Govt missive to Sebi as selloff worries mount
War of words at telecom meet
Polaris Q4 net profit up 60%
Madura Coats plans buyback
Madhu Tea Estate to change hands

New Delhi, April 21: 
The government is now working overtime to asses the impact of the recent order of the Securities and Exchange Board of India—barring Sterlite, Videocon and BPL from accessing the capital market—on its divestment programme.

The government’s worries stem from the fact that two of the three companies, Sterlite and Videocon, are directly connected with the selloff process. While Sterlite has already paid the money for Balco, Videocon is one of the bidders for Indian Airlines.

Disinvestment secretary Pradeep Baijal is now writing to Sebi to know when exactly does the restriction on Sterlite takes effect.

Baijal’s questionnaire will seek to know whether the order affects transactions already executed, such as Sterlite’s purchase of Balco, as also any future deals that Sterlite, Videocon and BPL enter into to buy state-run companies.

The department will also try to assess whether losers in the race for Balco can use this issue to get the bidding process annulled in courts of law.

Based on the reply from Sebi, the Cabinet committee on disinvestment is expected to take a final decision on barring scam-tainted enterprises from bidding for public sector companies as well as whether the government should reverse the Balco selloff deal.

Simultaneously the Cabinet committee on security will decide whether it can allow the Hindujas who are alleged to be involved in the Bofors pay-off case to bid for Air-India.

The disinvestment department has also finally decided to recast the list of foreign institutional investors who can act as global advisors to sell off public sector companies. This follows Sebi’s indictment of two FIIs, including Credit Suisse First Boston that was advising the government on Videsh Sanchar Nigam Ltd (VSNL) divestment.

However, these fire-fighting measures are not likely to be enough. The Opposition is planning to rake up the fact that Sterlite was being investigated for alleged share price rigging from 1998 and this was known to the government.

“Our point all along has been why should the government allow a scam-tainted company to bid at all. They knew all along that Sterlite was suspected of wrongdoing in the share market. Sebi has merely put the seal of approval on something that every kid knew,” said Abani Roy, RSP leader and Rajya Sabha MP.

CPI secretary D. Raja said “The exposure of wrong doing by Sterlite has clearly vindicated our stand that Anil Agarwal and his company have dubious character and handing over Balco for peanuts is a big fraud.”

The leftist parties are now trying to convince Congress to allow Parliament to function for some time so that they can raise key issues like this.

“If we can pressure the BJP government to set up a JPC on the stock market scam as they have promised we will also try to extend its terms of reference to these wrong-doings in bidding for PSUs by scam tainted companies,” Roy said.


New Delhi, April 21: 
The Group on Telecom and Infotech (GoT-IT) today witnessed a battle royal between cellular and fixed line phone operators.

While cellular operators admitted before the ministerial group that fixed line phone operators would be able to offer cheaper mobile phones, they were quick to point out that this was because of the government policy that allowed them to cross-subsidise their mobile service.

Fixed line phone companies are allowed to retain 60 per cent of the charges for any long distance call made from their exchanges. Cellular companies, on the other hand, can retain only 15 per cent money from such calls.

“We are not against competition, all that we want is non-discriminatory treatment,” cellphone company representatives told the committee.

Implicitly, cellular companies wanted the government to impose higher licence fees on fixed line phone companies offering wireless in local loop (WiLL) services.

Fixed line phone companies, however, countered this by saying that they were not against paying a separate licence fee for WiLL phones but wanted the government to charge separate fees from cellular operators for internet access on cell phones and for cell-to-cell messaging, two popular value added services.

The finance ministry and the telecom ministries are locked in a battle over allowing fixed line phone companies the facility to sell mobile phones using WiLL technology. While the finance ministry tends to support the cell operators and wants basic phone companies to pay higher licence fees, telecom ministry feels this is not necessary.


Mumbai, April 21: 
Polaris Software Lab Ltd, the Chennai-based software solutions provider, has posted a 60 per cent rise in its net profit at Rs 18.26 crore in the fourth quarter of the financial year ending March 31, 2001. The company recorded Rs 11.40 crore profit in the corresponding period of the previous fiscal.

