Court cast in lead role in VST drama
MPs demand CBI probeinto stock market scam
Moody�s hint brings Reliance in limelight
Rupee closes at a new low
Two-pronged Saregama strategy to prune costs
Unique one-way messaging service
Survey to assess impact of imports
Glaxo to launch Twinrix by year end
Dabur focus on oncology
Foreign Exchange, Bullion, Stock Indices

June 13: 
With the curtain ringing down on the open offers for VST Industries today, the venue of the battle between Bright Star Investments and Russell Credit for the control of the Hyderabad-based cigarette company has now shifted to Hyderabad.

All eyes are now on Justice Gopal Reddy of Andhra Pradesh high court who will be giving his verdict on this bitter tussle on June 18.

It is Justice Reddy who, last week, restrained both Bright Star and Russell Credit from proceeding further in acquiring VST shares after receiving a writ petition from M.V. Subramanyam and Anita Paul, two small investors, holding between themselves a measly 400 shares of VST.

In a last ditch effort, representatives of ASK Raymond James, lead manager of Bright Star�s offer, today rushed to the Andhra Pradesh high court to get the stay order vacated. The court, in fact, virtually turned into a corporate battlefield with legal luminaries of both the rival parties arguing vociferously.

While adjourning the case to June 18, Justice Reddy gave an indication that if the verdict goes in favour of the Damani-owned Bright Star then their open offer will be revived and allowed to continue for three days starting from Monday.

Reflecting the heat and dust that the VST drama has kicked up, the tobacco company�s scrip sizzled on the Bombay Stock Exchange (BSE) today and closed at Rs 156.45, almost 7.61 per cent higher than the previous day�s close of Rs 148.25

ASK Raymond�s last-minute effort to get the stay order vacated was prompted by the fact that the financial institutions which were almost ready to bite the Bright Star offer started dithering.

According to the information available with The Telegraph, FIs had informed ASK Raymond that the high court stay prevented them from accepting the generous terms offered by the Damanis.

The institutions between themselves hold almost 18 per cent of the VST equity. Therefore, for any open offer to sail through the FI support was crucial.

Bright Star already owns 16 per cent stake in VST and its hostile bid in February forced Russell Credit, the ITC subsidiary, to come out with a counter-offer.

However, Bright Star had the last laugh in price war when it outwitted Russell at the last moment by winching up the offer price to an eye-popping Rs 151 per share. This was a cool Rs 26 more than Russell�s re-revised price of Rs 125 per share.

Bright Star further sweetened the offer by increasing its offer size to 30 per cent of VST�s stake, while Russell�s offer was for only 20 per cent.

On the other hand, BAT Plc, which holds a little over 32.16 per cent in VST Industries, has opened up a new front in this tussle by seeking to raise its stake further in the Hyderabad-based cigarette company. The VST board is meeting tomorrow to take a decision in this regard.

VST is the country�s second largest cigarette company with a market share of around 12 per cent, well behind ITC Ltd which enjoys a share of around 65-70 per cent.


New Delhi, June 13: 
The Joint Parliamentary Committee (JPC) investigating the stock market scam today demanded that the government institute a criminal probe by the Central Bureau of Investigation into the scam.

JPC members also pointed out that despite prior strictures directing stricter monitoring of UTI�s activities in the stock market, both Security and Exchange Board of India�s (Sebi) and finance ministry�s monitoring of the giant mutual had been slack. The mutual fund�s role in recent stock market scams has been found controversial.

Members also said they had reasons to believe the alleged share price rigging before the controversial UTI Bank-Global Trust Bank merger deal last year had cast its shadow over the Calcutta Stock Exchange (CSE) payment crisis early this year and sought a probe into this.

They also lambasted the finance ministry for turning a deaf ear to the strictures passed by earlier JPCs against four foreign banks, demanding cancellation of their banking licences.

�If steps had been taken against them, then it could have served as a warning for others and the role that many foreign banks and financial institutions have played in this scam could have been prevented,� they pointed out.

The JPC also pointed out that as many of the actions by those involved in the scam amounted to criminal breach of trust, mere probes by market regulators would not suffice. �We pointed out that the government had ordered a CBI probe into the 1992 stock market scam even before the JPC had been set up and much invaluable evidence for that JPC was garnered by the CBI,� a JPC member said.

