJP did not object to the inclusion of the Congress in our �Save Bengal front�. Why is it now raising a hue and cry over our attempts to reach a deal with the party?� he asked.

Trinamul feels both the Congress and BJP can be persuaded not to put up nominees against its candidates to ensure straight contests against the Left in a majority of seats.


New Delhi, March 23: 
The government is about to cancel the Indian cricket team�s tour to Sharjah for the tri-nation one-day international tournament beginning April 8.

But the decision is being taken not because Pakistan is a participant. Sri Lanka is the other. With the match-fixing scandal still fresh in mind, the home ministry is wary of Sharjah, which, with Lahore and Mumbai, is believed to form the golden triangle of cricket betting.

The ministry appears to have taken the stand that the Indian team can play Pakistan at any venue across the globe, but not in Sharjah. It fears that players might still be approached by members of the underworld working for Dawood Ibrahim to fix matches.

North Block�s position seems to have been strengthened by sports minister Uma Bharti�s view that the Indian team should not take part in any cricket match where Pakistan is the opposition. She recently wrote to home minister L.K. Advani, seeking endorsement of her view. Advani is understood to have held a meeting with home secretary Kamal Pande and is expected to sign the file cancelling the tour in a couple of days.

Former captain Mohammed Azharuddin and vice-captain Ajay Jadeja were implicated in the match-fixing scandal that the Central Bureau of Investigation probed. Its report had shaken up the cricket world, with players of almost all teams coming under a cloud.

Sources said the Vajpayee government is also reluctant to give the Musharraf regime the signal that relations are returning to normal by allowing the Indian team to play against Pakistan.

In New Delhi�s opinion, Islamabad has not done enough to rein in militants after the ceasefire was announced in Kashmir. Advani, particularly, has shown his displeasure at Pakistan�s continuing support to what India calls cross-border terrorism.

The government has come under criticism in the past for mingling sports with politics. Exchange of tours between Indian and Pakistani cricket teams has been seen by many as a way of kicking off normalisation of relations.

The International Cricket Council has been exerting pressure on the Board of Control for Cricket in India that tours already scheduled should not be cancelled. But when it comes to playing Pakistan, the board has to abide by what New Delhi decides.

If the Sharjah trip is cancelled, it will be the third time in recent months that the government has prevented the Indian team from playing against Pakistan. Last year, the Toronto tournament involving India and Pakistan was called off. After that, a fund-raiser for Gujarat earthquake victims proposed by the Asian Cricket Foundation to be organised at Sharjah � with these two teams playing against each other � could not be organised.

Only the other day, however, India played Pakistan in a hockey match and won. Hardliners in the Sangh parivar and the government believe that it is not time yet to revive cricketing ties as the game outstrips all others in popularity.


Calcutta, March 23: 
Red in the face over the controversy triggered by the Bengal government�s decision to offer former chief minister Jyoti Basu an all-expenses-paid-for retired life, the CPM today made a volte face.

The party said it would pick up the tab, relieving the government of the responsibility, for everything except security. Basu has been enjoying certain benefits provided by the state government since he resigned last November. At a Cabinet meeting last week, the arrangement was formalised, and to make it look as though it had not been worked out with only Basu in mind, all former chief ministers and Speakers were made eligible.

But the decision caused a stink with the potential of being turned into a handle to beat the CPM with in the coming elections. The CPM decision today, therefore, appears to be a damage-control exercise, though the party said Basu himself had refused to accept the benefits. There was no explanation, however, as to why the thought did not occur to the former chief minister or the party in the nearly five months during which the government has been meeting Basu�s expenses.

Bengal CPM secretary Anil Biswas said Basu had declined some of the facilities. Basu was present at the secretariat meeting this morning and � perturbed over the government offer � informed party leaders of how he felt.

The state government had offered Basu an office expense allowance of Rs 1,000 and entertainment allowance of Rs 1,500 per month, besides meeting expenses on travel, telephone, cooking gas and electricity. It also makes a car available to him for 24 hours. Basu continues to live at Indira Bhavan, owned by a government department, which he was using as the official residence of the chief minister. The CPM will now pay the rent for the house as well as for his other expenses.

The Opposition Trinamul Congress, which would have exploited the Basu bonanza to the hilt in the election campaign, is not ready to accept the CPM pledge at face value yet.

Party spokesman Pankaj Banerjee said: �We will believe the CPM only when the government makes an announcement supporting what the CPM wants us to believe.�

Biswas described Basu as the �most valuable asset� of the party and announced that the CPM would bear all his expenses, �whatever the amount�.

�We have 2.27 lakh party members and they will provide the money required by Basu. We are not depending on the government for expenses incurred by him, except on his security arrangements,� Biswas said. �Basu is a Z-category VIP and he has faced attempts on his life thrice,� he said, apparently to underline the point that only the government can take care of his security.

According to Biswas, for security reasons, too, Basu will stay at Indira Bhavan. He announced that the party would pay for the helicopter Basu would use during campaigning. �In the past, Basu had used helicopters for election campaigns and we have paid the fare from the party fund.�


New Delhi, March 23: 
At a time when economists have raised the spectre of double-digit inflation, the interest rate on employees� provident fund (EPF) is likely to be reduced by 0.75 percentage points to 10.25 per cent.

The fund�s board of trustees, chaired by labour minister Satya Narain Jatiya, today overcame internal resistance to recommend that EPF rates be lowered from the present 11 per cent. Last year, EPF rates had been cut by a percentage point from 12 per cent.

Congress spokesman Jaipal Reddy was quick to condemn the �anti-people� policies of the government. Leftist trade unions also joined in the criticism.

The trustees, who had been resisting the move, caved in today to maintain parity with the cut in small savings rates announced in the budget. However, the 10.25 per cent rate on EPF is still higher than that on public provident fund (PPF) and postal savings.

But with the inflation rate expected to shoot up to the 10 per cent levels, the real interest rate on EPF � the rate of interest adjusted for inflation � would drop to near zero, dealing a severe blow to the 33 million workers who benefit from the scheme.

�It is the recommendation of the trustees that (EPF) interest rates should be 10.25 per cent from April this year. It is up to the government to implement it,� the labour minister said.

EPF is a huge statutory savings fund where employers and employees of all firms employing over 50 people are expected to make matching contributions to an employee�s PF.

But with Sinha cutting rates on special deposit schemes in which 80 per cent of EPF funds are parked, there was little the trustees could do than to reduce rates by a similar amount.

Jatiya, however, promised to take up the issue of lower interest rates with Sinha.

Sinha had cut rates on small savings and special deposit schemes on grounds that high rates were placing an unsustainable interest burden on both the Centre and states. The ministry had also announced cuts in the interest paid out on general provident fund, a PF scheme for government servants.

But the ministry had also promised to explore �a better system� for determining the interest rate on provident fund and small saving schemes taking into account consumer price inflation.

Jatiya declined to comment on whether the Centre was considering changes in the investment pattern of EPF money. A committee will be constituted to suggest investment norms, he said.

Government economists and policy makers have been urging EPF trustees to park larger sums in the stock market. But trustees preferred the safer option of investing in government paper.




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