The total income of the company stood at Rs 78.41 crore, up from Rs 48.99 crore earned in the same period of the previous year. For the full year, the company registered around 62 per cent rise in its net profit at Rs 60.10 crore compared to Rs 37.21 crore recorded in 1999-2000. On the other hand, total income for the year was placed at Rs 269.67 crore as compared to Rs 160.28 crore in the previous year, an increase of 69 per cent.

At its board meeting held today, the board of directors of the company recommended a bonus in 1:2 ratio. Polaris has recommended a dividend of Rs 1.50 for each share.

Aftek net soars 245%

Aftek Infosys Ltd has reported a 245.89 per cent rise in its net profit at Rs 8.56 crore for the third quarter ended March 31, 2001, compared to Rs 2.47 crore in the same period of the previous fiscal.

Total income during the quarter stood at Rs 15.43 crore as against Rs 5.65 crore in the corresponding period previous year, the company said in a notice to Bombay Stock Exchange here today.

Kodak net dips

Kodak Ltd has reported a 74.73 per cent fall in net profit at Rs 3.05 crore for the first quarter ended March 31, 2001, compared to Rs 12.07 crore in same period of the previous fiscal.

Net sales in this quarter also declined marginally to Rs 168.9 crore from Rs 170.4 crore posted during January-March 2000, the company said in a notice to the Bombay Stock Exchange here today.


Mumbai, April 21: 
Coats Viyella plc is planning to hike its present 51 per cent stake in Madura Coats Ltd — the Indian subsidiary of the UK-based textile major — through a buy-back of its shares. Madura Coats is a sewing thread and fabric accessories major in the Indian market.

Madura Coats informed the stock exchanges today that a meeting of the board of directors has been convened on April 25 to discuss the quarterly results and consider the buyback of shares.

The Madura Coats scrip on Friday closed at Rs 13.30 after opening at Rs 12.50 and rising to an intra-day high of Rs 13.45. The 52-week high level for the scrip stands at Rs 20.

During the previous financial year, Madura Coats sold its garment divisions consisting of Madura Garments to the AV Birla group company, Indian Rayon and Industries Ltd.

Meanwhile, Finolex Cables Ltd announced its intention to go in for a buy-back of shares. The Pune-based company told the stock exchanges in a notice that a meeting of the board of directors has been convened on May 11 to consider the proposals for buyback of equity shares and employees’ stock option plan. Apart from this, the board will also consider the audited financial results.


Calcutta, April 21: 
K. Manibhai Patel & Co, a well-known tea producer and exporter, will buy T P Ray’s Madhu Tea Estate.

The Jalpaiguri-based Ray, known as Rony among his peers, is one of the oldest Bengali promoters in the tea business with four gardens in Dooars — Mathura, Kolabari, Madhu and Raipur.

“The process is still on. Things will be finalised in 15 days,” Kirit Patel, a senior partner of the company, said. After selling Mathura Tea Estate to Williamson Magor and Kolabari to the Bachawats, he is now left with Madhu and Raipur gardens.

Industry watchers say the sale of gardens have been prompted by falling productivity and the high cost of production. Sources said the transfer of Madhu tea estate to Manibhai group is held up by problems at Ray’s registered office in Jalpaiguri.

The 65-year-old company K. Manibhai & Company with 2,300 employees on its rolls trades in and exports tea, tobacco, shellac, spices, jute goods, coffee and rice. It has four tea estates — Belseri, Chardwar, Jalinga and Dwarbund —in Upper Assam with a combined production of 3.5 million kgs.

Patel did not disclose how much he paid for Madhu estate, which produces 3.5 lakh kgs of tea every year, but sources say it is being sold for a price between Rs 6 and Rs 7 crore.

Belseri and Chardwar gardens share a factory that produces fine black tea sold under the Belseri brand name. The produce at Jalinga and Dwarbund is sold under Jalinga brandname.


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