Bill on share buyback introduced
NEW DELHI, Dec 22 — The government today introduced in the Lok Sabha a Bill to allow companies to buyback their shares which has been restricted to 25 per cent of the paid-up capital and free reserves.

Tame inflation, IMF tells India
WASHINGTON, Dec 22 — India though has a comfortable level of international reserves, it needs to fasten its structural reforms process and also tame inflation, the IMF has said in its year-end world economic outlook.

PHDCCI AGM on Dec 24
CHANDIGARH, Dec 22 — The 93rd annual general meeting of the PHDCCI will be held on December 24 in New Delhi. Finance Minister Yashwant Sinha will be the chief guest.

ICICI offers free demat facility MUMBAI, Dec 22 — The ICICI has decided to offer depository participant facilities almost free of cost to all its individual shareholders to facilitate the process of dematerialisation of their holdings in ICICI Ltd and ICICI Banking Ltd.

‘Slash duty on wool to 10 per cent’
AMRITSAR, Dec 22 — The International Wool Secretariat and the Shawl Club have appealed to the Union Textile Ministry to slash the import duty levied on apparel grade raw wool from 20 per cent to 10 per cent.

• STOCKS

Bill on share buyback introduced

NEW DELHI, Dec 22 (PTI) — The government today introduced in the Lok Sabha a Bill to allow companies to buyback their shares which has been restricted to 25 per cent of the paid-up capital and free reserves.

The Companies (Amendment) Bill, 1998, introduced by Law, Justice and Companies Affairs Minister M. Thambidurai, made some further changes after the promulgation of the Ordinance to restrict the buyback of shares to 25 per cent of the paid-up capital.

The Bill, replacing the October 31 Ordinance, also makes it clear that the funds used for this purpose are not to exceed 25 per cent of the paid-up capital and free reserves, which have been defined for the purpose of buyback.

The other changes include the move that the restriction of 24 months, after the buyback, for further issue of securities will apply only in respect of the same security. The company will have no restriction to issue other securities during this period.

Prior approval of financial institutions in case of investment, loan or guarantee up to 60 per cent of the networth will not be required if there is no default in repayment of loan or interest to public financial institutions.

CPM member Varkala Radhakrishnan objected to the Ordinance promulgated during the inter-session saying a Bill on the subject was already before the parliamentary standing committee and was hence a trespass into Parliament’s right.

Thambidurai replied to the point saying there was an urgency to issue the Ordinance following demands from various chambers of commerce and industry and apprehensions that multinational companies would take over well-run Indian firms.

The other broad changes are:

— A company will not be allowed to make any inter-corporate investment if there is a default in repayment of deposits or interest thereon. Restrictions on inter-corporate investment will also not apply in case of wholly-owned subsidiaries or companies established with object of financing industrial enterprises and for subscribing to right shares,

— In case of corporate guarantee, the companies would be permitted to obtain ex-post fact approval of the shareholders within a specified period,

— The powers to the Board of Directors to decline or to suspend registration of shares in case of nominees have been withdrawn

— For transfer of unclaimed funds from company to investor protection fund, the period has been increased from five years to seven years and thereafter no claim to be entertained, and

— For issue of sweat equity, a special resolution has been provided instead of ordinary resolution.

Jaya, Jaya hey

NEW DELHI, Dec 22 (PTI) — Film stars Jayaprada, Jaya Bachchan, Shahrukh Khan, producers Mukesh Bhatt and Subhash Ghai are among the top 10 film personalities and firms with highest tax arrears.

Jayaprada has an income tax arrear of Rs 2.57 crore, Jaya Bachchan with Rs 2.21 crore and Shahrukh Khan Rs 1.55 crore, Minister of State for Finance, M.R. Janarthanan said in an answer to a written question in the Upper House today.

Producer Mukesh Bhatt has a tax due of Rs 4.73 crore, while Subhash Ghai owes the exchequer Rs 1.26 crore.

The other five highest arrears are of Vijay Productions (Rs 13.04 crore), K. Subramanyam (Rs 8.13 crore), Sujatha Films (Rs 6.32 crore), Adlabs Films (Rs 2.72 crore) and Sujatha Productions (Rs 2.19 crore), he said.

Tame inflation, IMF tells India

WASHINGTON, Dec 22 (PTI) — India though has a comfortable level of international reserves, it needs to fasten its structural reforms process and also tame inflation, the IMF has said in its year-end world economic outlook.

India has been experiencing a slowing of growth in the industrial sector accompanied by higher inflation, rapid monetary growth and a weakened rupee, it said.

