Eveready loses taste for tea in Bengal, to sell Dooars gardens
Maruti rights plan stalled
MRL weighs austerity measures
Sebi volte-face on badla bane
Fresh hurdle to BP Amoco open offer
Bharti likely to get reprieve in JT Mobile dues case
ONGC to cut workforce by 4,000
Rs 165-crore Command network update plan
Ranbaxy gets FDA approval for anxiety drug
Foreign Exchange, Bullion, Stock Indices

Calcutta, Aug. 31: 
Eveready Industries India Ltd, the B.M. Khaitan flagship, is pulling out of tea business in West Bengal. The company, which has already sold four gardens in Darjeeling and one in Dooars, plans to sell its remaining five tea estates in Dooars.

The company also plans to open a distribution wing which will not only market its own products but also those of other companies.

Speaking to reporters after the company�s 66th annual general meeting, Deepak Khaitan, executive vice-chairman and managing director, said, �We will sell our remaining gardens in Dooars if we get a good price.�

Earlier addressing shareholders, Khaitan said the company will exit the Dooars gardens as part of its restructuring plans.

The company has already sold its gardens in Darjeeling�Soom, Nagrifarm, Lingia and Glenburn�and Matelli Tea Estate in Dooars. The other gardens in Dooars are Bhatpara, Central Dooars, Chuapara, JaintiChuniajhora and MathuraJaibirpara. The company now wants to concentrate on the Assam gardens.

Khaitan, however, reconfirmed that the company will not sell its battery business since it is doing well. �We will only sell our unprofitable gardens,� he said.

Commenting on the bifurcation of the tea and battery businesses, he said there is no immediate plan to demerge the two. �Both are doing well for now. We are talking to the financial institutions on restructuring debt rather than demerging the two businesses,� he said.

ICICI, the lead financial institution of the company has been asked to work out a restructuring package. The company�s total debt burden stands at Rs 849.27 crore and the interest outgo is Rs 127.94 crore.

The company has asked the institutions to reduce the interest rate from 14 per cent to 11 per cent and increase the number of years for repayment. The board will meet within a month�s time to take a final view on the restructuring.

In a lighter vein, Deepak said he might increase the promoters� stake in the company since the scrip is hovering at Rs 15 on the bourses.

The company will start marketing alkaline batteries imported from Japan under its own brand name from November.

Eveready, which is currently exporting batteries to eight countries under the brand name �Lava� is venturing into the Philippines and New Zealand markets.

Commenting on shareholders� queries on the company�s exposure in group companies, Khaitan said they have decided to revive all the companies. Kilburn Chemicals has already turned around and is expected to generate dividends from next year.

�If we cannot revive these companies then we will think of selling them,� Khaitan assured shareholders.

EIIL reaches five lakh retailers through its distribution channels. It has 1,000 four wheelers across the country, which will be used to market its batteries, tea, and other FMCG products. �We are in talks with a company from the eastern region to market its products,� Khaitan said. The company expects a Rs 200 crore turnover from the distribution business.

Moreover, having exited the Nepal Battery venture, the company is selling Eveready batteries which are produced in India in Nepal.

Williamson Magor

Speaking at the AGM of Williamson Magor today, Deepak Khaitan said the company will carry on with the voluntary retirement scheme to make it lean and trim.

He added that a restructuring plan has been submitted to IDBI on Kilburn Engineering.


New Delhi, Aug. 31: 
The government�s plan to offload a part of its stake to the financial institutions through a rights issue has been stalled as Suzuki Motor of Japan, the 50 per cent shareholder, has not given its approval. The government had proposed to raise the Rs 132.29 crore equity base of the country�s largest automobile maker by 15 per cent.

Under the terms of the rights issue, the government would have been entitled to around half the number of rights shares to be issued.

However, the plan was to renounce its rights to those shares in favour of the financial institutions. Disinvestment minister Arun Shourie said, �The proposal to offload the stake to the FIs who, in turn, would have sold it to the Indian public has been put on hold.�

The standoff on the issue has come about as Suzuki has been unable to get the government to accept its valuation of the Maruti share as a first step towards buying up the government�s stake and getting controlling interest in the company.

The government has decided not to invest any more money in Maruti as part of its decision to gradually pull out its investments in non-strategic areas. Fresh investments will have to come from Suzuki.

Suzuki has been stalling on the government�s plan till it reaches agreement on the �control� premium�the price at which it will get control of the automaker.

Shourie added, �No new proposal on the issue of divestment has been put forward to my knowledge. The government has yet to decide the three independent valuers who will decide the premium that Suzuki will pay us for the controlling stake.�

�As far as I know, there is no proposal to divest in favour of a third party brought in by Suzuki. (There has been talk that Suzuki, which is facing a funds crunch, is trying to rope in General Motors of the US�which has a 20 per cent stake in the Japanese auto giant�to take over the Indian government�s stake). Such a proposal will require Cabinet clearance. This has not come up before the Cabinet at all,� Shourie said.

Earlier, the Cabinet Committee on Divestment had decided that the Maruti selloff would be done in two stages.