These observations were made even as JPC today focused mostly on how much of the action taken report of the earlier JPC filed in 1993 has been implemented.

It pulled up several government departments for what it felt had been tardy implementation of the corrective measures.


Mumbai, June 13: 
After Moody�s Investors Service indicated that top companies could receive higher-than-sovereign ratings, all eyes are now on Reliance Industries which has outlined plans for big expansion in information technology and communications.

With a rating higher than that of the country it would be possible for Reliance to raise funds in the international markets at low interest rates.

Power Finance Corporation and Industrial Development Bank of India (IDBI) are also being talked about in the same breath as Reliance.

Recently, Moody�s indicated that it was willing to relax its policy of giving the highest � sovereign � rating to countries. Previously, no company could be rated higher than that.

Moody�s will give a company a higher rating based on its creditworthiness and its access to foreign markets. The rating agency will also ensure that there will be no general moratorium in the event of default by the government in question.

Moody�s had identified 38 companies which could qualify for the upgrade. Among Indian companies, ICICI Ltd (current rating Ba2) was the only one to make the category.

So far, Moody�s has rated 15 domestic companies, with ratings ranging from Ba2 to Ba3..

However, analysts expect Reliance to break the sovereign barrier as well. According to an analyst with Deutsche Bank, Reliance could be upgraded to the �border of investment grade, between Ba1 and Baa3, or a one to two notch hike from its current rating�. He believes factors that could go in Reliance�s favour include its strong financial profile, its high level of export activities and its subsidiaries.

Sources said if it were to manage the higher rating, Reliance would be big gainer as it needs huge funds for its expansion programme. Reliance, as well as its group companies, have been raising money steadily from the international markets.

The company had earlier announced that group firm, Reliance Infocom, would invest over Rs 25,000 crore in the next three to five years over a wide spectrum, including voice through fixed line, cellular, national long distance and international long distance besides data services such as call centres and web hosting. In broadband, the company plans to focus on connectivity to high-end companies and other business customers.

Sources in ICICI said that the success of its policies has enable the financial institution to be included among those companies that could qualify for a rating above the sovereign ceiling.


Mumbai, June 13: 
Driven by dollar demand from banks and companies today, the rupee touched 47.03/04 per dollar after hitting an intra-day low of 47.0505/06 against the US currency.

While the previous low of the rupee was 47.02/04 per dollar on April 15, forex analysts are projecting a further slide as it continues to remain overvalued against other currencies.

With demand set to continue and supplies not projected to improve dramatically following slowing down of foreign institutional investors� (FIIs) investments, in the immediate term rupee may hit an all-time intra-day low of Rs 47.10 per dollar levels.

�The Rs 47.10 level is a very crucial level for the Indian currency. If the rupee breaches this mark, it could then touch 47.12-15 levels,� says N Subramanian, senior analyst with e-Mecklai.

The rupee has been under pressure over the past couple of trading sessions and dealers attribute the dollar buying largely to public sector oil companies. In fact, it had depreciated by over 6 paise in the last two sessions due to demand emanating from this front.

Such a demand from these companies was witnessed in today�s trading as well when it opened at Rs 47.0250/0350. With steady demand for the US greenback, towards noon it touched the an intra-day low of 47.0550/06 as banks too joined the dollar buying trend.

However, at these levels selling by couple of foreign banks steadied value of the rupee.

The selling of long dollar positions was also attributed to lack of follow-up buying by companies and importers. The currency finally closed at 47.03/04 against the greenback.


Calcutta, June 13: 
Saregama India has lined up a two-pronged strategy to help reduce costs and shore up its bottomline.

On the one hand, the RPG group company has started a top-level organisational shuffle, and, on the other, it is planning to raise the prices of its top-selling music albums.

As part of the organisational rejig, N. Sathasivam, vice-president (finance), has been made head of the finance retail sector with effect from June 1. He will be based in Chennai and will handle the finances of MusicWorld and Great Club Store.