This reflects slow progress in implementing key structural reforms, high interest rates in the industrial sector, a decline in exports owing to weak international demand and sector-specific factors.

The international funding body has put India’s government sector deficit at 10 per cent of the gross domestic product (GDP). Reflecting its insistence on clubbing together the deficits of the central and state governments and the losses in state-owned enterprises.

However, the Government of India insists that the public enterprise deficits should not be taken into account, as these are commercial enterprises though state-owned.

A continuing deficit of 10 per cent of the GDP, not only the IMF but also the World Bank has said repeatedly, is unsustainable in the long run.

Slow growth also reflects fragile sentiment further undermined by the intensified weakness in the equity market since the revelation of financial problems in India’s largest mutual fund, which may also have, in the IMF’s view fiscal implications.

The current account position has suffered, says the report, but India’s international reserves remain comfortable.

Convertibility

The IMF has asked India and other developing countries not to rush towards full currency float till they have adequate safeguards in place.

Macro-economic stability, while necessary is not enough for financial stability, which also requires sound financial sector policies, the IMF said in the latest issue of “Finance and Development” published by it and the World Bank jointly.

Inadequate accounting, auditing and disclosure policies in financial and corporates sectors weaken market discipline and countries with these problems run the risk of a crisis if they fully open their currencies, World Bank chief economist Michael Mussa said in an article.

PHDCCI AGM on Dec 24
Tribune News Service

CHANDIGARH, Dec 22 — The 93rd annual general meeting (AGM) of the PHDCCI will be held on December 24 in New Delhi. Finance Minister Yashwant Sinha will be the chief guest and Industry Minister Sikander Bakht will preside.

Mr Ashok Khanna will take over as President of the Chamber.The Chamber is organising a conference on “Building world class infrastructure: a blue print for faster economic development. It will be attended by Chief Ministers of North India, including Dr Farooq Abdullah, Ms Sheila Dixit, Mr Ashok Gehlot, Mr Digvijay Singh.

‘Slash duty on wool to 10 per cent’

AMRITSAR, Dec 22 (UNI) — The International Wool Secretariat (IWS) and the Shawl Club (India) have appealed to the Union Textile Ministry to slash the import duty levied on apparel grade raw wool from 20 per cent to 10 per cent.

IWS Area Director S.K Chaudhari and Shawl Club Chairman J.S. Madan said in the presence of the Australian High Commissioner to India, Mr Rob Lauria, here today.

The High Commissioner was on a two-day visit to Punjab during which he visited a number of Shawl manufacturing units in Ludhiana and here.

Mr Lauria pointed out that China was levying just 1 per cent duty for imported raw wool from Australia.

The duty would have to be lowered if India wanted to compete in the world woollen market and also to develop its own wool industry, the High Commissioner said.

The High Commissioner pointed out that the Indo-Australian wool trade as of today was more than $ 175 million with India being the fifth largest consumer of Australian raw wool.

His country was looking forward to set a constructive process that would set the directions for a viable and sustainable wool industry in India, he said while interacting with the members of the IWS and Shawl Club.

Dr Chaudhary said presently the annual turnover of the Indian shawl industry which was primarily located at Ludhiana and Amritsar was to the tune of Rs 700 crore out of which around Rs 250 crore were earned through exports.

Referring to a recent market survey conducted in France, Dr Chaudhary said that there were chances of the export turnover further increasing in the next few years as shawls which were traditionally considered an Indian apparel has found acceptance in certain western nations.

Pak to work out modalities for euro

The Board of Directors of the State Bank of Pakistan (SBP) will meet in Karachi on December 24 to approve modalities for the euro currency which will come into force on January 1, 1999.

The European Central Bank in Frankfurt will become responsible for setting interest rates for the 11 countries joining the Economic Monetary Union (EMU).

“Even after the approved of the framework for euro, the Central Bank would seek approval of the Ministry of Finance and the Law Ministry,” says an official of a private bank.

The Board is expected to discuss in detail the pros and cons of the euro on the Pakistani economy and ascertain the percentage of foreign exchange to be reserves in euro. — ANI

Shell-shocked

Shell, the world’s largest oil company, has sacked over 150 employees in Pakistan without notice. The employees said they were sacked after they had refused to resign as demanded by the management of Shell Pakistan Limited.

According to the termination letter, the employees’ services were being terminated with immediate effect “as a consequence of restructuring.” The letter informed the sacked employees that they were “surplus to the company’s requirements and have become redundant.”