New Delhi, Aug. 31: 
The board of directors of Modi Rubber Limited (MRL) today discussed cost-cutting and turnaround strategies suggested by independent consultant Ravi Rajan.

The agreement signed by the company last month with the union was also taken up at the meeting.

Speaking to The Telegraph after the four-hour meeting, MRL managing director B.K. Modi said the board decided to implement the agreement signed on August 7.

�The board also discussed the cost-cutting measures and turnaround strategy suggested by Ravi Rajan in his 200-page report. However, no decision was taken on the report,� Modi said.

He said the board also discussed the auditors� report and the timespan by which the Ravi Rajan-framed turnaround strategy could be implemented.

�The report will be taken up again at our next board meeting. However, we have yet to fix the date for the meeting� Modi added.

Modi however said that details like appointing a new CEO, shifting of the company headquarters and the recently concluded open offer were not discussed.


Calcutta, Aug. 31: 
Having reached the last lap of investigations, the Securities and Exchange Board of India (Sebi) is now of the view that unauthorised badla did not affect market integrity. Though badla had so far been the favourite whipping boy and carryforward trades had been banned, Sebi chairman D.R. Mehta said in an interview: �Unofficial badla did not affect market participants except those directly involved.�

This reversal of stand comes at a point when the Sebi board is examining a proposal to introduce margin trading soon. The Sebi board is expected to meet in a couple of weeks to deliberate on the matter, and if approved, the introduction of margin trading will mark the return of badla, though in a slightly different mode.

Mehta said: �Unauthorised badla did not affect anyone other than the broker and his financier. It should not be held responsible for bringing the market to its knees.� He went on to explain that there were broadly three kinds of arrangements that took place between the brokers and their financiers. Brokers churned positions among themselves for temporary accommodation, or borrowed money through mutual trust, or through pledging securities with their financiers.

Mehta said: �None of these arrangements appear to affect the market. If one broker bails out another by taking over his outstanding position for a day, how is the market affected? And if someone borrows money on trust, what can the regulator do about it? Further, if a broker transfers his position to his financier through collusive trades, how are other market participants affected by it?�

Establishing collusive trades too could be difficult, Mehta added, referring to the Calcutta Stock Exchange�s (CSE) recent experience. �Collusive trades of an aggregate value of Rs 50 crore were identified by CSE and the Sebi investigation team. Of this, Rs 28 crore was reverted without any resistance, but for the other Rs 22 crore, the involved brokers moved Calcutta High Court and got a ruling in favour of themselves,� Mehta said.

Mehta�s detractors, however, point out that without badla stocks could not have been driven. Their argument is that the market regulator should have monitored large build-up of positions and forced the operators to disclose their source of funds or stocks in case they were shorting.

According to Abhijit Banerjee of Massachusetts Institute of Technology (MIT), �the Indian markets were imperfect by being extremely predictable. Unless the key players were to a certain extent sure about how the market would move, badla rates could not have been as high as 100-150 per cent�there simply would not have been any takers for funds at such a high cost. Ideally, a market should not be predictable, though there should be free flow of information.�


Mumbai, Aug. 31: 
BP Amoco�s open offer for picking up a 20 per cent stake in Castrol India will have to cross one additional hurdle as authorities have still to decide whether BP Amoco is liable to pay 15 per cent interest on the open offer price of Rs 350 per share from March 2000 onwards.

JM Morgan Stanley, managers to the public issue has informed BSE that their clients BP Plc and Castrol Ltd (UK) have approached Mumbai High Court against a Sebi order that requires them to increase the offer price from Rs 311.91 to approximately Rs 350.

While the judgement and final order of the High Court in the matter is awaited, the High Court has stated that it will be upholding Sebi�s order.

Consequently, BP have, in principal, agreed to proceed with an offer at a price of Rs 350.02, subject to resolution of the details of such an offer, in consultation with Sebi.

The matter of payment of interest if any, in addition to the said offer price of Rs 350.02 is currently being appealed before the Securities Appellate Tribunal,� the BSE notice said.


New Delhi, Aug. 31: 
Attorney general Soli Sorabjee has said the Bharti Group has a prima facie case for demanding waiver of the Rs 550 crore licence fee dues in respect of JT Mobile, the cellular service provider for Punjab.

The Bharti group had acquired JT Mobile five years ago and the liabilities of the cellular service provider devolved on it.

The group has argued that it is liable to pay only Rs 60 crore of the dues and that the rest should be shouldered by the Essar group which controlled the company before it was bought. The case has since gone to court.

Giving his opinion on the dispute, Sorabjee suggested that the government should either consider a full waiver of the sum or a part of it. He also said the government would do well to take up the Bharti Group�s offer to pay a part of the dues in cash and the rest in corporate or bank guarantees pending.

�The government may well consider this proposal and suggest payment of a sizeable amount in cash without prejudice to the right of the parties pending resolution of the dispute,� Sorabjee said in a note to the communications ministry.

The AG�s opinion will now be placed before the Cabinet at a meeting due next week. It considerably strengthens the Bharti Group�s case for a cash-and-guarantees package for the settlement of the dues.