�Sathasivam wanted to be in Chennai,� said Saregama managing director Abhik Mitra. �Earlier, he had to shuttle between Chennai and Calcutta. So, we decided to put him in the retail business. This will ultimately help us reduce the operational cost and increase efficiency.�

Sathasivam was also handling the international operations � Saregama plc and RPG Global Music Ltd. Now, S.D. Gurudutt, CEO of FM Audio Software, will take on additional responsibility and handle these businesses as well. He will report to Mitra, and not to Sathasivam, as he was doing earlier.

�Gurudutt has been performing extremely well. So, we decided to give him the additional responsibility,� said Mitra.

Like Gurudutt, Adit Atal, general manager (commercial and finance), will now report directly to the managing director.

Mitra said Saregama � which was earlier called Gramophone Company � wants to become a leader in the FM business by becoming a content provider to emerging FM broadcasters. �We have already started supplying content,� Mitra said.

He expects the FM audio software business to boom during the third quarter of this fiscal as new FM stations start broadcasting.

Mitra himself, along with B.L. Chandak, vice-president (group corporate investor relations), and Atal will look after investor relations.

Saregama is also banking on revising the prices of certain categories of music catalogues � old Hindi films, ghazals, Hindustani classics, and regional music, for instance � to boost its bottomline. Old Hindi film songs accounted for 30 per cent of the company�s total sales last year.

Mitra said the effect of the revised prices on the company�s profitability would get reflected in the financial results of the company from July onwards.


New Delhi, June 13: 
Bharat Sanchar Nigam Ltd (BSNL) is preparing to launch a satellite-based data-only messaging service, a sort of poor cousin of the short messaging system (SMS) that cellular service providers offer.

The MSS reporting system�which is cheap and is a one-way satellite-based messaging service available through Insat�is being targeted at groups of people who operate in remote locations which have virtually no telecom facilities. The service will be aimed at security agencies and transporters and will enable better transport fleet monitoring, and provide query and acknowledgement services as value addition to a multi-cast service.

The service will enable people on the road and those stationed at remote areas to send short messages or data to their central station.

Sources in BSNL said, �We will send the proposal to Telecom Regulatory Authority of India to get their comments, recommendations and terms and conditions for the Insat-based MSS reporting service.�

�This service should not be considered as a competitor to other mobile telecom services like cellular telephones, which provide two-way voice services. It is also not a competitor to paging services, which is text messaging service from a central location to pager receivers in the field,� a BSNL source hastened to add.

Officials in the Telecom Engineering Centre said: �The service will be offered under limited spectrum and will not be able to send voice. Thus, it will not be a threat to any other value added service offered by both BSNL and private telecom service providers.�

This is a new type of communication system that is not available in the existing Insat system. ISRO has demonstrated the potential and its application of this system to various agencies.

A few companies have already evinced interest in the project�ArrayCom (India Ltd), Avantel Softech Ltd, Satyam Computer Services Ltd, Tata Infotech Ltd, Bharat Electronics Ltd, India Satcom Ltd and HCL Comnet are likely to undertake pilot projects.

Thrust for Bengal telecom

West Bengal chief minister Buddhadeb Bhattacharjee has promised to offer land free of cost to Bharat Sanchar Nigam Limited and also waive the commercial tax on buildings housing the exchanges and offices of BSNL.

Bhattacharjee made the promise to minister of state for communications Tapan Sikdar at a meeting held on Sunday. Sikdar had told the chief minister that state governments should participate in improving teledensity.

Sources in BSNL said, �We have been promised free of cost land for installation of exchanges. If the state government is unable to provide the land, then it has promised to bear cost of acquiring the land.�

Bhattacharjee has also agreed not to charge any fee for digging land to lay the fibre optic lines in rural areas and provide concessions for such activities in urban areas.


Calcutta, June 13: 
With the local industry clamouring for protection against cheap imports, the Union government has initiated a grand data collection exercise to assess the actual situation.

After the last batch of quantitative restrictions were removed on April 1 this year, the local industry raised a hue and cry that cheap imports will kill the domestic manufacturers.

Though there may be some logic in what the local industrialists are arguing, the Union government is of the view that the industry�s claims are largely based on �impressionistic views�.

That is why, to put the whole issue in a more concrete perspective, the government has launched this data collection exercise in this regard.

A.K. Kundra� chairman of the Tariff Commission who is also the ex-officio secretary of the department of industrial policy and promotion, has already held a series of meetings with chief secretaries and other senior officials of the state governments.