Ironically, only a day earlier, Shell Pakistan’s Managing Director T.V. Higgins was shown on television meeting Prime Minister Nawaz Sharif in Karachi, promising him that his company would invest more in his country and provide additional jobs. Sharif had said he appreciated the gesture. — IANS

‘Express Lane’

The Collectorate of Customs Appraisement is to introduce an “Express Lane” scheme for the expeditious assessment of bills of entry to facilitate swift clearance of imports.

This was stated by Tanveer Ahmed, Additional Collector of Customs Appraisement, at a meeting of the advisory committee which was attended by a large number of representatives of trade, including the Karachi Chamber of Commerce and Industries, the Pakistan Ship Agents Association and the Karachi Customs Agents Group. — ANI

PIA profit

The ambitious turnaround programme being pursued by Pakistan International Airlines (PIA) has brought a profit of Rs 700 million for the current fiscal year.

A PIA spokesman said the airline’s “seat factor” had gone up by more than 2 per cent despite fierce competition and low fares offered by its competitors. This increased yields and revenues to the tune of 14 per cent as against the target of 13 per cent in 1997-98.

Despite PIA’s reservation system being outdated, a 2 per cent growth in seat factor had been maintained in the current fiscal. “PIA’s expanded Business Class had a 60 per cent seat factor which is highly positive and has resulted in higher revenues and yields,” he added.

Under the leadership of Chairman Shahid Khaqan Abbasi, PIA’s share of non-ethnic traffic has gone up from 18 per cent to 30 per cent. The Chairman’s cost reduction policy, by which domestic sales agents (DSAs) in Pakistan and passenger sales agents (PSAs) abroad had been appointed, has resulted in savings of 10 per cent. British Airways and a few other airlines have approached PIA for advice on appointing PSAs. — IANS

HLL: no lemon in Wheel; Fena says ad misleads

NEW DELHI, Dec 22 (PTI) — The country’s leading detergent maker Hindustan Levers Limited (HLL) has admitted that its ‘wheel’ brand of detergent and cake contains no lemon (NIMBU), despite its aggressive ad campaign ‘nimbu ke saath’.

Wheel, which has been advertised with the punchline “nimbu ke saath. Bedaag safai, super safai” (with lemon, spotless cleanliness, super cleanliness), comes packaged in a distinct green and yellow wrapper, with a lemon prominently displayed on it.

HLL submitted before the Monopolies and Restrictive Trade Practices Commission (MRTPC) that Wheel contained only ‘lemon perfume’ and never misled the consumer into thinking otherwise.

Interestingly, HLL had earlier maintained that “lemon has been part of the brand (Wheel) since 1992 and as such consumers instantaneously associate this key ingredient as part of their brand, as evidenced through consumer research”.

Hindustan Lever had been challenged by rival detergent maker Fena Ltd before the MRTPC on the grounds of misleading detergent consumers by advertising that Wheel had the cleansing power of lemon, traditionally used in Indian households to remove stains and bleach clothes.

Fena Ltd had earlier filed a case in the Advertising Standards Council of India charging HLL of violating the council’s code of honesty in advertising and making false and misleading statements.

HLL’s claim is currently being contested by Fena Ltd, which has sought a ban on HLL’s “misleading advertisement” under Sections 36B and 12A of the MRTP Act.

In its appeal, HLL has said it spent over Rs 50 crore on the advertising of wheel brand over the last 10 years but has never misled the consumer over Wheel’s lemon content.

After Fena Limited filed its complaint before the MRTPC, the latter issued a notice of enquiry to HLL and had directed the Director General (Investigation and Registration) to take over the matter and conduct proceedings before the commission.

While Hindustan Lever’s reply was filed during the course of the latest hearing on the case last week, further hearings on the case are scheduled for February next.

The Wheel vs Fena detergent war began in October last year when HLL reportedly objected to Fena’s new advertisement which said lemon power was an obsolete claim and showcased the “latest” cleaning technology in its ad.

In its hearings before the MRTPC, the company has stated that there is no material on record to show that any consumer was misled into thinking that Wheel detergent or bar contained lemon.

In its submission, HLL has also denied that lemon was the main or key ingredient in wheel and that claims of lemon being added for better washing action on clothes and stain removal were never made by it.

ICICI offers free demat facility

MUMBAI, Dec 22 (PTI) — The ICICI has decided to offer depository participant facilities almost free of cost to all its individual shareholders to facilitate the process of dematerialisation of their holdings in ICICI Ltd and ICICI Banking Ltd.

Individual equity investors in the ICICI group can now open a demat account with ICICI free of charge and the investor would not have to pay custodial fees or demat charges in respect of the holdings in the group, ICICI said.