The dues have to be cleared by a government-mandated September 14 deadline.

The Bharti Group had claimed that it was not responsible for payment of 693 days (the period between transfer of licence from JT Mobiles to Evergrowth and cancellation of licence for non-payment of the licence fee) and the government should waive the dues for that period.

On this issue, the AG opined, �The crux of the matter is whether JTM�s (now Bharti) plea for waiver of licence fees for the back period is justified. Prima facie there is substance in its plea because the basis for demand of licence fees is the assumption of non-compliance by JTM with the conditions set out in the no-objection certificate of April 18, 1996.�

He has suggested three courses for the government.

�The first is to waive the entire licence fee for the back period of 693 days. Second, to waive the licence fee partially. Third is to outright reject the claim for waiver of licence fee. Needless to say outright rejection is bound to lead to litigation,� said the AG.


Calcutta, Aug. 31: 
The Oil & Natural Gas Corporation (ONGC) is going in for the lean and trim look. After the successful implementation of its organisational restructuring early this month, ONGC has embarked on a massive manpower rationalisation.

The company has decided to offer a fresh voluntary retirement scheme next week to reduce its 40,000-strong workforce by at least 4000.

Speaking to

The Telegraph,

ONGC chairman Subir Raha said the company expects around 8-10 per cent of its employees to opt for the VRS package, which will result in significant cost advantages to ONGC in the long run.

�Several departments have surplus workers, especially those which are not directly connected to production like administration, finance and logistics. These have to be trimmed according to our needs,� he said. Raha said the company urgently needs to reduce manpower in �support services� so that more people can be employed in departments where we have a manpower shortage.

Asked whether the company has any plans to roll back the retirement age from 60 to 58 years, Raha said � this may be considered.�

�But our first priority is to get rid of surplus staff through the VRS so that employee morale is not affected,� he said.

The proposed VRS will be open for the next two to three months, he noted. ONGC had offered a VRS two years back and 2500 employees had then opted for the scheme.

The company has also decided to outsource services which are not directly linked to production. Besides reducing manpower, the company has also decided to strictly implement its transfer policy.

�Employees or executives stationed in metros for five years should be transferred,� Raha said.

The chairman however added that the management could always exercise its discretion to allow someone to stay in a place more than the stipulated time, depending on his or her family problems.

Meanwhile, Raha said the company is seeking management decontrol in order to have a level playing field as and when the oil sector is opened up in April 2002. �We have discussed the matter in SCOPE. This is very important for us to compete with both domestic and global oil producers,� he said.


Calcutta, Aug. 31: 
Command, a leading cellular service provider in Calcutta, plans to increase its subscriber base by upgrading its network and improving services.

The company will invest Rs 165 crore on upgrading infrastructure in the current fiscal. It plans to increase the number of base stations from the present 101 to 125 by November. There are also plans to install boosters at locations with weak signals.

A stronger network will enable Command widen its connectivity map and help subscribers stay connected in most important areas in the city and in metro stations. After the launch of the new flat-rate tariffs on August 20, Command says its subscriber base has gone up from 94,000 to the present 1.05 lakh.

Says chief executive officer Rajiv Sawhney, �In the last quarter we have seen a growth rate of 10 to 12 per cent. This is twice the national growth rate figures of 5 to 6 per cent.�

Moreover, as part of the endeavour to consolidate customer relations, Command has launched two �Command Shops� � a one-stop outlet for Command products and services. Six more outlets will be added by December this year. Each outlet is being set up at a cost of around Rs 0.5 crore.

�The launch of these outlets is part of our strategy to reach out to subscribers and provide an experience, rather than mere products and services. We plan to set up these outlets even in the suburbs so that a customer does not have to travel to the city to solve his queries,� adds Sawhney.

The a Hutchison joint venture partner has also introduced an internal customer relationship management (CRM), which will provide instant data on the customer�s usage history, billing details and other information to the customer service executive. This reduces service delivery time and helps the company address problems on a customised basis.


New Delhi, Aug. 31: 
Ranbaxy Pharmaceuticals Inc (RPI), a wholly-owned subsidiary of Ranbaxy Laboratories Ltd in the US, today received FDA approvals for Lorazepam tablets, USP, 0.5 mg, 1mg and 2 mg., according to a statement issued by the company.

Lorazepam is indicated for the management of anxiety disorders or for short-term relief of the symptoms of anxiety or anxiety associated with depressive symptoms. Sales in 2000 for Lorazapem totalled $ 336.5 million, with sales of the tablets alone totalling $ 270.4 million.

Lorazepam has been a multi-source product and the RPI approval represents the seventh Abbreviated New Drug Application (ANDA) granted for the tablet formulation of this product since patent expiration. However, while all other ANDA holders are dependent on the two Active Pharmaceutical Ingredient (API) manufacturers for this product, Ranbaxy�s approval is based on its own Drug Master File (DMF).

According to Ranbaxy , the approved formulation is the result of R&D efforts focused on the API and the bio-equivalent formulation both of which were developed through through the scientific capabilities within Ranbaxy Laboratories Ltd of New Delhi.



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