The data collection exercise will cover all segments of the industry�large, medium and small.

However, the onus of making out a case for tariff protection or other remedial measures has been put on the domestic industry. It will be the responsibility of the industry to conclusively prove how much they are hurt by such import of foreign goods.

In order to get duty cover, the specific industry segment will have to prove, backed with data, that unbridled import of foreign goods has really put them on a tight spot.

�We have so far received impressionistic views on the problem from different companies/associates in terms of bare facts. For a critical appraisal of the problem, it is desirable to have the details of such imports,� Jawhar Sircar, state commerce and industry secretary, said in a note to the chambers of commerce and industry associations.

As part of this data collection effort, the West Bengal government has sent a proforma to all the chambers of commerce and industry associations. If this proforma is filled in properly properly it can reveal the actual market scenario.

Among other things, the proforma seeks to know the price differential between the domestic and imported varieties of specific items.

D. Chakraborty, joint secretary of the state commerce and industry department who is coordinating with various chambers of commerce and industry associations, said the industry would have to fill out the proforma in detail to get reliefs.


New Delhi, June 13: 
Glaxo India Ltd is going to launch Twinrix�a vaccine for both Hepatitis A and B�in the domestic market by the end of this year. Twinrix is available in the western markets for the last three years. Kalyan Sundaram, director, pharmaceuticals, told The Telegraph that Glaxo has already got the necessary approvals from the regulatory authorities to launch the product. Stating that hepatitis is widely prevalent in India, Sundaram said the unique thing about Twinrix is that it is a combined vaccination for both Hepatitis A and B. In the Indian market, most vaccines are for Hepatitis B only, he said.

Glaxo is also planning to launch an anti-diarrhoea oral treatment next year, subject to necessary approvals. Though the product is available in international markets, the company refused to divulge the brandname of the product as it has filed for legal approvals in the country. Both Twinrix and the anti-diarrhoea drug will be imported by Glaxo India from its parent company.

Today, Glaxo India launched its oral smoking cessation product Zyban in north India. Zyban will be available in Calcutta next week. It was first launched in Mumbai on May 31. The nationwide launch will be over in three months, Kalyan Sundaram said.


New Delhi, June 13: 
Dabur India is spending about Rs 10 crore a year on oncology research (for treatment of tumours), funding research projects in 14 government research institutes, including research departments of three universities as well as in its own R and D labs.

Dabur says it is increasing its spending on oncology research. According to a company spokesperson, Dabur provides a matching grant to the government-funded research institutes or sometimes even a bit more. The institutes have signed MoUs with Dabur that provide that wherever there is a positive research lead, the patent rights to the molecule will lie with Dabur.

Most of the research work is carried out in the laboratories of CSIR (Council for Scientific and Industrial Research) which include, IICT and CCMB, both based in Hyderabad, NCL in Pune and CDRI in Lucknow. Of the three universities, Dabur named only one�Delhi University.

Other institutions include the National Institute of Immunology (NII) and a research institution attached to the Defence Research and Development Organisation (DRDO).

The government research institutes include the Indian Association for Cultivation of Science (IACS), Calcutta (department of science and technology). Scientists at the IACS have developed an anti-cancer molecule. Next week, a meeting is scheduled between Dabur and IACS, �to look at the possibilities of working further on this cancer molecule,� said the spokesperson.

However, there is a long haul before the outcome of the research can be put to commercial use, he said, adding that once the drug is developed, it will be followed by permission from the Drug Controller of India, for phase I clinical trial.

Dabur Research Foundation (DRF) at present has about 135 scientists working on various research products. Of these, around 20 scientists are working in the area of oncology. In the year ending March 2001, DRF has spent about Rs 15 crore on various types of research.

At present, oncology research is a part of the pharmaceutical division of Dabur India. However, Dabur India has a 100 per cent subsidiary in UK called Dabur Oncology plc. Its plant in UK has set up a facility to produce oncology formulations and is in the process of getting the approval from the drug regulating agency in the UK.



Foreign Exchange

US $1	Rs. 47.04	HK $1	Rs.  5.95*
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Euro	Rs. 40.18	Sing $1	Rs. 25.55*
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*SBI TC buying rates; others are forex market closing rates


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