However, transaction charges would be payable. The investor could also use these demat accounts for holding and trading their securities in other firms as well, but for a charge, the financial institution said in a statement here.

ICICI, one of the 12 scrips notified Sebi for mandatory trading in the electronic (book entry) for all investors including individual investors from January 4, 1999.

The company is extending free demat facility to its shareholders so as to ensure that the tradability in the scrip is maintained and investors get the benefit of demat trading.

STOCKS
Early gains pared on profit-taking

MUMBAI, Dec 22 (PTI) — Equities failed to sustain at higher levels due to mild profit-taking and selling pressure by foreign institutional investors (FIIs) and ended with minor gains at the Bombay Stock Exchange (BSE) here today.

The market got off to a firm start as speculators made purchases to wind up their positions at the National Stock Exchange (NSE) on the last day of the current settlement.

Players were cautious and awaited to see the Patents Bill being placed in Parliament. However, non-Congress members objected to the introduction of the Bill which led to heavy selling in most of the heavy-weighted counters.

FII activity was low with most players out on year-end holidays. Domestic funds covered up oversold positions and lifted the market from its low level.

Foreign funds sold Bajaj Auto, Hind Lever and Satyam Comp to book profits at higher levels. Among the information technology shares, Infosys Tech was in the limelight and peaked to 52-week high at Rs 3079 ahead of its board meeting scheduled for tomorrow to consider a bonus issue.

Other issues moved in small range both ways on alternate boots of buying and selling for squaring up positions at NSE.

Shares of the Tata group shot up all round on speculative buying and shortcovering.

NEW DELHI: Telco among the Tata group company stocks continued to remain in keen demand among foreign and domestic financial funds and posted Rs 3.70 higher at Rs 156.50 after rising to Rs 158.40 mostly on hopes that the company’s passenger car was likely to be well accepted in the market.

Tata Steel shares also attracted massive buying support and ended Rs 3.55 higher at Rs 108.30 after reports that the company had sold its cement division.

Reliance Industries shares were also in some demand and gained Rs 1.70 at Rs 118.70 largely on speculators buying.

Multinational company stocks such as Hindustan Lever ended Rs 21.50 to Rs 1668.50 while Nestle India shares lost Rs 9 at Rs 458 on selling pressure.

ITC Ltd in two-way movements finally ended Rs 5.65 down at Rs 712.95 after moving in the range of Rs 708 and Rs 724.95 on hectic buying and selling.

Bajaj Auto Ltd shares fell Rs 5 at Rs 520, Hero Honda Motors shares lost Rs 17 at Rs 558 while LML Ltd shares down 85 paisa to close at Rs 68.05.

Carrier Aircone shares declined by Rs 5.25 to Rs 196.75 while Castrol India shares finished marginally down at Rs 702 against last close of Rs 702.90.

US $ 42.53/54
£ 71.46/48
D mark 25.42/44
Jap yen (100) 36.37/39

The RBI reference rate was 42.53.

Gold falls
NEW DELHI, Dec 22 (PTI) — The recovery trend was shortlived on the bullion market today as prices of both silver and gold, rolled back on fresh arrivals and weak outside advices to close with heavy losses. The quotations: silver .999 (ready) 7345 and delivery 7355. Silver coins buyer 10,400 and seller 10,600. Standard gold 4260, ornaments 4110 and sovereign 3725.

PNB branches
CHANDIGARH, Dec 22 (TNS) — Mr Rashid Jilani, Chairman & Managing Director, Punjab National Bank, inaugurated ISO 9002 international banking branches at Jalandhar, Ludhiana and Phagwara today. Punjab National Bank is the first bank in Punjab to get ISO 9002 quality certification from Det Norske Veritas Ltd, London. Mr Jilani said in Punjab Sunday services have been introduced in seven branches and six branches are working for all the seven days.

IT Bill cleared
NEW DELHI, Dec 22 (PTI) — The Lok Sabha today approved a Bill seeking to extend tax holiday from five to ten years to industrial undertakings set up in free trade zones and units in software technology parks. The Income Tax (Second Amendment) Bill, 1998, also seeks to provide full depreciation acquired by an assessee on or after October 1 this year but before April 1 next year and put to use before the latter date for the purpose of business.

Award for BEL
NEW DELHI, Dec 22 (TNS) — The Panchkula unit of the public sector Bharat Electronics Limited (BEL) has bagged the prestigious national award for R & D efforts in industry for 1998. Col H.S. Shankar, Director (R&D), received the award today from the Union Minister for Science and Technology, Dr Murli Manohar Joshi here.