CESC may move court against power regulator
Bid to rename CSE, revive its fortunes
Scam memories haunt GTB in land-for-loan deal

Calcutta, Dec. 29: 
CESC, the R.P. Goenka flagship, will decide next week whether to move court against the new tariff revision or will approach the West Bengal Electricity Regulatory Commission (WBERC) for a review of the order.

However, the company will start implementing the new tariff from the December billing cycle. CESC had demanded a 92 paise hike per unit but WBERC allowed only an increase of 9 paise.

Addressing the shareholders after a five-hour long annual general meeting, R.P. Goenka, chairman of the company said: “The tariff award given by WBERC needs to be reviewed. It is not possible to bring down the transmission and distribution (T&D) losses to 14 per cent as directed by WBERC within a period of four years.”

CESC, in its tariff petition, had demanded T&D losses of 22.36 per cent. However, WBERC has said that for the year 2001-02 CESC should bring down the T&D losses to 16.1 per cent which should be further brought down to at least 14 per cent in the next four years by reduction of 0.7 per cent every year.

A large section of the company’s minority shareholders attributed the high T&D losses to the company’s inefficiency in operations. However, all the six resolutions were passed by majority shareholders.

Commenting on the status of the New Cossipore and Mulajore generating stations of the company, Goenka said: “We had earlier decided to participate in the Gouripore power project and redeploy some of our employees of Mulajore in that plant. But we have not got the clearance from the government. We are still thinking what to do with the power plants.”

The cost of generation of these two stations is higher compared with the company’s average generation cost.

The two power plants together employ 1,558 employees. WBERC is against the idea of closing down the units. Instead, they have asked CESC to prepare a note on the matter with various options available for continuing or closing the stations.

Talking to newspersons after the AGM, Sumantra Banerjee, managing director of the company said: “According to the civil judice prudence we can implement the tariff award on one side and ask for reviewing the tariff petition on the other. There is no conflict between the two. So we are implementing the new tariff.”

Commenting on the fate of Balagarh power project, Banerjee said: “The project has now gone on the backburner. We will not pursue the project at the moment. Let CESC have some operating cash flow first and then we can think about it.” CESC co-promoted Balagarh Power Company Limited for setting up 2X250 MW thermal power units at Balagarh near Calcutta.


Calcutta, Dec. 29: 
A large number of members of the Calcutta Stock Exchange (CSE) recommended changing the name of the bourse to Kolkata Stock Exchange at the annual general meeting (AGM) today. The brokers feel altering the name will bring luck and help in reviving the country’s third largest stock exchange.

“Kolkata Stock Exchange is numerologically favourable to Calcutta Stock Exchange. We have tried various ways of reviving the exchange — why not try this as well?” said a former CSE president. The brokers wanted to move the proposal as an item on the agenda of the AGM today, but there were technical problems in doing so.

It was decided that the matter would be produced before the board at its next meeting slated to be held in the first week of January.

If approved by the board, which now comprises nine broker-directors, the exchange will have to apply to the Registrar of Companies for the change of name, and will also have to seek its members’ approval in a general meeting.

Brokers recommended a host of other measures as well for the revival of the beleaguered exchange. These include reduction of the age of retirement from 65 to 58 and recruitment of more professionals for the administration of the bourse. Members have also asked the board to examine measures of reducing costs. The board will consider these proposals at its next meeting.

Overall, there was a sense of jubilation among the brokers as their representatives returned to the CSE board after about nine months, albeit in an advisory capacity.

The Securities and Exchange Board of India had decided in its meeting on Friday that brokers would not be allowed to become office bearers though they could take board berths as ordinary directors.

Among the executives too there was a sense of relief as the AGM sailed through smoothly. The brokers had threatened to boycott the AGM if the market regulator decided to keep them out of the administration of the exchange.

Speaking at the AGM attended by some 100 CSE members, former president Ajit Kumar Day said: “Let us admit the fact the payment crisis took place because of deficiencies in surveillance and we have faced enough criticism for this. But it is time for us to look beyond and strive at reviving the credibility of the exchange.”

A key problem facing the bourse is the lack of depth in its cash segment. The exchange clocks a daily turnover of around Rs 125 crore these days, which is about a twentieth of the average turnover a year back. The exchange had yet to introduce a derivative platform, though derivative products are fast gaining popularity.


Mumbai, Dec. 29: 
The Hyderabad-based Global Trust Bank, which has recently been in the news for all the wrong reasons, may now see itself embroiled in fresh trouble.

In line with the trend of banks and financial institutions acquiring properties from companies in lieu of default on loan repayments, an acquisition made by the bank recently has come under scrutiny as the custodian of properties belonging to the scam-accused has raised several queries pertaining to the deal.

This time, it is the Rs 78-crore land deal with Killick Nixon Limited that could create problems for the company. The bank had acquired 2.47 lakh square feet of land (roughly 6 acres) belonging to Killick Financial Services at a rate of Rs 2,900 per square feet which amounted to Rs 74 crore.

However, the custodian of properties for the 1992 securities scam accused has shot off a letter to the bank asking it to provide more details on the land deal, as the property in question is controlled by T. B. Ruia, an accused in the 1992 scam.

The custodian’s stand is that if the property in question was, indeed, owned by T B Ruia, then it will have first charge on the asset. It is not yet clear how the bank has responded to the missive.

In January this year, GTB entered into a debt-asset swap with three Killick Nixon Companies, involving a total amount of Rs 54 crore.

However, the deal was later cancelled and renegotiated with additional parcels of land. Killick Financial Services had stood as a guarantor for the three group companies, namely Filtrona India, Millennium Caribonum and Lodestar Slotted Angles, which defaulted on the loans. At the time the deal was struck, it was claimed that it had the approval of the Reserve Bank of India.

Over the past few days, several attempts were made by The Telegraph to contact senior officials at GTB. However, it failed to elicit any response from the bank.

The acquisition involves five plots of land aggregating 23,000 square metress. Industry circles said though the land is in an area known for commercial and residential complexes built by noted builders like the Hiranandanis and Rahejas, the price paid by GTB was on the higher side. However, the bank, which was constrained after the three Killick group firms defaulted on the payments, had to enforce the security pledged by Killick Financial Services.

For GTB, the acquisition was part of its efforts to lower its non-performing assets, which had already pole-vaulted five-and-a-half times to Rs 153.8 crore for 2000-01 from Rs 27.8 crore the previous year.


Maintained by Web Development Company